The E ssential s of Economic Sustainability

1. The Essentials of Economic Sustainability • Guiding Principles: • Holism: Each session embodies whole class • Spiral learning: Each session builds on others • Collaborative Learning: • Reality is not absolute but potentials – to be experiences and to become • Students and “teachers” must participate in a co-learning process. • Claim Your Truth: What you believe to be true • Just in time learning/teaching: Address economic concepts as questions arise

2. Spiral Learning: The Essence of Economic Sustainability in Each Session

3. The Essentials ofEconomic Sustainability • The industrial era of economic development has resulted in many material benefits. • However, the benefits have not been equitably shared inside or among the societies of the world. • In addition, the natural and human resources that have sustained industrial economic development are being rapidly degraded and depleted. • The modern model or paradigm of industrial economic development is not sustainable.

4. #1-Essential Questions of Economic Sustainability Change is normal and usual, but some changes are truly revolutionary. Questions of sustainability are driving revolutionary change – a great transition. How can we meet the economic needs of the present without diminishing economic opportunities for future? – the essential question of economic sustainability.

5. Sources of Economic Value • All economic value comes from nature by the means of society. • Sustainability is a question of energy. • Anytime energy is used to do anything useful, some of its usefulness is lost. Law of ENTROPY • Economic productivity depends on people to make things of nature useful to other people. • Productivity depends on both physical energy and social energy – on society.

6. Economic Relationships • Economic relationships are individual, instrumental, and impersonal. • Social relationships are instrumental, personal, and relational – non-economic. • Social relationships evolve into ethical relationships – into cultural values. • Ethical relationships are non-instrumental, impersonal, and communal. • Cultures value the “common good” – not just individuals – relationships matter.

7. Emergent Properties: A whole is more than the sum of its parts • Families, communities, and societies are more than collections of individuals. Sustainability is an emergent property of caring societies. • Emergent properties of economies may enhance the value of economic entities but lack individual incentives – Tragedy of Commons • Real people don’t make purely economic decisions, publicly-traded corporations do.

8. Economic value is inadequate to ensure economic sustainability. • Economic value gives priority to the present. • Interest is cost/return of delayed gratification. • Well-being of future generations has too little economic value to ensure sustainability. • Economic value of social & ethical behavior is insufficient for sustainability. • Non-economic and economic investments are both necessary for economic sustainability.

9. Social and ethical values are essential for economic sustainability. • Some social and ethical relationships also have economic value – not enough for sustainability. • Some relationships essential for economic sustainability are purely social and ethical. • Social and ethical values cannot be “internalized.” • An economy motivated solely by economic value is not sustainable. • A society motivated solely by individual value is not sustainable – fallacy of composition. • Sustainability ultimately depends on a shared ethic.

10. Questions for Chapter 1 Please write your answer to one of the following questions: • What is your definition of economic sustainability? • Do you believe sustainable use of energy is essential to economic sustainability? Why or why not? • Do you believe economic value is fundamentally different from social and ethical value? Why or why not? • Do you believe decisions of large, publicly-traded corporate organizations are different from decisions of real people? Why or why not? • Do you believe government regulations are essential for economic sustainability? Why or Why not? Please write answers to both questions below: • Why are your answers to these questions important to the people of your nation, your community, and to you personally? • After thinking about these questions, what might you do differently to make life better, for others and for yourself?

11. Spiral Learning: The Essence of Economic Sustainability in Each Session

12. Review of # 1:Essentials Questionsof Economic Sustainability Today’s industrial economy is not sustainable. It is depleting and degrading the natural and human resources upon which the economy ultimately depends. Sustainable economies must meet the needs of he present without diminishing opportunities for the future. All economic value comes from the earth or from people – from natural or human resources – ultimately from energy. Sustainable development must invest in nature and society even when there are no economic incentives to do so. Sustainable development depends on social and ethical values, which are different from economic values.

13. #2- The Hierarchies of Sustainability • Most economists limit concerns to spheres of nature and society that have economic value and assume… • Social and ethical relationship that have no economic value are irrelevant to economic sustainability. • Humanity is separate from nature and can manipulate nature to sustain economic growth. • Questions of sustainability arise from a different worldview – how the world works & where we fit. • Social and ethical relationship that have no economic value are essential to economic sustinability. • Humanity is a part of nature and humans must live in harmony with nature.

14. Economic Worldview

15. Ecological Worldview Nature Human Needs Human Needs Society Economy

16. Ecological Worldview Nature N N Human Needs Human Needs Society ShN ShN EhN ShN EhN ShN N Economy N EhN EhN EhN ShN N ShN ShN N

17. Ecological Worldview Nature N N Human Needs Human Needs Society N ShN EhN ShN ShN N Economy N EhN EhN ShN ShN N

18. Ecological Worldview of Sustainability Nature N N Human Needs Human Needs Society ShN N EhN N Economy N EhN ShN ShN N

19. Ecological Worldview of Sustainability Nature N N Human Needs Human Needs Society ShN N EhN N ShN Economy N ShN EhN EhN ShN ShN Solar Energy Solar Energy N

20. The Hierarchies of Sustainability • Ecological Worldview:Society is a sub-set of part of nature and thus the economy is a sub-set or part of nature. • The whole of the economy intersects with both society and nature; every economic transaction has social and ecological consequences. • Everything is interconnected – everything matters. • Everything of economic value must be derived from nature, and beyond self-sufficiency, by way of society. • Nature is at the highest hierarchal level, higher than society, and society is at a higher level than the economy.

21. Nested Hierarchies defined byPurpose and Possibilities • Purpose of society is derived from nature. • Purpose of economy is derived from society. • Possibilities of a society is affected by its economy. • Possibilities of nature is affected by society. • Higher levels change more slowly, are stronger. • Higher levels set limits for lower levels. • Higher levels define principlesfor lower levels. • Society & economy function by laws of nature.

22. Hierarchy of Intentionality • Humans are capable of intentional actions. • Sustainability of humanity – the dominant species on earth – depends on the intentions of humans. • Ethical value is highest level of intentionality, social value is next & individual value is lowest. • Higher levels define purpose and principles. • Lower level affect possibilities of higher level. • Higher levels are slower and stronger. • Higher levels set bounds & limits for lower levels.

23. Sustainability: alignment of hierarchies of sustainability & intentionality • Constitutions – with ethical values (laws of nature) • Laws & regulation – with social values • Economy – with individual values. • Nature must be given priority over society. • Society must be given priority over the economy. • Ethical decisions require consent of people. • Social decisions require citizen involvement • Individual autonomy, within society & nature.

24. Questions for Chapter 2 Please write your answer to one of the following questions: • What is your definition of world view? • Do you believe respect for the hierarchy of sustainability is essential to economic sustainability? Why or why not? • Do you believe purposes and principles are always determined at higher levels of organization? Why or why not? • Do you believe economic sustainability is essential for social and ecological sustainability? Why or why not? • Do you believe respect for the hierarchy of intentionality is essential to sustainability? Why or why not? Please write answers to both of the questions below: • Why are your answers to these questions important to the people of your nation, your community, and to you personally? • After thinking about these questions, what might you do differently to make life better, for others and for yourself?

25. Spiral Learning: The Essence of Economic Sustainability in Each Session

26. Review of # 2 -The Hierarchies of Sustainability Human society is part of nature and the economy is a part of society – nature is the highest hierarchal level. “Purpose and principles” are defined at higher levels but “possibilities” are determined at lower levels. Principles of nature must take priority of over the preferences of society and the needs society must take priority over economic preferences of individuals. The hierarchy of human intentionality must be aligned with the hierarchy of nature: ethical with nature, social with society, economic with individual.

27. #3-Ecological Principles of Economic Sustainability • Sustainability is a human centered concept. • Assumes that humanity is capable of choosing sustainably and is worth sustaining • Accepted as matter of faith; can’t be proven • Sustainability recognizes that human well-being is interrelated with well-being of nature. • Humans & nature share the same elements & same energy; both are biological and depend on solar energy. • Purpose and principle of the sustainability of humanity are purpose & principles of nature – the highest level.

28. Living things function according to Ecological Principles. • Holism: Everything is interconnected; wholes are more than sums of parts; wholes have emergent properties; relationships matter. • Ignorance of holism has consequences: • Human health • Global climate change • Economic exploitation of society & nature • Inadequate government policies

29. Ecological Principles of Sustainability • Diversity means having dissimilar or different parts or aspects; necessary for resilience & reproduction; moves away from entropy. • Ignorance of diversity has consequences: • Species extinction – consequences for humanity? • Over-population/consumption; human extinction • Diversity: Best single ecological indicator • Industrialization – direct conflict with diversity • How many more species can we afford to lose?

30. Ecological Principles of Sustainability • Interdependence: Mutually-beneficial; interconnected, decentralized, source of “something more.” • Relationships of choice among people; of intentionality in relationships with nature. • Humanity is losing the war with nature. • Human consequences of ecological ignorance: • Nature now dependent on human wisdom • Failure to respect indigenous wisdom • Lack of respect for life • Lack of sustainability of humanity

31. Ecological Principles: Also Relevant to Social Relationships • Sustainable families, communities, and societies must be see as more than collections of individuals – relationships matter. • Cultural and social diversity is necessary for sustainable communities and societies. • Mutually-beneficial, interdependent relationships of choice are necessary for sustainable families, communities, and societies.

32. Ecological Principles:Relevant to Economic Relationships • Sustainable economic organizations must be managed as wholes, not divisions or parts. • Sustainable economic organizations and economies must be diverse, rather than specialized and standardized. • Economic relationships must be mutually beneficial – not extractive or exploitative. • Lost sense of connectedness has ecological and economic consequences.

33. Questions for Chapter 3 Please write your answer to one of the following questions: • Do you believe sustainability is anthropocentric or human-centered? Why or why not? • I what ways are living systems alike and different from nonliving systems? • How would you define an “emergent property”? • Do you believe diversity is the most important principle of ecology? Why or why not? • Do you believe nature has an interdependent relationship with humanity? Why or why not? Please write answers for both of the questions below: • Why are your answers to these questions important to the people of your nation, your community, and to you personally? • After thinking about these questions, what might you do differently to make life better, for others and for yourself?

34. Spiral Learning: The Essence of Economic Sustainability in Each Session

35. Review of # 3Ecological Principles of Economic Sustainability Holism: A whole is more than the sum of its parts: the relationships among the parts are as important as the parts. Diversity: Differences among the parts give wholes the resistance and resilience to withstand adversity and the ability to renew, regenerate, and evolve. Interdependence: Mutually beneficial relationships among interdependent parts of wholes make them “something more” than the sum of their parts – emergent properties. Ecological principles must also be respected in social and economic relationships; society and the economy are part of nature.

36. #4-Social Principles ofEconomic Sustainability • Societies include all direct and indirect human relationships – economic, social, and ethical. • Human relationships are unique and special because we know what it means to be human. • Humans are not the only social species, but the only “intentionally” social species. • Humans relate not just for safety, security, and reproduction but for companionship, affection. • Cultural/ethical values evolve from social relationships. • Societies share core values: honesty, fairness, responsibility, respect, compassion.

37. Social Principles of Sustainability Trust: Rule-based, universal; depends on core values of honesty, fairness, responsibility. • Ignorance/betrayal of trust has consequences. • In business & politics: loss of public confidence • In marriage & friendship: loss of companionship • Sustainable relationships depend on trust. • Demand honest and truthfulness • Reject discrimination: race, gender, age… • Expect and require responsibility

38. Social Principles of Sustainability • Kindness: Care-based, situational; depends of core values of empathy, respect, and compassion. • Lack of kindness has consequences: • Everyone makes mistakes, needs forgiveness, needs mercy or charity rather than justice. • Trust – being honest, fair, responsible – is necessary but not sufficient to sustain relationships. • Conflicts among social values can be resolved through internal consistency.

39. Social Principles of Sustainability • Courage: Good intentions without action are of little consequence; not just bravery; it takes moral courage to be trusting and kind. • Lack of courage has consequences: • Courage to reject end-based ethic: utilitarianism • Courage to reject labels of naivety and idealism • Courage to be make the social investments necessary for economic sustainability

40. Social Principles also Relevant to Ecological Relationships • Ecological principles cannot be in conflict with social principles; truth cannot be in conflict with truth. • Relationships with nature have positive and negative consequences for other people. • Sustainable relationships with nature must reflect honesty, fairness, and responsibility. • Use of resources and the environment must reflect respect and compassion for others. • People must have the courage to be trusting and kind in their relationships with nature.

41. Social Principles also Relevant to Economic Relationships • Sustainable economic relationships must be based on trust: honest, fair, responsible. • Contracts may be necessary but not sufficient. • Sustainable economic relationships must also be based on kindness: respect, compassion. • It takes courage to be trusting and kind in an economic environment which considers such things to be idealistic and naïve. • Industrial development destroys social relationships, threatens economic sustainability.

42. Questions for Chapter 4 Please write your answer to one of the following questions: • Do you believe human relationships have purely personal and social value? Why or why not? • How important do you believe a person’s relationships are to their personal development? • Do you agree that essentially everyone believes the core values of honesty, fairness, responsibility, respect, and compassion are essential for positive human relationships? • How would you explain the difference between a rule-based and care-based principle? • How would you define a trusting relationship? Can you sustain an economic relationship without trust? If so, how? If not, why not? • Does kindness affect your relationship with nature? If so, how? If not, why not? • How is courage different from bravery? How in courage related to interdependence? Please write answers for both of the questions below: • Why are your answers to these questions important to the people of your nation, your community, and to you personally? • After thinking about these questions, what might you do differently to make your life better, for others and for yourself?

43. Spiral Learning: The Essence of Economic Sustainability in Each Session

44. Review #4Social Principles of Economic Sustainability Trust: Results from honesty, fairness, and responsibility. Validations of trust strengthen social relationships. Violations of trust weaken and destroy social relationships. Kindness: Results from empathy, respect, and compassion. Everyone makes mistakes at times and needs forgiveness. Courage: Requires commitment in spite of adversity. Good intentions without action are of little consequences. It takes moral courage to be trusting and kind. Social principles also must be respected in relationships with nature and in sustainable economic relationships.

45. #5-Essential Economic Principlesof Sustainability • Purpose of economy derived from society but potential of society depends on the economy. • Individuals must meet their own needs plus contribute to needs of society and humanity. • Respect for basic human need for individuality, of thought and behavior, is essential for sustainability. • Principles of economic sustainability are principles of individual human behavior.

46. Economic Principles of Sustainability • Scarcity: Not enough for everyone to have all they need or want – source of economic value • Economic value is different from intrinsic value. • Contemporary conomic value is ‘exchange’ value. • Law of diminishing returns: less scarcity or more abundance, results in less economic value. • Law of demand: greater quantity, less value • Law of supply: greater quantity, more cost • Market price: price where value equals cost

47. Market Supply and Demand

48. Total Economy Supply and Demand

49. Supply and Demand for Labor or Employment

50. Reduction in Demand