The Economics of Sustainability

Tyler Watts on Sustainability and Market Forces:

Sustainability:  An Assault on Economics

By Tyler Watts

Ah, the greens. They’re not just treehuggers anymore. They’ve been browbeating us to recycle, eat soy, save energy, drive less, ride the bus, and a thousand other ways to “act local” for many years now. Now they’ve even got a hip new huckster on the big screen: “No Impact Man,” your conductor on a first-class guilt trip to ecoland. Despite the massive popularity of their cause, I don’t think they’re satisfied. They want to control us. If we don’t watch out, these people hell-bent on saving the planet are going to end up micromanaging our daily lives.

The idea of sustainability itself sounds pretty benign — it merely implies that people ought to be forward thinking, prudent, and thrifty in their use of economic resources. And I’m OK with this basic idea — on the surface, it sounds like simple wisdom, in league with similarly bland and benevolent values like responsibility and generosity.

But deep down, there’s something unsettling about the basic premise of sustainability. Sustainability advocates — let’s call them “sustainists” — are damning in their fervor, poise, and rhetoric. Their ideology is pregnant with an accusation that the way things currently are is somehow unsustainable. There’s an alarmism here which essentially claims, “there’s a crisis, it’s your fault for being ignorant, irrational, and greedy. You must do as we say to fix it, or we’ll all die.”

This alarmist crusade, which underlies the sustainability movement, should rankle people with an economic understanding of the world. A basic tenet of economics is that markets are self-correcting and orderly; prices indicate resource constraints and guide people in economizing on their use. Prices change as underlying supply and demand conditions change, inducing appropriate adjustments in consumption and production patterns. Prices channel the profit motive — a natural aspect of the human condition — into productive and innovative activities. In short, prices work.

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