Ecological Economics

Economics is conventionally considered to be a social science that examines the allocation of scarce resources among various potential uses that are in competition with each other. As such, economics attempts to predict and understand the patterns of consumption of goods and services by individuals and society. A core assumption of conventional economics is that individuals and corporations seek to maximize their profit within the marketplace.

In conventional economics, the worth of goods or services are judged on the basis of their direct or indirect utility to humans. In almost all cases, the goods and services are assigned value (that is, they are valuated) in units of tradable currency, such as dollars. This is true of: (1) manufactured goods such as televisions, automobiles, and buildings, (2) the services provided by people like farmers, doctors, teachers, and baseball players, and (3) all natural resources that are harvested and processed for use by humans, including nonrenewable resources such as metals and fossil fuels, and renewable resources such as agricultural products, fish, and wood.

Ecological economics differs from conventional economics in attempting to value goods and services in ways that are not only based on their usefulness to humans, that is, in a non-anthropocentric fashion. This means that ecological economics attempts to take into account the many environmental and social costs associated with the depletion of natural resources, as well as the degradation of ecological systems through pollution, extinction, and other environmental damages. Many of these important problems are associated with the diverse economic activities of humans, but the degradation is often not accounted for by conventional economics. From the environmental perspective, the most important problem with conventional economics has been that the marketplace has not recognized the value of important ecological goods and services. Therefore, their degradation has not been considered a cost of doing business. Ecological economics attempts to find ways to consider and account for the real costs of environmental damage.