On January 11's "Five on the Future" letter
Recently, Mainebiz published “Five on the Future,” asking five prominent Maine economists about challenges and opportunities facing Maine in the upcoming year. For the most part I agree with them, but one issue stood out for me: the rhetoric surrounding “greenwashing” (aka sustainability) and economic freedom. Both issues were clearly on the mind of Jonathan Reisman, one of your contributors. They are on my mind too, but for different reasons.
Reisman states that sustainability advocates rarely define the term. Sustainable economic development, in the term's current usage, was defined in 1987 by Gro Harlem Brundtland, former prime minister of Norway, and the World Commission on Environment and Development as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”
Economists differ on how best to achieve that goal. Nonetheless, it is an important guide for economic policy.
Sustainable economic development can best be considered as balancing a portfolio. We have certain assets that can be used to heighten our economic productivity, including manufactured capital and financial capital, but also including natural capital (our forests, fisheries, and clean air and water) and human capital (our workers and their skills). So sustainable economic development involves increasing the productivity of our overall economy without compromising the value of our assets.
When economic growth, narrowly defined as increases in GDP, is pursued without thought to sustainability, the consequences can be devastating, even deadly. Speaking as a dispassionate economist, many of our “assets” may have been irrevocably damaged.
We may need to worry about the loss of economic freedom and “crony capitalism,” as Reisman points out. But we also need to take care of our assets, including natural and human capital. It's not greenwashing. Just good economic sense. / Rachel Bouvier, rbouvier consulting, Portland
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