Economic sustainability

This is meeting the needs of present generations without compromising those of the future. Sustainability aims to improve the quality of people's lives, now and in the future so it links to issues around growth and development, GDP and HDI and broader measures of development. Notice this means we should meet the needs of present generations as well as the future. Thus development aims to improve the quality of life of present generations now, and is part of sustainability.

Economic growth (by GDP measure) is now very fast in many poor countries so we are meeting the material welfare side of the definition better than we were, but perhaps threatening the future. The rise of China and India and others is rapidly increasing the demand for finite resources. Oil and mineral supplies may be threatened one day, just as we face global warming soon as the science strongly suggests. Also this might affect the social stability of these fast changing nations.

Also renewables are threatened. by Population growth, now 6. 5 billion people and expected to rise to over 9 billion in 20 years. Farmland, fish and forests and the environment are all under tremendous pressure as economies grow and industrialise, people want cars and houses with central heating etc. There are 3 areas to judge for sustainability. 1. Economic sustainability. 2. Social sustainability. 3. Environmental sustainability.

Economic sustainability means we need to increase GDP growth to lift present generations out of poverty and need. This also implies we must provide good human investment in both health and education so future generations are as productive as present. Clearly epidemics like aids damage present generations in the poorest countries and make it difficult to improve human capital for the future - apart from hurting the social sustainability of families that lose their parents or child.

Economic sustainability depends on human investment, capital investment and good governance to ensure these things continue so GDP grows well and is distributed fairly to all classes and groups. Economic sustainability depends on sustained improvements on the supply side in its broadest sense. Social sustainability is mainly to ensure good equity between social groups etc. Education must be available for all up to minimum standards. This means for women as well as men.

It means elementary education for all at least so all have the basic tools to live well in a modern society. Absolute poverty needs to be removes so that all groups have their basic needs for shelter, food and clothing met. Thus minority groups must have a good basic standard of living, so must pensioners. Needs for medical care must be general too. Sex equality must be strong in all areas including birth control which enables women to choose their lifestyle and help economic and environmental sustainability by reducing very high birth rates in the poorest countries.

Also unmanaged economic growth can damage traditional societies because growth demands so much change. It could lead to standardised consumption as modern capitalism with its advertising and economies of scale could produce much the same products being sold around the world in much the same chain stores. Environmental sustainability. This concerns itself with maintaining a stock of natural resources, a bank of natural capital, to pass on to future generations to ensure they have the same quality of life as today, or more.

We need broader measures than GDP or HDI to explore whether any country is only progressing at the expense of the future generations as it is using up its bank of mineral and energy resources, its fertility, its forest, fish and ecological diversity. Uncontrolled growth leaves the environment open to harmful negative externalities. Non renewables like oil, gas and minerals might be disappearing living little for the future. Poverty and overpopulation means the poor are forced to cut down forests for fuel and to exhaust their soil.

They leave little for their children to survive on and the world may be heading for malnutrition at some time without more sustainable methods. Often the problem is lack of property rights, this means the resource is a free good with no one owning the right to limit its use and charge a price. Thus many sustainability problems are outside the price system and a major market failure. No property rights mean no price to limit consumption and make efficient se of a scarce resource. This is very true of global warming and natural resources like fish and forests, especially tropical rain forest.

This can only be solved the governments taking action to assert their right to limit supplies through quotas etc and then charging, or even better using regulation to ban or limit use. This happens with fish quotas in the North Sea (UK), and pollution permit trading. The Brazilian government is only just now becoming strong enough to enforce controls against logging and burning of rain forests. This is a big problem, poor governance. Weak or corrupt governments in the 3rd world are not effective in imposing controls or property rights over their resources.

MNCs may well exploit their weaknesses to exploit the environment, use their labour force in unsustainable ways, and use up renewables like rain forests, as well as non renewables like mineral reserves. MNCS may of course act ethically, most try as they will be exposed by the media and lose sales. However in remote parts of the world subcontractors working for clothing chains etc may carry out unsustainable practices. The media, consumer pressure, but above all strong and good governments can gradually weed out these practices.