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A new post on the environmental economics blog tries to link environment with economics. Like explained there, many environmentalists believe economics is somehow driven by concerns that are contrary to environmental goals.

The article argues that many current economists are very much concerned with environmental issues, even if they might have different approaches.

Of course economists don’t agree on everything, and there is always some economist hack at one of the rightwing “think tanks” who will put forth an outlandish idea—but by and large the most well-respected mainstream economists are squarely on the side of environmentalists.

Something I would like to add to the conversation, the origin of economics is actually founded in environmental concerns. Adam Smith was a professor of ethics, and the main argument of The Wealth of Nations was that free markets can maximize the productive use of resources. What is more environmental than that?

Over time, I have become more and more convinced that much of Keynes’ teaching has distracted the world from the true goals of economics. Keynes’ teachings tell us we should direct policy toward maximizing economic growth and employment.  As a primary goal, that distracts policy makers from the true goals of economics, the efficient use of resources for producing what we need and want.

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2 Comments

  1. Resources has the charactertic of inelastic, no matter how much change of the price of resources, the quantity of resources is still constant and limited, as the resources are one of the important factor for developing country, the higher and higher price of resources will cause the deteriorating terms of trade for developing countries, and they will have current account deficit during the International trade. Then using of resources wjwill cause the nagative externalities, resourses should be re-allocated by producer paying more of the real costs and consumers the real price of such goods. So in that way of thinking, that can not cause the maximize the productive of using resources.

  2. Actually, environment is not totally contrary to economic growth. To prevent deteriorating of environment, increasing number of companies will explor new areas and invent new technology which can make more profit with less resources. Besides, I think eco-friendly products are more popular as well. Thus,economic growth can be achieved in the process of protecting the environment.
    Good environment also helps the country to gain economic development.For example, fresh air is a factor of standard of living because it relates to citizens’ health. We cannot consider about long-run profit whitout protection of environment.


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