CAN WE REDUCE POVERTY AND PROTECT THE ENVIRONMENT?

CAN WE REDUCE POVERTY

AND PROTECT THE

ENVIRONMENT?

This final chapter brings together a number of the concepts, themes
and theories introduced and analysed in the preceding pages.We are
thus finally able to examine the two important questions that
opened this text: how to improve living standards for all without
sacrificing the needs of future generations.
Economics is concerned with scarcity and the need for choice.
Clearly, if Earth’s resources were limitless then there would be no
need to economise on anything – but instead humankind’s ideals
must always be constrained by the finite means at our disposal.
Since we cannot always have everything, we are faced with tradeoffs.
What goals do we seek to prioritise and which do we therefore
have to sacrifice?
Society can employ one of three decision-making systems to
address these issues. Central authority can issue commands as to
what, how and for whom things should be produced. (What legitimises
this authority is a question of political economy. It could be
democracy or dictatorship.) Free trade between independent buyers
and sellers may instead arrange all economic affairs, with market
prices signalling which, and how efficiently, social needs should be
met. Finally, there are some communities that leave economic
organisation to tradition – following the pattern of past decisionmaking
to embrace the demands of the present.