I have seen the enemy, and he is an economist Economic lessons for

I have seen the enemy, and he is an economist Economic lessons for the ecologically literate Jon D. Erickson Rubenstein School of Environment and Natural Resources University of Vermont

Academic Autism Autism, a disorder characterized by: Absorption in self-centered subjective mental activity (such as daydreams, fantasies, delusions, and hallucinations) Marked deficits in communication and social interaction Marked withdrawal from reality Abnormal behavior, such as . . . excessive attachment to certain objects

Pareto Efficiency When no one can be made better off without harming someone else

Fundamental Theorems of Welfare Economics 1. Pareto Efficiency implied by: a. Maximization of consumer preferences under budget constraints. b. Maximization of profits under technology constraints. 2. Any Pareto Efficient outcome can be supported with lump sum transfers.

Policy Implications Theorem 1 Exhaust Pareto Improvements Theorem 2 Exhaust Potential Pareto Improvements MB MC

Organization of Society Maximize individual well-being (utility) Maximize per capita consumption Maximize per capita GDP (production) Maximize GDP Specialization & exchange Free market capitalism World trade Globalization Maximize GWP

Pillars of the First Theorem 1. A theory of human behavior based on an isolated, rational, self-maximizing individual at a point in time 2. A theory of firm behavior based on perfect competition, production as allocating fixed resources, and exogeneous technical change

The Efficiency Criterion requires we: Ignore interpersonal, intergenerational, and interspecies comparisons Accept the rational actor model of human behavior Accept perfect competition Accept an economic system devoted to material production, free of social and biophysical constraints

The Ecological Economics Umbrella Human economy as a social system embedded in a biophysical universe Efficiency as a third-tier goal, behind sustainable scale and equitable distribution Allocation of scarce means among alternative desirable ends