Economics, Politics and Ethics.docx

5 Pages

Child and Family Studies
Course Code
ENSC 1005
Heather Kaye

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Monday March 18, 2013 Economics, Politics and Ethics (CHAPTER 26) Economy – system of producing, distributing and consuming economic goods Economic goods – any material items or services that satisfies people’s wants or needs Economic resources – kinds of capital used in an economy to produce economic goods Three types of resources (capital): 1. Natural resources – Earth’s capital 2. Human resources – People’s talents 3. Manufactured resources – items made from natural resources with the help from human resources Demand – the amount of goods or service people want Supply – the amount of goods or service that is available Economic growth – an increase in a nation’s capacity to provide people with goods and services Economic development – improvement of human living standards by economic growth Types of Economies 1) Subsistence economy – people meet most or all of their daily needs directly from nature and do not purchase or trade for most of life’s necessities - Oldest type of economy (comprises much of human population) 2) Pure market economy (capitalist market economy) – buyers and sellers freely interact in markets to determine which goods and services to produce, how much to produce, and how to produce and distribute these goods and services - Economic resources owned by private individuals and institutions - See FIG 26.2 - THEORETICAL IDEAL 3) Pure command economy (centrally planned/socialist economy) – central government determines in a top-down manner how to allocate resources - Economic resource owned by government 4) Hybrid (real world) economy – mixed economy where government intervenes in a market economy to: prevent monopolies or cartels, spread wealth, protect those who cannot attain basic needs, promote stability by controlling boom-and-bust cycles - See p.621-626 for other reasons Types of Economists Neoclassical – economic growth is necessary, desirable, and unlimited - Earth’s capital is part of a human economic system - Four fundamental assumptions: 1) Resources are infinite or substitutable 2) Long-term effects should be discounted 3) Costs and benefits are internal 4) Growth is good Ecological and Environmental – economic systems are part of the Environment that depend on the Earth’s capital which is irreplaceable - See FIG 26.4 - Distinguish between unsustainable economic growth and environmentally sustainable economic development - See FIG 26.5 Environmentally sustainable economic development – encourages forms of economic growth that meet the basic needs of current generations of all species without preventing future generations of all species without preventing future generations of all species from meeting their basic needs, and discourages environment;;y harmful forms of economic growth Strategies to help make the shift to environmentally sustainable economic development: - Use resources more efficiently - Use indicators to monitor economic and environmental health - Use full-cost pricing life-cycle costs - Eliminate environmentally harmful government subsidies and tax breaks - Shift taxes by increasing taxes on pollution and resource waste - Pass and enforce laws and regulations to prevent pollution and resource depletion - Use tradable permits to pollute or use resources within programmes that limit overall pollution and resource use - Use eco-labeling to allow consumers to make informed choices Economic Growth Technology – consumes natural resources so use a better technology and more efficient productions systems to produce goods and services with fewer resources Efficiency of resource use – produce the same or more goods and services with smaller input of 3 resources - Problem – replaces human workers with machines Ecologically unsustainable development – human population size and resource use must be limited to a level NOT exceeding carrying capacity, therefore SUSTAINABLE Economic growth is measured by GDP but this is a poor indicator because it: 1) Hides negative impacts 2) Doesn’t include depletion/degradation of natural resources 3) Hides/underestimates positive effects 4) Shows nothing regarding economic justice - Most governments and business leaders incorrectly use GDP to measure environmental quality or human well-being - Environmental and ecological economists are looking for new indicators to guide sustainable development - e.g. GPI (genuine progress indicator) developed by same group that developed the concept of ecological footprint GPI = GDP + benefits not included in + harmful environmental Market transaction and social costs Solutions: See Fig 26.16 Environmental and Political Challenges for this Century CHAPTER 27 Shifts in the way we view and deal with environmental problems since 1970’s: 1) Increasing concern about the harmful e
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