ES101 Lecture Notes - Lecture 7: Economic Capital, Human Capital, Natural Capital
Continued From Monday...
Does the government protect the bluefin tuna?
● The govt does not “protect” this species
● It tries to maximize fishers incomes from catching this species
● As we saw in lab 4, when it’s a choice between making $ and protecting a species or its
habitat, the species typically loses
● Govts are more willing to protect species like trumpeter swans that have no commercial
value and live in remote areas
Three main forms of capital according to classical economics
● Economic capital: i.e. money and things readily convertible to money
● Human capital: i.e. skills, talent, and labour that can be used to obtain money
● Physical capital: things that are made or manufactured to be used to produce wealth,
such as tools, machines, etc
Capital and monetary valuation
● Economic capital, human capital, physical capital
● Note that all can be assigned a monetary value
● Note the absence of any mention of natural resources, ecological goods and services
● Classical economics simply assumes natural resources will always be available
find more resources at oneclass.com
find more resources at oneclass.com
How do you overcome declining utility?
● Invent new types of pizza, sell things that people like to consume with pizza (pop,
wings), provide faster delivery service)
Key assumptions in traditional economic theory
● Economic growth is necessary
● The potential for economic growth is virtually unlimited
● Continuous economic growth should be the end goal of policy and decision-making
Problems with these assumptions
● Continuous economic growth implies continuous growth in consumption
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
The govt does not protect this species. As we saw in lab 4, when it"s a choice between making $ and protecting a species or its. It tries to maximize fishers incomes from catching this species habitat, the species typically loses. Govts are more willing to protect species like trumpeter swans that have no commercial value and live in remote areas. Three main forms of capital according to classical economics. Economic capital: i. e. money and things readily convertible to money. Human capital: i. e. skills, talent, and labour that can be used to obtain money. Physical capital: things that are made or manufactured to be used to produce wealth, such as tools, machines, etc. Note that all can be assigned a monetary value. Note the absence of any mention of natural resources, ecological goods and services. Classical economics simply assumes natural resources will always be available.
