Economics, biology and society

Without a sympathetic understanding of economic mechanisms, it isn't possible to offer advice on the interactions between nature and the human species.

Partha Dasgupta has written this in a review of Jared Diamond's Collapse (that I found via Resilience Science). He has more wise things to say. We are right to worry about environmental decay, but we must weigh environmental costs against benefits to human welfare. Some of our present actions have environmental costs that extend, or may even grow, into the future, but those same actions may also have welfare benefits that extend or grow into the future. Market prices are often our best estimate of the state of natural resources. And "the scarcity of resources can itself act to spur innovations that ease those scarcities."

Dasgupta is not complacent about the future. He argues that the world's poorest countries are losing natural capital more rapidly than they are creating other forms of capital (infrastructure, knowledge, skills and institutions) needed for future growth. He warns that some future changes may be so rapid and unexpected that adaptation will be traumatic; and that once we run out of certain resources, substitutes may turn out to be very imperfect and costly.

What kind of society is best suited for dealing with these problems?