Download The American Dream is an institutionalized set of values pertaining

Introduction to Ecological Economics
Group 8: Wildcats
Charles Schaefer, Kellen Ryan, Cara Schacher, Henry Pfeffer, Eric Walth, Han Duong
June 27, 2017
Individual vs. Societal Needs
The American Dream is an institutionalized set of values pertaining to
accumulation of wealth, and consumption. Americans have been engrained in the idea
that the final goal as an individual is to make as much money as possible and to provide
as much as possible for ones family. While this is all good when looking at individual
needs, this pattern of behavior does not reflect the overall goals for a healthy society.
Quality of life is not measured in income per capita, but it seems that Americans have
been tricked into thinking that it is. The results of production and consumption generated
endless externalities have different impacts to our ecosystem, that eventually, society
must deal with. We must ask ourselves if we still believe in this Dream, or if we need to
reevaluate and how it might affects future generations.
Below is a graph showing how wealth might contribute to a nation’s overall
satisfactory with life. Those with high level of economic development are more satisfied
with their life than nation’s that are lower. Drawing from this, as a society, we believe in
the accumulation of wealth and consumption to make us happy, but disregarding the
impacts that is taking place within our ecosystem.
Environmental Ethics
When looking at the weight of individual needs compared to societal needs it is
important that one also considers some basic ethical obligations in relation to the
environment and others. While self-interest may blind one of the lives of others within or
between generations, we must begin to think of society as a whole if we want to function
to our full potential and maximize scarce resources for the future. This is an important
concept to consider when discounting the future, for our actions today, have their
repercussions for others tomorrow.
The Golden Rule- Fundamental moral value which is essentially to treat others
as you would like to be treated. When considering the environment and the future of
limited resources, it is vital to reflect on the greater good and the human rights of others.
Harm Principle- The harm principle was first derived by John Stewart Mill and
is as an ethical argument to stop people from harming others. In essence this concept
distinguishes self-regarding action (that which effects only his or her self) and other
regarding actions (actions that effect others). The main principle is that power can only
be exercised over another if it is preventing harm on others; that self-interest is not a
sufficient warrant for causing harm on others regardless of what generation they fall in.
This ties into the economic idea of social discounting by questioning the ethical
soundness of using up scarce natural resources.
Activity: A popular game of strategy known as the Prisoners Dilemma helps us
understand the balance between cooperation and competition. It can be applied to
business, politics, social setting, and economics as a medium for understanding
sustainable scale and communal cooperation. The most common setting is as follows:
Two suspects, A and B, are arrested by the police. The police have insufficient evidence
for a conviction, and, having separated both prisoners, visit each of them to offer the
same deal: if one testifies for the prosecution against the other and the other remains
silent, the betrayer goes free and the silent accomplice receives the full 10-year sentence.
If both remain silent, both prisoners are sentenced to only six months in jail for a minor
charge. If each betrays the other, each receives a five-year sentence. Each prisoner must
make the choice of whether to betray the other or to remain silent. However, neither
prisoner knows for sure what choice the other prisoner will make. So this dilemma poses
the question: How should the prisoners act?
Having read this hypothetical situation, go to the following site and see for yourself the
results of your actions. Play against the computer and get a better sense of how
cooperation and competition interact.
(http://www.princeton.edu/~mdaniels/PD/PD.html)
http://en.wikipedia.org/wiki/Prisoner's_dilemma
Pure Public Goods vs. Market Goods
In previous sections you learned how the individual actions of producers and
consumers manage to allocate our goods and services. Unfortunately there are some
knots in the system that prevents an efficient allocation. Many of the goods and services
have characteristics that make the market ineffective at allocating them.
To review, market Goods are goods that can be allocated affectively by the
market. These goods have two key characteristics that allow this. They are excludable,
meaning that someone can use the good and prevent it from being used by others
(property rights). Market goods are also rival, meaning that the use of a unit by one
person prohibits use of the same unit at the same time by another. Cars, houses, clothes,
boats, bikes, computers are all market goods that can be effectively allocated in the sense
of Pareto by market forces
It is when the good or service in question does not have either of these qualities
that big problems arise and allocation is not efficient. Information is an example of
excludable and nonrival goods. Most information is seen as nonexcludable because
everyone is able to access information. Firms could guard their trade secrets, but if the
secret leaks out, there is nothing to prevent others from using them. One person's use of
any information has no negative impact on someone else's use and it can actually lead to
improvements in quality. Information is meant to be shared and built on each other’s
idea to make it better. The problem is that information can also be seen as excludable.
Information flows through technology such as the internet, books, articles, television, and
by word of mouth. Not everyone have access to these resources; therefore, they are
excluded from the mainstream. People in many developing countries do not have access
to televisions or computers; their accessibility to information is limited compare to
developed countries.
Examples of some types of information exchanges:
http://www.scielo.br/img/revistas/ne/v32n3/18749f2.gif
Some essential public goods for human wellbeing are ecosystem services to
society. Examples are carbon sequestration by forests, or flood control by wetlands. The
services that are provided by the ecosystem are invaluable to our survival, however
because the market only offers incentive for producing and allocating market goods these
services get neglected. A local community will almost always convert the services into
market flows before concerning themselves with global public goods, even if the
community would benefit more from preserving the ecosystem service.
Activity 1: Markets do a good job of allocating market goods that are rival and
excludable. Pure public goods however are not allocated effectively through the market.
As a result many of our ecosystem services are ruined in order to derive market goods
from them. As an activity, come up with a few ecosystem services that suffer as a result
of the markets inability to allocate them. After this, research some of the policies that
regulate that ecosystem service. Describe the nature of the policy. Does it provide
regulation at a local, national, or global level? What are the regulations regarding the
ecosystem service? Do you think that it is affective?
Activity 2: http://mondediplo.com/2000/06/15publicgood
Read through this website about public goods. Think of some other examples of
public goods that weren't mentioned in the text. Write out how you would explain the
idea of public goods to someone who had no idea. Use some of the example you thought
of in your explanation.
Activity 3: http://www.springerlink.com/content/gk657721w2523555/
(will have to go through UVM libraries webpage to get full article)
Click on the link above and read through the article. What was the main goal of this
study? Do you think this was a valid experiment? Why or why not? If you could design
your own experiment to test the same question, how would you go about it? Design this
experiment and test it out! Did you expect the results you received? Why or why not?
How might you design your experiment differently?
Activity 4: Information is excludable and nonrival. This puts information in an
interesting place in terms of allocation. Intellectual property advocates suggest that an
individual should be able to profit of off effort put into ideas, while many others advocate
free exchange of information across the board. Read Steve Lohr's “New Economy; The
intellectual property debate takes a page from 19th century America.”
http://query.nytimes.com/gst/fullpage.html?res=9C07E4D8103AF937A25753C1A9649C
8B63
Take a stand and, in one page, defend your position on the exchange of information. Use
an example like printed word (books) or music (MP3) to explain yourself.
Net Present Value and Discount rate
Net present value is the value to us today of all cost and benefits from now to the
future. Taking into account of future generations is not easy for economists. With the
physical absence of future generations, do we have the right to decide for individuals that
can’t express their opinions? Contemporary people have a hard time deciding whether to
start saving some of these resources for future generations, or to just keep consuming, but
they do not express them in their decisions.
Discount rate looks at the rate or measure of how much future benefits are worth
today. People generally prefer to receive benefits sooner rather than later, but they are
willing to pay costs later than sooner. Also, money available now is worth more to
people than money received in the future. For most of us, the reason why we don’t look
deep into the future was because the deeper we look into the future, the more uncertain
we become. Uncertainty caused us to value the present more than we value the future.
Activity 1: http://www.springerlink.com/content/268277p47181866k/
(will have to go through UVM libraries webpage to get full article)
Click on the above link and read the full article. Pay close attention to the social discount
rates mentioned. Don't get too confused with all the formulas and math that get thrown at
you in this article; just try to get the basic idea.
After reading it, prepare a reflection on the article. Do you agree with what was said? If
not, why? Back up your argument with examples from the text. If you did agree with it,
provide examples and reasons why you do.
Try to find another example of how a social discount rate has been applied to global
climate change. Give a brief explanation of how they applied the discount rate and how it
differs from the first article.
Activity 2:
http://www.becker-posner-blog.com/archives/2007/02/discounting_gre.html
Read through this blog post about discounting greenhouse gas effects. Also read through
the comments. Prepare a reply post to this blog entry. You can be supportive of it, or
totally rip it apart. The only thing to keep in mind is to back up your statements with
examples from the blog itself, or from other credible publications.
Activity 3: Net present value and discount rate look at how people value the
present more than they value the future. Is this true for everyone? Survey at least ten
people regarding this topic. An example of a question could be: Would you try save
resources or reduce consumption for future generations, or would you use and consume
all that is available to you today? You can use this example question, or make one of
your own that is similar.
After surveying, graph your results. Explain the results and try to come up with an
explanation of the responses that people give you.
If you want to go in-dept with this, along with the question, you could ask people their
reasoning. (This would help you explain the reason why people give you the answer they
did.)
Additional activity:
This activity is designed for the teachers to assign students in-class and to
hopefully open up an in-depth, ethical and educational debate. This activity is designed to
get students to think about the psychology of consumption and rethink their ideas of
“wealth”. Hopefully the students will begin to think beyond monetary value and into
deeper, more important factors that are part of Max-Neef's Matrix of Human Needs.
Directions: Take the chart above and cut out each individual square. The first row of four
squares belongs to “Country 1”, the second row of four squares belongs to”Country 2”
and so forth. At the end there should be four separate piles of four squares. After this is
done, have your class break up into 4 different groups. After the groups are formed, go
around and issue each group a title (country 1, country 2….) and issue them their squares.
After squares are passed out, ask the groups determine amongst themselves, they would
rank themselves, based on the given characteristics, compared to the other “countries” in
the class in terms of “wealth”. After giving the students five or ten minutes, go through
each group and see where they thought they fell. The key to this part of the exercise is to
develop a debate. If a group ranked themselves higher based on GDP and didn't consider
quality of life, ask them to explain. Hopefully this will bring about some thought and
emotion from other groups and a debate will ensue. Good luck!
No trading done with
any countries.
Therefore a low
GDP but a free,
centralized health
care system.
Primitive, subsistence
lifestyle but all
natural resources are
available and
personal happiness is
extremely high.
Strong, centralized
government with an
approval rating of
95%
Average Life
Expectancy of 75
years
Central government
with an approval
rating of less than
10% and is extremely
unstable.
Major exporter of oil
and electronics,
Average life
giving it the highest expectancy of 65
GDP of all countries years.
in the world.
Tropical, aesthetically
appealing with
extremely fertile soil
but poor drinking
water.
No exports but
heavily reliant on
tourism from other
countries.
Average work week
of 20 hours but
housing is
communal with little
to no personal
consumption.
Citizens claim to be
extremely happy and
the life expectancy is
over 85 years.
No organized form of
government at all.
People are organized
in tribes of
approximately 20
with all communal
resources.
High levels of
intimate social
interaction and
affection from
family and
community.
Very primitive,
hunter-gatherer
society that is over
2000 years old but
average life
expectancy is only
45 years old.
Little or no health
problems, extremely
high happiness level
among citizens but
completely isolated
from the world.
All basic natural
resources are
available as well as
water and food, but
all of it is imported
from other countries.
Works Cited
Daly, Herman E., and Joshua Farley. Ecological Economics Principles and Applications.
Washington DC: Island P, 2004.