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by Peter Hume, columnist

The great concern of the environmental movement is that our current standard of living and levels of consumption are not ecologically sustainable.

Ecological sustainability refers to how much resources we can use without reducing the future capacity of the resource base to provide for future use.

Interestingly enough, the concept of sustainability is similar to the economic concept of capital. Capital refers to how much resources for production — production goods or capital goods — can be used to provide goods to be consumed, without reducing the capacity of the original production goods to provide for future consumption. (Producing goods so as not to reduce the future productive capacity of the capital is called profit. Producing goods so as to reduce the future productive capacity of the capital is called loss.)

However the economic concept of capital is limited only to those resources which can be subject to economic calculation in terms of money prices, whereas ecological sustainability refers also to resources that cannot be calculated in terms of money prices, either because they are not the subject of private property rights, or because they are end values in themselves.

Calculation in terms of money prices is only useful for values which are a means to an end. It cannot be used for values which are an end in themselves. For example if you are hungry, you can figure out whether you’d prefer $4 or a sandwich. But you can’t value the niceness of your mother in money terms, or the beauty of a sunset, because these are end values in themselves.

The fact that economic calculation cannot be used to evaluate things which are valued as an end in themselves in no way reduces the usefulness of economic calculation. This is because for things you value as an end in themselves, there is no need to compare with money prices.

The hostility of many environmentalists to producing things at a profit seems misguided, because the alternative is to produce them at a loss, which uses up more resources, and is less ecologically sustainable.