Antonio V. Osmeña
Estatements

THE words “economics” and “ecology” both come from the same Greek root, oikos, meaning “house or home.”

Ecology is the study of our earthly home-an analysis of interactions among species and between species and the environment. Economics literally means “household management.” Today, the term refers to the study of principles and customs that affect the production, consumption, growth and distribution of material wealth for human needs.

In spite of the common origin of these two terms, ecology and economics have scarcely interacted until recently. To most econo-mists, chambers of commerce and industrialists, economic growth is equated with progress.

Only a vigorously growing economy coupled with maximum production and maximum consumption is considered healthy and sound. Less developed countries are encouraged to develop and grow like the most developed countries. More economic growth is supposed to increase human well-being, help provide enough jobs, control inflation, help cure poverty and provide enough funds to clean up the environment.

Since 1970, the goal of ever increasing economic growth has come under attack by a growing chorus of environmentalists, economists and some industrialists. These critics argue that continued economic growth is neither possible nor desirable because of finite resource supplies and the limited ability of the environment to absorb heat and waste matter. They believe that the harmful consequences of economic growth often outweigh the benefits.

The issue is more complicated than growth-at-any-cost versus no-growth.

The recent world economic meltdown is a blessing in disguise for the world leaders to determine: (1) which forms of economic growth are neither desirable, necessary nor inevitable; (2) the major need to use economic rewards and penalties to redirect growth and eliminate waste; (3) to determine which types of growth have good effects and which have bad, or about how to measure these affects; and (4) by placing a monetary costs on the bad effects, the price of any form of economic growth can be made to reflect such costs, and undesirable growth will be discouraged.

It is about time that economists use gross domestic quality (GDQ) instead of gross domestic product (GDP). To many environmentalists and to some economists, GDP is a misleading indicator of the quality of life. Producing more cigarettes raise the GDP, but also causes more cancer. This increases medical expenditures, which increases the GDP, but in a negative way.

In the same way, having more automobiles causes more accidents, more congestion and more pollution, yet causes the GDP to grow—but again, by incurring costs of a harmful activity. Waste in government is also included in the GDP.

Most economists agree that we need a better indicator than GDP for determining the quality of life. A number of scholars are
attempting to develop definitions and measures of the quality of life based on a concept such as the GDQ. For example, we put a value on the positive—such as clean air, clean water and narra trees.

The Overseas Development Council has devised a physical quality of life indicator (PQLI) based on three social indicators—life expectancy, infant mortality, and literacy—to be used instead of per capitalism, socialism and communism, which have the same need to increase economic growth continually by increasing the rate of flow of matter and energy resources through each national economy.

The resulting rise in pollution is a problem in all industrialized countries. Economists also find that modern economic models cannot be used to predict and control the economy as well as they had hoped. This strongly suggests that the problem is economic theory itself.

It has been suggested that instead of tampering with dangerously out-of-date economic models, economists should develop a more comprehensive and realistic body of economic theory based on preserving the health of basic biological systems (fisheries, forests, grasslands and croplands), which form the foundation of the global economic system.

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(December 3, 2008 issue)
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