E D I T O R I A L
And then there were markets
In the beginning, God created humans and nature. Some believe it and some don't. Whatever the case may be, the two must co-exist, and while nature can do just fine without us, we can't do without nature.
Historically, humans developed three Big Ideas to protect and preserve nature. The first was based on ethical or religious principles, usually presuming the existence of some God or at least something that is greater than humans out there - mysterious, even bigger than reason.
Natives and aboriginals still call it Mother Earth or the Creator. He or She was good to them. So they try to be good in return to Him or Her. "Do unto others as thou wouldst have others do to you," as the old saying goes.
This first approach proved very sustainable, using internal ethical limits to how much one could exploit nature for one's own good.
The second approach was externally based on fear of condemnation, punishment or penalties for doing wrong to nature. This presumed the existence of something more powerful than oneself, such as a king, state, police, courts or banks.
Today, it's often called command-and-control, supported by tools such as laws, regulations, policing, fines, prisons and enforcement.
The third and most modern approach is based on markets. This presumes that the individual human being is at the centre of the universe. No greater or powerful being is above. It relies on individual self-interest in wealth and personal comfort. It is rooted in Adam Smith's concept of "The Invisible Hand."
It relies on the price one will pay for some thing or service. And if the price includes the damage that a specific thing or service does to nature, one will think twice of buying it. And if one decides not to buy, the producer of the thing or service may also think twice, to avoid losing profits. Ideally, as a result, the producer may then try to come up with greener things and services, so that consumer, producer and nature all win-win-win.
Big Idea Number Three is overwhelmingly popular these days in the developed world. This Bulletin's stories on economic instruments, climate change and transportation will show you that.
But is Number Three the best?
Time will tell. The future will most likely be variations of Big Ideas One, Two and Three. Depending mostly on what or who the centre of the universe is at the time.
