Chapter 4: Economics

Tai Munro

Key Ideas

In this chapter, you will learn about:

  • how value is determined
  • current alternative economic models

Generally speaking, when people think of sustainability, they think about the environment. We’ll see how this is being questioned from a social and cultural perspective in the next chapter. The economy is often included in some form, whether we intend to or not. When considering the following two models of sustainability that we considered at the start of this text, you will notice that the economy has a prominent position in each.

Three interlocking circles like a venn diagram. Circles are labelled as social, economic, and environment respectively. In the middle, where all three overlap is labelled as sustainable
Venn diagram of sustainability. Image adapted by Tai Munro. CC0
Three embedded circles. Environment is the largest circle. Inside it is a second circle labelled society. Inside society is a third circle labeled economy
Embedded circles model of sustainability Image adapted by Tai Munro. CC0

The image with the interlocking circles, is visually very similar to the model of the triple bottom line from business: people, profit, planet. Do you think that profit is the same as economic?

The image with the embedded circles can be problematic. While the intention is to show that society must be nested within the environment and the economy must be nested within society, some interpretations see this as the economy is central and, therefore, the first concern above both society and environment. There are no clear answers here, and achieving sustainability requires asking some difficult questions. The following podcast (16:55) discusses some of the current consequences of how we currently think about economics and some alternatives. Listen (recommended) or read the following and consider how value and success might impact how we act. This post was originally published at under CC-BY-4.0 by Munro (2020).

Reflections on Value and How We Measure Success

Regardless of your opinion of the role of economics in sustainability, it is impossible to argue that the economy does not currently have a large impact on each of our lives and our lives as a community. It is difficult to be concerned about changing light bulbs if I can’t put food on the table, or if I don’t have a table to put food on. It is also interesting to note that economics used to be known as political economy — that is, until the powers that be decided to science it to make economics more like sciences like physics, impartial and non-value driven (Mazzucato, 2018). This sits poorly for me, as a student of science, because there is growing recognition that science is value-laden, rather than value-free. And really, that’s where we need to start: by thinking about value. For the next couple of minutes, I’m hoping that you might think about three different questions. I’ll ask you a question and then give you 30 seconds (s) to answer it. If you want to grab something to write on, put me on pause and go do that. There will be background nature sounds playing for the 30 s.

Look around you, what elements in your environment have value to you?

-30 s-

If you need more time, feel free to pause me again and continue your list. Just press play when you’re ready to continue with the next question.

What elements in your environment contribute money to the economy?

-30 s-

Now compare your two lists. What made it onto both lists and what didn’t? What does comparing the two lists make you think or feel?

-30 s-

I did this activity while sitting outside in a city park. That’s something I value, having access to open spaces and being able to interact with nature. I value the time I have spent with friends in parks. I value the trails I can ride my bike along and the river I can paddle on. I value the sun shining down on me and the birds chirping in the trees. I can’t see them, but I know there is other wildlife around me too, like it should be.

But when I think about what contributes money to the economy, I struggle. The trails and facilities do require maintenance, so there are people who have jobs, but I don’t pay to use this park. There are education and sports programs that use the park, not to mention dog companions (most people call them owners, but can we own another being?). They all contribute money to the economy in some way, exchange of services or purchase of equipment. My friends and I might bring food to the park — that adds a little bit to the economy.

But what about when I compare my lists? It isn’t the food that we bring to the park that I value; it’s the time I spend with people I care about. I do value the people who maintain the park trails, but that’s so that I can continue to ride my bike safely and not have to pay to go to a gym just to get a workout. I enjoy the wind in my face — no economic value there unless we’re talking wind turbines. There is value to be found in the trees in the way that they prevent the bank from washing away, but not economic value. We can save money by leaving the trees in place, but if we need to support the economy as it is, we’d be better off to cut the trees down, process them for paper, and erect erosion guards on the bank to stop the river from washing the soil away.

The concept of value is one that we don’t often think about. What determines value? Is value the same thing as cost? Is the most expensive thing you own, also the most valuable to you? I remember going to a concert while I was a student. I had my computer with me and they wouldn’t let me take my bag into the theatre and told me I could leave it in their secure coat check. I was, shall we say, reluctant, but it had nothing to do with the value of the computer. It had everything to do with the value of what was on that computer, which was my entire thesis for my PhD. It was the time that I had put in. It was the thought that that document contained that I was terrified of losing.

Value is an interesting term, isn’t it? We’ve been confronted by it within the covid-19 pandemic. The value of things like toilet paper has suddenly been made clear, as was the value of the people who perform essential services, which, for a time anyway, included grocery store staff. For many, the value of a teacher who spends their day helping 30 eight-year-olds learn also became abundantly clear. Funny how none of those people are the highest paid in our society.

Generally speaking, when we measure how a country is doing, we look at the GDP or GNP. These are the gross domestic product or gross national product, respectively. It is the measure of the “value” of all goods and services produced in an economy. So, for the GDP, all spending is good and everything that doesn’t involve goods and services that are bought and sold means nothing. Therefore, as John F. Kennedy said,

Our Gross National Product (GNP)… counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl. It counts napalm and counts nuclear warheads and armoured cars for the police to fight the riots in our cities… Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile. (as cited in Anielski, 2007, p.27)

Think about that for a moment — a car accident is good for the economy because it results in spending on repairs or new cars, higher insurance, physiotherapy, and who knows what else. But being a safe driver with its reduced costs is not. Similarly, being active and eating healthy is less valuable to the economy than someone who eats poorly and smokes. Oh, and if you volunteer to do anything, or take on the challenge of being a stay-at-home parent, you are simply not a contributing member of society.

So long as the GDP continues to rise, we are told that we are on a good path, but the research says something else. Yes, you need enough money to meet basic needs and a bit above that, but beyond a certain point, more money does not equate to more happiness, or as Anielski (2007) puts it, more well-being.

This is where the idea of universal basic income or universal basic services might enter into the discussion. What if everyone had the ability to access basic services either because they were simply available (acknowledging, of course, that for this to occur, we would need to first tear down the systemic racism and inequality that prevents many from accessing the services that are available) or because they were guaranteed enough income to be able to pay for them. Of course, someone might ask who determines what is basic, and we end up back in a conversation about value. Is access to healthy food essential? On that, we might be able to agree. But what about access to knowledge on how to prepare healthy food — is that essential? What would you say if someone got to go to a basic cooking class for free so that they could prepare food for their family? I’m sure someone out there would argue that it isn’t essential. What about a gym membership? Is that essential, or should people be expected to exercise outside at minus 30 or in a basic apartment that just gives them enough space to eat and sleep?

This question of who decides what is valuable is an important one that we rarely even consider, even in education programs designed to teach people about economics and business. And what is valued in terms of the GDP has changed over time. Did you know that finance and banking activities weren’t included in the GDP until the 1970s (Mazzucato, 2018)?

There is significantly more that can be said about the downsides of measuring success with dollars and cents, but the thing is that, unless we have an alternative, it is very difficult, if not impossible, to change. So, is there an alternative?

The first country to really try an alternative is Bhutan, a tiny country on the edge of the Himalayas. Bhutan was a monarchy, and their king decided that if they were going to interact with the Western world, they were going to do it on their terms, and that meant focusing on the well-being of the nation. Thus, they introduced Gross National Happiness which, according to Bhutan Prime Minister Dr. Lotay Tshering, “means contentment, control of your mind, control of wants in your life. Don’t be jealous with others, be happy with what you have, be compassionate, be a society where you can be more than happy to share.” It is “development with values” (in LaMotte, 2019, para. 5-6). Bhutan banned plastic bags in 1999 and tobacco in 2005 and a minimum of 60% of the country must remain under forest cover.

New Zealand is another country that is trying a different model. With their well-being budget and the Living Standards Framework (LSF), they “consider that drawing on a range of data and evidence to understand the interdependencies and trade-offs across the different dimensions of wellbeing is simply robust economics” (New Zealand Government, 2019, para. 5). The LSF includes 12 domains of current well-being, including housing, income and consumption, but also social connections, cultural identity, and even subjective well-being. It also includes four stocks: natural capital, social capital, human capital, and financial and physical capital.

Doughnut economics, developed by Kate Raworth, is a model of economics that argues that we need to meet the needs of people without exceeding the limits of the environment. It too is gaining traction, as locations like Amsterdam look to recover from the recession triggered by the covid-19 pandemic while also addressing the extensive social and environmental issues of the times (Doughnut Economics Action Lab, 2020).

There are other alternatives as well. Modern monetary theory argues that countries that issue their own currencies can’t actually run out of money the way an individual or a business can, and, therefore, the idea of a country going into debt is a social construct. We might also consider Indigenous economics, which recognizes that Indigenous peoples had trade and specialization, public infrastructure, property rights, and mediums of exchange long before Europeans ever arrived on Canada’s shores.

So, we started thinking about what we value and where do we finish? Well, we finish rethinking the mentality that the economy we know is the only possible option. There are questions that need to be asked by every individual, community, and country. What are the things that we wish to measure our success on? Is a system that is supported by the negatives of society like poor health and systemic racism the system we want to be using? What would it take to achieve change?

Anielski, M. (2007). The economics of happiness: Building genuine wealth. New Society Publishers.

Doughnut Economics Action Lab with Biomimicry 3.8, Circle Economy, and C40. (2020). The Amsterdam city doughnut: A tool for transformative action. Retrieved from

LaMotte, S. (2019, September 13). Meet the smoking-free, carbon-negative country that passes no law unless it improves citizens’ well-being. CNN health.

Mazzucato, M. (2018). The value of everything: Making & taking in the global economy. Public Affairs.

New Zealand Government. (2019). Te Tai Ōhanga The Treasury: Our living standards framework. Retrieved from

Sometimes we are so embedded within the systems we operate in that it is hard to tell that it is a system or that there could be different systems. However, this is exactly what projects like doughnut economics, modern monetary theory, and Indigenous economics attempt to introduce: a new (or old) economic system that sees things like value and growth differently than the GDP. While all of these alternatives are interesting and relevant when it comes to sustainability, we are going to look at doughnut economics.

Activity 4.1: Doughnut Economics Discussion

Watch A health economy should be designed to thrive, not grow. As you watch, consider:

  • What surprised you in Raworth’s talk?
  • What opportunities can you identify in doughnut economics?
  • What challenges can you identify in doughnut economics?
  • Is there anything missing from Raworth’s model?

Systems Thinking and Economics

Consider Raworth’s (2018) discussion about the impacts of the view that economic growth is not just desired but necessary. If we think of that as being the goal of our current system, what are some of the potential consequences through the rest of the system? What feedback loops exist because our economy is designed to grow? What elements don’t get included into our system as a result of this goal? The goal of constant growth is what humans want out of the system, at least some humans. But then what are the emergent properties of the system? What is the observed behaviour of the system? What do the inner and outer circles of the doughnut model show us about how the system is behaving?

Reflection 4.1: Perceptions of Growth in Your Life

How does the idea that all growth is positive show up within your discipline or your personal or professional life? What are the consequences of this image for how you or others interact with those around you, including the natural environment?

Activity 4.2: Unthing

Go for a minimum of 72 hours without something that you would have used frequently in that time.

Being sustainable is often paired with the idea of sacrifice, but this is often because we can’t see another way. Your challenge is to identify what you gain from your unthing. Connect your experience in this activity to the discussion around doughnut economics and GDP. At the end of your experience, consider the following:

  • What your unthing was and why you chose it?
  • Identify 2 elements and 1 interconnection between your unthing and other aspects of your life.
  • How does your unthing relate to sustainability broadly?
  • What did you gain from your experience?
  • What was your experience of focusing on what you gained rather than what you were sacrificing?
  • Which economic model (doughnut or GDP) would be more likely to benefit from your unthing and why?


Lockert, M. (2022, July 22). What is Modern Monetary Theory? Understanding the alternative economic theory that’s becoming more mainstream. Business Insider.

Munro, T. (2020, September 18). Reflections on Value and How We Measure Success. Connecting with Science.

Raworth, K. (2018). A healthy economy should be designed to thrive, not grow [Video] TED Conferences.

Raworth, K. (n.d.). What on Earth is the Doughtnut?… Kate Raworth: Exploring doughnut economics.

Swiderska, K. (2021, April 13). Here’s why Indigenous economics is the key to saving nature. International Institute for Environment and Development.



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