Library Communiveristy Open Learning Course The Economy and Us: week 2 Overview
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Transcript of Library Communiveristy Open Learning Course The Economy and Us: week 2 Overview
Library Communiveristy Open Learning Course
The Economy and Us: week 2Overview
What is ‘capital’?
The ‘conventional’ viewAn extended view
What are the ‘flows’ in an economy?
The ‘conventional’ viewAn extended view – the basis of an ecological economyThe implications of the ecological model
What is ‘capital’?
In broad terms:
A ‘stock’ of something which has the ability to produce a flow of economically desirable outputs.It depreciates over time, but can be renewed
For example:A house: produces over time a ‘flow’ of ‘shelter services’.
A car: produces a ‘flow’ of transport services
Conventional economics …
Recognises two kinds of capital:
Fixed, ‘human made’ or physical capital – machinery, roads, buildings, various kinds of equipment, …
Financial capital: The financial (monetary) counterpart of ‘physical’ capital; the title to ownership
This latter usage is rather misleading – ‘finance’ is a further remove from practical use!
An extended definition recognises more
• Natural capital• Human capital• Social capital • (plus – the ‘conventional’ physical capital)
Natural Capital …
• … the services of the environment around us – for example:– Trees and plants take in carbon dioxide and
produce oxygen– Earthworms regenerate the soil– Microbes break down our waste– … [Your own examples?]
• Natural capital is a gift – and is easily damaged!
Human capital …
• … ourselves! People:– having skills– ethical positions– the ability to plan– think ahead– design and invent– the ability to learn and adapt
Social capital
• The ability to work together, identify and meet needs, settle disagreements/disputes
Physical/manufactured capital …
• As noted earlier – buildings, machines, roads, …
Economic production processes
Goods and services
Economic policy
Individual welfare
Manufactured capitalLabourLand
Consumption
Investment
‘Fixed’ investment, training, land improvement
Flows in the ‘conventional’ economy
QUB P&SD 2011/2012 10
Comments on the ‘conventional’
• Output is of two types: ‘consumption’ and investment. Split between the two determined by ‘economic policy’
• No mention of ’waste’• No mention of resource limits• ‘Welfare’ solely a function of consumption
Words again: ‘ecological’ or ‘environmental’ ?
‘Ecological’ preferred; it suggests a powerful concern to recognise and integrate
Flows in an ecological economy
Solar Energy
Natural Capital
Human CapitalSocial Capital
Manufactured capital
Economic Productio
n processes
Ecological services
Well-being: individual and community
Goods and Services
Wastes
Policy and
Culture
Waste heat
Restoration/Conservation of natural capital; Education and training of human capital; developing mutuality and trust; investment in manufactured capital
Positive impact on human capital
Investment
Consumption
Negative impact on all forms of capital
QUB P&SD 2011/2012 13
Much more to say …
• Four distinct kinds of capitals now explicit
• Investment – to maintain stocks of each – is a requirement (including ourselves!)
• Waste – and waste energy (heat) is recognised
• “Well-being” is a function of several ‘outputs’, not just consumption
• Solar energy drives the whole system
Waste … what can we say about it?
• What is it? How does it arise?• What waste streams can we identify?• Why is it a bad thing?• Can we do anything about it?
Synergy/symbiosis – spent grains in a brewery
http://www.zeri.org/ZERI/Beer.html