Mind Blown: Real Economics and Protecting the Environment

Finally, I've found a rational method for being a conscientious consumer. I can't do everything, but I can understand how the system operates, and I can pull in the right direction.

For one thing: I'll never buy a natural diamond. I have a few I've inherited and a few I've been given, but the cost of extracting diamonds for the consumer market has always been brutal. I'm never going to be in that market again. I'll take synthetic, thank you very much. The Best Books on Economics and the Environment recommended by Deiter Helm, 2024-05-04, interview of Deiter Helm by Sophie Roell

There’s what economics is supposed to do, and there’s what economists actually do, and there’s a distinction between the two. Economics is really just about the allocation of scarce resources. It’s about allocating and making choices where there’s scarcity. The natural environment is, obviously, a scarce resource. It’s the critical building block of an economy and therefore why wouldn’t you be interested in how best to allocate this scarce resource?

So economics and the environment shouldn’t be separate subjects. But they are, because what many economists do is focus on this allocation as if it were a GDP problem. The public representation of economics is often, ‘How can we maximise GDP? How can we have more and more economic growth as defined by GDP?’ That, I think, is very short-sighted and quite a lot of economists now realise that.

But there are deeper problems, too. I’m interested in the longer-term, intergenerational effects. I’m interested in how we make sure that people in the future—citizens, not just consumers—have the ability to choose how to live their lives. Part of what’s required for that is not GDP flow and utility and trying to make people happy; it’s about making sure that these core infrastructure assets—of which natural capital is the most important—are properly maintained and passed on to future generations.

That is all economics, but it’s not economics as most people conceive of it. That’s why quite a lot of my work is critical of the conventional way in which economists address these questions.

From the perspective of a member of the public who’s trying to understand how they should behave, how should I be thinking about the challenges? Is it about who I vote for? Is it about what I do with my trash?

It’s about what you and I do because we are the ultimate polluters. Companies don’t go around thinking at the board table, ‘How can I do some more pollution today?’ Activists go and chain themselves to the railings or doors of oil companies. They think, ‘If only these nasty oil companies would do the right thing and close down fossil fuel production!’

But 80 percent of the world’s energy is fossil fuels. It’s 70-something percent in the UK. You and I buy that stuff. Companies wouldn’t produce the oil unless you used it. They wouldn’t produce the gas, whether it’s in the North Sea or elsewhere, unless you used it. We are the ultimate polluters. It’s us humans that make the world as it is.

We can try to organise in two ways. One is about what you and I choose to do. I choose not to fly. I’ve got loads of hypocritical behaviours that I engage in, but occasionally I try and do the right thing. We should all do our bit. That’s really important.

But it’s also about being aware that, as humans, we’re almost insatiable when it comes to consumption—and we don’t want to pay the costs. That’s why we have governments and laws that set frameworks, within which markets (and you and I) engage in exchange, production, and so on. We want a framework that curtails our insatiable expenditures and that makes us live within our means, save enough for our pensions, repair the potholes in the road and look after the rivers by stopping pollution.

It’s both of those things that we need to do. We can stop a lot of this.

Values Vs. Beliefs

Values weigh more heavily than beliefs with respect to our actions. (Hint: they have $value.) We are willing to pay the price to reach something we value.

Digital Tonto: Values Always Cost You Something, 2023-May-21 by Greg Satell

...values are often confused with beliefs. When you’re sitting around a conference table, it’s easy to build a consensus about broad virtues such as excellence, integrity and customer service. True values, on the other hand, are idiosyncratic. They represent choices that are directly related to a particular mission.

Make no mistake. Real values always cost you something. They are what guides you when you need to make hard calls instead of taking the easy path. They are what makes the difference between looking back with pride or regret. Perhaps most importantly, they are what allows others to trust you.

Without genuine commitment [to] values there can be no trust. Without trust, there can be no shared purpose.


Warren Buffet's recommended strategy: Assault your bad habits

Powerful strategies allow you to navigate an ever-changing world. Warren Buffet's strategic advice is to attack your bad habits—habits that hold you back. Those habits don't always start out being bad. Your environment, goals, and strengths change over time. You need to be in the habit of evaluating your habits. Which ones are holding you back?

My current bad habits are junk food, rabbit-hole research, and reading without a purpose. What are yours?

Inc.: Warren Buffett Says There Is 1 Key Choice in Life That Separates the Doers From the Dreamers, 2022-Jun-2 by Marcel Schwantes

Warren Buffett once advised graduating students... to learn and practice good habits early in life. The key, [he said], is to catch and change your bad habits before [they change] you for the worse.