Defining "conventional" and "sustainable" economics
Economics is broadly concerned with the core question of how to allocate scarce resources to meet unlimited needs1. As the "Production, Distribution, and Consumption" strand of the National Social Studies Standards states,
"People have wants that often exceed the limited resources available
to them. As a result, a variety of ways have been invented to decide
upon answers to four fundamental questions: What is to be produced? How
is production to be organized? How are goods and services to be
distributed? What is the most effective allocation of the factors of
production (land, labor, capital, and management)?" 2
Given that these ideas form the basis of K12 economics education (and are derived from dominant schools of economic thought3), this article will refer to this paradigm as the "conventional" economic paradigm.
The sustainability paradigm shares similarities and differences with
its conventional cousin. Like the conventional school of thought,
sustainability also concerns itself with questions of scarcity, needs,
and distribution. But the sustainability paradigm begins with a
fundamentally different question: How can we create an
economic system that enables individuals and communities to thrive,
while also sustaining the capacity of the environment to support this?4
The question reflects the fundamental assumption of the
sustainability paradigm: economic activity occurs within, and depends
upon, larger ecological systems. In other words, the
economy is contained within the environment.
As explained below, this is more than an assumption–it is a basic
scientific fact that informs the models, practices, and policies that
distinguish sustainability from conventional economic thinking.
Before going further, a clarification of terms: As commonly
defined, the "environment" is all living (biotic) and nonliving
(abiotic) substances on earth that comprise our surroundings5.
In this definition, humans are part of the environment, not separate
from it. Moreover, the environment is everywhere, not just in the
rainforest, the artic, or other "wild" places.
In an economics context, the substances and materials of the
environment are often referred to as "natural resources." The term
"resources" implies that the environment is merely a set of materials
for human to use–an assumption which flies in the face of the biological
reality that all species (including humans) are part of the
environment. Sustainability-minded educators often use
"natural materials" as an alternative to "resources" to more accurately
reflect the fact that the environment supports all life forms, not just
Core principles of the sustainability paradigm
By now, the reader may begin to think that sustainability is really a
science topic. It isn't; however, economics in this paradigm is
grounded in some basic scientific ideas that can help educators make
their teaching more integrated and relevant. While some of
these concepts are too advanced for an elementary classroom, they are
provided here to introduce all educators to the essential
knowledge for teaching sustainability at any level.
Let's begin with an overview of five key principles6 that
all educators should understand (and with which readers may already be
familiar). To provide a context, the principles are applied to an
everyday item: a jar of strawberry jam.
Principle 1: All materials come from the environment. The
environment is the ultimate source for all raw materials used in any
economic activity. For the jam, essential materials include not
only soil and solar energy, but also silica (for the jar), metal (for
the lid), and trees (for the label). Technically, even a plastic
jar is not "man-made" since it is derived from crude oil, the decayed
remains of plants and animals.
Principle 2: Economic activity involves the transformation of natural materials.
Transformations occur at all stages of a product's life cycle,
including extraction of raw materials, manufacturing, distribution,
consumption and disposal. For example, making the jam required
growing berries (perhaps with machinery powered by diesel fuel), and
cooking them (powered by electricity from a coal-powered plant).
Moreover, making this energy available involved its own set of
transformations, such as mining, refining, and combustion. All of
these stages create outputs–wastes. This leads to the next idea.
Principle 3: The environment is the final "sink" into which all wastes go. The
wastes produced through jam-making (or any economic activity) go back
into the environment in one form or another: The glass jar may end up in
a landfill. The carbon emissions from processing the jam will go
into the atmosphere. As described in the next principle, these
wastes do not–and physically cannot–disappear.
Principle 4: There is no "away." The First Law of
Thermodynamics–a scientific law as basic as gravity, but far less
known–states that energy (including the potential energy in matter)
cannot be created or destroy, but only transformed. This means
that the wastes (outputs) produced through economic activity can change
physical or chemical form, but do not leave the
environment. For example, the plastic bag the jam was carried home
in can break into small pieces but it does not decompose. The
carbon emissions will circulate through the carbon cycle. If
leftover jam was composted, it will return to the soil as valuable
nutrients. (In this case, "wastes" are not polluting, but serve as
nourishing food for next year's crop.) In reality, then it is
impossible to throw something "away" since outputs are continually
changing form within the environment. (The Second Law of
Thermodynamics, entropy, constitutes another related principle, but an
explanation is omitted here for the sake of brevity.)
Principle 5: The environment provides critical life-sustaining services. Consider
the many–and often invisible–ways the environment plays a role in
producing the jam: Wetlands surrounding the strawberry field absorb
fertilizer run-off; trees absorb the carbon emissions while providing
oxygen; organisms in the soil maintain its fertility. The
conventional paradigm tends to ignore the value of these life-sustaining
ecosystem services, whereas the sustainability paradigm counts
them. In fact, a landmark 1997 study assessed them to be worth $33
trillion per year – almost double the global output of human-made good
and services, valued then at $18 trillion7. And while
such research invites speculation and debate, it also underscores the
importance sustainability places on the value (intrinsic and otherwise)
of the essential services provided by ecosystems.
Reflecting these ideas, Figure 1 shows the true relationship between
natural systems and human systems (the economy). Here, the
environment is not merely a factor of production (as it is portrayed in
the conventional "circular flow" economic model), but rather the
containing system for the economy. The diagram shows that
environment is the source of all materials humans use and the "sink"
into which all wastes go; moreover, wastes stay in the system and do not
Figure 1: The ecological economics model. The placement of the economy in
the center reflects the fact that it is contained by the environment,
not a suggestion that human activity is the "center of the world."
In the ecological economics model, the placement of the economy in the center reflects the fact that it is contained
by the environment, not a suggestion that human activity is the "center
of the world." It is important to clarify these ideas with
The principles described add up to a simple fact: the economy exists
within, not apart from, the environment. This raises several
critical questions: Does our culture–and the economic systems that
result from it–acknowledge this fact? To what extent are we
designing production processes, markets, and policies to reflect the
reality of interdependence? To what end are current
indicators such as the GDP serving the well-being of the larger system?
Preliminary answers to these questions can be found by exploring a
few other conceptual differences between the sustainability and
Full-cost accounting: In conventional economics, indirect or
unintended impacts such as pollution are considered
"externalities." For example, the carbon emissions produced by
driving are not counted in the price of gas. In the jam example,
the carbon emissions and other wastes are not reflected in the jam's
price, creating hidden subsidies that make it artificially
cheaper. A sustainability paradigm approaches this differently,
and attempts to quantify external environmental and social costs using a
"full cost" approach. The research mentioned above is an example
of ecosystem valuation: identifying the true value of these vital
service so that markets function with more accurate price signals.
The Commons: Air and water are examples of environmental
"commons" that all species depend on–but which are limited and/or
degraded by overuse. How we allocate these needs–and whether we
recognize them as basic rights–are the policy questions surrounding "the
Commons." (Economist Elinor Ostrom won the Nobel Prize for her work in
this area.) In a convention paradigm, overuse of the Commons is
often framed as the unavoidable "tragedy" of open access; consider the
overgrazed field described by Garrett Harden in his 1968 article "The
Tragedy of the Commons." Sustainability also recognizes the
potential for overuse, and seeks policy solutions that are equitable and
sustain the Commons; this may means a mix of market incentives,
regulation, cultural norms, and community ownership. Some of these
policy approaches overlap with conventional economics, demonstrating
again common ground between the paradigms.
Long-term vs. short-term return: A sustainability framework
recognizes that the well-being of human, economic and environmental
health are connected across time, place and scale–often in vast and
long-term ways. In this view, short-term actions are assessed by
their long-term consequences. In contrast, the conventional
paradigm tends to focus on short-term returns: profits, gross domestic
product (GDP), or stock returns. And, while these short-terms
measures certainly matter in a sustainability paradigm, but they do not
define "success" to same extent as they do in the conventional one.
Quality vs. quantity ("More vs. better"): Both sustainable
and conventional economics are concerned with the question of "utility"
(well-being). The sustainability paradigm measures well-being
through qualitative improvements in health, happiness, and
satisfaction of real needs. On the other hand, the conventional
paradigm tends to emphasize quantitative growth, with the
assumption that "more" is "better." Consider, for example, the
GDP: A rise in the GDP is considered good news, yet the GDP can rise as a
result of spending on crime, illness, or environmental clean-up.
The indicator does not differentiate between beneficial economic growth
and "gains" made through spending on negative things such as
crime. Sustainability indicators, on the other hand, consider
economic growth within a broader framework of community and
Of course, sometimes more is better, and sustainability recognizes this.
Having more food or water is better
for someone who is hungry; however, the sustainability paradigm would
consider not the only quantity of calories or food, but also the quality
of nutrition as well as broader impacts on the individual, environment,
community, and economy.
The "more or better" question is also reflected in each paradigm's
approach to global economic issues. In a conventional paradigm,
the term "developed" is typically applied to Western, industrialized
societies. "Development" is likewise defined as the process of
advancing "undeveloped" countries along a Western path–of making "them"
more like "us." These terms carry the assumption that
industrialization is higher up along the ladder of human evolution and
ignores questions of overall, long-term well-being.
In contrast, a sustainability paradigm focuses on these qualitative
factors, and takes a hard and honest look at the role of economic growth
in advancing these. When does growth bring real
improvements in people's lives and communities? In contrast, when
are increases in GDP tied to (or a result of) "bads" such as disease or
environmental destruction? This type of analysis is more
complex and accurate than the simplistic (and incorrect) assumption that
economic growth, measured in output or monetary terms, is the sole or
even best path to improved well-being. Moreover, the
sustainability paradigm requires exploring issues from multiple
perspectives–a much-needed competency in a diverse and global society.
From theory to practice: Getting started in the early grades
How can an elementary educator turn the challenging questions of
sustainability into effective and age-appropriate economics
instruction? The following section explains tested and effective
activities for teaching the most basic concepts to young learners in the
context of familiar topics. (See the Appendix for lessons and
resources to teach the more advanced principles not addressed here.)
Beginning the inquiry: What do we need for a fulfilling life?
As noted, the concept of "utility" (fulfillment; well-being) is
common to both "conventional" and sustainable economic frameworks.
This forms an excellent entry point. To begin, the teacher can
ask students to generate responses to the question, "What do we need for
a fulfilling life?" This can take many forms: brainstorming, or
prioritizing and sorting needs vs. wants.
This leads to the next question: "How do we get what we need?"
In a conventional paradigm, the discussion might be limited to material
products and the roles of consumers, producers, markets and money; the
teacher might have students give examples of these concepts in their
A sustainability approach looks different. First, students would have
defined a broader definition of well-being or "quality of life" that
goes beyond material products to consider friends, love, and other
non-commodities. (See Figure 2)
Figure 2: The sustainability definition of well-being or "quality of life" should
go beyond material products to consider friends, love, and other non-commodities.
Next, instead of focusing on money as the way to meet needs,
sustainability first asks students to consider the elements and
relationships that sustain their well-being. For example, children
might identify the role of families in providing needs, and the role of
the environment in providing air and water. In sustainability,
understanding how these elements work together–interdependence–is the
To further explore human-environmental relationships, the teacher can
provide the students with two lists of words: One lists natural
"Commons" (sunlight, water, air, etc.), and the other, human-created
physical and cultural elements (roads, power lines, stories,
language). Students must cross out the things they can do without
if they are to live a fulfilling life9. Usually,
nothing is crossed out, or there is a heated discussion about whether
one can have a fulfilling life without a computer. (This provides
an excellent opportunity to re-examine needs and wants, and to do
identify the real benefits of the computer: fun, education,
communication.) As students uncover, these are things we all need,
and the computer is but one of many ways to obtain them.
Students must next choose at least one word from each list (natural
and human-created), and describe how the two work together to provide
well-being. For example, students might pair sunlight and food
markets, noting that we need the sunlight to grow the food to sell at
the market. Through this, students see how the natural and human
Commons support each other in larger systems. Thus, sustainability
is not "against" conventional concepts such as markets and money, but
rather emphasizes the essential role of the environment in supporting
Questions of the Commons and well-being can also add a new lens to a
common early-grade activity: learning about families and communities in
other countries. Imagine how this might typically play out: The
teacher assigns Johnny to make a poster about family life in a Ladakh, a
remote part of India. Johnny selects images of traditional homes,
and people herding and making their own cheese and clothes.
During his presentation to the class, Johnny talks about how "poor" and
"primitive" the people are; the other children concur, noting the
decided lack of cars, video games and other technologies.
Through a sustainability lens, this activity has different
outcomes. Building on the "fulfilling life" activity, the
assignment now focuses on identifying if the family has what it needs to
thrive and the factors that contribute to this. This time, Johnny
comes to different conclusion: He realizes that the family's
home, made from local materials, is not only better suited to the
climate, it is also affordable and can be maintained using
readily-available knowledge and technology. Likewise, Johnny
discovers that the family's food is not only nourishing and fresh, but
that it also comes from plant and animals that are suited to the
environment, and is produced with traditional methods that sustain human
and environmental health. He extends his understanding of
technology beyond computers to include looms, water wheels, and other
tools made from local materials. Johnny also learns that skills
such as weaving and cheese making are important assets for community
life, serving not only as cornerstones of their economy, but also
vehicles for building intergenerational relationships.
The learning can deepen by encouraging students to think about shared
needs, similarities, differences, and ways cultures and communities are
interdependent. For example, students could create Venn diagrams
or make collages comparing everyday needs and ways they are met.
("Everyone needs clothes. How is the way you get your clothes
different from how the Ladakhis do? Why is this? What would
it be like to make your own clothes? Who in our class knows how to
sew?") This line of inquiry helps students explore the richness
among cultures while expanding students' conceptions of what has
value. (It is also a starting point for an essential intercultural
skill: considering issues from the perspective of a different culture.)
Teachers can further foster these outcomes with questions such as "If
you went to Ladakh, what would you like to do or try? What would
you like to learn more about?" Likewise, "If a child from Ladakh
came to our school, what favorite games or activities would you most
want to share with them?" This two-way questioning also reflects
another side of interdependence: that we all need to learn with, from,
and about each other. (This also avoids the problematic (if
well-intentioned) practice of holding up traditional peoples as a
romantic definition of diversity: "others" who are different (in a
wonderful way, of course) from "us." )
To serve as effective learning, a sustainability paradigm must avoid
naiveté in other ways as well. Returning to the
families-in-other-countries example, an honest investigation of global
well-being will surface inequalities, hunger, disease, and illiteracy
(with the level of disclosure appropriate to students' development and
prior learning experiences). For example, while the family Johnny
studied is healthy and stable, Maria may find a family that does not
have what it needs. But here, too, sustainability opens a door to
meaningful inquiry. Again, using well-being as a starting point
(and a foundational goal of economics), the teacher could ask, "Do all
families in the [school, community, nation, etc.] have what they need to
thrive? Why or why not?" This lens invites students to
learn more about needs within the community, the role of the economy in
meeting them, and ways students might contribute in positive ways.
A sustainability approach would help students experience multiple types
of exchanges, including a toy exchange (barter), a food drive
(sharing/gifting), or a student-led "buy local" campaign
(markets/monetized exchanges). As described below, framing
economics in broader terms than money and consumption is essential for
reaching all learning.
Of course, Maria or Johnny may themselves be the ones that don't have
what they need. Then what? How does a teacher make
economics not only relevant, but also a context for effective teaching
A sustainability paradigm offers multiple opportunities for building
authentic bridges among students' cultures, economic knowledge, and
deeper inquiry. The question and role of money in economic
exchanges provides a good example.
As noted, conventional economics tends to define economic activity in
terms of consumers, producers and markets, with money being the means
of exchange (with a token nod to barter and "traditional" economic
systems). The centrality of money in this framework omits other
exchanges, relationships, and "currencies" that may be more prominent in
the lives of low-income, homeless, and/or immigrant students: barter,
repairing, and non-monetized networks of exchange (car sharing,
community gardening, etc.).
In contrast, a sustainability paradigm provides opportunities to
examine and find the value in these types of exchanges. To begin,
after completing the "fulfilling life" activity, students could then
explore multiple types of relationships and exchanges they utilize to
meet their needs: sharing skills or resources within the community,
bartering, and/or buying. This approach not only broadens the
definition of economic activity, it also provides opportunities for
students to identify the resources and skills they do have, rather than
focusing on the money they don't.
For example, students can survey the knowledge, skills and resources
in their own communities. Who in our community knows how to grow
food? Fix a bike? Winterize a home? Surfacing these
skills can validate cultural knowledge while also making a bridge to
other forms of economic activity: How could Johnny use his
bike-fixing skills to earn money or barter for other needs? Thus,
rather than viewing low-income students as "deficient," the pedagogy of
sustainability and democratic education emphasizes the resources and
knowledge students do have. This inclusion of both monetized and
non-monetized forms of enterprise is thus essential for making economics
relevant to students of all socioeconomic backgrounds.
Of course, sustainability is not idealistic; it doesn't pretend that
money doesn't matter. On the contrary, the paradigm recognizes
that students must gain knowledge and skills to function in the
dominant, monetized economy. The approaches described are thus not
ending point, but rather a starting point: The goal is to identify
students' existing knowledge, and help them build on it to acquire the
skills needed to succeed in the "power" culture and the cash economy10.
The activities described are the perfect foundation for exploring a
full range of economic concepts through a sustainability lens.
This includes product life cycles, the Ecological Footprint, price. vs.
cost, economic indicators, trade, and more. While a discussion of
teaching these topics is beyond the scope of this article, readers can
find resources in the accompanying list.
As an instructional approach, a sustainability approach to econonmics
offers teachers an opportunity to build a foundation of economic
thinking that is integrated, holistic, and inherently connected to
students' lives and communities. The approach builds bridges to
learners of all backgrounds, invites students to explore real-world
issues through an interdisciplinary lens, and equips learners with
skills to be effective citizens. What more could an elementary
teacher ask for?
1. "20 Voluntary National Content Standards in Economics", National Council on Economic Education, 2009.
2. "Curriculum Standards for Social Studies", National Council for the Social Studies.
3. Mark H. Maier and Julie A. Nelson, Introducing Economics, Armonk, NY: M.E. Sharpe, 2007,
4. Herman E. Daly and Joshua Farley, Ecological Economics, Washington, DC: Island Press, 2004, page 5.
5. G. Tyler Miller, Living in the Environment, Belmont, CA: Wadsworth/Thomson Learning, 2002, page G5.
6. Herman E. Daly, "Introduction to the Steady-State Economy," Economics, Ecology, Ethics: Essays Toward a Steady-State Economy, Ed. Herman E. Daly, San Francisco, CA: W.H. Freeman and Company, 1980, pages 1-31. See also Herman E. Daly and Joshua Farley, Ecological Economics, pages 74-75.
7. Robert Costanza, Ralph d'Arge, Rudolf de Groot, Stephen Farberk,
Monica Grasso, Bruce Hannon, Karin Limburg, Shahid Naeem, Robert V.
O'Neill, Jose Paruelo, Robert G. Raskin, Paul Suttonkk, & Marjan van
den Belt, "The Value of the World's Ecosystems Services and Natural
Capital," Nature, Volume 387, May 1997, pages 253-259.
8. Herman Daly and John B. Cobb, Jr., For the Common Good: Redirecting the Economy Toward Community, the Environment and a Sustainable Future, Boston, MA: Beacon Press, 1989, pages 84 and 443.
9. Creative Change Educational Solutions, "Defining What Matters" (Lesson plan in on-line database).
10. Lisa Delpit, Other People's Children, New York, NY: W.W. Norton and Company, 1995, page 24.
For lessons and curriculum on sustainability and economics, visit the
Creative Change Educational Solutions web site.
This site offers free downloads with subscription-based access to an
extensive curriculum library. To view a slide show of ecological
economics concepts and teaching approaches, click
The classic article on
the Commons: Harden, Garrett. (13 December 1968). The Tragedy of
the Commons. Science, Vol. 162. no. 3859: 1243-1248. Available here.
For adaptable ideas on teaching sustainability and economics, see Santone, Susan,
"Eco-economics in the Classroom," Teaching Green:
The High School Years, Ed. Tim Grant and Gail Littlejohn
(Gabriola Island, BC: New Society Publishers, 2009), 96-102.
For a deeper analysis of
economics education, see Mark H. Maier and Julie A. Nelson,
Introducing Economics (Armonk, NY: M.E. Sharpe, 2007).
Center for the Advancement of the Steady State Economy is another useful website for
educators, providing clear explanations of the core ideas of sustainability and economics.
United States Society for Ecological Economics is a leading academic and scholarly
association for sustainability and economics. Their site has
documents and newsletters that provide background information on eco-economics.
About the author: Susan Santone is the Executive Director of Creative Change Educational Solutions, a national nonprofit focused on sustainability-based leadership and innovation. Under her leadership, Creative Change provides curricula and instructional change models to institutions that are reframing instruction through the lens of ecological economics, sustainable food systems, and other topics. A former classroom teacher, Ms. Santone is also an adjunct instructor in the Department of Teacher Education at Eastern Michigan University.