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How economic growth becomes a cost: The scarcity multiplier

Citation

Smith, Paul Edmund, How economic growth becomes a cost: The scarcity multiplier, Ecological Economics, 68, (3) pp. 710 -718. ISSN 0921-8009 (2008) [Refereed Article]


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DOI: doi:10.1016/j.ceolecon.2008.05.024

Abstract

Competent macro-allocation of natural capital would allow micro-allocation by economics to be fully useful and may help prevent the latter being confused with the former. This macro-allocation requires social choice, so to see whether it is likely to be competent the effectiveness of democratic politics is investigated. Dysfunction is predicted because democratic institutions produce elements of irresponsibility and ignorance. These permit inflation of want by supply (IWS), a positive feedback in which wants are increased by their supply, provoking more supply, hence more want. Four IWS systems combine under common conditions to indefinitely escalate the scarcity of natural capital, a crucial failure of macro-allocation. This ‘scarcity multiplier' causes apparently rational attempts to satisfy a few wants to exacerbate many, increasing dissatisfaction. Institutions for deliberative public participation may enable democracies to recognize and control IWS. Unless this is done the scarcity multiplier may make cost-benefit analysis misleading: it may make the costs of development projects exceed their benefits in proportion to their financial success.

Item Details

Item Type:Refereed Article
Keywords:Natural capital, Population, Contingency of preferences, Cost-benefit analysis, Macro-allocation
Research Division:Economics
Research Group:Other Economics
Research Field:Ecological Economics
Objective Division:Economic Framework
Objective Group:Other Economic Framework
Objective Field:Ecological Economics
Author:Smith, Paul Edmund (Mr Paul Smith)
ID Code:57943
Year Published:2008
Web of Science® Times Cited:1
Deposited By:Geography and Environmental Studies
Deposited On:2009-08-26
Last Modified:2010-04-12
Downloads:0

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