The Sustainability of Economics

Abstract

Think about what you did yesterday. Think about what you’re going to do tomorrow. In economic terms, your actions are choices. Even if you went to work, that was a choice. You choose to go to work because you want the money, or you don’t want to get fired, or you actually enjoy going to work. And if you go shopping—whether at the grocery store or an art gallery—that is a choice, too. Even within those choices, there are choices: you could spend $0.99 per pound of bananas at the discount grocery chain, or you could spend $3.00 per pound of organic, fair-trade bananas at the farmers’ market (well, whether or not you could depends on where you live, but you get the idea). Maybe bananas aren’t your thing; maybe you chose to stock up on candy bars, instead. When you make these choices, you reveal some very valuable economic information: you are telling the world that you prefer one item or activity over the other. You are revealing your preferences. Why do you make your choices? In economic terms, the answer is simple: because the benefits are greater than the costs. Whether we know it or not, whether we think about it consciously or not, every decision we ever make is an economic comparison of costs and benefits.

The sustainability of economics is about enduring, surviving and thriving in the long term. Firms that best understand their competitive environment, the resources available to them, and the ways to extract value from those resources are the firms that survive and thrive. Because of the competition for capital and resources, growth will rarely be easy; others are fighting for the same success. The key to achieving success and economic sustainability over the long term is to understand the factors that drive growth and create competitive advantage.