I started school earlier this month. For those who don’t know, I’m a political economy student at Athabasca University here in Alberta. Political economy studies how economic theories work in the real world.
Anyhow, one of the things my first readings in both my microeconomics and macroeconomics courses mentioned is that “economics” is the study of how society manages its scarce resources. And one component of that scarcity management is “efficiency”, or how we get maximum benefits from these scarce resources.
We tend to view “efficiency” as strictly economic. How do we extract the wood from the forest that will bring us the most value at the mill? How do we extract enough nutrients from the soil to give us the highest yield in our crops? How do we extract the most coal from the mountain?
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But as I was pondering on this principle of efficiency, I realized that economics efficiency isn’t strictly financial. The maximum benefits don’t have to be financial benefits.
Maybe the maximum benefit of that unmined coal, for example, is to just leave it in the mountain, eliminating the risk of contaminating the drinking water of hundreds of thousands of people.
Maybe the maximum benefit to not extracting the most nutrients from the soil is that reduced yields force us to address the 1.3 billion tonnes of food that’s wasted globally every year.
And so on.
Sometimes there are benefits that can’t be bought. And not all resources must generate a profit.