Abstract

The current mainstream model of the global economy is based on a number of assumptions about the way the world works, what the economy is, and what the economy is for (Table 18.1). These assumptions arose in an earlier period, when the world was relatively empty of humans and their artifacts. In this context, built capital was the limiting factor, while natural capital was abundant. It made sense not to worry too much about environmental “externalities,” since they could be assumed to be relatively small and ultimately solvable. It also made sense to focus on the growth of the market economy, as measured by gross domestic product (GDP), as the primary means to improve human welfare. And it made sense to think of the economy as only marketed goods and services and to think of the goal as increasing the amount of these goods and services produced and consumed.