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EconomicsNeoclassical economics is based on Adam Smith’s belief that the market is the best method for theallocation of resources. The individual, led by an invisible hand through an unregulated and competitivemarket, responds to prices on goods and services, and brings about the efficient maximization of socialwelfare. As a resource is used, the market causes prices to rise naturally over time, induces theintroduction of resource substitutes, brings about capital augmentation for economic growth and assuresthe development of new technology. Neoclassical economics assumes that substitution is alwayspossible, which makes scarcity only relative (Underwood & King, 1989).Environmental economists accept the basic premises of neoclassical economics but work tointernalize environmental externalities. The market does have limitations: inefficiency due to monopolypower and public goods, inequity due to unfair distribution of benefits and unsustainability due toinadequate pricing and incorporation of externalities. But the majority of present-day economists workin the neoclassical framework and attempt to make adjustments for market imperfections.Ecological economics is an alternative system of economic thought to neoclassical economics. Thetraditional economic theorists argued that the market could ultimately handle any and all environmentalproblems. Another school of thought, however, emerged under the influence of Nicholas Georgescu-Roegen, Kenneth Boulding, Herman Daly and others (Georgescu-Roegen, 1975; Boulding, 1966; Daly1991, 1996, 2007). It questioned the sustainability of any market-generated Pareto optimal economicgrowth path. It argued that production requires the economic process to receive a continuous flow ofenergy–matter obtained from the natural environment. Extraction, use and discharge of this flow mustconform to the immutable laws of thermodynamics.Taking the laws of thermodynamics as an economic first principle, Georgescu-Roegen concludesthat a global society with an endlessly increasing thirst for material production, dependent upon acoinciding flow of resources, is doomed to extinction. Neoclassical economics is theoreticallyinconsistent with and unable to analyse the role of resource flows in sustaining the production process.Because the neoclassical paradigm accepts only relative scarcity as a first principle, it has a propensityto analyse incorrectly a world in which there is absolute scarcity. A market analysis, which assumes thatall scarcity problems can be accommodated by appropriate adjustments in resource prices, cannoteffectively incorporate in the economic process the impact of entropy or the running down of thecomplexity of the Earth’s resources.EthicsAristotelian virtue ethics states that we can define moral terms by identifying the qualities or virtues ofgood people. The approach is to look at good people and their actions and define their characteristics ortheir virtues (Aristotle, 1948; Hursthouse, 2007; Kraut, 2007). In a sense, virtue ethics is a bottom-upapproach, where it looks at the values or virtues identified in everyday language and behaviour andbuilds an ethical theory around those virtues.Kant’s approach was in a sense a top-down approach. He believed that there were certain universalprinciples and procedures that could be used to define moral status. He said that people should do theirduty, and this was able to be determined through the procedure of the categorical imperative. This hadat least two forms. The first is: act only on that maxim through which you can, at the same time, willthat it should become a universal law. The second is: so act as to use humanity, both in your own personand in the person of every other, always at the same time as an end, never simply as a means (Paton,1958).Utilitarianism also aims to establish a top-down principle. It states that an action is right when itsoutcome produces the maximum utility or happiness and the minimum amount of pain for humans andanimals in comparison with other relevant options. This calculus can be applied to individual acts orrules (Bentham, 1948; Mill, 1998; Ball, 2005). Utilitarianism is the ethic that underpins neoclassicaleconomics.203