Rethinking Teaching of Basic Principles of Economics from a Sustainability Perspective

Namrata Chindarkar and Dodo J. Thampapillai
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Namrata Chindarkar: Lee Kuan Yew School of Public Policy, National University of Singapore, Singapore 259772, Singapore
Dodo J. Thampapillai: Lee Kuan Yew School of Public Policy, National University of Singapore, Singapore 259772, Singapore

Sustainability, 2018, vol. 10, issue 5, 1-8

Abstract: In this paper, we posit that sustainability warrants explicit recognition in the teaching of basic principles of economics. The conventional exposition of conceptual and analytic frameworks in basic principles in almost all standard economics textbooks overlooks at least two basic flaws. The first of these concerns the collection of residual externalities that exist without being internalized in market transactions and hence fall outside the calculus of national income accounting. For example, not all energy resource prices capture the entirety of the damages inflicted on natural ecosystems. The cumulus of residual externalities threatens the feasibility of sustainability. The second flaw is the absence of sustainability as a necessary condition in the fundamental benchmark of perfect competition (PC). Sustainability, when explicitly introduced in the PC benchmark, results in significant changes to conceptual premises in economics. The most significant of such changes concerns the axiomatic differentiation between “goods” and “bads”.

Keywords: basic principles of economics; sustainability; residual externalities; perfect competition (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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