Can the Market Economy Deal with Sustainability?

Dirk Schoenmaker and Hans Stegeman ()
Additional contact information
Hans Stegeman: Triodos Bank

De Economist, 2023, vol. 171, issue 1, No 3, 25-49

Abstract: Abstract The central question in this paper is whether a market economy can theoretically and empirically deal with sustainability. A system analysis of the current neoclassical theory shows that the system components (goal function, interaction mechanisms, actors and outcomes) are predominantly defined in terms of economic growth and facilitated by market exchange. This fosters (over)production and consumption of private goods, crowding out public goods and preservation of the commons. The one size fits all ‘economic mechanism design’ cannot deliver social outcomes regarding sustainability. The explicit recognition that an economy has different domains (ecological, social, economic) broadens the options for incorporating sustainability within the economic system. This richer framework allows us to analyse the economic problem at hand: an efficient economic system in an inclusive society within biophysical boundaries. We show that the alternative for market economics does not only have to be government intervention but can also include private forms of collective decision-making.

Keywords: Market economy; Economic growth; Inequality; Social inclusion; Environment; Commons; Well-being (search for similar items in EconPapers)
JEL-codes: E61 H41 I31 O11 O43 O44 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1007/s10645-022-09416-6 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
Working Paper: Can the market economy deal with sustainability? (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:decono:v:171:y:2023:i:1:d:10.1007_s10645-022-09416-6

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/10645/PS2

DOI: 10.1007/s10645-022-09416-6

Access Statistics for this article

De Economist is currently edited by Rob Alessie, Bas ter Weel, Casper van Ewijk, Jan C. van Ours and Frank de Jong

More articles in De Economist from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().