The Economic Dimension
The economic dimension of sustainability is complex and there are quite a few disagreements between the parties involved in the discussion. To define rules of economic sustainability, authors use different approaches. Daly (2007b), for example, assumes that “the economy is a subsystem of the larger ecosystem, and the latter is finite, nongrowing, and materially closed”, thus claiming that the economic dimension is subordinate to the ecologic dimension. He is supported by von Hauff and Schiffer (2013) who state that the economic and social system cannot be sustainable in themselves. They need a certain quality and stability of the ecological system to work, therefore, stakeholders’ adaption to the resilience of nature is necessary. The alternative to this approach is offered by the representatives of the sustainability models claiming equality for the dimensions.
A specific of the economic column is the creation of value, which is not necessarily limited by the laws of nature, as natural input is combined with knowledge. Therefore, the criteria for economic sustainability have to include not only physical capital and natural resources, but also human capital and technical and organizational knowledge (sometimes summed up as social capital). But apart from some general rules like the preservation of assets, criteria suggested differ widely, mostly based on different assumptions regarding factor mobility (BLAZEJCZAK, Edler 2004). The German Network for Sustainable Economics developed a set of economic management rules to comply with the requirements of a sustainable development (cf. Figure 18).
Figure 18: Economic management rules
(Netzwerk Nachhaltige Okonomie 2012b)
The first rule sounds simple but has not always been followed to date: that one has to consider the economic consequences of economic actions. The second rule, the guar?antee of fulfilling basic needs with sustainable products, means that individual and societal needs must be fulfilled efficiently, but within ecological limits. Therefore, economic policy must encourage all innovations and changes towards sustainable production. The appropriateness of prices means that they have to include externalities. The balance in foreign trade is a common requirement, but the sustainable addition is that goods are only exchanged if they cannot be produced efficiently (i.e., if internalizing all externalities the foreign goods are still cheaper or better) within the country. This would also reduce economic dependency on other countries. The last rule, a functioning budget, is also extended with the demand for an adequate endowment with merit goods. That means that the functioning budget has to go hand in hand with sufficient collective and merit goods to improve education and human capital, among others (Netzwerk Nachhaltige Okonomie 2012b). To fulfill those requirements, three main actors within this dimension have to be taken into account: the govern- ment/politics, companies and consumers.
-  Herman Daly is one of the Founders of the International Society for Ecological Economics andcan be counted among the advocates for the precedence of ecology.