Economics and Ecology

The video below is a part of a series from the GUNT foundation for Environmental Economics. The audio isn’t great, but the content is absolutely fantastic. Not watching the video doesn’t jeopardize your understanding of this post.

With no doubt, one of the most interesting questions I would like to explore is that fact that both of those sciences, Economics and Ecology, share the same etymological root from greek,  οiκος (oikos), which means “home”. We can transcend the meaning of home by just meaning the house we inhabit. Economics studies the allocation of scarce resources, and in the limit, how people make decisions and react to incentives. Ecology studies the environment, the relationship between all living things, what guarantees the equilibrium, as well as what could generate systematic catastrophes.

In Economics, it is really clear that any type of crisis or financial bubble happen when people fail to recognize, at the time of decision making, to foresee the pass-through of their own actions and the interactions between their own actions and everyone else`s. That being said, it seems like the study of Economics has a lot to learn from Ecology. As almost everything has a counter-positive, environmental professionals are desperately trying to save the planet, could dedicate themselves to the art of comprehending people’s decision making processes, and how to create the right incentives to achieve their objectives.

May those two sciences share not only etymological roots, but also their principles.