Sustainability for Human Wellbeing
The equity equation asserts that, whereas inequity results to more conflict, equity leads to stability. As such, without being burdened by other inequitable factors, free market can balance out with free market capitalism. Therefore, inequity is prevalent in those situations whereby the available avenues for selling one’s products are controlled by few people for their own advantage to the detriment of the greater good of humanity (Hayek, 2007).
Because of global risk and scarcity, inequity is unsustainable and at the end of the day conflict has to break out. When economic control over means of production takes place, what happens is that all aspects of the people’s lives end up being controlled. Therefore, profit ought to be looked at by considering aspects such as social welfare and the ability of the environment to sustain those relying upon it in the long-term.
There have been suggestions that GPI (Genuine Progress Indicator) should supplement or take place of GDP (Gross Domestic Product) as the means of measuring economic growth (Stiglitz, 2012). The rationale for this is that GPI takes a much fuller account of how a country’s economy stands by incorporation of the social and environmental factors which the GDP does not usually measure. For example, various GPI models decrease in value when the poverty situation becomes worse.
GPI is especially used for green economics whereby, it factors in the various carbon footprints and environmental footprints, which businesses produce or eliminate. Therefore, by use of GPI, there are no externalized costs (Stiglitz, 2012). GPI, unlike the GDP, factors in the equation that prevail ecological impact. Therefore, we can say that GDP (that is the value of all what has been produced) minus the social and environmental costs is equal to GPI. In other words:
GDP-Social and environmental costs=GPI.
We can conclude that GPI is zero where the monetary costs of pollution and crime are similar to the monetary gains from the production of services or goods, where all other factors are constant. To ensure sustainability, there is a need to factor in the carrying capacity of the available resources (Hayek, 2007). For instance, water and energy can be made capable of supporting those relying upon it by reduction of wastage. For instance, instead of using two cars, a husband and wife can do carpooling.