Green Economics Essay Example | Topics and Well Written Essays - 2000 words

Green Economics - Essay Example Green economics have so far been considered external to mainstream economics and there is a lot of discussion about whether they have any major points in similar. Green economics states that in the world we live in, needs looking after and if our daily transactions or dealings with each other affect the natural atmosphere, then it should be taken into account in decision making. As the natural resources are scarce, we can not use them wastefully, thus, our use of them should be noted. Besides, as our actions affect other human beings, such as a business decision affecting its consumers, suppliers, workers, shareholders, bank, the society and community etc, our actions can also affect non-human things such as plants, animals, the environment or the ecology and the different natural systems that exists around us. Green economics broadly encompasses the natural environment too while talking about social justice and other economic matters and has questioned some of the assumptions made by the classical economics. For this reason, it is often called non-neoclassical economics. ... Firms and individual also act separately on the basis on information and they have perfect knowledge. The assumptions of neoclassical theories include the profit maximizing behaviour of firms and the derivation of demand curves from the consumer indifference curves and budget lines to maximize their utility. Factors of production are analyzed by supply curves. It emphasizes on equilibrium and the aggregation of individual and firms' demands and supply curves. Bodies which shape up individual behaviour or are considered not as important are not emphasized. The conventional economics has taken a lot from this neoclassical approach in its assumptions and at the basic microeconomics level. Despite these derivations, there have been many individuals and economists who have criticized the neoclassical theories, especially when it came to the lack of attention given to the environment or the ecology. Green critics say that mainstream economists consider environmental and ecological considerations as externalities, which are a cost or benefit arising from an economic transaction or deal that affects a third party or people who are not directly related to the transaction. Conventional economics assume that the society's preferences are fixed and does not change or evolve with time or analysis. The green economists have often also shown distrust about capitalism which refers to an economic system where ownership is in private hands and economic decisions are made by the market economy. They do not believe that the "invisible hand" as called by Adam Smith makes the best decisions. The theory that self interest of individuals make them act in a certain way which brings