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Sustainable Development and Economic,Social and Political StructuresKarel MulderJanuary 8, 2010                           ...
Economic,Social & Political StructuresEconomic OrganisationMarket: free interactions between consumers and producers      ...
Economic,Social & Political StructuresThe Free Market EconomyThe free market economy is not a type of ‘natural system.In t...
Economic,Social & Political StructuresThe Free Market EconomyAdvantages of trade based on the assumption that labor is of ...
Economic,Social & Political StructuresDevelopment of the Free Market Economy19th century: social inequalityRevolutions, ce...
Economic,Social & Political StructuresEnvironments and Markets, changing equilibria     price                             ...
Economic,Social & Political StructuresRebound effects: contributing to a better environmentPeople are prepared to pay a li...
Economic,Social & Political StructuresA Sustainable Economy?Lock in:   Behaviour of others is copied: Windows, driving on ...
January 8, 2010   9
Economic,Social & Political StructuresPrisoner’s Dilemma                           Prisoner 1,      Cooperates    No polic...
Economic,Social & Political StructuresChicken’s DilemmaNot cooperating is an advantage if others                          ...
Economic,Social & Political StructuresResource Dilemma= Tragedy of the commonsUsing common resourcese.g. depletion of the ...
Economic,Social & Political StructuresExamples of Suboptimal Situations in a Free MarketIndirect routes in air travelDoubl...
Economic,Social & Political StructuresFree Markets and the Environment Trade in emission rightsResources: market is not se...
Economic,Social & Political StructuresSimon-Ehrlich wager5 metals were worth $1000 in 1980In 1990 they were worth only $ 4...
Economic,Social & Political StructuresPrices of Crude Oil in 2003  $100                                     2003 US$      ...
Economic,Social & Political StructuresSustainable Economic DevelopmentInternalizing external costs   Emissions, CO2   Soci...
Economic,Social & Political StructuresSocial Hierarchy, what does it mean?More than a set of decoded rulesRolesExpectation...
Economic,Social & Political StructuresAuthorityHow are authorities established?LegalMeritsScientific authorityMeritsAuthor...
Economic,Social & Political StructuresMilgram Experiment                  http://www3.niu.edu/acad/psych/Millis/History/20...
Economic,Social & Political Structures       Does changing social order inevitably lead to conflict?January 8, 2010       ...
Economic,Social & Political StructuresHow to influence behaviour?Group IdentityCommunicationExpectation with respect to be...
Economic,Social & Political StructuresNew Technologies and ChangeWhat are the effects of new technologies?How are they rea...
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  1. 1. Sustainable Development and Economic,Social and Political StructuresKarel MulderJanuary 8, 2010 1
  2. 2. Economic,Social & Political StructuresEconomic OrganisationMarket: free interactions between consumers and producers State involvement needed to enforce law Problem: ‘natural monopolies’ Lock inHierarchy: The State steers the economy for the common good Problem: Power is concentrated InnovationNetworks: Free market with checks to prevent socially unacceptable outcomes of a free market Problem: Complex, not very transparentJanuary 8, 2010 2
  3. 3. Economic,Social & Political StructuresThe Free Market EconomyThe free market economy is not a type of ‘natural system.In the middle ages ‘producers’ were governed by a guild systemThe free market economy only developed in the 19th century.January 8, 2010 3
  4. 4. Economic,Social & Political StructuresThe Free Market EconomyAdvantages of trade based on the assumption that labor is of equalvalue and trading costs are 2 per unit Production cost calculated England Portugal in hours of labor Without With Without With trade trade trade trade Wine 20 7 5 5 Pig iron 8 8 14 10January 8, 2010 4
  5. 5. Economic,Social & Political StructuresDevelopment of the Free Market Economy19th century: social inequalityRevolutions, centralized economies in the USSR, China, Vietnam, CubaMass unemployment in the 30’s opened potential doors to communism, but instead led to social market economies: - Social security - Healthcare - SafetyJanuary 8, 2010 5
  6. 6. Economic,Social & Political StructuresEnvironments and Markets, changing equilibria price supply Wealthier consumers Lower production costs demand Quantity “ Q”January 8, 2010 6
  7. 7. Economic,Social & Political StructuresRebound effects: contributing to a better environmentPeople are prepared to pay a little extra for environmentally friendlyproductsJanuary 8, 2010 7
  8. 8. Economic,Social & Political StructuresA Sustainable Economy?Lock in: Behaviour of others is copied: Windows, driving on the right/left side of the road Better technologies are available, but it cannot be adopted.January 8, 2010 8
  9. 9. January 8, 2010 9
  10. 10. Economic,Social & Political StructuresPrisoner’s Dilemma Prisoner 1, Cooperates No police years in jail with Police Cooperation Prisoner 2, years in jail Cooperates 5 10 with Police 5 0 No police 0 1 Cooperation 10 1Optimum solution cannot be reached between two individuals unless they can reach a joint social arrangemente.g.eco-friendly products, taking kids to school by car instead of bikeJanuary 8, 2010 10
  11. 11. Economic,Social & Political StructuresChicken’s DilemmaNot cooperating is an advantage if others http://flickr.com/photos/annawiz/150998400/cooperateCooperating is an advantage if others do notcooperate E.g. car vs. public transportJanuary 8, 2010 11
  12. 12. Economic,Social & Political StructuresResource Dilemma= Tragedy of the commonsUsing common resourcese.g. depletion of the oceansJanuary 8, 2010 12
  13. 13. Economic,Social & Political StructuresExamples of Suboptimal Situations in a Free MarketIndirect routes in air travelDouble infrastructureCosts to negotiate and set up a contractSocial effects: unemploymentOwnership of knowledge is difficult: minimal investments to create knowledgeMarket unwanted: waste disposal, health careNational prestige set above creating a market: Concorde, NASAJanuary 8, 2010 13
  14. 14. Economic,Social & Political StructuresFree Markets and the Environment Trade in emission rightsResources: market is not sensitive to long term effects: Higher oil-supply at a lower price Resources are cheaperJanuary 8, 2010 14
  15. 15. Economic,Social & Political StructuresSimon-Ehrlich wager5 metals were worth $1000 in 1980In 1990 they were worth only $ 423,97 because: The nickel monopoly ended Innovations in the production of chrome Demand dropped due to application of polymers and composites The same goes for copper and fibre glass Ceramics replaced tungsten in e.g. tools.January 8, 2010 15
  16. 16. Economic,Social & Political StructuresPrices of Crude Oil in 2003 $100 2003 US$ US$ at the time 1861 2001January 8, 2010 16
  17. 17. Economic,Social & Political StructuresSustainable Economic DevelopmentInternalizing external costs Emissions, CO2 Social: victims Compensation in nature Problem: time Subsidies or taxes to stimulate innovation in early stagesJanuary 8, 2010 17
  18. 18. Economic,Social & Political StructuresSocial Hierarchy, what does it mean?More than a set of decoded rulesRolesExpectationsJanuary 8, 2010 18
  19. 19. Economic,Social & Political StructuresAuthorityHow are authorities established?LegalMeritsScientific authorityMeritsAuthority having the advantageJanuary 8, 2010 19
  20. 20. Economic,Social & Political StructuresMilgram Experiment http://www3.niu.edu/acad/psych/Millis/History/2004/milgram2.gifJanuary 8, 2010 20
  21. 21. Economic,Social & Political Structures Does changing social order inevitably lead to conflict?January 8, 2010 21
  22. 22. Economic,Social & Political StructuresHow to influence behaviour?Group IdentityCommunicationExpectation with respect to behavior of othersForceIndividual compensationEconomic stimulusLeadershipPrivatization of resources or marking territoriesJanuary 8, 2010 22
  23. 23. Economic,Social & Political StructuresNew Technologies and ChangeWhat are the effects of new technologies?How are they realized?What can we do? TECHNOLOGY ASSESSMENTJanuary 8, 2010 23
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