Speaker: John Ikerd, Ph.D. Professor Emeritus of Agricultural Economics, University of Missouri Columbia Author and speaker on the topic of sustainable agriculture with an emphasis on the economics of sustainabilty. BS, MS, PhD Agricultural Economics, University of Missouri ​​ Worked in Extension Agricultural Economics positions at North Carolina State University, 1970-76 and Oklahoma State University, 1976-84 and was Head of Extension Agricultural Economics, University of Georgia, 1984-89. Returned to the University of Missouri 1989, under a cooperative agreement with U.S.D.A, to provide state and national leadership for research and education programs related to sustainable agriculture. National Sustainable Agriculture Projects with USDA SARE Program 1988-91: Farm Decision Supports Systems for Sustainable Agriculture (PLANETOR) 1991-93: Sustainable Agriculture Education Council (SA Professional Development Program) 1992-94: Addressing the Quality of Life Dimension of Sustainable Agriculture 1993-95: Regional Liaison-South and Northeast- SA Professional Development Program 1994-99: State Co-coordinator of SA Professional Development Program for Missouri

1. The Essentials of Economic Sustainability
Economic Sustainability: Ability to meet the economic
needs of the present without diminishing economic
opportunities for the future
Prepared by John Ikerd for MUM Deep Green Business Symposium, July 5, 2013

2. Economic Worldview:
Sustainability: Internalize Externalities

3. Nature
Economy
Society
Ecological Worldview:
Sustainability: Rethink Economic Reality

4. Hierarchy of Sustainability
• Purpose and Principles are determined at
higher levels:
– Nature and society set bounds and define
parameters for economic development.
– All economic value is derived from nature by way of
society – there is no other possibility.
• Possibilities determined at lower levels.
– Economy determines the extent to which society can
realize the potential of society & nature.

5. Investments in nature and society essential for
economic sustainability have no economic
value.
• Economic value is fundamentally different from
social and ethical value.
– Economic value: Individual, Instrumental,
Impersonal
– Social Value: Interpersonal, Instrumental, Personal
– Ethical Value: Communal, Non-instrumental,
Impersonal.
• Internalizing economic externalities is necessary but
is not sufficient for sustainability.
• The economy places a premium on present value
relative to future value.

6. Interest: Savers: Reward for delayed gratification or use.
Borrowers: Cost of advanced gratification or use.
Compound Interest: Growth in economic value over time.
$100 at 7% Compound Interest

7. Discounted Present Value: Economic value of a future benefit
Discount: Consumers: Cost for delaying gratification --
Investors: Cost for delaying return on investment
$100 at 7% discount rate

8. We have created an unsustainable economy.
• All economic value is derived from nature by way of society –
there are no other possibilities.
• Nature is finite in its ability to create economic value –
productivity ultimately limited by solar energy.
• It is necessary to respond to economic incentives to use
nonrenewable resources more efficiently and shift to
renewable sources of energy – but not sufficient.
• The economy places too little value on future benefits to
ensure the level of investments in nature and society
essential for economic sustainability.
• The resulting degradation of nature and society has degraded
the productive capacity of the economy.

9. Ethical/Nature
Individual
Economy
Social/Society
Economic Sustainability will require
“An Expanded Social and Ethical Awareness”

10. We are inseparable from nature.
Our purpose, principles, and priorities are of nature.
• A cultural ethic reflects a societal consensus of the
purpose of life and the principles that must guide it.
• A cultural/ethical commitment to sustainability must
take priority over societal values and needs of
society must take priority over individual
preferences.
• Economic and social autonomy is necessary but must
be bounded by societal and ethical responsibility.
• A sustainable economy must function within the
bounds of an equitable and just society.

11. The Essentials of Economic Sustainability
This is not some new-age philosophy.
This is hard, cold economic reality.
We are economic, social, and ethical beings.
It is not a sacrifice to care for others or care for the
earth.
We are all part of the same inseparable whole
The “expanded awareness of self” essential for Economic Sustainability
is a key to a better way of life and a better world.