Externalities and a Sustainable Life
We talk a lot about sustainability on this blog. “Wait a minute—you don’t talk a lot about the environment,” you might say. And to that, we say “Yes…” to our sophisticated and imaginary reader, “…that is true.” We don’t talk enough about economic and environmental issues, but that does not mean that you can’t use the same framework to illuminate many different topics.
Sustainability, in our view, is a very broad and useful way to assess the world, human behavior, and many other things. Sustainability, in our perspective, means that we conduct ourselves in a way that minimizes the harm to ourselves and our surroundings in the longer run. This perspective can therefore be used to assess a multitude of different topics and issues—and many of these fall into the scope of our coffee talks.
As some of you know, we have somewhat of a diverse background ranging from Economics, Philosophy, Journalism, Global Nutrition and Health, training, and drinking coffee—of course. We therefore often end up running out on a tangent—attacking issues from unorthodox angles—and today is no different.
Today we want to talk about, and maybe introduce you to, the notion of externalities—a perspective often used in economics and philosophy. An externality is, in short, any consequence of an activity or product that is not reflected by the price of the product or service. Examples of this could be Co2 emissions from production and use polluting the local environment, or highly processed food's impact on the healthcare system.
There’s a big discussion, from an economic standpoint, that a good way to make the market economy more sustainable is to include externalities in the market price of a product or service. A carbon tax is a good example of this—every ton of Co2 released into the atmosphere should be taxed with e.g., 2 dollars. This system would reflect the real-world consequences and costs of a given activity.
But we think that this perspective also is very useful in our daily lives. When you choose to do something, drink a coke, smoke a cigarette, stay up late, or keep the stressful job—then there is an externality—there is a cost that we’re not paying up front but affects our surrounding or future selves. Many of the questionable decisions we make don’t feel that bad at the moment but are quite harmful if you look at the bigger picture or in the longer run.
A lifestyle that works in the long run and the bigger picture is, therefore, a worthwhile goal to aim for, and we think that a sustainable perspective is a very useful way of evaluating our lives in general. If we look at ourselves, literally and figuratively, are we doing the best we can for our surroundings and our future selves? This applies to almost any topic, such as physical and mental health, financial issues and opportunities, our career, our kids, our partners, etc. Are we living a sustainable life and are we taking the externalities into account?
Good luck and we hope this will help you in the longer run.
Until next time
Scott and Lennart