At the New Bretton Woods, Sustainability is Inheritance
At a new Bretton Woods conference in New Hampshire, I came across a new definition of sustainability. Typically the term sustainability is understood to be about preserving the environment. However, in the hands of a famous French economist, sustainability has an even richer meaning. Jean-Paul Fitoussi says a sustainable economy means the ability to give your children at least as much capital as you enjoyed.
Fitoussi is a professor of economics at the Institut d'Ã‰tudes Politiques de Paris, and a member of the commission on measuring well-being that reported directly to French President Sarkozy. By capital, Fitoussi means traditional capital, things with dollar signs attached. By capital, Fitoussi also means human capital; making sure your children are at least as educated as your are, for example. By capital, he also means environmental capital; making sure the next generation is handed air, land, water and other resources in at least as decent condition as their immediate forebears. How many parents can guarantee this kind of inheritance? If they can't leave for children at least as much as they had, the parents are not living in a sustainable economy.
Fitoussi also sees the recent financial collapse as a crisis of sustainability. "We thought we were becoming richer, but in fact we were consuming out of debt, not out of income," Fitoussi told me. "That means we were consuming our capital. Suddenly we discovered we were poorer than before." The growth that led up to 2008, in Fitoussi's view, was clearly unsustainable.