The ecological, social, and economic challenges that confront us today are consequences of our persistent retreat from reality. After more than thirty years of denial and neglect we must return to the principles that people throughout human history have known to be true. By observing and experiencing the world around us we can gain greater insights into the true nature of the higher order of which we are a part. This is what science at its best is about, understanding how the world works and where we fit within it.

However, we are not dependent on science to reveal the most important truths that affect our physical, emotional, and spiritual well-being. The most fundamental ecological, social, and economic principles are mainly just matters of common sense. A return to truth actually is a return to the things most thoughtful people everywhere and at all times have known in their hearts and souls to be right and true. Fortunately, the principles that must guide us in our pursuit of happiness are the same principles that must guide us to ecological, social, and economic sustainability. The things are old; these things are true.

Principles of ecological relationships. All living and nonliving things, including us humans, are part of the same complex whole of matter and energy. The molecules that make up our bodies are the same molecules that have been on the earth since its beginning, the same molecules that have made up the bodies of all living species of all times. The energy that fuels our bodies and the electrical impulses we perceive as thoughts are the same energy that permeates the universe and continually transforms everything within it. Everything and everybody in the past was made from this same matter and energy, as will be everything and everybody in the future. The principles that guide us in our pursuit of happiness are the same principles that have guided and will guide all of the other living and nonliving elements of the universe.

Holism. The principle of holism was perhaps summarized most concisely by Aristotle when he wrote, “The whole is more than the sum of its parts.” The essence of the whole of any system (mechanical, biological, or social) is not fully embodied in its individual parts. Wholes have properties that emerge only when the parts come together to form a whole. Parts have properties when they are part of a whole that disappear when they are separated from the whole. The relationships among the parts matter; when the relationships change, the whole is changed.

Where interconnections are weak or relatively simple – as in mechanical and chemical systems – ignoring holism doesn’t appear to be critical; the industrial paradigms seem to work. Where relationships are strong and systems are complex – as in ecological, social, and economic systems – ignoring holism has critical consequences. The most important challenges confronting society today are not mechanical but instead are ecological, social, and economic. As a result, the mechanistic industrial paradigm now creates more problems than it solves. These problems are symptoms of dysfunctional relationships within and among nature, society, and the economy.

Our water, air, and soil are polluted with chemical and biological waste because we fail to appreciate the importance of our relationship with nature. The human health consequences of pollution include respiratory problems, various cancers, food poisoning, endocrine disruption, and general poor health, which lead to the exploding economic costs of health care. Today, fossil energy supplies are dwindling, and the polar ice caps are melting because we failed to appreciate the importance of our connectedness with natural ecosystems. The consequences are not just violent storms and rising oceans but also a growing realization that we are betraying a sacred trust to keep the planet livable for those of the future.

To address these systemic problems, we must learn to think holistically. To appreciate the full implications of our actions, we must view them from an ecological perspective – everything affects everything else. Reducing, reusing, and recycling are not isolated acts. When we reduce our use of the earth’s scarce resources, we are not only leaving greater opportunities for those of the future but also helping to make the essentials of life more economically affordable to all people today. When we reuse things rather than throwing them away, we are not only reducing pollution and waste but also the time and energy required to produce new things, leaving more time and energy for friends and personal reflection. And when we recycle, we are not only creating new products out of old ones but also reducing pollution and creating a more hospitable environment for the living things on earth. These living things in turn renew and regenerate the energy on which all life on earth ultimately depends. Everything is interconnected.

That said, no matter how efficiently we use, reuse, and recycle things, if we don’t renew and regenerate, we will eventually use everything up. This conclusion is firmly rooted in the most fundamental truths of science: the laws of thermodynamics. Energy can be neither created nor destroyed: the first law of thermodynamics. However, each time we use and reuse energy, some of its usefulness is lost: the second law of thermodynamics – the law of entropy. No matter how efficiently we use, reuse, and recycle, some of the usefulness of energy is inevitably lost to entropy. We are depleting and degrading the energy that must support the future of humanity. Slowing the processes of depletion and degradation, while commendable, does not address the ultimate necessity for renewal and regeneration. We can’t afford to continue ignoring this fundamental truth of nature.

The only energy source capable of offsetting the effect of entropy is the sun. The only systems capable of capturing, transforming, and storing solar energy are living systems – plants, animals, people. The leaves of plants capture solar energy and combine it with elements from the air and from the earth and create surplus energy to support other plants and animals, including people. The chemical elements captured and stored in the tissue of plants are the same elements released into the environment when fossil fuels are burned. Everything is connected.

Humans are also capable of capturing and storing solar energy. We just do it with windmills, waterfalls, and photovoltaic cells. We are also capable of sequestering the elements in greenhouse gasses in the organic matter of the soil. As living beings, we have the capacity to move away from entropy. But humans are ultimately dependent on the other elements of the biosphere – the great living system of which we are a part. We are biological beings; we can’t eat the electricity generated by wind, water, and photovoltaic cells. We must sustain the biological systems that sustain us. We can’t afford to continue ignoring this fundamental truth.

Our greatest impacts on nature are indirect, through our impacts on our economy and society. When we buy food, we are supporting food manufacturers and farmers who have specific kinds of impacts on the soil, air, and water. When we buy any material goods – harvested, grown, or manufactured – we are supporting a particular production and distribution process that has specific impacts on natural resources. When we invest in companies through the stock market, we are supporting companies that have specific kinds of impacts on the natural environment.

Our collective choices may have even greater ecological consequences. These consequences are not limited to regulations protecting the natural environment from pollution. Government policies affecting agriculture, manufacturing, labor relations, capital investments, employment, and economic growth all have direct and indirect impacts on the natural environment – locally, nationally, and globally. We have no way of knowing how large or small our individual impacts may be, but we cannot afford to continue ignoring the fact that all things are interconnected – the truth of holism.

Diversity. The whole of anything is said to be diverse if it has a variety of different or dissimilar elements or parts. We need only look around us to see that nature is inherently diverse, and if it were not, it would not be capable of sustaining life. Entropy, as previously explained, is the process of degradation of usefulness of energy and matter. The ultimate state of entropy is characterized by the inert uniformity of component elements: the absence of form, pattern, structure, or differentiation. In other words, systems that are completely lacking in diversity have no energy left to support life.

Diversity gives living systems the capacities to renew and regenerate – to live, grow, mature, produce, and reproduce life. Diversity provides the resistance and resilience needed to endure and recover from unexpected threats to health or life. Diversity allows living systems to adapt and evolve to accommodate their ever-changing environment. Even if we don’t fully understand all of the ecological problems that confront us, we can understand that loss of diversity represents a growing threat to the future of humanity.

We have witnessed an alarming loss of diversity over the past several decades. Prior to the spread of humans across the globe, species extinction most certainly had occurred but, for the most part, at a fairly steady rate. It’s interesting to note that as the human species spread to a new part of the earth, large mammal species, such as mastodons and mammoth, systematically disappeared. Fossil records indicate that species typically have lasted about ten million years from emergence to extinction, and only about one in a thousand of all species that have ever existed remains today.

The last great mass extinctions of species occurred about sixty-five million years ago, the end of the age of dinosaurs. Some catastrophic event apparently blocked the inflow of solar energy. Species extinctions again accelerated, to a rate unprecedented since that catastrophic event, during the industrial era with its rapid growth in human population and economic development,. During recent decades, species have been becoming extinct at a rate of one species every twenty minutes. Some experts estimate at least half of existing species will be extinct by the end of 2100. This time, we humans are the global catastrophe. The future of humanity is at risk because we have ignored the truth of diversity.

The greatest single threat to biological, cultural, and economic diversity is the industrial approach of economic development. Industrial strategies of specialization, standardization, and consolidation of control allow us to extract more useful energy from the earth’s natural resources. However, specialization and standardization destroy the form, pattern, structure, and differentiation necessary for living systems to capture and store solar energy. Industrialization systematically destroys diversity and accelerates the process of entropy.

Plants, animals, and other living species also specialize, simplify, and establish hierarchical control. But nature sets limits within which individual species must function to maintain the health of natural ecosystems. If living systems become overly specialized, they develop complex internal dependencies and eliminate the redundancies that have allowed them to respond to threats and to adapt to change. If such fragile systems avoid ecological collapse, a dominant species may emerge. Such a species will expand its population until it kills off the other species, depletes its energy sources, and degenerates into mass starvation or disease. These are nature’s ways of dealing with excessive specialization, standardization, and consolidation of control.

We humans have become the dominant species in a highly specialized and incredibly complex global ecosystem. We are destroying the biodiversity of the earth upon which we ultimately depend. Species extinction is our “canary in the coal mine.”

Laws protecting endangered species have generated a great deal of public controversy. Opponents question why we should sacrifice potential jobs to protect a spotted owl or a snail darter. They fail to understand that in truth we are protecting the future of humanity. We humans are a part of the same living ecosystem as spotted owls and snail darters. If we destroy the diversity of those ecosystems we eventually will destroy their ability to support human life. We don’t know how many more species we can lose, if any, before we tip the ecological balance toward the extinction of humanity.

Diversity is the single most important indicator of ecological health. The causes of species extinction are too complex and interrelated to develop a strategic plan for stopping this destructive process. Instead of developing strategic plans of action, we must continue to rely on the basic principles of ecosystem health, beginning with the principle of diversity. Even if we personally are not in a position to enact or enforce laws protecting endangered species, we can all help others understand the importance of such laws. To stop and reverse ecological degradation, we must respect the truth of diversity.

Interdependence. Dependence is exploitative, independence is self-limiting, but interdependence benefits everyone involved. With interdependence, there are no losers. Interdependent relationships are mutually beneficial. When it involves humans, interdependence is a matter of choice. Our dependence on nature obviously is a matter of necessity rather than choice. However, we have the choice of continuing to exploit and extract from nature, or we can choose to renew and regenerate – to work with nature. If humanity is to survive, however, we must choose interdependent, mutually beneficial relationships with nature.

Throughout most of human history, humans were far more dependent on nature than nature was on humans. Nature often denied humans their basic necessities of life. Floods, droughts, pests, and plagues decimated human settlements and destroyed entire societies. Understandably, people throughout history have worked to become less dependent on nature. Unfortunately, people in many cultures choose to fight back against nature rather than learning to work with nature for the mutual benefit of both. The dominant society of today – the modern industrial society – has been very “successful” in its battles with nature. We have dammed streams, irrigated fields, poisoned pests, and vaccinated against plagues. But nature has always fought back – with bigger floods, longer droughts, more resistant pests, and more complex diseases.

After all of the victories, we are no less dependent on nature than before. However, we are now capable of doing about as much damage to nature as nature can do to us. Nuclear radiation, acid rain, greenhouse gasses, and other “weapons of mass extinction” now threaten the integrity of the biosphere. If we choose to fight to the bitter end, nature will win the last battle – we can’t survive without nature, but nature quite likely can survive without us.

We can’t conquer nature without destroying ourselves, but we might do a lot of damage to nature in the process. Thus, nature also has something to gain from an interdependent relationship with us. Nature benefits most when we respect our interdependence with nature. If we are to benefit from nature, nature also must benefit from us. We must face the truth of our interdependence with nature before it’s too late.

Traditional Native American cultures recognized and valued their interdependence with nature. They believed nature was sacred, an earthly expression of something higher, beyond the realm of human understanding. They treated the plants and animals as beings deserving of their respect. They believed animals purposely offered themselves to be killed. The purpose of those animals was to provide food for humans, just as it was the purpose of plants to provide food for animals. The Native Americans nurtured the plants and animals, not overhunting or overgathering any species. They left enough to provide food for other plants and animals as well as for other humans in the future.

Our society today shows very little respect for any kind of life other than human life. Most of our meat, milk, and eggs today are produced in giant animal factories, where animals barely have room to move, are fed antibiotics daily to mitigate their inherently unhealthy environment, and suffer the inevitable stresses of caged animals. Our industrial food system shows no sense of dignity or respect for the lives they propagate, promote, and then destroy. The conditions of life, death, and dismemberment of animals are simply matters of economic efficiency. All forms of life ultimately provide nourishment for other forms of life. However, when we disrespect and degrade the life that supports our life, we are diminishing the quality of our own lives. We must respect our interdependence with nature.

What can we do? We can avoid eating meat, milk, or eggs, if we choose to do so. Or we can buy animal products from those who comply with humane production standards or from people who we know and trust to treat their animals humanely. Free-range chickens and eggs, pastured poultry and pork, grass-fed beef and dairy products are all increasingly popular alternatives to products from confinement livestock and poultry operations. We also can buy our fruits, vegetables, and other plant products from organic or sustainable farmers who understand and respect their interdependence with nature. We may not have sustainable alternatives for everything we buy, at least not yet, but our choices today can help create more and better alternatives for the future.

We can continue to take from nature, but we must be willing to give back to nature. We must respect the fact that if we try to take too much too fast, we ultimately will destroy ourselves. We must not create more waste than nature can digest or the kinds of wastes that nature can’t digest. Nature is too complex for us to manipulate or manage. We can select things from nature to meet our needs, but if we attempt to redesign nature through genetic manipulation, we may unwittingly redesign the nature of ourselves. In fact, nature is already perfectly designed to meet our needs if we are willing to respect its needs as well. If we learn to nurture nature, nature will nurture us. We must accept the truth of our interdependence with nature.

Until sometime in the 1940s, most people in the United States didn’t need to study ecology; they understood it because they lived it. They lived and worked in rural farming, fishing, or logging communities, in proximity to nature. But with increasing industrial urbanization, our personal connections to nature were weakened and then, for most people, were lost. Today, we are suffering the ecological, social, and economic consequences of this lost sense of interconnectedness. To restore ecological health and our personal happiness, we must respect nature’s truths – holism, diversity, interdependence. We must return to ecological truth.

Principles of social relationships. Even though we are interrelated with the whole of the universe, our relationships with other human beings are special. Because of our alikeness, we naturally assume other humans have thoughts and feelings similar to our own. We can’t know what it’s like to be a dog, a fish, or a bird, but we know what it’s like to be a human. We know how to treat other people as we would have them treat us, if we choose to do so. We know how to be helpful or hurtful because we have been helped and hurt by others. Perhaps most important, we know that it matters how we treat others and how they treat us.

Standards of right and wrong behavior have evolved from a common understanding of what’s necessary to sustain positive human relationships. President Obama referred to the American values of “hard work and honesty, courage and fair play, tolerance and curiosity, loyalty and patriotism.” He said, “These things are old, these things are true.” Some of these shared values, such as patriotism, hard work, and curiosity, relate to personal character rather than interpersonal relationships. In addition, we must have life in order to have liberty, and we must have some measure of freedom in order to pursue happiness. However, values of honesty, fair play, tolerance, and loyalty clearly relate to the quality of our relationships with others. As President Obama said, “What is demanded then is a return to these truths.”

People in different cultures obviously have different values, but a common set of “core values” is shared across virtually all cultures of civilized society. We humans have come to share a “common sense” of goodness and rightness in our relationships with other people. This common sense provides our best insights into the truth of human relationships, just as physical science provides our best insights into the truth of mechanical relationships. To address the challenges of the new world, we will need more than one means of searching for truth.

In their search for truth, the Institute for Global Ethics conducted surveys, interviews, and focus groups with people from different cultures around the world. These groups were highly diverse with respect to race, religion, education, age, and income. The researchers asked members of each group the same question, “What do you think are the core moral and ethical values held in the highest regard in your community?” Responses varied widely, as would be expected. But five values consistently ranked high in virtually every inquiry: honesty, fairness, responsibility, respect, and compassion. The different groups had many different values, but these core values were shared by all. These are not very different from the core American values identified by President Obama.

We share a common sense of rightness in our relationships with other people, regardless of how we express them. We share these values with those who have gone before us and those who will come after us, because over time these things have proven to be true. Those before us called these truths “natural laws.” Regardless of what we call them, these truths must guide our pursuit of happiness.

Trust. We trust people without knowing for sure if they are trustworthy. Trust is a matter of faith. We have a basic human need to trust because we can’t possibly know enough about other people to be sure about the outcome of every interpersonal decision we make. We need to be able to give people the benefit of the doubt, so we trust other people to tell us the truth. We need to be able to depend on people, so we trust people to keep their promises. We need to believe in the basic decency of people, so we trust people to treat us fairly. Since we need to trust other people, we know they need to trust us; we need to be trustworthy.

Trust is a rule-based principle of human behavior – a universal standard of conduct deemed appropriate for all people under all conditions. Rule-based principles do not consider the consequences of specific actions; good behavior is assumed to ensure good results.

The core values of honesty, fairness, and responsibility are all aspects of the principle of trust. To maintain positive personal relationships, we need to be honest and truthful in our words and actions. We need to be fair and impartial in our treatment of others, regardless of their race, age, gender, or other characteristics of particular groups with which they might be identified. We need to do our share of whatever needs to be done and to follow through on our commitment. We need to be trustworthy.

Whenever people are trustworthy, relationships grow stronger. Whenever trusts are betrayed, relationships grow weaker. Unfortunately, we live in a distrusting society. Lying in politics and business is so commonplace it has become expected, perhaps even socially acceptable. We have learned we can’t believe much of anything we hear and only half of what we see. We feel we need to get everything in writing because some people will even lie about the lies they have told us. Engaged couples are advised to sign a prenuptial agreement, in case their trusts are betrayed. Discrimination is rampant, in spite of laws against it, because it’s easier to condemn a whole group than to get to know people individually. Many people do as little as they can get by with and think it’s foolish for anyone to do anything they don’t have to. Our lives are filled with distrust.

To sustain personal relationships of trust we must reject the cynicism, skepticism, and doubt that are sweeping across the social landscape. We must expect and demand honesty from our political and business leaders. We must support politicians who tell the truth and keep their promises and reject those who don’t, regardless of whether the liars and cheats might do more for us personally than would an honest politician. We must support those businesses that are worthy of our trust, even if their prices are a bit higher. We will probably continue to need contracts for some things, since we can’t change the world overnight, but we should not expect contracts to sustain good relationships. We must neither practice nor tolerate discrimination but instead take the time to evaluate people on their individual merits and insist that others do likewise. We must always be willing to accept our share of responsibility and even a bit more, to make up for the others who don’t. We must be trustworthy and willing to trust others.

Trust is a “natural law”; it reflects our common sense of rightness and goodness in our relationships with each other. How can we possibly believe we can maintain good personal relationships while being dishonest and deceitful in our dealings with others? How can we possibly believe that civil relationships can be maintained among people within societies that are inequitable and unjust? And how can we possibly defend a society that condones deception and capriciousness as shrewd business tactics? We know we can’t do any of these things. We don’t need proof; we already know the truth. We must respect the truth on trust.

Kindness. There are times when we all need respect and compassion rather than honesty and impartiality. We need to be treated with kindness. Kindness is a care-based rather than rule-based principle. What’s right and good depends on the specific context or conditions under which the principle of kindness is applied. We should do for others as we would have them do for us, if we were in their situation or condition and they were in ours. The ideal of kindness – the Golden Rule – has been a fundamental aspect of virtually every enduring religion and philosophy throughout human history.

The core values of respect and compassion are aspects of kindness, but empathy is a precondition for kindness. To be kind, we first must be willing and able to imagine ourselves in the situations of those to whom we wish to express our kindness. The “goodness” of an act must be assessed from the perspective of the “person done for” rather than the perspective of “the person who is doing.” It’s not always kind to treat another person as we would like to be treated; their needs, wants, and values may be very different from ours. We first must be able to put ourselves in their situation, under their conditions, with their unique obstacles and aspirations. We must be empathetic before we can be kind.

Even though we share common values, we also have many differences in our opinions. We don’t necessarily need others to agree with us, but we do need for them to treat us with tolerance and respect. If we are to treat others as we would have them treat us, at the very least, we must be respectful. The core value of respect is an important aspect of kindness.

We are all human; we all make mistakes; at times, we need mercy rather than justice. We all face the possibilities of ill health, natural disasters, and financial problems in our lives. If we are to treat others as we would have them treat us, we must be compassionate. Kindness is not a reward for performance. It requires no assessment of merit or worth. It doesn’t require kindness in return. We should do for others as we would have them do for us, not as we necessarily expect them to do for us. Acts of kindness are motivated solely by the belief that “doing good” is the right thing to do. Kind people are compassionate people.

Ethicists seem to agonize over potential conflicts between core values such as honesty and compassion. However, the truth is invariably revealed through internal consistency. Two truths cannot be in conflict when considered within the context of the larger whole. A “little white lie” won’t hurt a relationship, as long as it doesn’t violate a trust. Those who trust us trust us not to be hurtful, unless it’s necessary. If it’s necessary, they trust us to be truthful, even if it hurts. It’s not always unkind to be hurtful.

It is not a violation of trust to discriminate among people as long as we don’t discriminate against people. Respecting real differences among cultures does not violate trust. It’s not always unfair to be unequal. It is not irresponsible for people to do less than an equal share when they are not capable of doing anything more. Respect and compassion for those less fortunate and less capable is not a violation of trust. When in doubt, conflicts among values and principles can be resolved by finding their internal consistency.

Kindness starts at home. We need to do good things for our family members, friends, and neighbors. This doesn’t mean that we should spend all of our time doing things for others, while ignoring our individual needs. We should simply treat them as we would have them treat us. But our kindness cannot be limited to those people we know or who might know us. True kindness is a belief in doing good, even when we do it for people who we will never know and who will never know us – when there is no possibility of receiving anything of individual value in return. Such simple acts of kindness that are good for others are also good for us.

Kindness is not an option; it’s a necessity. Trust is also a necessity, but trust without kindness is not sufficient. People may be completely honest and truthful about their lack of respect and compassion for others. We have seen this attitude a good bit among those who object to government interference in the free market economy on behalf of the poor and oppressed. They may insist on rewarding people fairly in relation to their contribution to the economy but are not willing to give a penny more. They may be open and honest about their belief that poor people simply need to pull themselves up by their own bootstraps. People also can be completely trustworthy but have no respect or tolerance for the values of others. Loyalty and patriotism are too often linked with intolerance and disrespect. Sustainable relationships require kindness as well as trust. We must respect the truth of kindness.

Courage. It’s not enough to know that we should be trustworthy and kind; we must actually be trustworthy and kind. It takes courage to act on our convictions and to persevere in our intentions, even in the face of adversity and personal risks. It takes courage to be trusting and kind in a cynical society that labels such things as idealistic and naïve. Courage, like life and liberty, enables us to pursue happiness. To sustain good relationships, we must find the courage to be trusting and kind.

Even though courage is necessary, it is not sufficient without trust and kindness. Courage too often is limited to acts of bravery – the willingness and ability to face great risks in carrying out commitments. Some of the most evil and despicable acts in the history of humanity were carried out by people with great courage. Many of the Nazi leaders of World War II braved great risks in carrying out their convictions. The terrorists who brought down the New York World Trade Center on September 11, 2001, also were men of courage – they willingly gave their lives for their cause. Few people would label such intentions or actions as right or good. To strengthen human relationships, bravery must be guided by ethics and morality. It must give us the ability to be trustworthy and kind. We must have moral courage.

When we trust another person, there is always some risk that our trust will be betrayed. When we are kind to another person, there is always a risk that our kindness will be exploited. It takes courage to confront these risks. This doesn’t mean we should trust everyone we meet or invest in every cause that promises to do good. It doesn’t take courage to be careless and reckless. However, we can’t allow our fears of betrayal and disappointment to keep us from making worthwhile commitments or carrying through with good intentions. Not only must we be brave, we must also persevere. Life is not an event; it’s an ongoing process. We must find the courage to trust again and again, even at those times when we have doubts. We must find the courage to keep on doing good, even knowing that other people will take advantage of us now and then.

We must learn to express moral courage in all aspects of our lives, at the same time diligently guarding against self-righteousness in appearance or reality. We need good relationships in our communities and in our workplaces. Our decisions affect our neighbors and fellow workers, and their decisions affect us. We also need good relationships within the volunteer, charitable, and nonprofit organizations through which we work for the common good. We certainly need good relationships with the people who represent us in local, state, and national governments. Their decisions affect our lives, and our decisions at the ballot box affect theirs. We may not face the same personal risks in such relationships, but we still face the risks of being betrayed and exploited.

Unfortunately, public life in the United States is dominated by a utilitarian or ends-based ethic that places no purely social or ethical value on human relationships. The rightness or goodness of actions is judged solely by their consequences, and the economic consequences are the only ones that seem to matter. The supposed objective of such intentions is to do the “greatest good for the greatest number of people.” But the “greatest good” has become synonymous with the “greatest wealth,” as measured by personal prosperity, regional economic development, or the gross domestic product. There is no place for trust and kindness in the utilitarian ethic of economics.

We must have the courage to be labeled as idealist when we demand that our business and political leaders be trustworthy and kind. Realists will tell us that politics is a “dirty business” and that cutthroat competition is what made this country great. We will be called naïve for thinking that people can learn to trust each other in today’s “dog-eat-dog” world of business and politics. We will be disparaged as “bleeding-heart liberals” when we express our willingness to pay taxes to support government programs to help the sick, hungry, and poor. We will be told that kindness in government policies creates chronic dependencies. We may be called “tree-huggers” or “eco-Nazis” when we stand up for protecting the environment and conserving resources for the future. When we speak out against corporate exploitation and global imperialism, we will be labeled “unrealistic” and “unpatriotic.” And when we call for reconciliation, disarmament, and an international rule of law we will be dismissed as “utopians.” It will take courage to make our communities, our nation, and the world fundamentally better than they are today.

It takes moral courage to speak the truth about the necessity of trusting and caring in our pursuit of happiness. It takes even more courage to reflect this truth in all aspects of our personal way of life.

Lacking such courage, we will never find happiness. Lacking such courage, our communities, our society, and humanity will never achieve sustainability. We must respect the truths of trust, kindness, and courage. We must return to social truth.

Principles of economic relationships. We obviously can’t meet our individual needs very well by relying on what we personally can glean from nature and society. For most of us, the sacrifices of self-sufficiency are simply too great. Our individual needs include such things as food, clothing, shelter, transportation, and health care, as well as physical rest and mental relaxation. We also have individual wants, which may include gourmet food, stylish clothes, bigger houses, bigger cars, private health care, and nice vacations. To meet such needs and wants through today’s economy we must earn money and spend money. We could certainly learn to be more self-reliant and to rely more on local, community-based economies. However, there are too many of us to go back to subsistence communities of hunters and gatherers. We must create a sustainable economy.

Many people find the discipline of economics to be confusing, boring, or depressing; it seems too abstract or irrelevant to their day-to-day lives. Even if they understand economic theory, it just doesn’t seem to match their everyday reality. These criticisms are often valid, but they relate far more to the way economics is taught than to economic reality. In spite of the complexity of our economy and murkiness of economic theories, the basic principles of economics are really fairly simple and straightforward.

In fact, the essence of economics can be reduced to three basic principles: value, efficiency, and sovereignty. These principles reflect basic truths of individual human behavior. They determine what we need to do to earn and spend enough money to meet our individual needs. They also determine what we need to do to pay the economic costs of living in a sustainable society. These things are real, and they are certainly relevant to our day-to-day pursuit of happiness. We must respect economic truth.

Economic value. Things have economic value only if they are scarce – meaning there isn’t enough for everyone to have all they want. Obviously, the economic value of something is different from its intrinsic value or its contribution to the overall good of humanity. For example, air most certainly is valuable to human life, but it has no economic value, at least as long as we can breathe all we want for free. Air becomes economically valuable only when we pollute so much of it that good, clean air becomes scarce. We then have to pay the costs of pollution prevention to get enough clean air. Diamonds aren’t necessary for human life, but they have great economic value. There are too few diamonds for everyone to have all they want. They’re scarce so they can command a high price.

Intrinsic value is determined by necessity. Economic value is determined by scarcity. This may sound pretty simple, but it’s amazing how many people just don’t seem to understand that the economy doesn’t put a value on lots of things that are important to society and humanity.

Scarcity doesn’t necessarily mean a small amount; it just means not enough to satisfy everyone. For example, most people in the United States already have more clothes than they need, but clothes still have economic value. Some people are willing to pay for new clothes rather than wear the clothes they already have. There are lots of old clothes around, but new clothes are still scarce. On the other hand, it’s hard to find collard greens on a restaurant menu, at least outside of the South. Collard greens aren’t expensive, when you can find them. There just aren’t very many people who want to eat collard greens, so they aren’t scarce. This is a pretty basic concept, but otherwise intelligent people seem to think that if there is a lot of something it should be cheap.

As something becomes less scarce, meaning more of it relative to the amount people need or want, it has less economic value. The economic law of demand is derived directly from this basic economic truth. The first hamburger may really taste good to us, if we are hungry. The second might taste okay, but the third or fourth would be more than enough for most of us. This is just the nature of our individual humanness.

Demand is an economic term for the willingness and ability to buy things. Buyers naturally value things that are more scarce more highly than they value things that are less scarce. So sellers can generally charge higher prices for things when there is less of something available but must reduce their prices when they need to sell more. As a result, prices tend to vary inversely with, or opposite to, the quantity demanded – if prices go up, people buy less. If prices go down, people buy more. This is the essence of the law of demand. Again, it’s pretty much just common sense.

To earn money to buy things, we have to provide something of economic value to the one who pays us. As we devote more of our time and energy to work, we have less time left for other things, including rest and recreation. Our time and energy then become scarcer and more valuable to us as we work longer and harder, simply because we have less time and energy left for ourselves. So as we work more, we need to be paid more to offset the increasing scarcity of our time and energy. So the amount of labor we are willing to supply varies directly with our wages or salary, which in a sense is the price of our time and energy.

The situation looks a bit different from the perspective of the employer, but the end result is much the same. We are likely to become less productive and less valuable to our employer as we work more hours during a given period of time. Beyond some point, we begin to get physically and mentally tired, and, as a result, we become less productive. However, we are not willing to accept less pay for the additional work because our time is actually becoming more valuable to us, as it becomes less valuable to our employer. So our employers get less value out of each additional hour of work, and their costs of production go up accordingly. The same basic relationship holds for any raw material used in producing things of economic value, such as steel, chemicals, fuel, or electricity. Producers are willing to produce larger amounts of things only if they can get higher prices to cover their increasing costs per unit of production. Quantities supplied by producers overall vary directly with and in the same direction as prices. This is the essence of the law of supply. Prices go up; sellers offer more for sale. Prices go down; they offer less. This is a bit more roundabout than demand but still just common sense.

This is what economists are talking about when they say that prices are determined by supply and demand. As more of something is sold, the costs of producing it go up, but its value to buyers goes down, until it reaches a point where buyers are willing to pay just enough to cover the costs of production. At this point, buyers would buy more only if prices were lower, but producers would produce more only if prices were higher. The laws of supply and demand have caused them to arrive at a market price.

The most powerful economic concepts are these simple ideas of supply, demand, and market price. Certainly, the real world in which buyers and sellers operate is far more complex than this single-product, single-market example, but the underlying principles are the same. The global economy has been brought to the verge of collapse by people who failed to understand or respect both the power and the limitation of economic value. We may not like the way the economy values things, or might just rather not think about it, but we still must respect the truth of economic value.

Obviously, clean air and clean water are more necessary to humanity than are iPods and sports cars, but the economy doesn’t reflect necessity. It reflects scarcity. Women traditionally have been paid less than men, not because they were less productive, but because they were more willing to work in lower-paying jobs. Teachers and social workers are not paid nearly as well as sports stars and movie stars because there are far fewer people who have the physique, talents, or persona of a star.

We simply cannot expect economic values to protect our air and water from pollution or to distribute income or wealth in relation to people’s contributions to society or their basic human needs. The economy values only scarcity. When we respect the truth of economic value, we understand why we must rely on society, not the economy, to value those things that are not yet scarce but still have great intrinsic value to society and humanity. We also must accept the fact that we have to meet our individual needs in the world of economically determined values. The prices we have to pay and the wages we are able to earn may not seem fair, but economic values are an important part of our day-to-day reality.

In making and spending money, it’s important also to understand that quality, location, time, and individuality also affect economic value. To know what something is worth to us individually, we must first know what it is, where it is, and when it’s available – again just common sense.

Different products and qualities of products are more or less scarce and thus have different economic values. People in some areas are willing and able to pay more for things than people in other locations. But it costs money to transport things from places where they are worth less to places where they are worth more. Most people value things they can have now more than things they have to wait for. That’s why they are willing to pay interest on borrowed money. In general, each of us values things differently. Even the same thing at the same place at the same time may have a different value to different people. Likewise, as workers, we each have differing abilities to produce things of economic value, and the things we produce have different values to different employers at different places at different times. These are not complex ideas, but they are very important ideas.

Prices and wages are determined by the overall market supply and demand, not our individual preferences or abilities. To get the most economic value out of what we have to offer, we must choose the jobs in which we are more productive than people in general and buy things that are worth more to us than to people in general. If we are different from most mainstream Americans, we probably can get more value for less money by buying things that are functional rather than fashionable, buying locally rather than paying shipping costs, and saving to buy later rather than borrowing money. Regardless, meeting our material needs is an important prerequisite for happiness. To meet those needs we must respect the truth of economic value.

Economic efficiency. All economic value comes from either nature or society. The raw materials and human abilities used to produce things often have a variety of alternative uses. Oil, coal, and natural gas, for example, can be used by a variety of means in manufacturing, transportation, or home heating. Most agricultural land can be used for a variety of crop and livestock enterprises. Many managers and workers have a wide variety of employable skills and talents and thus a variety of employment opportunities. Economic efficiency requires that we put natural and human resources to their “highest” economic use – meaning greatest economic benefits relative to economic costs.

Profits are a consequence of efficiency. The higher the value relative to costs, the greater will be the profits. The fundamental purpose of a for-profit corporation is to maximize economic returns to its stockholders, which means maximizing profits. Profits can be paid out as dividends or invested to enhance the value of corporate stock. Either way, greater economic efficiency means greater stockholder returns on investment. This is why corporations have invested in new technologies that replace workers rather than employ more workers. Workers demand more wages when their employers make more money; machines just keep on working. More recently, American corporations have set up manufacturing operations in lower-wage countries for the same reason – greater economic efficiency.

Economic efficiency is also the reason that corporate businesses are reluctant to shift from fossil energy to renewable energy alternatives. Fossil energy still produces greater economic value at lower economic costs. Intrinsic values and costs are ignored because they are not economic values or costs. This is also the reason that corporations continue to extract and exploit the resources of every corner of the earth. The needs of future generations do not affect the scarcity of resources in today’s marketplace. Those of the future cannot affect economic values, costs, or efficiency.

When politicians and bureaucrats insist that policy decisions be based on cost-benefit ratios, they are giving priority to economic efficiency over the needs of society and humanity. Certainly, economic costs are relevant to government policy. However, a primary responsibility of government is to ensure that the basic needs of society are met in those cases where intrinsic values differ from economic values. Again, this simple concept is routinely ignored by those responsible for making public policy.

At the personal level, we need to allocate our time and money among the various things we need and want to get as much value as we can out of whatever we have to spend. We need to be efficient. When we spend our money on one thing, we can’t spend it for another. When we spend time and energy working, we have given up the opportunity to be doing something else. Our real cost for the things we buy is not the money we spend but the value of the other things we could have bought instead. The real cost of our work is the value of what we could have been doing instead. Economists refer to this as “opportunity costs” – the value of forgone opportunities. Again, this is basic economic reality.

As long as there is something else in particular that would make us better off than we are now, we have an opportunity to use our time and spend our money more efficiently. If we don’t have something specific in mind that we would do or buy if we had another hour or dollar to spend, we are probably spending our time and money pretty efficiently. The same basic reasoning can be used to allocate government spending among alternative programs. The cost of government spending on one program is the lost opportunity of spending the same money on another. In both individual choices and public policy decisions, we must respect the truth of economic efficiency.

Economic sovereignty. To make good choices, we must be free to choose. We must be free to determine what we need and want by ourselves, without persuasion or coercion. We must have accurate information so we can know the ultimate value of the things before we buy them, not learn later through buyer’s regret. We must have the freedom to choose what we do for a living and how we spend our money, without fear of deception or fraud. These conditions are necessary for the economy to function for the collective good of society. People must be free to choose – they must be sovereign. Although little appreciated among economists, the necessity of sovereignty is an economic truth.

Most economists just assume that people are sovereign, without asking whether it actually is true. After all, no one is forcing people to buy things. It’s true; no one forces people to buy “junk food.” No one held a gun to the head of the people who took out the “subprime” loans to buy houses they couldn’t afford. However, that doesn’t mean the buyers were sovereign decision makers. This is one reason economics doesn’t make sense to so many people. The economic assumptions don’t match their reality.

Perhaps people aren’t forced to buy anything, but billions of dollars are spent each year on advertising to persuade, coerce, and create social pressures to convince them to buy things they don’t really need or even want. Such things are advertised and merchandised because they are profitable to those who sell them, not because they are useful to the people who buy them. Advertising today is designed by behavioral psychologists to manipulate the subconscious mind, not to facilitate the rational evaluation and choice. The “hidden persuasion” of modern advertising has destroyed our economic sovereignty.

The financial chaos of 2008 is a prime example of what happens when credit transactions are based on coercion and deception rather than transparency and honesty. One reason people took out subprime loans was because their leaders were urging them to join the “ownership society.” Others bought homes they never intended to live in because they were told homes were a safe investment. When the deception was revealed, the housing market collapsed.

Many people today are not free to choose how they spend their money because they have been lured into making decisions in the past that have left them with little money to spend on anything else. Many others are not free to work where they choose to work because past decisions have left them with few choices of employment. They are no longer free to choose.

This is the economic world in which we must live and make a living, but we don’t have to sacrifice our economic sovereignty. We can refuse to fall for the persuasive and coercive advertising and sales tactics. We can buy things that actually meet our needs and satisfy our individual preferences. We can reject the social pressures of our consumerist society. We can avoid the pitfalls of borrowing too much or becoming too narrowly educated or trained. We can break out of a career path that no longer makes sense – even in our fifties or sixties. We can avoid borrowing so much money for things we think we want that we don’t have enough left for the things we know we need. We can refuse to give up our freedom of choice.

We can seek employment outside of the corporate mainstream. We can start our own business and produce things that we have the ability to produce, or can learn to produce, for people who share our ethical values. We can become a builder, farmer, writer, or holistic health practitioner. We can break away from corporate or institutional employment and become an independent contractor or business consultant, or even start our own school. Or we can choose to work for people who manage organizations we respect rather than organizations we resent. We can buy things from sovereign individuals and businesses that have chosen to produce the things we need, want, and value. We can reclaim our economic sovereignty.

As sovereign individuals, we can also choose to work together, through government, to protect the economic sovereignty of others. The protection of consumers’ and workers’ rights to make informed choices is a legitimate and necessary function of government. The right of free speech was never intended to include the right to intentionally mislead or deceive. True economic competition requires that market participants be free to make sovereign choices, which means that governments must maintain the economic competitiveness of markets. No corporation should be allowed to become so large as to limit the economic choices of its customers or employees. No advertising should be allowed that is designed to persuade rather than inform. No contract should be ruled valid if it is not clear and transparent with respect to its conditions and requirements.

Old legal axioms, such as “buyer beware,” are no longer appropriate in an economic culture of deception and fraud. Certainly, people should be held responsible for their actions, but some people are simply not capable of coping with today’s business practitioners. They don’t have the education or experience to understand the potential consequences of their choices in today’s economic environment; their rights need to be protected. The young and the elderly are particularly vulnerable because they have gotten through life thus far by trusting other people and now find themselves surrounded by people who are unworthy of their trust. All of us have personal weaknesses that make us vulnerable to certain types of schemes and sales pitches. We all need protection from those who would deny our economic sovereignty.

Finally, we each have the ability to find ways to earn enough money to buy the things we need to fulfill our purpose in life. It simply doesn’t make sense that we would have been given a path through life that is impossible for us to walk. We will still have to make many choices during our life to fulfill our purpose. We will have to decide how we are going to spend our limited talents, time, and energy to earn enough money to do the things we are meant to do. We have to decide how to spend our money to meet our needs and to help others meet theirs. We are going to make mistakes along the way so we must be prepared to choose, choose, and choose again. In our pursuit of happiness, we must respect the economic principles of value, efficiency, and sovereignty. We must return to economic truth.