International Society for Ecological Economics Internet Encyclopaedia of Ecological Economics Equity Neva R. Goodwin February 2003 Introduction There are many definitions of equity. The word is normally associated with both "fairness" and "equality," while equality is often understood as an important component of fairness. This essay will not attempt to cover all the meanings of equity, but will proceed on the assumption of some common understandings of equality and fairness. It will first summarize briefly how the concept of equity has fared in the evolution of economic theory, from the classical economists of the 18 th and 19 th centuries, through the neoclassicals of the 20 th . It will then focus on ways that ecological economics can once again provide a central place for equity. To do so is not simply a theoretical exercise. Values are involved – values that cannot help but have an impetus toward action. Some possible implications for action will be outlined. 1. Goals for economic systems as represented in economic theory Economics, as developed by Adam Smith and later classical economists, on through the 19 th century, was a discipline that was designed to make the world a better place. "Better" meant providing a higher standard of living, most particularly for those who had least resources. This tendency towards equalizing, at least by lifting those on the bottom, embedded a concern for equity in the foundation of the discipline. This received some additional support from the combination of marginal analysis with utilitarianism, where the reasonable assumption of the declining marginal utility of money suggested that the goal of maximizing well-being was best served by increasing the incomes of the poor. However, in the 20 th century the ethical character of economics, which had persisted up through the work of Alfred Marshall (1842-1924), was weakened by several forces. These included the idea that the utility of different people could not, scientifically, be compared (making it unrespectable to suggest that $100 would mean something different to a pauper and to a millionaire), as well as the desire of economics to be "value- neutral," as the hard sciences were imagined to be. In fact, rather than being value-neutral, neoclassical analyses have tended to support the status quo, based on principles such as Pareto efficiency. As the distribution of economic resources has become more unequal in recent decades, some economists have questioned whether significant economic inequities are socially sustainable. The linkages between economic inequality and environmental degradation have also been explored. Ecological economics was born, as a field, in the early 1980s, just in time to benefit from – and to foster – wide dissemination of the idea of sustainability. Attention to this concept ushered in a renewed debate on what, in fact, are the 1