Nature, Well-Being, and Moral Sentiments: Modern Economics and Some History of Economic Thought

The standard economic paradigm prevailing over much of the twentieth century is characterized by a focus on consumption, production, income, and growth. It was not until the 1970s that issues outside of these fields received more than marginal attention. This included the relationship of economic activity to the natural environment, and the role of nature as a source of human well-being. While well-being was viewed until then as relying mainly on the availability of consumption goods, it started to be recognized that the connection between consumption and well-being was weak in developed economies. Complementing the traditional focus on private goods supplied in markets, public (non-market) goods—environmental and other—and their relevance for well-being increasingly became the subject of economic analysis. Moreover, as self-interest cannot adequately explain individuals’ contributions to public good supply, new behavioral foundations started to be considered which involve moral values as drivers of voluntary public good provision. This chapter reviews the pertinent research literature against some background from the history of economic thought.