I recently attended a seminar where one of the main themes dealt with was that of sustainable economics. In the seminar, we were informed that there are several features that define a sustainable economic model.
Firstly, in the sustainable economic model, an effort is made to ensure that the expenses never exceed the revenues. The moment you have a system where the expenses exceed the revenues, then you know that it is unsustainable: because you are soon likely to end up with a situation where you have to start borrowing to maintain the façade. Of course, there are instances where it can be necessary to have the expenses exceed the revenues temporarily: like when capital investments are being made (using borrowed money). But this should only be done with the expectation that the investments being made will result in enhanced revenues in the future.
Secondly, in the sustainable economic model, an effort is made to ensure that ‘everything pays for itself’. Ideally, we should also have a situation where everyone pays for his own upkeep. But that is an ideal that is hard to maintain: because at any given point in time, there will always be people who can’t pay for their upkeep. Those would include the kids who are too young to work, the old people who are too feeble to work, the inmates who are in jails… and so on. Of course, the money that is spent on the upkeep of some of these groups of people is best seen as an ‘investment’. The society can spend money on kids with the expectation that the kids would eventually become economically useful upon maturity. Similarly, the society can spend money on the upkeep of people who are in jails with the expectation that such people would become economically useful after undergoing rehabilitation. Meanwhile, the money spent on the upkeep of the old people would be justified on the basis that the older people were economically useful (and they made their full economic contribution) in their heyday.
Thirdly, in the sustainable economic model, every effort is made to ensure that resources are not depleted at a faster rate than they are replaced. This is where we find the need for sustainable water utilization, sustainable manufacturing, and sustainable agricultural practices, among others.