Exploring sustainability/Economic sustainability
In 1776 an economist named Adam Smith published a book which stated the idea that an individual businessman "by pursuing his own interest" frequently promotes that of the society more effectually than when he really intends to promote it" (Smith, 1776).
This idea of an invisible hand which in the absence of governmental interference guides markets towards their optimal efficiency became very influential and was widely adopted by free-market economists. Unfortunately it has become clear that the problem with free-market economies is that they do not take economic externalities into account (Stiglitz as cited in Altman, 2006). Left to their own devices, businesses have pursued profits without consideration of the impact of their actions on others.
In recent years, consumers have become more aware of the negative impact that some businesses are having on the world. Some of these consumers have started to exert pressure on businesses to behave in a more socially responsible manner (Robins, 2005). Many businesses now report their financial results using triple-bottom line reporting - reporting on the business’s social and environmental impact as well as financial data.
Economic sustainability requires businesses to take into account their impact on the environment, and on society (Hawken, Lovins & Lovins, 2008b; Goodman, 2002).
