THE PRICING AND EVALUATION OF NATURAL RESOURCES 



Ronald M. North 



Director 

 Institute of Natural Resources 

 University of Georgia 

 Athens, Georgia 30602 



As an economist, I believe we have 

 been working with complex interrelation- 

 ships very successfully as a profession 

 for 200 yr. Civilized nations created 

 monetary systems wery early as a common 

 denominator for value either as a stock 

 or a transaction. I do not propose to 

 bring you the answers, but I will dis- 

 cuss how economists think and some of 

 the strange things they do or say. 



We define economics as a study of 

 any action or process which has to do 

 with the creation of goods and services 

 to satisfy human wants. As I look over 

 this program, I see it is concerned with 

 creating salt marshes, sand dunes, man- 

 grove swamps, and habitats associated 

 with these areas. In effect, there is 

 concern with creating goods and ser- 

 vices. This program does suggest an 

 economic interest; therefore, the plan 

 of action this evening will be to dis- 

 cuss some of the economic interests in 

 natural resources and how we as econo- 

 mists try to work with natural scien- 

 tists in understanding the biological 

 and social interface. I will also try to 

 explain some of the basic premises of 

 economics and spend just a few minutes 

 with the economic thought processes. 

 Then I would like to open the meeting to 

 any questions you have. I was impressed 

 by some of the problems ecologists do 

 face and the fact that perhaps we econo- 

 mists have not adequately addressed 

 those problems yet. 



There has been interest these past 

 few days in the technical creation of 

 communities in salt marshes and other 

 coastal habitats. I am certain the con- 

 cern has had to do with the state of the 

 art for increasing the quantity or the 

 quality, or both, of these coastal habi- 

 tats. For example, I am sure some of 

 the questions asked include how do we 

 create more salt marshes, or more sand 

 dunes, or how do we manage such areas to 



create a viable and a productive habi- 

 tat? I am sure questions have arisen as 

 to how much do these habitats cost and 

 how much do they produce? But has it 

 been asked to what extent do they satis- 

 fy human wants? Keeping these thoughts 

 in mind may help explain some of the 

 thought processes of economists and some 

 of the problems we have. Remember, eco- 

 nomics is often defined as not just the 

 creation of goods and services, but also 

 the creation of those goods and services 

 that satisfy human wants. 



Proceeding further with the defini- 

 tion, one could say that economists are 

 a bunch of narrow-minded, selfish fel- 

 lows who are only interested in humans 

 and the personal satisfaction of the 

 species. Perhaps that is correct. Per- 

 haps most economists are introverts, but 

 we are really interested in economics as 

 a body of knowledge wherein the central 

 interest is, and should be, the satis- 

 faction of human wants. I ask you also, 

 would not Darwinian survival theory sup- 

 port this economic premise of satisfying 

 human wants by the production of goods 

 and services? 



Since this is the Bicentennial, I 

 will mention that Adam Smith's book "In- 

 quiry into the Theory and Wealth of Na- 

 tions" was first published in 1776, 200 

 yr ago. I will not go into much detail, 

 except to say that Adam Smith's concept 

 of the economic man has a direct ecolog- 

 ical counterpart. The concept is that 

 economic man is one who goes about pro- 

 ducing goods and services for himself 

 and in so doing contributes to the wel- 

 fare of society as a whole. The economic 

 man is led by an invisible hand to pro- 

 mote an end which is no part of his in- 

 tention. 



A layman could easily conclude from 

 the literature of ecology that each ele- 

 ment of the food chain goes about pursu- 

 ing its own interests in making a living 



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