while quite unintentionally providing a 

 meal for the next link or a service to 

 some link far removed. If one thinks a 

 little about Adam Smith's concept of 

 economic man or an ecologist's concept 

 of an ecosystem, one can easily conclude 

 that both concepts are quite self-cen- 

 tered and perhaps immoral with respect 

 to religious or philosophic concepts of 

 life. However, we do recognize those 

 religious or philosophic concepts which 

 arise in humans, by their will, to pro- 

 duce goods and services to serve their 

 fellow man, not just for themselves. 

 Some economists avoid this moral issue 

 by assuming that economists do not make 

 moral judgments, that it is not the do- 

 main of economists to make moral judg- 

 ments. The economist concludes that he 

 is only interested in the efficiency 

 with which man goes about producing his 

 goods and services. 



I suppose there is no single con- 

 cept in economics that gets us into more 

 trouble that this concept of efficiency 

 and what it means. However, this assump- 

 tion, that the central objective of eco- 

 nomics is efficiency, has led to the 

 development of two factions or two ap- 

 proaches in both the economic literature 

 and in professional practice. These are 

 the positive and normative approaches to 

 economic thinking. 



The basis of the positive approach 

 is to avoid moral, ethical, or normative 

 judgments and to take the economic sys- 

 tem as it is. We take the economic sys- 

 tem as it is to be studied, modeled, 

 forecasted, and reacted to; we accept 

 the economic system for what it is. 

 This is the modern version of the Adam 

 Smith's classical school, in which self- 

 interest is the prime motivation for all 

 economic behavior. Positive economists 

 generally conclude that both individuals 

 and the whole society benefit most with- 

 out governmental intervention in eco- 

 nomic life. The basic premises are indi- 

 vidual economic freedom and private 

 property. 



The basis of the normative approach 

 is to make value judgments respecting 

 the performance of the economic system. 

 The normative economist is not satisfied 

 with what is, but espouses a belief that 

 economists should be concerned with what 

 should be. This line of thought, which 



developed from the mid-19th century his- 

 torical school, largely in Germany, says 

 that economic policy should be derived 

 from lessons in history and should 

 evolve to meet judgments about human 

 needs. The normative economist consid- 

 ers the government to be the most re- 

 sponsible motivator for economic behav- 

 ior. The basic premise is government 

 direction of economic activity and ex- 

 pansion of what we call the public in- 

 terest doctrine, that is, the doctrine 

 of an expanded public role of govern- 

 ment, particularly with respect to natu- 

 ral resources which would become a pub- 

 lic trust for the use of all people. 



Now that we have established the 

 rationale for all things coming in 

 pairs, such as normative and positive 

 economics, male and female, and Demo- 

 crats and Republicans, perhaps we can 

 better understand why economists never 

 seem to agree and why so many economic 

 statements seem pardoxical or certainly 

 contradictory with respect to their pur- 

 pose. I would like to explore some of 

 the more substantive economic concepts 

 which relate to pricing natural re- 

 sources generally and to coastal ecosys- 

 tems particularly. 



First, the major subject matters 

 with which we are concerned include pro- 

 duction, consumption, distribution, and 

 allocation. These terms refer to tech- 

 nical aspects of economics. They are 

 technical in the sense that production 

 includes the physical and economic com- 

 binations of goods and services consump- 

 tion refers to the limits and choices in 

 consuming certain resources or goods and 

 services; distribution is the process of 

 equalizing supplies and demands among 

 producers and consumers; and allocation 

 is the scheme by which we permit re- 

 sources or goods and services to be own- 

 ed or controlled by the various sectors 

 of the economy. 



The economic theory counterparts of 

 these technical aspects include, for 

 production — the familiar supply func- 

 tions; for consumption—the demand func- 

 tions; for distribution — the exchange 

 system; and for allocation — the pricing 

 system. Of course, pricing and exchange 

 get mixed up quite a bit. Pricing is a 

 part of any exchange, but in a modern 

 economic system pricing is much more; 



155 



