how we slice the pie for the various 

 sectors. 



In the free market system we solve 

 our equity problem by saying that the 

 existing allocation of resources and 

 talents and goods and services is ac- 

 ceptable. This is the positive approach. 

 In the normative approach we say that 

 the equity situation is unacceptable; 

 therefore, we will implement certain 

 policies to change the distribution of 

 goods and services, either as flows or 

 as stocks. This approach results in 

 progressive income taxes, progressive 

 excise taxes, and transfers from one 

 sector of the economy to another, gener- 

 ally by governmental activity. The ob- 

 jective is to change the equity status 

 by changing the payees and beneficiaries 

 for the given economic activity. 



Going further into the goals of 

 economics, we have several that I should 

 mention. One goal that is often attrib- 

 uted to economics is that of growth. 

 Growth is defined as an increase in the 

 gross national product. Now this is a 

 perennial national policy. We wish to 

 grow at a certain rate, to increase the 

 gross national product at a certain 

 rate, to keep the growth from declining 

 too much. It is the rate of growth that 

 we are interested in. 



Another national goal is to have 

 full employment. This is essentially 

 the thought that everybody who wants a 

 job should have the opportunity to have 

 one. However, as you see in a complex 

 industrialized society, we have great 

 difficulty balancing full employment and 

 economic growth. Another national goal 

 is a stable price level, or control over 

 inflation. These are the three basic 

 national economic goals: growth, full 

 employment, and stable prices. Of course, 

 we have not determined how to achieve 

 these three goals simultaneously. 



It seems we cannot have all of 

 these things. We have to reach some 

 kind of a compromise. When we get dif- 

 ferent answers about what the national 

 policy should be with respect to inter- 

 est rates, with respect to the taxing 

 system, or with respect to the welfare 

 system, we are trying to reach some kind 

 of agreement about what the national 

 goals are with respect to balancing 

 growth rates, employment, and price 

 levels. All the other things to do with 



investments in our natural resources 

 would be subject to these overall larger 

 goals. 



For any goal or mix of national 

 economic goals, how much are our natural 

 or environmental resources worth? There 

 are several ways we try to value natural 

 resources where there is no established 

 market. If we have a market in which 

 prices are established, then we have a 

 dollar measure of the value of those re- 

 sources at any given time. There are 

 five different methods of evaluation and 

 each method will give one a different 

 value for a nonmarket good. 



The first one is the market value 

 to the consumer or the participant. This 

 is a measure of the direct market value 

 of the activity in terms of alternative 

 costs of purchasing on the market a dif- 

 ferent type of activity or a different 

 good. That is, we are always trying to 

 get the best deal for the dollar in the 

 market. The market value is determined 

 on the basis of our willingness to pay 

 directly for a good, a service, or an 

 activity. This is a direct method of 

 measuring value in the commercial sec- 

 tor. 



The second method is the sectoral 

 economic impacts, which are the direct 

 impacts of an investment or an expendi- 

 ture in a community. The multiplier ef- 

 fect that comes from an initial expendi- 

 ture is alleged to measure the larger 

 efficiency impact of a consumption or 

 investment activity. If the expenditure 

 is for a good or service, where it is 

 retained largely in the designated area, 

 one has a high multiplier of three, 

 four, or five dollars of activity in a 

 given geographic area. However, when 

 the initial expenditure is for an import 

 or where the material and labor are 

 brought in from the outside, then the 

 local multiplier effect is very low and 

 there is little or no economic impact. 

 This method of measuring value by the 

 sectoral impact is often used as an 

 estimate for a hunting day or a fishing 

 day spent in a particular area. The 

 direct expenditure, plus the multiplier 

 impacts, is perceived as a measure of 

 the real value of a resource in the pub- 

 lic sector. 



The third measurement is the per- 

 sonal cost of participation. This is a 

 surrogate for total willingness to spend 



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