Toward a neoclassical theory of sustainable consumption: Eight golden age propositions

- Neoclassical economics reveals the deeper nature of sustainable consumption.
- Neoclassical growth, general equilibrium, and duality theories must be invoked.
- Such a framework confirms some tenets of ecological economics and challenges others.
- Phelps' Golden Rule is confirmed and modestly extended.
- Eight “golden age” propositions follow from these considerations.

Popular trends in ecological economics increasingly consign neoclassical economics to the sidelines of modern-day relevancy. The neoclassical tradition is often seen as reliant for its authenticity on a presumption of human avarice - both unbridled consumerism and corporate cupidity - and demanding for its real-world applicability an assumption of continuous economic growth in a world of hard limits.This article examines the question of whether neoclassical theory could instead provide keys to deeper understanding of sustainable consumption. By combining in a single framework neoclassical growth theory, general equilibrium theory and duality theory - and by explicitly considering leisure time - the analysis demonstrates that neoclassical economics yields several useful insights bearing on long-term sustainability. The analysis confirms several tenets of ecological economics and challenges others.Eight propositions emerge from this analysis that could help speed the development of a robust neoclassical theory of sustainable consumption, here branded “golden age” propositions as they strongly echo the “Golden Rule” discoveries of Edmund Phelps.

Graphical Abstract