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On the Problem of Sustainable Economic Development: A Theoretical Solution to this Prisoner's Dilemma

Funk, Matt (2008): On the Problem of Sustainable Economic Development: A Theoretical Solution to this Prisoner's Dilemma. Published in: 2008 AICIS Conference Proceedings, ”Islands of Competence: Branding Identities in a Globalized World” (9. June 2008): pp. 1-117.


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This paper offers a solution to The Problem of Sustainable Economic Development, and a universal theory of value. We introduce axioms which serve as the first of two derivations of our solution, our methods, the origin and evolution of our theory, field notes from Mustique, Iceland, and Prince Edward Island, and set the stage for a more thorough discourse. Next we demonstrate that value (V) is a derivative function of relative insularity (IR): V=f´(IR), then model economic development by dividing the world into geo-political islands: Relatively Insular States (RIS), and Global Economic Military Superpowers (GEMS). Our axioms deduce two opposing development strategies: Maximum Economic Development (MED), and Maximum Ecological Preservation (MEP). We clarify this by applying our Theory of Value within geo-political contexts which reveal divergent, optimizing strategies for GEMS and RIS economic development. We discover GEMS and RIS strategies are antithetical, yet also discover these naturally opposing strategies represent the most tenable, rational solution-set possible. In light of the inherent and inescapable planetary uncertainties our axiom reveal, we discover the optimal RIS strategy = MEP and GEMS = MED. We note our solution represents the Prisoner's Dilemma. We also note, that, ceteris paribus, based upon revealed 20th and 21st century preferences, RIS strategy has been suboptimal/irrational. Strategic Equilibrium is attained when players pursue respective rational, opposing development strategies. Equilibrium, however, offers windfalls: surplus value is created (RIS-driven ecological preservation, and GEMS-driven Global Security and Planetary Protection). In essence, this non-cooperative, strategic equilibrium paves the way for rational, mutually beneficial, cooperative behaviour, and yields surplus ecological and planetary insularities, and thus surplus economic and biologic value: RIS cooperate, form coalitions, and struggle for greater ecological insularity (ecological preservation). At the same time, GEMS fight for economic development and planetary insularity (planetary preservation, i.e. financing national and global defense, extraterrestrial exploration, and solutions to mission-critical, extra-planetary threats to human existence). Furthermore, surplus value is maximized through strategic transparency: If all players recognize the value of respective, opposing, and antithetical, rational strategies, then all players negotiate more rationally, efficiently, and peacefully. We refer to our solution based upon two opposing, rational strategies as The Funk- Zweikampf Solution. Moreover, we demonstrate our solution is as powerful at local and individual levels as it is at the national level, including its use as a tool for strategic decisionmaking under uncertainty and variable insularity. Furthermore, our Theory of Value illuminates an entrenched, systemic, strategic RIS error which reflects the false application of widely misunderstood economic principles, and fundamental constitutional defects which promote The Tragedy of the Commons. Our theory also suggests that it is no coincidence that the island which best exhibits optimal pure RIS economic development strategy (MEP) is the uniquely independent, autonomous, privately-controlled island of Mustique. All RIS, however, may optimize with our counter-intuitive solution through individual, regional, and state coalitions. Furthermore, our Theory of Value promotes self-organization, constitutional amendment, self-sufficiency, independence, and thus places stones along the illusive path to a tenable solution to The Problem of Sustainable Development.

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