The word economy comes from the Greek “oikonomos,” meaning “household management”: Oikos means home and nemein, means administration. Hence, economics is concerned with how available resources are managed to produce a variety of goods and distribute them for consumption among the members of a society. In the opinion of Gregory Mankiw one of the principles of economics that have to do with “People face trade-offs,” is important for modern society, since currently, companies face the dilemma between a clean environment and a high level of income, Mankiw believes, faced with this dilemma.
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In the opinion of Gregory Mankiw (2021) one of the principles of economics that has to do with “People face trade-offs”, is important for modern society, since currently companies face the dilemma between a clean environment and a high level of income, Mankiw believes, faced with this dilemma, that the laws necessary to make companies pollute less cause the costs of production of goods and services to be lower Because of these higher costs, firms earn less, or pay low wages, or sell at higher prices, or create a combination of these variables. Thus, although laws to pollute less result in a cleaner environment and improve health, their cost is the reduction of the income of business owners, employees, and consumers.
Another principal Mankiw emphasizes is that “markets are usually a good mechanism for organizing economic activity.” Companies and families interact in the market, where prices and personal interest focus their decisions, in a Market Economy, which were previously made in a centralized way are replaced by the decisions of millions of companies and families. Companies are responsible for deciding who to hire and what to manufacture, families decide where to work and what they want to buy with their income. Market economies have shown that they are capable of successfully organizing economic activity to promote the general welfare.
Within this context, the linear production systems that currently prevail in the world's economy have proven to have limits when it comes to the use of resources and with consequences with a great environmental and social impact; This is where the role of the circular economy plays an important role for a planet in urgent need of change.
According to the editorial staff of National Geographic (2023), the Latin American Circular Economy Forum reveals that linear production models are exposed to constant changes in prices and access to raw materials, which in some way contribute to the degeneration of the environment, affecting ecosystem services essential for development, but, Conversely, the circular model is restored and regenerated by design, aiming to keep products, components, and materials at their highest utility and value at all times. And when it comes to returning materials to the production cycle, it could be an option to reduce the amount of raw material that is obtained from nature, which would reduce waste along the chain.