“Part of the attraction and the promise of economics is that it claims to describe policies that will improve people’s lives” (Varian, 1994, p. 1). Put another way, the ultimate purpose of economic theory is to secure and safeguard the well-being of people. To meet this purpose, today’s economic policy is promulgated to promote stable prices and economic growth. Economic growth is reached through increased production and consumption. The sustainability of natural resources is, at best, a side factor in most of today’s economic policies (Pestel & Oswald, 2021). The measurement used at a national level to determine whether an economic policy is successful is gross domestic product (GDP). GDP is the sum of all final goods and services produced in a time period. Embedded in the goal of increasing GDP through continuously increasing production and consumption there is the axiomFootnote 1 of non-satiation. Communities often follow suit, using commensurate metrics with GDP to determine economic health and so community well-being. There is sufficient evidence that if production and consumption trends continue without change, our planetary systems will collapse, including our climate, water, soil, forest, ocean and biodiversity, and with the health and social and economic systems (Filho et al., 2020; Intergovernmental Panel on Climate Change [IPCC], 2022); Organization of Economic Cooperation and Development [OECD], 2012; Randers et al., 2018; United Nations, 2021. The collapse of communities will, in all likelihood, follow suit.Footnote 2

This paper provides a perspective for community organisers and change agents who are not well versed in economic theory to help them to understand some elements of the underpinnings of economic theory that drive current economic policies and practices, and why they matter. It explains the non-satiation axiom in simple terms and gives examples of its role in current economic theory, policy and practices. It provides a brief and broad overview of the history of economic thought, to provide the community organiser or change agent with enough information - and power - to learn more. The paper includes recommendations for communities seeking to secure and safeguard the present and future human and planetary well-being in the face of the dominant economic paradigm.

The Non-satiation Axiom in Economic Theory

The axiomatization of economic theory, including non-satiation, was introduced by the Cowles Commission in the 1930s (Weintraub 1983; Ingrao & Israel 2006). In the 1930s, axiomatization was used to highlight the boundaries within which a theory could be thought valid. Subsequently, many axioms were questioned and relaxed to extend the validity of the general equilibrium theory. While the axiom of non-satiation has been questioned (Simon, 1959; Schwartz et al., 2002) and various models of non-satiation exist (Lieb, 2002), it has not been questioned to the same extent as many others, nor have any been used as ubiquitously as those in which the axiom on non-satiation is used. In most traditional economic research, the non-satiation axiom has been considered to correspond to universal human nature and underpins the concept that greater economic growth is associated with greater prosperity for individuals, communities and nations. To this day, in many cases, scholars, policymakers and community organisers take it for granted that people naturally tend to want more and more because this increases their well-being.

Non-satiation is the state of never being satisfied.Footnote 3 Economic theory expresses non-satiation through a mathematical property of the utility function called local non-satiation, which, simply put, states that for every bundle of goods, there always exists a better bundle of goods - a bundle that gives higher utility. The utility function measures the satisfaction a consumer gets from personal consumption. It is depicted in the form of a curve that slopes up at diminishing marginal rates – also called decreasing marginal utility – with the rate of the slope determined by the amount of goods and services consumed and preferences for them. It is used to represent consumer preferences and to model people’s choices of consumption.

The utility function can be practically understood to operate in three stages. The first stage is represented by an overall paucity of goods and services and, implicitly, unmet needs. In this stage, there is great benefit in each additional good. In the second stage, there is a relative balance between goods and services and the benefit from consuming any one good or service diminishes as more of it is consumed, but the benefit never really goes away. In the third stage, there is such a surfeit of goods and services that consumers do not want them, and there is no benefit from consumption. Economists by and large ignore the third stage, and economic theory is extensively based on the utility curve at the second stage. While decreasing marginal utility within the utility function presents theoretically the possibility of needs satiation, the matter is moot, as with the axiom of insatiability, one need or another always rears up and the utility curve is there to capture its economic value throughout the course of people’s choices of consumption.

The principle of non-satiation is foundational to the neoclassical theory of demand and models of rational choice (Gale & Mas-Colell, 1975; Page & Wooders, 1996).Footnote 4 Demand curves are derived from the utility function, which, in turn, underlies economic decision modelling and making. Neoclassical economic theory uses the utility functions to prove the efficiency and superiority of competitive markets, or global efficiency. Global economic efficiency is the state in which all the things that go into the production of goods and services (raw materials, people’s work, etc.) are allocated to get the maximum value (with an assumption of free disposal rather than a result of the least waste possible). Without the axiom of non-satiation, the global efficiency result does not occur. Theoretically, general competitive equilibrium is efficient when all the assumptions of consumption and production theory hold true and there are no market failures (Arrow & Debreu, 1954). The general competitive equilibrium can be achieved in a state of equal and equitable distribution and in a state of very unequal distribution across the population. A fundamental theorem of welfare economics proves that free markets can ensure global efficiency. This theorem is valid under certain conditions, including non-satiation. This theory does not attempt to solve the problem of meeting needs; therefore, some people may live lives of misery and the sustainability of our earth does not enter into consideration. On the other hand, the conviction that only the market system can guarantee general welfare and growth has remained firm in economic theory.

Needs in Economic Theory and Sustainable Development

There is agreement within economic theory in both defining and taking into account preferences; however, there is no interest in the definition of needs.Footnote 5 Many economics textbooks use the words needs, wants, desires and preferences synonymously. This loose use of terms conflates needs with wants, desires and preferences.

Early economists considered human needs to be the driving force behind an economy but did not define needs. Smith (1776) posited that voluntary exchange is based on needs and gave examples of needs, such as shelter and clothing, but did not define needs in general. Ricardo (1817) did not directly address needs but, from his statement, it can be inferred that he felt that needs are at least partially socially determined:

Is not the value of labour equally variable; being not only affected, as all other things are, by the proportion between the supply and demand, which uniformly varies with every change in the condition of the community, but also by the varying price of food and other necessaries, on which the wages of labour are expended. (Ricardo, 1817, p. 7)

Over the course of the late nineteenth century, Jevons, Walras and Menger introduced the theory of marginal utility to understand and explain consumer behaviour. MarginalismFootnote 6 shifted the emphasis in economic theory from the social relations of production to individualistic consumption choices and an individualistic view of society. Within the marginalist approach, the laws of economics are interpreted as corresponding to those of mechanical physics and mathematics is acknowledged as the natural language of economics. Economic agents (which include people) are considered pleasure machines and their aim is to maximise pleasure, measured by the utility function. Utility is not an intrinsic quality of the good, it defines a relationship between a subject and an object. Marginalism effectively decoupled individual needs, wants, desires and preferences from the collective. Without defining or using the word need, Jevons (1879) posited that satiation of needs is impossible because while one need may be satisfied, a new one inevitably arises. In 1938, Samuelson (1938) proposed the revealed preference theory to explain consumer decision-making. The revealed preference theory states that individual consumer choices reveal underlying preferences assuming that they are based on rational decision-making. Samuelson’s theory replaced Smith’s observation that the individual chooses to consume to meet their needs with the concept that every choice a consumer makes is a rational decision that can be revealed by their purchasing behaviours.

The marginalist approach, which later merged into neoclassical economic theory, was dominant for much of the twentieth century. In a nutshell, the neoclassical theory states that free markets can bring an economy to its highest level of general welfare if consumption and production are pushed to their maximum. The non-satiation axiom plays a foundational role in achieving this theoretical statement.Footnote 7 Non-satiation is in reference to preferences, on which traditional theory builds its main results. Economics uses preferences instead of needs. If economic theory were based on needs, economic systems would be different. Today, many economists continue the tradition of conflating needs, preferences, wants and desires as well as leaving the term needs undefined.Footnote 8 In their discourse on needs theory, Jackson et al., (2004) point out that some economists “insist that needs are an irrelevant distraction [and that] the discourse on human needs remains a fiercely contested one” (p. 1). This perspective inherently relies upon the axiom of non-satiation and the assumption that an increase in consumption necessarily results in similar scale increases in well-being, where utility is synonymous with well-being, both at the individual and social levels.

Well-being is “people’s living conditions and quality of life today (current well-being), as well as the resources that will help to sustain people’s well-being over time (natural, economic, human and social capital)” (OECD, 2019, p. 2). People’s well-being is ‘multidimensional’ (Phillips & Wong, 2017, p. xxix). Well-being depends upon and so includes ecological sustainability now and in the future because without a sustainable planet, there is no human well-being (Brundtland, 1987). The Brundtland Commission defined sustainable development as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (Brundtland, 1987, p. 41). Within this definition, the Brundtland Commission emphasized the importance of respecting limitations, meeting people’s needs and caring for the environment for the future well-being of humans.

Needs Can Be Satisfied

Needs have been defined within psychology and understood to be capable of being met and so not insatiable. Starting with Maslow (1943, 1968), psychologists have been working on the definition and the hierarchy of human needs. Within Maslow’s hierarchy of needs, needs can be satiated. As one meets some needs, they are satiated, and one can go on to meet other needs of a superior order. Outside the neoclassical economic theory, Jackson et al., (2004) and Jackson (2014) are among the scholars who have questioned the axiom of insatiability and put forward theories in relation to sustainable development. Max-Neef (1991) formulated a taxonomy of needs within nine categories: subsistence; protection; affection; participation; understanding; leisure; identity; freedom; and creation. Max-Neef (1991) states:

It is traditionally believed that human needs tend to be infinite, that they change all the time, that they are different in each culture or environment and that they are different in each historical period. It is suggested here that such assumptions are inaccurate, since they are the product of a conceptual shortcoming (p. 16).

Nussbaum (2000) and Sen (2004) proposed taxonomies of needs, also called functionings, as the goals and metrics for the realization of sustainable development. Nussbaum and Sen reject an economic approach to meeting needs stating that:

...utility... is inadequate to capture the heterogeneity and non-commensurability of the diverse aspects of development. Because it fails to take account of the fact of adaptive preferences, it also biases the development process in favour of the status quo, when used as a normative benchmark. (Nussbaum, 2003 p. 34)

The multidimensional nature of people’s well-being requires that economic policies factor in more than the common goals and include environmental, social and personal goals. Economic policies formulated without consideration of the multidimensional nature of people’s well-being, and thus sustainable development, and grounded in the axiom of insatiability as the basis for increases in well-being from economic growth, resulting in unsustainable and unfair outcomes (de Graaf & Batker, 2011; IPCC, 2018; Martin 2008; Stiglitz et al., 2009; Wilkinson & Pickett, 2018). Wilkinson & Pickett (2009) captured this:

[..] It is a remarkable paradox that, at the pinnacle of human material and technical achievements, we find ourselves anxiety-ridden, prone to depression, worried about how others see us, unsure of our friendships, driven to consume and with little or no community life. Lacking the relaxed social contact and emotional satisfaction we all need, we seek comfort in over-eating, obsessive shopping and spending, or become prey to excessive alcohol, psychoactive medicines and illegal drugs. How is it that we have created so much mental and emotional suffering? Despite levels of wealth and comfort unprecedented in human history. Often what we feel is missing is little more than time enjoying the company of friends, yet even that can seem beyond us. We talk as if our lives were a constant battle for psychological survival, struggling against stress and emotional exhaustion, but the truth is that the luxury and extravagance of our lives is so great that it threatens the planet (p. 3).

Despite evidence that insatiable growth in consumption decimates the environment, defeats humans’ opportunity for sustainability and does not increase well-being after a certain point, the primary goal and metric for most national governments and economists continue to be increasing GDP and thus the consumption of the goods and services produced to increase GDP (Costanza et al., 2016; Fioramonti, 2016). Communities are suffering the consequences. Globally and within communities, there is rising economic, health and social inequality that leads to misery for all (Wilkinson & Pickett, 2018). Subjective and objective well-being data contributes to the evidence that in mature economies continued economic growth produces growing inequalities, uncontrolled environmental damage and a suffering society in search of a new lifestyle and social model. (Easterlin, 2016; Martin, 2008)

Doomed by Non-satiation?

Non-satiation leads to the maximisation of GDP and is not consistent with goals for community well-being, individual happiness or the sustainability of our planet. This way of thinking dooms us to an unsustainable future, in spite of evidence that non-satiation also impacts on well-being. In the early 70s, Easterlin (1974) found that after a certain point, increases in income and consumption result in increasingly diminishing returns to well-being. This is called the Easterlin Paradox (Easterlin, 1974). The Easterlin Paradox calls into question assumptions about the benefit of economic growth and consumption in a steady (non-recovering) economy (Easterlin, 1995, 2001, 2016). Other researchers also found that after a certain point, an increase in economic growth does not increase individual or collective well-being (sometimes called happiness) and may even result in decreases to well-being (Bruni et al., 2008; de Maya Matallana et al., 2022; Helliwell et al., 2012; Jebb et al., 2018; Layard, 2006). Rationally, people would stop choosing to earn money and consume more after they reached acceptable well-being from earning and consumption, but they do not. There are various theories that attempt to explain collective and individual irrational behaviour focused on consumption, increasing wealth and GDP. Three are mentioned below as they may be useful for communities seeking to realize sustainable development and well-being.

Binswanger (2006) put forward one theory, which entails four treadmill effects to explain why people would continue to focus on increasing income and wealth at the expense of their own happiness: (1) positional; (2) hedonic; (3) multi-option; and (4) time-saving. Treadmill theories explain why there is never enough – never enough status, never enough pleasure, never enough options, never enough time to do all the things one wants to do. All four treadmills are what Gilbert (2006) would call logical fallacies. They are based on a misunderstanding of human behaviours that are reinforced by economic policies and practices.

Schwartz et al., (2002) advanced another theory with the concept of satisfying behaviour, first introduced by Simon (1959). Schwartz et al., (2002) classify consumers into two types, maximizers and satisficers, where the maximizer, when faced with many purchasing choices, reacts by second-guessing, anxiety and higher consumption (purchasing) than a satisficer. Sullivan (1953) explains the root cause of non-satiation in some individuals, stating that when a child’s needs are adequately met during their corresponding developmental stage, that need is satiated and its satiation is the ground for future self-esteem, but when childhood needs are not met, they linger into adulthood as out-of-time needs (Kohut, 1971; Sullivan, 1953). Out-of-time needs cannot be satisfied and materialize in various forms of non-satiation. Out-of-time needs can drive an unquenchable drive to prove self-worth, a compulsion to seek approval, or a tendency towards addictive behaviours (Hollis, 2007). They can also frustrate a person’s ability to meet their intrinsic, universal and innate needs, and so rely upon meeting replacement needs, which include being rich and famous, emulating youthful beauty in old age, dominating and controlling people and other extrinsic objectives (Deci & Ryan, 1980; Ryan & Deci, 2017). Meeting out-of-time needs increases GDP, which upon appearance proves the veracity of the non-satiation axiom and virtues of increased production and consumption.

Fagioli’s (2019) Human Birth Theory is yet another theory that may explain non-satiation. The Human Birth Theory distinguished needs (bisogni in Italian), which are physiological, from requirements (esigenze in Italian), which are psychological. This theory states that needs and requirements remain for over the course of life and that mental illness is not innate (Calesini, 2017; Fagioli, 2019; Gatti et al., 2012; Pettini, 2009; Polese et al., 2014). Psychologically healthy people merge the meeting of their needs and realizing of their requirements so that they live with integrity and contribute as much as they can towards intergenerational environmental sustainability and community well-being (Atkinson et al., 2016; Binder & Blankenberg, 2017; Pelenc & Ballet, 2015; Stewart, 2014). People who are psychologically unhealthy conflate their needs with their requirements, which can result in insatiable consumption, leading them further and further away from a state of well-being (Oral & Thurner, 2019) but aligned with economic theory.

Discussion & Directions for Communities

Economic theory, practices and policy today are based on the myth of non-satiation that is driving us to our doom, yet we show little resistance to rushing headlong into it at a national level, leaving communities to take action on their own. Reduction of production and consumption is rarely an objective of a nation’s economic or development policy (Atkinson et al., 2014), and communities may have to lead the way. Max-Neef (1991) advocated for transdisciplinary approaches to economics, whereby human psychology and behaviour and considerations of sustainable development and human well-being are encompassed. Many communities can, and are, taking transdisciplinary approaches to economics (Phillips & Besser, 2013; Pittman et al., 2022). Lelkey (2021) suggests that economic theories about preferences are impeding the ability to sustainably live a good life and that humanity faces an existential need to examine theories about preferences. Bartolini (2010) and Layard (2006) point out that in the United States, where growth in GDP continues, various dimensions of well-being are in decline. Yet, as Costanza et al., (2017) and Costanza et al., (2018) point out in their call for a sustainable well-being theory within the United Nations Sustainable Development Programme that results in economic models to replace the models currently in use, there is little progress towards the development or use of new economic models at the national or international level, leaving communities the opportunity to lead the way. While economic theory and practice at national scales should go back to their purpose of securing and safeguarding the well-being of people, and by way of that goal – ecological sustainability – they have not. Communities, however, are often more versatile than nations and can adapt the lessons researchers and others propose.

Layard et al., (2018) called on all nations to provide mental health care at the level of physical health care, finding that investment in mental health care yields a net positive payoff within two years. It can be postulated that mentally healthy people are less likely to be victims of out-of-time needs and more capable of merging meeting needs and requirements. They may also be less likely to fall prey to the logical fallacies of the various treadmills, and so contribute in their daily lives to ecologically sustainable levels of production and consumption, their own well-being and the well-being of their communities. In spite of the cost-benefit evidence Layard et al., (2018) provide, many nations have yet to heed their advice. The reason for this may be the tendency to resist change until a threat is imminent (Gilbert, 2006; Kahneman, 2011). This tendency may prove the undoing of communities, as is indicated by the consumption of psychotropic drugs and the spread of mental health problems, termed by some the opioid crisis (Lee & Ahn, 2016). The opioid crisis may be most apparent and destructive to communities with high housing costs, high levels of income inequality, and insufficient treatment facilities. For communities, mental health provision may be necessary but not sufficient. A community’s investment in mental health with the goal of sustainable development and overall community well-being can include expanded mental health services as part of health care, sufficient treatment facilities for people suffering from opioid addiction or mental illness, as well as employment and affordable housing opportunities (Garrett, 2012; National Health Care for the Homeless Council, 2017). The stigmatization of mental health can be a factor that impedes the take up of mental health-care services even when they are available. Campaigns to destigmatize mental health may be necessary and can take many forms, from public relations efforts to educational programs aimed at schools, medical professionals, as well as policing, judicial and other systems (Benbow, 2007; Committee on the Science of Changing Behavioral Health Social Norms et al., 2016).

At the time Our Common Future was issued, global economic activity was 13 trillion dollars (Brundtland, 1987). By 2019, global economic activity climbed to 133 trillion (Hamadeh et al., 2020). Reduction of the consumption of goods can result in sustainable development (Harbo et al., 2017; Lintott, 1998; D’Alessandro & Bilancini, 2012) propose that a decision by policymakers to decrease production and consumption, termed degrowth, should replace the generally accepted concept of insatiable consumption and economic growth if we are to reach sustainability for the planet and protect the future of humankind. One way to transition from a growth-based economy and society is to shift the indicators relied upon by policymakers. This approach sometimes called beyond GDP or the happiness and well-being movement, has been taken up by the nation of Bhutan with its Gross National Happiness Index (Ura et al., 2012). In New Zealand, the federal government’s financial resources are allocated according to a well-being budget that encompasses ecological, cultural and equality (Te Tai Ohanga The Treasury, 2021). In the United Kingdom, the office of national statistics has been gathering well-being data for over a decade (Office for National Statistics, n.d.). Communities can borrow from national well-being measures and policies and use well-being metrics to gather data from their community, use the data for budgeting and other decisions, and monitor progress towards community well-being and sustainable development (Musikanski et al., 2019; Compton & Kasser, 2009) suggest a governmental shift from GDP to well-being metrics influences a corresponding shift in the values of a society away from production and consumption and towards caring for each other and the environment and realizing one’s full potential.

Where some nations have not succeeded in measures to mitigate climate change due in part to the prioritization of economic growth over ecological sustainability, communities will bear the brunt on many levels. Rising sea levels and melting glaciers will impact communities in floodplains or shorelines on many levels, from access to safe water and sewer system backups to flooding (National Oceanic and Atmospheric Administration, n.d.). Where nations are failing to prepare for these eventualities, communities can through preparedness measures and relocation plans (Ferris & Weerasinghe, 2020). Communities can prepare for climate change impacts on transportation, communication and energy systems impacts supply chains by developing local agriculture (Dubbeling et al., 2019). Skill development courses in local manufacturing, as well as manufacturing, automobile and household item repair offered in schools, technical colleges and community centres, are among the steps communities can take (Maitre et al., 2018; OECD/European Commission, 2022).

Loneliness is a contributing factor to insatiable consumption (Kim et al. 2005). It may also exacerbate the tendency for people to focus on consumption over psychological needs and engage the logical fallacies of the various treadmills, seeking more and more pleasurable experiences instead of taking action to be less lonely. While loneliness is traditionally considered a problem among older populations, with the pandemic, the problem of loneliness is spreading to all ages (Miller, 2020; Yanguas et al., 2018). Communities are in a position to help people understand when they are suffering from loneliness with public awareness campaigns, and provide interventions through online and in-person community activities, centres, events and services, and, most importantly, mental health services (Masi et al., 2011).


The purpose of economic theory is to bring about the well-being of people, communities and nations. The non-satiation axiom is one of the foundational assumptions still underpinning current economic policy. Historically the non-satiation axiom was thought of as a natural trait of human beings and according to which greater consumption always corresponds to greater satisfaction. Consumption choices are the consequence of complex motivations, but today we know with certainty that consuming more and more does not lead to increased satisfaction with one’s life and, socially, moves the system away from sustainability goals. The axiom of non-satiation, moreover, operates as one of the founding assumptions of mainstream economic theory and the resulting neoliberal growth model. Now, despite the fact that few economists are still open defenders of the growth model that is leading us to social and environmental disasters, not much within our economic systems seems to be changing decisively and convincingly, and GDP growth continues to dominate as the most important goal almost everywhere, leaving it up to communities to change their economic systems at a local level. For these reasons, an exploration into the motivations behind ever-increasing consumption is crucial.

The evidence is clear that communities and the planet are at risk of collapse and that the current economic paradigm is driving the collapse. While many national governments persist in the pursuit of economic growth despite the negative impact on planetary and social systems, communities can take action to realize well-being and sustainable development.