In this lecture, I demonstrate how very different macroeconomic history begins to look if Nature is included as a capital asset in production activities. The tentative conclusions I draw from the evidence are: (1) high population growth in the world’s poorest regions (South Asia and sub-Saharan Africa) has been an obstacle to the achievement of sustainable economic development there; relatedly, (2) when population growth is taken into account, the accumulation of manufactured capital, knowledge, and human capital (health and education) has not compensated for the degradation of natural capital in South Asia and sub-Saharan Africa and, in all probability, even in the UK and the US; (3) China is possibly an exception to (1) and (2). Twentieth-century economics has, in large measure, been detached from the environmental sciences. Judging by the profession’s writings, we economists see Nature, at best, as a backdrop from which resources can be considered in isolation. Moreover, macroeconomic forecasts invariably exclude natural resources. (When was the last time you read quantitative estimates of soil erosion, atmospheric pollution, or habitat destruction in a government report on the state of the economy?) Accounting for Nature, if it comes into the calculus at all, is an afterthought to the real business of ‘‘doing economics’’. We have been so successful in this enterprise that, if someone today exclaims, ‘‘Economic growth!’’, no one needs to ask, ‘‘Growth in what?’’—we all know that they mean growth in gross domestic product (GDP). The rogue word in GDP is ‘‘gross’’. Since GDP is the total value of the final goods and services an economy produces, it does not deduct the depreciation of capital that accompanies domestic production. In particular, it does not deduct the depreciation of natural capital. It is useful to think of natural capital in an inclusive way. Pollutants should be seen as the reverse side of natural resources. Roughly speaking, ‘‘resources’’ are ‘‘goods’’ (in many situations, they are the sinks into which pollutants are discharged—for example, the emission of carbon dioxide into the atmosphere), while ‘‘pollutants’’ (the degrader of resources) are ‘‘bads’’. If, over a period of time, the discharge of pollutants into a sink exceeds the latter’s assimilative capacity, the sink collapses. Pollution is, thus, the reverse of conservation.