Introduction—I begin by considering two competing definitions of sustainability (utilitybased versus throughput-based), and offer reasons for rejecting the former and accepting the latter. Next I consider the concept of development as currently understood (GDP growth led by global economic integration), and why it conflicts with sustainability, as well as with the premises of comparative advantage. Then I turn to the more general necessity of introducing the concept of throughput into economic theory, noting the awkward consequences to both micro and macro economics of having ignored the concept. Finally I consider some policy implications for sustainable development that come from a more adequate economic theory. These policies (ecological tax reform and/or cap and trade limits on throughput) are based on the principle of frugality first, rather than efficiency first. As a concluding addendum I comment on the World Bank’s 2003 World Development Report, dedicated this year to the topic of sustainable development, and note points of agreement and difference with the ideas presented here.