Growth isn't Possible

[Rajiv]

Re: Growth isn't Possible

What Mobus gets wrong, and the thought process behind it is what is responsible for India to currently have a population of 1.3 b instead of (by my estimate) around 900 m, is that anything you do today will have an immediate impact on the population. The attempt by Sanjay Gandhi (Indira Gandhi's son) in the 1970's to implement drastic changes in Indian reproductive behaviour through heavy handed methods caused the loss of a generation in North Indian states to the message of the benfits of a reduced family size. The primary drivers toward reduced population are a reduction in child mortality, education, the emancipation of women, and lastly better perceived economic well being.

The problem is that population is a generational problem, and you rightly point out that there is an element of self moderation. But these perceptions change as generational experiences and educational factors change the mental frame -- all at a intergenerational speed.

Which brings me to the major points -- the fact remains that no matter what you do (other than what would be considered genocide,) a world population of around 9 billion is already baked in. Large questions remain as to whether such a large population can be sustained, and at what the cost will be to to the planetary eco-system.

My personal belief (and I do not think we can at this moment rely on anything other than belief) is that we have to, as a species, change how we look at our lives and the world around us. I do believe that we will muddle through, and come out better at the end. However, the challenges facing us on this journey are immense, and the costs of mis-steps very large (in human terms.) There will always be those among us (I do not believe that Mobus was among that number) who opt for the "quick and dirty" path -- one that is morally and ethically extremely reprehensible.

However, the costs of doing nothing, and letting things change at their own pace, are in my opinion very high, and in my opinion, raise the probabilities of systemic collapse.

[Glenn Black]

Re: Growth isn't Possible

I've got a question . . . perhaps a stupid one.

Imagine for a moment something crazy . . . .
And don't think I'm suggesting this as a prescription for how to run civilization. I'm not.
It's merely a way for me to understand conceptually how money and finance works.

Let's say that the Chinese kept making stuff, but just gave it all to America.
And suppose the all the raw materials, oil, etc. required by China to make that stuff was just given to China.
Then imagine that everyone in the world went to their jobs, and did their work for no pay, and that all their needs for food, etc., were given to them.
Assume also that all production and consumption continued at the same levels -- in other words, people would get and give what they've been getting and giving. As the population grew, the new people would give and receive in the same manner.
And finally, assume there is no peak in any natural resource.

Under these conditions, would society's wealth continue to increase?
Would standards of living continue to rise, remain stagnant, or decline?

It is common in chocolate manufacturing companies to permit ...nay, encourage new employees to eat all the chocolate they want. After 1 to 3 months, they never touch the chocolate again. Too much of a good thing.

Your theoretical case of "free trade" may fall into this category. However, I doubt it. Because it applies to everything, people will have no monotony. We will kill ourselves & our planet for sure.

[Glenn Black]

Re: Growth isn't Possible

I do not agree with the sentiments that growth is no longer possible, nor do I agree with the increasingly prevalent view that "growth" is inherently a "bad thing" for mankind and the planet.

Two centuries ago what is now the "developed world" defined growth very differently than the way we define it now. The entire make-up of GDP and how the vast majority of citizens participate in our economies has transformed dramatically over that time. A generation or two from now it will have continued to transform...and so I see no reason to believe that "growth" is somehow capped at the level just before the onset of the current recession.


A few things strike me when I survey the current situation:

1. The developed economies have just concluded a giant multi-decade "Cash for Clunkers" scheme. What we have done is use ever increasing and ever cheaper amounts of credit to bring forward years of future growth in the same way that cash for clunkers brought forward and spiked auto sales. Having binged for more than a decade, now we lament the fact that "auto sales" [growth] have again declined from unsustainable, artificially stimulated levels.
2. The developing world, that we seem to fear [even resent?] so much, is merely playing catch up. Their rapid growth rates are measured the same way we used to measure growth not that long ago - tons of steel output, miles of new highway, gigawatts of new generating capacity, number of new skyscrapers - measures of growth that will prove, in hindsight, to be increasingly obsolete in the developed economies.
3. Quite naturally anyone with a vested interest in the previous circumstances - and let's face it, almost everyone in America got some benefit from gaming the economy while the good times lasted, so this is hardly a banker or corporate CEO conspiracy - wants to restore the old order...and the unsurprising result is that huge amounts of the nation's resources and remaining borrowing capacity are being devoted to that objective. Virtually no one is arguing against this; the clamouring is from different constituencies, each claiming they deserve an undiminished share of the now shrunken pie [isn't that really what the banker bonus controversy is all about?].
4. To use these circumstances to claim the "end of growth", or that it's inevitable that the developing countries are destined to surpass the developed economies is both unsupportable and myopic.

Granted the immediate future looks pretty difficult and fraught with political, moral, and perhaps even physical [war, civil unrest] hazard, but a generation from now the economy will be bigger than it is today, we'll still be growing - but probably in ways that are quite different from today's measures, and the developing economies will still be trying to catch up.

For all those who think growth goes on forever, you owe a duty to watch this 8 part video before you say another thing. Highly recommended, entertaining too!

Arithmatic, Population, & Energy

[media][/media]

[Rajiv]

Re: Growth isn't Possible

Somehow your embed got a bit messed up - so here is the Bartlett video

[GRG55]

Re: Growth isn't Possible

With all due respect, GRG55 and jk, I don't think you get it. You're both viewing things thru the eyes of a Westerner that already is living at a much higher baseline of consumption than billions of other people on the planet.

Your arguments remind me of a person I know that lives in a McMansion, drives an SUV, yet recently bought these nifty designer water bottles that he and his wife re-use in place of disposable bottled water. Gee! They cut consumption! They're so proud that they are being "green!"...

Wrong. You are missing the point completely.

There are billions of people on the planet that do not have cars, do not have air conditioning, do not eat red meat several times a week, etc... yet you think because you have a neato blackberry, then wow... post industrial growth now relies on a small product with little commodity inputs.

What you overlook is that the rest of the planet - billions - will want the car, the air conditioning, the house and kitchen you have before they get the latest toy from Apple. Guess what? They won't be able to live like us, at least not all 7 billion people will be able to live like us. The planet doesn't have the resources to produce that much red meat, aluminum siding, and gasoline etc...

Quite the contrary, I have not overlooked this at all. I also think there's already too many people on the planet [just look what we are doing to the fish stocks] and I don't disagree that "They won't be able to live like us"...and that's the very reason why many of our current methods of measuring "growth" [tons of steel output, miles of new roads, numbers of automobiles produced, increases in office space, red meat, aluminum siding, gasoline, etc] are going to be displaced...in the same fashion as many of these present day measures of "growth" didn't exist 100 or 200 years ago [I am quite certain that aluminum siding consumption 100 years ago was absolutely zero and gasoline consumption was not much greater]. But I gather that you think it is "invalid" to consider or measure growth in any other way than how we measure it today...and that appears to be the key issue on which we differ.

So what then? Resources will get scarcer and more expensive and eventually, most of us won't be able to live as we do today. There will be a tremendous shift, or a leveling out, of wealth globally, wealth will no longer grow - it will migrate. And then, a limit will be reached...

History is not on your side when you make these statements. We don't live today as we did in the past. So what. How many families in our societies today still measure their wealth by the size of their farm? How many families tomorrow are going to measure their wealth by the size of their McMansion or the number of cars cluttering the driveway...regardless of whether those families are in a so-called developed economy or in one of the densely populated cities of the developing world?

What other species on this planet has ever successfully grown it's population and total consumption more than it had the prior year -forever?

Again, it all depends on what we are consuming...because today the distribution of what we consume is vastly different from what we consumed in large amounts 100, 200, 300 years ago. And tomorrow it will be different again. And it's changing faster...which is another point on which we apparently disagree. Let's set aside the Blackberry and Apple products that you apparently despise so much, and consider another low commodity input activity. How much value would you place on our improved ability to treat cancers and thereby increase longevity? Isn't the increased and ongoing development and consumption of, for example nano-medical technologies, just as valid an economic activity in the future as building a new skyscraper in Manhattan in the 1920s, or the Interstate highway system in the 1960s?

i think your points are well-taken. i agree that the planet cannot support 7 billion people living the life style currently enjoyed by americans- the resources aren't there. and i, too, think resources will get scarcer and more expensive. but i also think they will for that very reason be used more frugally, plus their higher value [their price] will go into calculating the numbers that will determine whether there has been "growth." at the same time, however, there will be increasingly valued goods and services with little commodity input.

re the growth in population- i do not expect it to grow much larger. the carrying capacity of the planet must have a limit; and some parts of the population - the wealthier ones - voluntarily restrict their reproduction. and there are demographic catastrophes, in the form of aging and shrinking populations, not all that far down the road. in any event, we will be extinct one day. [do you think that homo sapiens will still exist a hundred thousand, or say a million years from now? 10 million?] the only question is: "when?"

I agree we [homo sapiens] won't last forever, but in the nearer term I am not sure the aging and shrinking populations are a "demographic catastrophe". They are only a "catatrophe" because of the economic models we've created for ourselves in the developed economies. If you are GM, a lack of recovery in high-margin automobile unit sales, in part because the population in your home market is aging [and therefore passing their peak earning years], is a "catastrophe". It's also a catastrophe if you are the administrator of the public Social Security pension system, because of the way it is structured.

But it need not be a catastrophe for the economy as a whole. For example, the "pig in the python" Boomers have dramatically influenced both our economies, and that of the world, all along. I see no reason that's going to change just because we are now entering our twilight years. There's going to continue to be the same gradual, but dramatic, shift in consumption patterns of goods and services that we have seen this cohort influence all along. That may be catastrophic for GM, or sales of Coors beer, or the builders of office space, or the vendors of underpriced mortgages for overpriced homes, but I hardly think it need be a catastrophe for the economy as a whole.

What Mobus gets wrong, and the thought process behind it is what is responsible for India to currently have a population of 1.3 b instead of (by my estimate) around 900 m, is that anything you do today will have an immediate impact on the population. The attempt by Sanjay Gandhi (Indira Gandhi's son) in the 1970's to implement drastic changes in Indian reproductive behaviour through heavy handed methods caused the loss of a generation in North Indian states to the message of the benfits of a reduced family size. The primary drivers toward reduced population are a reduction in child mortality, education, the emancipation of women, and lastly better perceived economic well being.

The problem is that population is a generational problem, and you rightly point out that there is an element of self moderation. But these perceptions change as generational experiences and educational factors change the mental frame -- all at a intergenerational speed.

Which brings me to the major points -- the fact remains that no matter what you do (other than what would be considered genocide,) a world population of around 9 billion is already baked in. Large questions remain as to whether such a large population can be sustained, and at what the cost will be to to the planetary eco-system.

My personal belief (and I do not think we can at this moment rely on anything other than belief) is that we have to, as a species, change how we look at our lives and the world around us. I do believe that we will muddle through, and come out better at the end. However, the challenges facing us on this journey are immense, and the costs of mis-steps very large (in human terms.) There will always be those among us (I do not believe that Mobus was among that number) who opt for the "quick and dirty" path -- one that is morally and ethically extremely reprehensible.

However, the costs of doing nothing, and letting things change at their own pace, are in my opinion very high, and in my opinion, raise the probabilities of systemic collapse.

The planet and the environment is a lot more resilient than most people, including the climate change cohort, want us to accept. We as a species on the face of this planet, however, would appear a great deal more vulnerable than most want to accept. I think all it would take is significant crop failures in both the Northern and Southern hemispheres in the same calendar year [say, drought] to expose how vulnerable 7 Billion people really are. If something like this was to happen, some would argue it was brought on by mankind [climate change] and others would point out that civilizations have been devastated by drought and crop failures going back thousands of years. Regardless, the point would be moot.

I haven't been to India for more than two years, but what I noted the last time I was there, and the reports I am getting from business associates, suggest that more and more Indian families are investing more money - particularly for education - raising each of their children. If this is the case, the economics of the situation will dictate fewer offspring. I have no way of determining if this is a pattern only among the better-off urban professionals, which is whom I am most exposed to in my dealings there...so this could be a pattern that cannot yet be extrapolated to the nation as a whole.

[Serge_Tomiko]

Re: Growth isn't Possible

Great. So what's plan "B"?:confused:

Well, firstly, I think it's important to consider the possible outcomes of a zero-growth society.

Alan K Webb's piece that just came out today is a very good overview:

http://www.frontporchrepublic.com/20...tionary-state/

Secondly, well - I don't know really. What I do know is the average person has no respect for the political class as it exists at the present time. Throughout the history of the West, we have revered kings, knights, nobles, and even a few peasants who put the good of their nation ahead of their own material comfort and well being.

A lot of people, including myself, have nothing to lose really. Living a virtuous life is certainly the key, and that easily can be done when you separate yourself from the consumerist culture and free yourself from debt enslavement.

Anyway, Webb write a great book on this topic a few years ago, but its name escapes me at the moment...

[dropthatcash]

Re: Growth isn't Possible

Only if you have a ridged concept of growth. The amount of places, goods and ideas that people can "visit" are growing at the fastest rate in all of human time. This growth consists of digital information. A billion songs/movies/whatever can be produced with virtually no resources used. Better yet, these copies are far superior in quality than the old methods, are far easier to find, store and acquire. They can be delivered worldwide in seconds as opposed month/years not to long ago.

[Starving Steve]

Re: Growth isn't Possible

If mankind could limit its population growth, it could innovate and grow its way out of any so-called scarcity of resouces on Earth. Some examples:

a.) nuclear power could reduce the cost of energy to make de-salinization of sea-water affordable; nuclear power might allow deserts to be farmed because pumping-costs for filtered sea-water would be affordable;

b.) nuclear power and hydro-electric power could reduce the cost of energy to make habitation of high-latitude countries ( especially, Russia and Canada ) more affordable;

c.) side-a-ways drilling and fracturing of rock might make natural gas a cheap and plentiful fuel, worldwide; nat. gas might replace gasoline and diesel fuels in motor vehicles in future;

d.) affordable light oil could be derived entirely from up-grade bitumen, tar sand, and heavy oil;

e.) pro-growth urban planning could reduce land and housing costs, and make urban living more affordable; cities would be allowed to grow outward and upward, without planning restriction;

f.) substitute materials might lower the cost of goods, even lower the cost of buildings; for example, steel buildings with brick or wood facades might lower the cost of construction;

g.) central banking and fiat money could be abolished, worldwide, in order to lower the cost of living and re-instate market approaches and market discipline in the world's economy;

and there are many other examples of what could be done in future to lower the cost of living and make life more bearable. This is going to take a C-change in the way economists think; i.e, we want and need general de-flation, not inflation. The entire economic strategy has to be pro-growth and pro-deflation and pro-people.

The ecologists and the economists are way off-base (out-of-touch) to-day. And the religious-right has to re-think the issue of unlimited population growth, too. For the welfare of humanity, there has to be discipline in procreation.

[gnk]

Re: Growth isn't Possible

GRG55 - I think we're speaking about different things here.

Just a quick question, which may clear things up:

If no one could wash their own laundry and everyone washed each others' laundry for pay, would the economy grow? If everyone washed each others' laundry twice as much per week, would the economy grow twice as fast?

Just curious what you think.

As for medical innovations replacing "traditional" growth - first, that medical innovation has to be financially obtainable by the population at large to contribute to "growth." Second... when people live longer due to medical innovation, they consume more over that longer lifespan. Please look at Social Security and it's sustainability. Would social security last longer if people lived to be 50 yrs old instead of, say, 95 yrs old? Your medical innovation "new growth" just backfired, I'm afraid.

Sorry... growth cannot continue forever for one species. Please watch the Al Bartlett video posted below... a few threads down.

[GRG55]

Re: Growth isn't Possible

GRG55 - I think we're speaking about different things here.

Just a quick question, which may clear things up:

If no one could wash their own laundry and everyone washed each others' laundry for pay, would the economy grow? If everyone washed each others' laundry twice as much per week, would the economy grow twice as fast?

Just curious what you think.

...

That brought up a pretty funny mental picture...an entire world of dhobi-wallahs...

"...Have you ever heard of a “dhobi-wallah?” Dhobis are the human washing machines of India. They get up early every morning and head for the dhobi-ghat where they spend the rest of the day stomping around in vats of sudsy water and dirty clothes, laundering everything clean with their feet in a very very dirty Ganges river.

Where do the clothes come from?
Other dhobis do the pick-up and delivery. They begin at dawn, heading in all directions on bicycles to collect or deliver their customers’ laundry in big bags tied to the back fender. This is how is it is and how it’s been done for centuries (maybe not with bicycles, though). They bring the clothes in and after cruelly stomping on them they punish the clothes by scrubbing them with stiff brushes. Next, they flog them against cement walls… just to make sure they’re really clean. After that, they use heavy irons loaded with live coals to press out any stubborn wrinkles..."

A "services" economy only works where there is a net benefit to specialization. If everyone "specializes" in doing the same thing there's no economy. What you describe is no more an economy than the FIRE equivalent of everybody in the world becoming a derivatives trader or investment banker or a "day trader".

As for the remainder, you and I will just have to agree to disagree. While there are limits to growth within a given business strategy or economic sector, there are no demonstrated limits to economic growth in the world at large, and I don't see that any are imminent...

[And I wouldn't lose any sleep worrying about the exponential function...we've been living with this mathematical factoid since the beginning of our time, and there's nothing magical that I can discern that should cause us to be any more concerned about it now than any time in the past. I have a recollection reading a story about a forecast that was made in NY City in the late 1800s, where the exponential function was trotted out and used to explain to New Yorkers how in just a few more years they would be knee deep in horse manure because of the steady increase in the equine population used for carriages and delivery carts in that city. However, if stress does persist, I recommend applying the same solution we engineers use...start plotting on semi-log paper ;) ]

[Rajiv]

Re: Growth isn't Possible

I recommend applying the same solution we engineers use...start plotting on semi-log paper ;)

That is a good solution. However it seems that Natural Resource availability seems to be quite resistant to being plotted on semi-log!

Another interesting resource for viewing growth is GrowthBusters

Hooked on Growth: Our Misguided Quest for Prosperity from Dave Gardner on Vimeo.

Here are some alternative approaches to growth

Also the problems associated with economic growth

[Starving Steve]

Re: Growth isn't Possible

That is a good solution. However it seems that Natural Resource availability seems to be quite resistant to being plotted on semi-log!

Another interesting resource for viewing growth is GrowthBusters

Hooked on Growth: Our Misguided Quest for Prosperity from Dave Gardner on Vimeo.

Here are some alternative approaches to growth

Also the problems associated with economic growth

Here is the dichotomy of people to-day between: Group A, those who are pro-growth and pro-prosperity, for now and for their kids; and Group B, those who are anti-growth and pro-poverty and want to just survive in caves and f*ck and smoke pot all day.

And one can observe the dichotomy between Group A and Group B in the politics of the world, especially in the politics here on the West Coast of North America.

[gnk]

Re: Growth isn't Possible

Here is the dichotomy of people to-day between: Group A, those who are pro-growth and pro-prosperity, for now and for their kids; and Group B, those who are anti-growth and pro-poverty and want to just survive in caves and f*ck and smoke pot all day.

And one can observe the dichotomy between Group A and Group B in the politics of the world, especially in the politics here on the West Coast of North America.

It's not a choice, it's an observation. It seems to me that many that are critical of that observation fear it the most.

[thriftyandboringinohio]

Re: Growth isn't Possible

The ecologists and the economists are way off-base (out-of-touch) to-day. And the religious-right has to re-think the issue of unlimited population growth, too. For the welfare of humanity, there has to be discipline in procreation.

Too many monkeys on the rock.