Growth isn't Possible

[Rajiv]

Growth isn't Possible

Four years on from nef's Growth isn’t Working, this new report goes one step further and tests that thesis in detail in the context of climate change and energy. It argues that indefinite global economic growth is unsustainable. Just as the laws of thermodynamics constrain the maximum efficiency of a heat engine, economic growth is constrained by the finite nature of our planet’s natural resources (biocapacity).

As economist Herman Daly once commented, he would accept the possibility of infinite growth in the economy on the day that one of his economist colleagues could demonstrate that Earth itself could grow at a commensurate rate.

Whether or not the stumbling international negotiations on climate change improve, our findings make clear that much more will be needed than simply more ambitious reductions in greenhouse gas emissions. This report concludes that a new macro economic model is needed, one that allows the human population as a whole to thrive without having to relying on ultimately impossible, endless increases in consumption.

Pdf Book (148 pages)

Towards what ultimate point is society tending by its industrial progress? When the progress ceases, in what condition are we to expect that it will leave mankind?
John Stuart Mill (1848)

From birth to puberty a hamster doubles its weight each week. If, then, instead of levelling-off in maturity as animals do, the hamster continued to double its weight each week, on its first birthday we would be facing a nine billion tonne hamster. If it kept eating at the same ratio of food to body weight, by then its daily intake would be greater than the total, annual amount of maize produced worldwide.6 There is a reason that in nature things do not grow indefinitely.

The American economist Herman Daly argues that growth’s first, literal dictionary definition is ‘…to spring up and develop to maturity. Thus the very notion of growth includes some concept of maturity or sufficiency, beyond which point physical accumulation gives way to physical maintenance’.7 In other words, development continues but growth gives way to a state of dynamic equilibrium – the rate of inputs are equal to the rate of outputs so the composition of the system is unchanging in time.8 For example, a bath would be in dynamic equilibrium if water flowing in from the tap escapes down the plughole at the same rate. This means the total amount of water in the bath does not change, despite being in a constant state of flux.
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[gnk]

Re: Growth isn't Possible

This conclusion would have been reached by mankind much earlier if there hadn't been any wars. Wars destroy enough capital and lives to move the baseline down back to previous levels so future growth can be realized once again.

Imagine what the world would look like if there hadn't been any wars.

So, will mankind accept that future growth, in the traditional tangible resource extraction sense, cannot continue? Or will we fight against it and annihilate a large portion of the world population to once again, attain "growth."

And one more thing: What the hell does "a better life for our children" mean? More square feet of granite countertop space in the kitchen? A bigger SUV? A larger McMansion? Knowledge? A closer and better sense of community? Harmony with nature? What have we been focusing on so far?

[Aetius Romulous]

Re: Growth isn't Possible

Why is this not intuitive? Of course unlimited exponential growth is impossible. Duh. I call this syndrome "Impossibleism".

Perhaps it's because we measure the future (and the past) with reference to our own lifetimes. We assume that whatever is happening around us is the way it's supposed to be because we have no other point of reference but our own experience.

It may be that until we can physically see, hear, and touch regression we cannot fathom it. I dunno. It's a pet peeve of mine. As long as there are folks who don't think this trough, there will be major hurdles in our ability to come to grips with almost all our current socio/economic issues. There is/will simply be no motivation to work on the problem.

Thus, so many of the things we talk about here really come down to the problem of awareness, and crappy marketing of the issues. There are certainly enough academic resources to build the case - given that common sense has no effect, - the challenge is to move the fight from academia into the popular environment.

How do we do that? Have our own bizzaro world Glenn Beck?

[gnk]

Re: Growth isn't Possible

Why is this not intuitive? Of course unlimited exponential growth is impossible. Duh. I call this syndrome "Impossibleism".

Perhaps it's because we measure the future (and the past) with reference to our own lifetimes. We assume that whatever is happening around us is the way it's supposed to be because we have no other point of reference but our own experience.

It may be that until we can physically see, hear, and touch regression we cannot fathom it. I dunno. It's a pet peeve of mine. As long as there are folks who don't think this trough, there will be major hurdles in our ability to come to grips with almost all our current socio/economic issues. There is/will simply be no motivation to work on the problem.

Thus, so many of the things we talk about here really come down to the problem of awareness, and crappy marketing of the issues. There are certainly enough academic resources to build the case - given that common sense has no effect, - the challenge is to move the fight from academia into the popular environment.

How do we do that? Have our own bizzaro world Glenn Beck?

It is not only a personal conceptualization issue, it's also a deeply ingrained systemic issue as well.

Corporate leaders are perhaps some of the most powerful and influential figures in most countries. Now which corporate leader will be the first to accept that growth has limitations and act accordingly? None because it is not in the job description. That would be personal career suicide. And it also extends to banking, military, and governmental instututions as well.

The world will never confront the issue of growth limitation. For any country to do so, would give competing countries that do not limit growth an "edge" and they will consume the world resources faster and be financially and militarily stronger than the countries that voluntarily limit growth. Thus, it is a race to the bottom.

[Aetius Romulous]

Re: Growth isn't Possible

We are so on the same page GNK.

I make the assumption that a system which exists solely for the purpose of growth will not be changed by those who have the most motivation not to. It's self sustaining as you correctly point out.

So tilting at that windmill is a waste of time and energy - time and energy most concerned commentators are all to willing to waste away. As I say, the project should be in raising public consciousness to the extent that it can use the current system to set the conditions for change. No?

[due_indigence]

Re: Growth isn't Possible

The choice seems stark:

1. Usury-led growth punctuated by supply/demand destruction (war/depression). This is the preferred model of the bankers. Lending the chips out, then gathering the chips back in.

2. Sustainability. A post-Ponzi model.

[gnk]

Re: Growth isn't Possible

We are so on the same page GNK.

I make the assumption that a system which exists solely for the purpose of growth will not be changed by those who have the most motivation not to. It's self sustaining as you correctly point out.

So tilting at that windmill is a waste of time and energy - time and energy most concerned commentators are all to willing to waste away. As I say, the project should be in raising public consciousness to the extent that it can use the current system to set the conditions for change. No?

I'm not so sure anymore.

Have you ever tried to have this conversation with someone outside of our iTulip world? I have on many occasions. Even when people understand the concept, within an hour or so, cognitive dissonance steps in.

I'll be sexist and say that women fall into the cognitive dissonance trap much faster than men. There's a sale at Macy's and they need to buy their 40th handbag or they still compare their engagement ring to their friends'. But to be fair, we men although not as likely to fall into that consumption trap as easily, act differently when it comes to work. We thrive in that system of exponential growth - whether it's when we trade to increase our wealth, or at work to beat sales forecasts. We hunt, women nest. We always want to hunt down a bigger wooly mammoth, women always want to expand the nest and everything that's in it.

You're fighting survival instinct. We all know the dangers of salty and sweet foods - but that desire is in our genes from days when food wasn't as easy to come by. We try diets, yet are fatter than ever. That's what you're trying to fight.

Consumption also equals freedom. I think the US's history of Capitalism and free enterprise has a lot to do with the fact that our country seemed limitless in the 19th century. Unlike Europe, we had millions of acres of land available for the taking. Go west young man was a call to better your life, to take a risk and settle on no mans land and create something. Clear a patch of forest... there was no aristocracy that already owned that land as in Europe that expected rents. If you were lazy, you went hungry and that was your fault. That mentality is still ingrained in us today, especially amongst conservatives that hark back to those days.

Telling people that we need to consume less goes against survival genes and political philosophy.

One more thing - technology has accelerated global money flows and thus consumption and resource extraction. Yes, technology can also increase crop yields and energy efficiency... but that too will have limits. In the end, ironically, I think that technology will devolve civilization.

[GRG55]

Re: Growth isn't Possible

It is not only a personal conceptualization issue, it's also a deeply ingrained systemic issue as well.

Corporate leaders are perhaps some of the most powerful and influential figures in most countries. Now which corporate leader will be the first to accept that growth has limitations and act accordingly? None because it is not in the job description. That would be personal career suicide. And it also extends to banking, military, and governmental instututions as well.

The world will never confront the issue of growth limitation. For any country to do so, would give competing countries that do not limit growth an "edge" and they will consume the world resources faster and be financially and militarily stronger than the countries that voluntarily limit growth. Thus, it is a race to the bottom.

We are so on the same page GNK.

I make the assumption that a system which exists solely for the purpose of growth will not be changed by those who have the most motivation not to. It's self sustaining as you correctly point out.

So tilting at that windmill is a waste of time and energy - time and energy most concerned commentators are all to willing to waste away. As I say, the project should be in raising public consciousness to the extent that it can use the current system to set the conditions for change. No?

The choice seems stark:

1. Usury-led growth punctuated by supply/demand destruction (war/depression). This is the preferred model of the bankers. Lending the chips out, then gathering the chips back in.

2. Sustainability. A post-Ponzi model.

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.

[gnk]

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.

The current recession is not what I am using in my view of limits to growth. I also use the word "growth" as it is used today - which involves population, consumption, and resources. Therefore, you can't change the definition of "growth" and say we will always grow. And you can't simply peg the resurgence of Malthusian views because we happen to be involved in a recession.

Globalization and the meteoric use of resources is what has me thinking of growth.

Can our current monetary system continue without population growth? See Japan. But I would even say that's irrelevant too. In my lifetime, the world's population has nearly DOUBLED from just under 4 billion to almost 7 billion. And most of the world's population still doesn't live like the average American... but they are trying hard as hell to accomplish that. And who can blame them?

The question is, can everyone on the planet live like the average american does and expect their children to live even better than they did? It's not even a question of peak oil anymore.

[Serge_Tomiko]

Re: Growth isn't Possible

And one more thing: What the hell does "a better life for our children" mean? More square feet of granite countertop space in the kitchen? A bigger SUV? A larger McMansion? Knowledge? A closer and better sense of community? Harmony with nature? What have we been focusing on so far?

This is the problem of culture and why we have a culture war. The dominant ethic, and the one promoted by both political parties, is utilitarianism. Because argument for this ethic is circular, in that the good is defined as whatever the people want it to be, it makes propaganda the primary method of interacting with the public. It also necessitates our present system of debt as a means of social control.

[Serge_Tomiko]

Re: Growth isn't Possible

As I say, the project should be in raising public consciousness to the extent that it can use the current system to set the conditions for change. No?

What is the current system? Glenn Beck, or any talking head on the TV, is not the answer.

The cynicism of the people runs so deep that only real, demonstrable courage and total self sacrifice will have any impact on the populace at large.

[raja]

Re: Growth isn't Possible

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.

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?

[Rajiv]

Re: Growth isn't Possible

And finally, assume there is no peak in any natural resource.

That very assumption is what is crucially at fault -- We have a limited planet with a limited real estate, and hence limited resources -- as quoted in the book above

From birth to puberty a hamster doubles its weight each week. If, then, instead of levelling-off in maturity as animals do, the hamster continued to double its weight each week, on its first birthday we would be facing a nine billion tonne hamster. If it kept eating at the same ratio of food to body weight, by then its daily intake would be greater than the total, annual amount of maize produced worldwide. There is a reason that in nature things do not grow indefinitely.

The population pyramids of most countries are such that even if today every country dropped its population growth to replacement, even then, a peak population of 10-12 b is baked in -- with most of the growth taking place among the uneducated and illitrate of this world. It is very unclear to me that there are resources on this planet to feed and clothe this number without irreversably damaging the Earth's ecosystem.

[ThePythonicCow]

Re: Growth isn't Possible

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

Interesting thought experiment.

I find it easier to think about your imaginary scenario if I add one more twist to it. I imagine that instead of selling ones labor and goods for money, we all sold such for some intangible karma, for which there were no earthly accounting sheets or balances.

The first thing I notice is that answering your question "would society's wealth continue to increase?" is challenging. For those of us who have been living in the material world our entire lives, answering questions about karmic wealth comes less easily than answering questions about monetary wealth.

That is, one of the essential problems we face is that official economic statistics have become almost entirely a monetary concern, for that is how almost all official economic things are measured.

So when you ask if our wealth would continue to increase, I must respond first by asking what you mean by "wealth" ?

Then I might add that such a transformation from monetary to karmic rewards would be a fundamental change in typical human motivations. You would have to elaborate on this change before one could any grounds for speculating what the outcome might be. Would humans work harder, goof off, or work on different things? What would be the feedback loops that replace those currently governing markets, production and consumption?

[Sharky]

Re: Growth isn't Possible

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

To answer your hypothetical, first consider what wealth really is. Wealth is not money. Wealth is also not possessions. Wealth is production. The more you produce, the wealthier you are; this is a very critical concept that I think many in the West have forgotten.

One of the reasons this is true is because resources naturally flow from consumers to producers. If I am the only producer in a simple economy, let's say a farmer to make it concrete, and you are a consumer and have all of the money at the start, after a while I will have all of your money and you will have some food in exchange.

So, getting back to your question: if you eliminate money and resources from the equation, then look at what happens to production. In your example, it stagnates. Therefore wealth does not increase. In fact, if the population increases, then the same level of production needs to support more people, and average wealth will decline. If food supplies were constant as the population increased, for example, eventually some people would starve.