Growth isn't Possible

[GRG55]

Re: Growth isn't Possible

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.

I would modify your definition slightly...wealth is created by producing what is consumed.

The fallacy that wealth is created merely by producing is one that is near and dear to socialists everywhere, and is what gave rise to factories in the Soviet Union that were rewarded for meeting output targets for shoes that nobody bought, "mountains of butter and lakes of milk" in the EU, and the creation of central planning departments in goverments everywhere. I have strong suspicions that China's remarkable automobile "market growth" statistics [which are simply not credible] are due to the same sort of thinking going on in Beijing now.

There is absolutely zero benefit, including any "wealth creation", to producing anything unless somebody, somewhere is willing to "consume" it.

I think it was Dr. John Hussman that pointed out that recessions are not about across the board declines in demand, but are actually a mismatch between production and demand in only a few sectors...and that freeing up and re-deploying resources tied up in those sectors is what must happen to come out of a recession.

[gnk]

Re: Growth isn't Possible

I would modify your definition slightly...wealth is created by producing what is consumed.

The fallacy that wealth is created merely by producing is one that is near and dear to socialists everywhere, and is what gave rise to factories in the Soviet Union that were rewarded for meeting output targets for shoes that nobody bought, "mountains of butter and lakes of milk" in the EU, and the creation of central planning departments in goverments everywhere. I have strong suspicions that China's remarkable automobile "market growth" statistics [which are simply not credible] are due to the same sort of thinking going on in Beijing now.

There is absolutely zero benefit, including any "wealth creation", to producing anything unless somebody, somewhere is willing to "consume" it.

I think it was Dr. John Hussman that pointed out that recessions are not about across the board declines in demand, but are actually a mismatch between production and demand in only a few sectors...and that freeing up and re-deploying resources tied up in those sectors is what must happen to come out of a recession.

Good point. But I would also add that whereas central planning departments in socialist/communist nations focus on production, so called "capitalist" societies focus on consumption thru money printing i.e. deficit spending, interest rate manipulation, and fractional reserve lending.

So I guess where we, the US differ from China, is that our central planning - the Wall Street/Federal Reserve complex - focuses on debt creation for consumption. Thus, it doesn't matter where/who produces, as long as it is done cheaply.

[jk]

Re: Growth isn't Possible

part of the transition to a post-industrial economy is that many goods and services are becoming more ethereal, and less reliant on commodity inputs [except for energy- big exception]. i'm posting this note over a wireless network connected to an internet that really has only existed for a short time. i bought my first computer in 1982, a kaypro with 64.. wait for it... KILOBYTES of memory and NO hard drive, just two 5.25" floppy drives that used discs that were literally floppy. i remember getting my first modem- could it have been 128baud? the inputs into the laptop on which i am typing are what? some carbon, some silicon, some copper, lithium, some trace elements, petrochemical plastics - adding up to about a 3 pound object- again, not much material input. what gives it value is the intellectual property that went into the skillful combination of those skimpy inputs. and what really leverages that value is the existence of the internet, itself having a value far, far exceeding the value of the material objects that constitute its physical realization.

so there can be growth in measured economic value, with less and less of that value being the passed-through cost of the material inputs.

[GRG55]

Re: Growth isn't Possible

part of the transition to a post-industrial economy is that many goods and services are becoming more ethereal, and less reliant on commodity inputs [except for energy- big exception]. i'm posting this note over a wireless network connected to an internet that really has only existed for a short time. i bought my first computer in 1982, a kaypro with 64.. wait for it... KILOBYTES of memory and NO hard drive, just two 5.25" floppy drives that used discs that were literally floppy. i remember getting my first modem- could it have been 128baud? the inputs into the laptop on which i am typing are what? some carbon, some silicon, some copper, lithium, some trace elements, petrochemical plastics - adding up to about a 3 pound object- again, not much material input. what gives it value is the intellectual property that went into the skillful combination of those skimpy inputs. and what really leverages that value is the existence of the internet, itself having a value far, far exceeding the value of the material objects that constitute its physical realization.

so there can be growth in measured economic value, with less and less of that value being the passed-through cost of the material inputs.

Absolutely agree...

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...

...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.

Which is why I have some trouble accepting this view...

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...

[ThePythonicCow]

Re: Growth isn't Possible

i remember getting my first modem- could it have been 128baud?

I'd guess it was 300 baud.

[gnk]

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!"

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. 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.

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

[Fiat Currency]

Re: Growth isn't Possible

I'd guess it was 300 baud.

... and had an "acoustic coupler" ...

acoustic coupler.jpg

Suddenly, I feel old again :eek:

[Sharky]

Re: Growth isn't Possible

I would modify your definition slightly...wealth is created by producing what is consumed.

Yes, I completely agree. If there are no buyers for items that are being produced, and at a price above their true cost, then that production actually destroys wealth.

[jk]

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!"

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. 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.

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

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?"

[Aetius Romulous]

Re: Growth isn't Possible

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.

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

[Rajiv]

Re: Growth isn't Possible

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?"

JK,
I have to quibble with your scenario. Given that we are likely already much past ecological overshoot, I expect a sudden collapse of population. The image that I have in my mind is that of "an overloaded camel waiting for the last straw."

probably not as bad as the reindeers on St. Matthew Island, but bad nevertheless



In the words of a DOE consultant

"Oil peaking will be catastrophic, beyond anything I have seen...
We are about to drive the car over the cliff and say, `Oh my God,
what have we done?'"
-- Robert L. Hirsch, Ph.D., US Department of Energy consultant.

The above is from an essay by a Professor of Psychology at Loyola
Marymount

Overview.
I initially developed this webpage for my students, especially those in
my Ecological Psychology course. The goal was to provide a succinct
overview peak oil, and "heads up" about the social and personal challenges
we will need to confront in the near future.

This web page is divided into the following topics, which will be explored
in turn:

	Ecological overshoot as a general problem in population biology. The possibility of avoiding a human Mathusian collapse via a Kurzweillian "techno-fix"
	Peak oil as a an example of human ecological overshoot.
	Possible economic and social scenarios following peak oil.
	Contributions by psychological science, and evolutionary psychology in particular, that may help to mitigate these problems.

Part 1: Ecological overshoot as a general problem in population biology.
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[Sharky]

Re: Growth isn't Possible

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. 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.

Just because the third world wants a car, air conditioning, etc, doesn't mean that they will get those things.

Why would wealth "level out"? Wealth follows production. If the third world doesn't produce anything (which is what will happen if they're limited by resources, including capital or energy), they won't get any wealthier. Their "wants" will not translate into demand.

I do agree that there's a limit. However, I have no idea where that limit is. There were people who thought the Earth couldn't sustain a billion people, much less the seven times that.

I have to quibble with your scenario. Given that we are likely already much past ecological overshoot, I expect a sudden collapse of population. The image that I have in my mind is that of "an overloaded camel waiting for the last straw."

First, I agree that there will be some unpleasantness ahead. For example, the world has had many famines before, and there's no reason to think they've been somehow abolished.

But why would the collapse be sudden, and why would it be global? Global war? Disease?

In the absence of those things, it seems to me that the wealthier countries of today, and particularly countries that are net resource and food exporters, would do relatively well. It's the areas that import lots of food that are going to be in big trouble, especially when energy costs skyrocket.

[Rajiv]

Re: Growth isn't Possible

But why would the collapse be sudden, and why would it be global? Global war? Disease?

The question I have for you is "Why was the collapse in the Reindeer herd sudden?" The population dropped from 6000 to 42 suddenly. Why?

What will possibly happen is a sudden reduction in food supplies, inability of others to pick up the slack -- Hoarding, and eating the stored seed resulting in an insufficient seed stock -- an inability to produce food at the same level -- followed by hunger and then disease.

People act stupidly when they are under stress.

[Sharky]

Re: Growth isn't Possible

The question I have for you is "Why was the collapse in the Reindeer herd sudden?" The population dropped from 6000 to 42 suddenly. Why?

It seems to me that drawing any conclusions about people from a study on reindeer is a risky thing at best. People at least have the ability to be rational, even they don't act that way all the time. Reindeer don't have that option. If you're claiming that people will act like irrational animals when food gets tight, I disagree. The history of famines also says otherwise.

What will possibly happen is a sudden reduction in food supplies, inability of others to pick up the slack -- Hoarding, and eating the stored seed resulting in an insufficient seed stock -- an inability to produce food at the same level -- followed by hunger and then disease.

People act stupidly when they are under stress.

But that wouldn't happen everywhere at the same time, right? For example, if oil costs were to skyrocket, then transporting food for any distance could make it prohibitively expensive in some areas, but could in theory actually increase food supplies near where it's grown.

Consider the following map (from 2008):

[Rajiv]

Re: Growth isn't Possible

It might serve you well to read an article written in 1995 by David Price - Energy and Human Evolution

Life on Earth is driven by energy. Autotrophs take it from solar radiation and heterotrophs take it from autotrophs. Energy captured slowly by photosynthesis is stored up, and as denser reservoirs of energy have come into being over the course of Earth's history, heterotrophs that could use more energy evolved to exploit them, Homo sapiens is such a heterotroph; indeed, the ability to use energy extrasomatically (outside the body) enables human beings to use far more energy than any other heterotroph that has ever evolved. The control of fire and the exploitation of fossil fuels have made it possible for Homo sapiens to release, in a short time, vast amounts of energy that accumulated long before the species appeared.

By using extrasomatic energy to modify more and more of its environment to suit human needs, the human population effectively expanded its resource base so that for long periods it has exceeded contemporary requirements. This allowed an expansion of population similar to that of species introduced into extremely, propitious new habitats, such as rabbits in Australia or Japanese beetles in the United States. The world's present population of over 5.5 billion is sustained and continues to grow through the use of extrasomatic energy.

But the exhaustion of fossil fuels, which supply three quarters of this energy, is not far off, and no other energy source is abundant and cheap enough to take their place. A collapse of the earth's human population cannot be more than a few years away. If there are survivors, they will not be able to carry on the cultural traditions of civilization, which require abundant, cheap energy. It is unlikely, however, that the species itself can long persist without the energy whose exploitation is so much a part of its modus vivendi.

The human species may be seen as having evolved in the service of entropy, and it cannot be expected to outlast the dense accumulations of energy that have helped define its niche. Human beings like to believe they are in control of their destiny, but when the history of life on Earth is seen in perspective, the evolution of Homo sapiens is merely a transient episode that acts to redress the planet's energy balance.

Ever since Malthus, at least, it has been clear that means of subsistence do not grow as fast as population. No one has ever liked the idea that famine, plague, and war are nature's way of redressing the imbalance -- Malthus himself suggested that the operation of "preventive checks," which serve to reduce the birth rate, might help prolong the interval between such events (1986, vol. 2, p. 10 [1826, vol. 1, p. 7]). 1 And in the two hundred years since Malthus sat down to pen his essay, there has been no worldwide cataclysm. But in the same two centuries world population has grown exponentially while irreplaceable resources were used up. Some kind of adjustment is inevitable.

Today, many people who are concerned about overpopulation and environmental degradation believe that human actions can avert catastrophe. The prevailing view holds that a stable population that does not tax the environment's "carrying capacity" would be sustainable indefinitely, and that this state of equilibrium can be achieved through a combination of birth control, conservation, and reliance on "renewable" resources. Unfortunately, worldwide implementation of a rigorous program of birth control is politically impossible. Conservation is futile as long as population continues to rise. And no resources are truly renewable. 2

The environment, moreover, is under no obligation to carry a constant population of any species for an indefinite period of time. If all of nature were in perfect balance, every species would have a constant population, sustained indefinitely at carrying capacity. But the history of life involves competition among species, with new species evolving and old ones dying out. In this context, one would expect populations to fluctuate, and for species that have been studied, they generally do (ecology texts such as Odum, 1971 and Ricklefs, 1979 give examples).
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