Limits to Growth II: The Myth of Infinite Growth

stateofworldMore and more people have begun to question the possibility of human economies ability to grow forever.  The overuse of Earth’s natural resources as well as the destruction regional ecosystems and global ecosystems should tell us that something is wrong.  However many mainstream economists seem to not be concerned with these facts.  They are still claiming that economic growth is not only possible, it’s necessary to improve our well-being.  This maybe true in some cases–no one would argue that Uganda or Pakistan should not work for more economic growth but this distinction should not be generalized.

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The problem is that the whole model of macro-economic growth is built on a fatal flaw–we assume that we can grow forever. The theory states that the resources are fungible and substitutable simply put: “Natural resources are not an issue as long as our technology is improving.” This is not only irresponsible, it’s insane.

What will technology use if we run if we run out of the resource which we use to build the resources? Herman Daly put it nicely  “You can not build the same wooden house with half the wood just because you have more or better saws.”

The question now is one of responsibility: do we want to proceed with “business as usual” and naively assume that technology will solve all our problems and run the risk of a catastrophe? Or shall we back pedal and think about the development and balance of Western economies versus those of the developing world?

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4 responses to “Limits to Growth II: The Myth of Infinite Growth

  1. It seems part of your analysis is built on the idea that consumption destroys a resources. Is that a fair inference?

    However, consumption merely transforms a resources, and production transforms unusable matter into valuable economic goods.

    • Consumption may not always destroy as resource thanks to recycling however many natural resources are used/needed as fuel that cannot be used again. Coal for example cannot be burned twice and its environmental impact will remain after it’s use.

      Even recycling has its limits as the second rule of thermodynamics shows.

      So while some resources can be used again there limits built into there life span and therefore their use as a productive agent and therefore growth.

      • I’m not merely talking about recycling. Taking the coal example, the resource is transformed into something else when it’s burned. The goal of production is then to take that matter and make it economically valuable.

      • Agreed, and there are environmental costs of burning coal not to mention it’s a finite resource so there are limits to its potential.

        Even before we “run out” the gathering of coal would become so expensive that its no longer economically viable. If we then internalize the negative externalities of burning coal the cost becomes much larger. So unless we find a way to use the pollution for a good and nullify its harmful impact–no there are limits and no amount of production can change that.

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