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Have the Limits to Growth Really Been Reached?

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As true recovery from the Great Recession continues to elude us, more and more financial gurus have begun to question the fairy tale of endless economic growth. Of course this makes the true believers and high priests of the church of growth everlasting very nervous. I’ve been expecting them to rally the rhetoric to convince investors and the general public to “move along; nothing to see here.” 

The Wall Street Journal just ran The World’s Resources Aren’t Running Out, by Matt Ridley. Since that’s behind a paywall I don’t want to frustrate you by writing about it. So today we’ll honor a piece put out by the American Enterprise Institute. AEI is a conservative mouthpiece funded by many infamous growth-pushers, including the Koch brothers. The Institute’s Desmond Lachman apparently drew the short straw and got the assignment recently. In the AEI magazine, The American, Lachman makes the best case he can for keeping the faith. He takes on a recent paper by Northwestern University economics professor Robert Gordon, which theorizes that the past 250 years of robust economic growth were a unique blip, not a pattern we should expect to repeat into the future.

“Each time these economies stumble, there is no shortage of economists who come out of the woodwork to advance plausible reasons as to why the limits of economic growth might have been reached. Yet each time, events seem to have proved these pessimists wrong — it has turned out that they consistently have tended to underestimate the ability of the human mind to come up with new ideas that might underpin renewed long-term economic growth.”

So far this has been the case, for about 200 years. Out of the entire history of human civilization, a couple hundred years of successful binging doesn’t necessarily mean we can party indefinitely. The fact that we managed through innovation to push the day of reckoning with limits to growth farther into the future does not necessarily mean we can do this indefinitely. In fact, each time we manage to do this, we are winding ever tighter the spring of complexity in our civilization, increasing its chances of breaking, and compounding the likely consequences.

Lachman credits “the power of technical advances like hydraulic fracturing, horizontal and deep-water drilling,” with disproving predictions that peak oil would cause high energy prices that would cripple our economy. Yet high oil prices have been partly to blame for recent economic shocks. We are scraping the bottom of the energy barrel, going to the expense and risk of drilling in deep oceans, and risking the health of our air, water and children by drilling in our back yards. This hardly feels like a triumph of technology and human innovation.

But Lachman seems certain that we can drive our civilization with our eyes glued to the rear view mirror, expecting repeats of the same miracles that fossil fuels and a few continents worth of untapped resources provided during recent history. He proceeds to prove this using the word “could” in a few places. Yes, miracles “could” happen. Fairy tales “could” come true. But Robert Gordon, Jeremy Grantham, Herman Daly, and a host of very bright men, coincidentally not employed by growth profiteers, are very doubtful. Things are different this time. This is the first time we’ve had a planet full of over 7 billion people. It’s the first time in human history we’ve had 400 ppm of CO2 in our atmosphere. It’s the first time we’ve been pumping major aquifers and rivers dry. There's a first time for everything.

Please vote just how guilty of pro-growth bias you find this piece. Comment below.

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Comments

  • Mike Hanauer
    Mike Hanauer Tuesday, 29 April 2014

    I think one thing that is too often overlooked is: Even if we CAN continue to grow does not mean that we SHOULD. Quality of life, the planet, the traffic, the crime and so many other things continue to degrade even when further growth is POSSIBLE. Possible does not make right.

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  • Dave Gardner
    Dave Gardner Tuesday, 29 April 2014

    Maybe true, Mike, but doesn't the fact that it isn't possible make that a moot point? I guess for those who just don't buy it, they should look at whether it is really improving their lives, whether it is really generating prosperity, and whether it is improving the odds of their children being able to live good lives. Always appreciate the comments.

  • Mike Hanauer
    Mike Hanauer Tuesday, 29 April 2014

    Dave, not only do I believe is IS possible (to continue to grow), I believe we have been doing it for decades and can continue in spite of our (too often what appears to be) rhetoric to the right. It started with the original Paul Ehrlich/Julian Simon bet that we would run out of resources, but technology found us more or substitutes. We had peak oil, and now we have fracking, and then maybe nuclear, or clean coal, or whatever some entrepreneur comes up with to make a mint in spite of the side effects and "untended consequences". My guess is that global warming will be "solved" with an enterprising entrepreneur making big $$ on filling the atmosphere with sun blocking soot. We were often running out of food, and now we have franken foods. I think we have limited credibility in so often announcing resources are or soon will run out. It is quality-of-life (and sustainability) that we sacrifice no matter what. I think a dual approach is needed, and we need to realize that "running out resources" has lost credibility with many.

  • Karen Shragg
    Karen Shragg Wednesday, 30 April 2014

    when you base the discussion on WATER, limits are made clearer. WHO cares if we can invent new energy when we can't invent new clean water. We also need to frame the growth issue in terms of drving so many social ills. Injustice abounds in a world of limited water, land etc.

    ALSO since people just quickly scroll thru these posts, How about a title that is a statement and NOT a question. The Pain We Feel is because we have crashed into our limits... or something that is definitive..

  • Dave Gardner
    Dave Gardner Thursday, 01 May 2014

    Very true, Karen. I think the cornucopians of course will place their bets on desalination, which of course opens a Pandora's box of negative impacts.

    With rare exceptions our post titles are the actual headlines of the stories we are faming or shaming, thus the question heading this critique. There are some good reasons for doing that, but we are aware of the trade-offs. We'll keep evaluating and try to make sure it's as clear as possible.

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