Wednesday, August 31, 2011

Why Do So Many People Believe in the Fantasy of Infinite Growth on a Finite Planet? Three Bogus Reasons

...Each day it becomes more apparent that we are on a misguided mission. Pursuit of perpetual economic growth is not a winning proposition for a lasting prosperity. Building a bigger economy can make sense in some circumstances, but always aiming to build a bigger economy means taking an ever-bigger chunk out of the earth’s ecosystems and the life-support services they provide. Why, then, do so many people believe in the fantasy of infinite growth on a finite planet? Is it because we can’t come up with a better idea? Is it because the rich and powerful have trapped the rest of us in their web of conspiracy? Is it because people are hopelessly greedy and materialistic?

At various times and places we might answer these questions affirmatively, but we can more commonly answer, “No, no, and no.” Putting aside conspiracy theories for the moment, there are three honest (but bogus) reasons why we pursue economic growth past the point of effectiveness and reason.

Bogus Reason #1: We think we have to have economic growth to create jobs....

Bogus Reason #2: Screwy corporate incentives require growth....

Bogus Reason #3: We refuse to pay attention to the downsides of economic growth....

Why Do So Many People Believe in the Fantasy of Infinite Growth on a Finite Planet? by Rob Dietz at The Daly News: Steady State Commentary and Related News.

11 comments:

Adam said...

Tom - How do you merge MMT with Steady State Economics?

How much of MMT do Steady State Economists know?

Clonal said...

Adam,

Steady State Economics and MMT are not antithetical to each other. Private Banking and the charging of interest is antithetical to steady state economics - charging of interest by non government lenders sets up the necessity for real growth.

Septeus7 said...

I for one disagree with "no growth" economic ideas because they are the result of the same equilibrium analysis that the "free market" types always promote.

For an introduction, I'll post a link to a good blog from Econospeak (http://econospeak.blogspot.com/2010/11/embarrassed-by-left.html)

Second, I suggest you watch the first two of these documentaries by Adam Curtis (http://topdocumentaryfilms.com/all-watched-over-by-machines-of-loving-grace/)

The New Left's austerity program based on ecology is still an Austerity program.

The facts spending less whether it is units of power used or units of dollars still works with the same accounting. In order to spend on necessary work, something must take on a deficit.

If you decrease energy consumption you must run a deficit in production. If you increase production you must increase a deficit in the resource base.

The problem with these "finite world" idea is that is assumes that the mode of production and the resource base is fixed and therefore economics growth is simply the rate of depletion.

The problem is economic growth isn't just about exaction/depletion but increases in change of value. Value is subjective and humans change values. If we turned away from the "car CULTure" and started valuing the efficiency of rail the economy would grow because the increase in value measure is actually measuring a shift in values.

To say that infinite economic growth is impossible is to human being are limited in how much they can change their minds and values.

But such a claim is the essence of Oligarchism and Tyranny for what could be a greater tyranny than to say that human being must one have one unchanging system of values and must not be allowed to think of different mode of being and therefore wealth?

The only response to Austerity and Tyranny in any form is found in the follow song. http://www.youtube.com/watch?v=QU3eb5AfNJk

Anonymous said...

This is riduclous. Who's to know that in the future we wilkl be able to 'look' outside our own planet for resources, or come up with much better technology or harness the energy of the sun more efficently and at a cheaper price???

Damo

Tom Hickey said...

The argument is that in a debt-based system economic growth must outpace debt or the system will become unsustainable.

The solution is to recognized that government debt is unnecessary operationally and can be eliminated, and that private debt can be minimized by relying on government injection, since the cost of capital to government is zero.

I see moving in the direction of steady state and abandoning the unlimited growth model as perfectly compatible with MMT.

My view is that global leaders need to consider the global economy as a closed system, whose context is global ecology. Right now, there are major problems because we've got the context wrong and therefore can't adapt to changing circumstance quickly enough.

In addition, global leaders are using the wrong understanding of monetary economics, which vastly complicates the problem.

Anonymous said...

"This is riduclous. Who's to know that in the future we wilkl be able to 'look' outside our own planet for resources, or come up with much better technology or harness the energy of the sun more efficently and at a cheaper price???"

This is an other fallacy for infinite growth, that technology will always get better. Take in mind that historically this is NOT true at all. Technology does not always progress fast enough to make continuous growth possible.

However, the definition of "growth" is a totally different thing.

Tom Hickey said...

This is riduclous. Who's to know that in the future we wilkl be able to 'look' outside our own planet for resources, or come up with much better technology or harness the energy of the sun more efficently and at a cheaper price???

The dicey question is timeframe and scale up. These are huge engineering problems in addition to economic ones.

Leverage said...

Septeus7 good post but:
1) Steady state does not mean static state. In fact steady state is a dynamic system where things change, but energy flows remain constant in a lower-energy state than now (which is metastable, but will collapse at some point).

2) The whole analysis is based on thermodynamics and biophysical economics, and that's what is analysed, the flow of energy and waste and hence real goods output capacity. I agree is dangerous to use the term 'growth' in a fixed way, but still: if you know the context it makes sense.

This does not mean that culture can change, after all it's our must valuable adaptive tool as species, far beyond anything else (even knowledge and technology come into a second place). But the portion of costs which have to do with natural capital will raise and culture will have to adapt to that, how will it? That's in our hands.

And a lot of that has to do with adapting the financial and monetary system to a new set of rules. That's cultural change.

JimW said...

I think we should start by defining precisely what we mean by "growth," and then we can decide if this is a real possibility or not, and if so, then we can further decide if it is something positive and worthwhile in relation to this or that end in view, and in relation to given numbers of populations and patterns of settlement, resources, soil, and so one. It is a complex issue, but too often we have recourse to "sound bite" opinions.

Geo T said...

Septeus7 (and many others) are still in denial of what the word "finite" actually means, using word-salads to propose a different type of growth that's miraculously not physical. In the real world, there's no rational way to increase money supplies without increasing gross consumption. Otherwise, you're just playing new games with money & debt, which will eventually fail for the same reasons the old ones did.

For whatever reason, some people just can't handle the idea of scarcity in any context, and that's what needs to be corrected in the mass psyche. Put these finitude-deniers on a small island for awhile. They may learn to extrapolate that island to bigger ones, eventually planet-sized, and it should be clear that TIME is the main variable for hitting depletion limits. It's just math.

Bob said...

When the value of an asset (e.g. an apartment in a trendy part of town) increases year after year, the owner may consider that "growth". Realtors may consider a higher turnover in property sales as growth. But as JimW said, the exact definition has to be nailed down.