«

»

Nov
07

The entire concept of infinite growth on a finite planet is flawed

It always has been. It is truly unfortunate that we decided to create an economic system that requires growth to function. This hard physical limit to the fantasies of finance is coming home to roost. It has been for over a decade. Couple the limits with global heating and its effects on production, of food for example, and we have compelling reasons to pay attention.

Growth is no longer good. It has become a cancer on the planet and will lead to the demise of our unrealistic way of being. Just because we cannot envision a better way of meeting our every want doesn't mean that the universe gives a crap.

GDP is based on creating an artificial and fictitious boundary, assuming that if you produce what you consume, you do not produce. In effect , “growth” measures the conversion of nature into cash, and commons into commodities.

Embedded Link

How economic growth has become anti-life
An obsession with growth has eclipsed our concern for sustainability, justice and human dignity. But people are not disposable – the value of life lies outside economic development

Google+: View post on Google+

11 comments

  1. Danial Hallock
    Danial Hallock says:

    Unfortunately, the whole fiat currency system, our reliance on fossil fuels, and our crass consumerism are things that we (myself included) just don't want to give up; and I think as long as the cons are theoretical and abstract, they'll remain the problem of future generations.

  2. Chris George
    Chris George says:

    I agree completely. I happen to have a couple of members of one of those generations living right here with me.

    The cons are coming home to roost, I am not sure if the do nothing that doesn't effect me strategy is going to work out this time. Unless we are really close to checking out with ours.

  3. John Poteet
    John Poteet says:

    There is at least acknowledgement that the problem is real and serious among scientific elites. I'm seeing some of that recognition spreading to people in the private sector who work with information technology. 

    Getting the greater mass of people on board is going to be a challenge.

  4. Edward Morbius
    Edward Morbius says:

    For more fun and games:  this story was posted to KurzweilAI.net.  Comedy ensues in comments as Singularitarianismists are faced with the possibility that the Future May Not Be Infinite:
    http://www.kurzweilai.net/how-economic-growth-has-become-anti-life

  5. Chris George
    Chris George says:

    I still come back to this work on a regular basis, just to make sure that it is pounded into my neurons.

    http://www.inscc.utah.edu/~tgarrett/Economics/Economics.html

  6. Edward Morbius
    Edward Morbius says:

    +Chris George Why is it the physicists seem to get economics so much better than the economists?  There are some economists who do, but the mainstream very studiously ignores (or viscerally attacks) these ideas.

  7. Chris George
    Chris George says:

    Linking economics to empirical evidence removes their ability to sell snake oil.

    If people were to recognize that money is a symbol for energy, they would immediately make the connection between QE and fantasy. You cannot create energy. They haven't quite managed to expunge thermodynamics from highschool yet, but not through lack of trying. And until they do people will continue to make that connection on their own, making their agenda just a little bit harder to achieve.

    I see people jumping for joy over lower gasoline prices lately. The cheaper fuel is a function of increasing supply in North America, supply that becomes unprofitable at $90/bbl or so. The cheaper fuel will also increase demand as people start doing the things they gave up doing due to high priced fuel.Which of course will raise prices and make high cost producers want to get back into producing, raising supply…

    So price swings at this point aren't very helpful and people don't get it. They can't seem to make the connection between the price of oil and our ability to run our economy. At $125/bbl, growth stalls. At $90/bbl high cost producers drop out of the market. We can operate within a slim price window and even then we are seriously screwed without QE and the ability to spur borrowing. 

    So anything that encourages people to take a more reality based view of our economy is downplayed and the hope du jour from the economists is endlessly discussed in all of our media.

  8. Edward Morbius
    Edward Morbius says:

    +Chris George  QE and fantasy

    You cannot create wealth but you can by creating the liens on wealth (more currency) and distributing them, preferably fairly, change the allocation of that real wealth among parties.

    In a heart attack, the problem isn't that someone doesn't have working lungs or a sufficient glucose level in their bloodstream, it's that the blood isn't moving.

    That said:  once you've addressed the liquidity problem, you've still got a larger resource issue to deal with.

    Which is where the neoclassical economics orthodoxy starts punting like mad.

    Agree with your points regarding gasoline prices — at this stage in the game, they can only swing in a narrow and high-ish range.  Any higher and marginal economic activity cranks down.  Any lower and the extraction (oil and gasoline aren't "produced") stops.

  9. Chris George
    Chris George says:

    People seem to sense that QE is needed, but they don't seem to get the connection with it, interest rates and energy.

    Without true growth, interest, as an idea, becomes a theoretical construct. Redistribution of the tokens or "shaving" the currency, isn't going to address this fundamental flaw. We have seen large amounts of existing infrastructure and financial assets go under as they try desperately to keep the patient alive for another quarter. Garret points out that growth comes with an annual fee. This nails the most serious problem we are facing right now and that is our willingness to ignore the normal cycle of replacing or refurbishing infrastructure so we can keep making the interest payments. It is like spending the kids college fund to make the mortgage payment, you can do it for a while…

  10. Edward Morbius
    Edward Morbius says:

    +Chris George  Without true growth, interest, as an idea, becomes a theoretical construct.

    I've been beating my own head over that one for a year or so now, no real insights.

    Last night's brainwave was "maybe we've got to nationalize the banks".  Inspired by more of the LIBOR rate scandal stuff — Matt Tiabbi at Rolling Stone turning up the heat with stories that because the rates were manipulated by banks, contracts based on LIBOR are grounded in fraud …. and are void:  http://www.rollingstone.com/politics/blogs/taibblog/chase-isnt-the-only-bank-in-trouble-20131105

    A ruling against the banks in this case, which goes to trial in April of next year in England, could have serious international ramifications. Suddenly, cities like Philadelphia and Houston, or financial companies like Charles Schwab, or a gazillion other buyers of Libor-based financial products might be able to walk away from their Libor-based contracts. Basically, every customer who's ever been sold a rotten swap product by a major financial company might now be able to get up from the table, extend two middle fingers squarely in the direction of Wall Street, and simply walk away from the deals.

    Going back a ways, the question I didn't ask a regional FRB branch president was:  how does fractional reserve banking work in a world of declining real economic growth:
    https://plus.google.com/u/0/104092656004159577193/posts/ReocH3NrwGq

    I'm … still stumped on that one.

  11. Chris George
    Chris George says:

    If we can no longer increase the net energy going into the top of the funnel it is only a matter of time, and not a lot of it, before the wheels start coming off the financial system.

    From there is three short steps to collapse. Agriculture, transportation and energy exploration and production are all linked to finance. No finance, no seed. No seed, no crop. No finance, no ability to purchase a ship full of goods. No ship, no demand, no demand no need to run the factory. No finance, no drill rigs…

    Waving the magic wand, like they are doing now with QE, looks impressive and gives everyone something to ogle and serves as a great distraction.

Leave a Reply

Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>