The inability of the growth economic system to deal with a finite world

The problem is systemic and it truly is different this time.

What happened to Krugman’s realisation in his column back in 2010 (republished in The International Herald Tribune on December 28, 2010) that rising resource prices reflect “growing pressure on world oil and food supplies”. This, he suggested, explains the rising price of corn, commodities and oil. “What the commodity markets are telling us is that we’re living in a finite world … .” Spot on says the McKinsey Global Institute in a 2011 report entitled Resource Revolution: Meeting the world’s energy, materials, food, and water needs. According to this report, commodity prices have increased by 147% since 2000 thus ending a century of declining real resource prices. Indeed, ever since the start of the industrial era in the mid-1700s, no economic recovery has ever succeeded without lowering real resource prices. This is no longer possible in a “finite world” – a conclusion rammed home by another 2011 report by UNEP’s International Resource Panel entitled Decoupling Natural Resource Use and Environmental Impacts from Economic Growth.

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Keynesian Folklore
The Sustainability Institute, an international living and learning centre focusing on studies and experience in ecology, community and spirit

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