Is growth unsustainable?

From the website of the UNSW social work department comes one of the most common critiques of economic growth:

Our society’s most fundamental mistake is our commitment to affluent-industrial-consumer lifestyles and to an economy that must have constant and limitless growth in output, on a planet whose limited resources make these impossible goals.

Our way of life is grossly unsustainable. Our levels of production and consumption are far too high. We can only achieve them because we few in rich countries are grabbing most of the resources produced and therefore depriving most of the world’s people of a fair share. Because we consume so much we are rapidly using up resources and causing huge ecological damage. It would be impossible for all the world’s people to rise to our per capita levels of consumption. 

Although present lelvels of production, consumption, resource use and environmental impact are unsustainable we are obsessed with economic growth, i.e., with increasing production and consumption, as much as possible and without limit!

This is a sufficiently common critique of growth that it seems worth citing one of the best-honed responses, from Stanford’s Paul Romer:

Economic growth occurs whenever people take resources and rearrange them in ways that are more valuable. A useful metaphor for production in an economy comes from the kitchen. To create valuable final products, we mix inexpensive ingredients together according to a recipe. The cooking one can do is limited by the supply of ingredients, and most cooking in the economy produces undesirable side effects. If economic growth could be achieved only by doing more and more of the same kind of cooking, we would eventually run out of raw materials and suffer from unacceptable levels of pollution and nuisance. History teaches us, however, that economic growth springs from better recipes, not just from more cooking. New recipes generally produce fewer unpleasant side effects and generate more economic value per unit of raw material.

Every generation has perceived the limits to growth that finite resources and undesirable side effects would pose if no new recipes or ideas were discovered. And every generation has underestimated the potential for finding new recipes and ideas. We consistently fail to grasp how many ideas remain to be discovered. Possibilities do not add up. They multiply.

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23 Responses to Is growth unsustainable?

  1. Russell Hamilton says:

    Is this going to be a discussion unrelated to how things actually happen? Can I suggest Candide be added to the readings of economics students ?

  2. Patrick says:

    Candide is a great book. But Rousseau’s influence was fundamentally negative, after all. Just look at the brilliant French system of government (13 constitutions and counting since 1796?).

    The idea that growth is unsustainable always floors me. It is staggering that grown men and women of this age can imagine that we will still be doing the same thing in 25 years, let alone 150. I think it is reflects a consistent and central theme of left-wing thought: a fundamental lack of belief in humanity.

    The Economist also does the pro-growth anti-historical illiteracy thing, but I can’t link to any of it :(

  3. That’s all very nice, but you need some way of telling which growth comes from better recipes and which from more ingredients. (GDP is a rough measure of total growth and pursuing this growth will give us both better recipes but also more ingredients). My perception is that our economy’s recipes are getting rapidly better and that gives me lots of hope but also using rapidly more ingredients and that worries me.

  4. Patrick says:

    The basic point is that we never run out of anything, and if ever you feel siezed by the certainty that we shall shortly run out of x, you had better start divesting, because a glut is imminent.

    We are, in fact, rapidly using more of one and only one ingredient: ideas. Lamentably you can’t buy futures on them, except by proxy.

  5. Russell Hamilton says:

    Time ran out for quite a few species in the last few decades ….

  6. Patrick says:

    Presumably, we didn’t use them…

    Seriously, isn’t that normal? Time runs out on us all, individuals and species alike. Whilst there might be room for concern around the margins, scientists are still discovering new species, and not all soon-to-be-extinct species make it to their pronounced doom, see further timblair.net today :)

  7. Presumably we didn’t use them is right Patrick and it shows the failings of the limited economic perspective you’re arguing. You’re right, when we start running out of things, supply and demand tend to kick in to make sure we don’t. That’s if it’s things we want and need and value economically.

    My natural resources lecturer used to say he thought it was almost impossible to overfish a species to extintion – it becomes uneconomical to fish it long before it totally disappears. However, he said, there were plenty of non-target species that had been made extinct by fishing because we didn’t slow down when those species became rare – there was no incentive to do so.

    And no, it’s not normal. Species are disappearing at a very not-normal rate.

  8. Russell Hamilton says:

    Always conscious of the economics talent at ANU I have googled up this paper:

    http://een.anu.edu.au/download_files/een0207.pdf

    it’s written in economics rather than English, but here is a quote:

    “Overall, the results indicate that for the chosen measures of environmental degradation used in the study there is little evidence to suggest of a decoupling of growth and environmental degradation.”

    “The results suggest that Canada does not have the luxury of being able to grow out of its environmental problems. The implication is that to prevent further environmental degradation, Canada requires concerted
    policies and incentives to reduce pollution intensity per unit of output across sectors, to shift from more to less pollution-producing-outputs and to lower the environmental damage associated with aggregate consumption.”

  9. Ben says:

    Andrew,

    If growth in an economy can mean growth in the value of things without increasing the amount of materials consumed then you guys (economists) had better bloody well pull the finger out and show us how it can be done because right now were using valuable stuff up at a rate which is increasing exponentially.

    Patrick, discovery of a new species is not the same as creation of a new species. This is quite elementary. However disappearance is very often destruction/termination of a species.

  10. Patrick says:

    Ben, what are we using up? The ‘global footprint’ of westerners has been shrinking for decades now, I believe. The only thing that we are consistently using more of is energy, of which there are such vast reserves that it seems foolhardy to suggest we might run out.

    Anyway, the easy answer to your question would be growth in services;), not to mention recycling.

    As for the animals, I’m aware of that, I was really just being irritating. As it happens I’m all for saving animals, and welcome people’s charitable donations to that end, but not at the expense of third world growth.

    Animals boring, Humans good.

  11. Ben says:

    Patrick,

    “What are we using up?”

    Shall we start with oil, fresh water and forests?
    I agree that there are vast reserves of energy available. That’s why our household runs on wind power – essentially limitless.

    Your point about growth in services is a good one. Clearly services can grow provided there are not significant (non-recycled) material inputs required. There are no limits to the increased quality of our manufactured goods either but there are limits to the quantity.

    Oh and last of all ——> Humans = Animals.

  12. Patrick says:

    Fresh water, yes, but we can make more (see eg Israel).

    Forests are trickier – the real problem is that the solution is making people richer, which historically has often had a lot to do with deforestation… Also global forest cover is increasing, although of course plantation forests aren’t a real substitute for rainforests.

    Oil, so what, there is so much of it that it defies credulity to think that it is going to run out before we’ve forgotten what we used it for.

    I know that humans are animals, but this seems to be the only context in which leftists are willing to acknowledge it.

  13. Russell Hamilton says:

    Patrick: “The ‘global footprint’ of westerners has been shrinking for decades now, I believe.”

    Why do you believe that? As far as I remember, in the 50’s there were very few two car families, airconditioned houses; food, clothes etc didn’t come to us after being transported half way across the world, air travel was uncommon …. I think you must be wrong.

  14. Patrick says:

    Intuitively, I would be. But if I recall rightly from reading Lomborg, then in fact it has been, except for the energy component which has trebled over the last 50 or 100 years or something like that. But when 70-80% of the figure is energy, then it is meaningless, because generally energy comes from big holes in the desert/ocean, and can be replaced by those shiny metal and concrete sculptures in honour of the environment that we call nuclear power plants.

  15. Russell Hamilton says:

    So you would discount your own experience, and lots of other stuff you know to be true, because of Lomborg? How many PCs, mobile phones etc are thrown away each year ? Where did all those chemicals in the environment come from (you know, those ones associated with manufacturing plastics etc?). You know that the environmental damage that goes along with so much economic activity is more than just energy use.

    I don’t know where you live Patrick, but are there no environmental issues there associated with expanding industrial activity?

  16. Patrick says:

    My own experience teaches me mainly not to trust my intuition too much. After all, intuitively, no-one could possibly romanticise a slovenly, self-indulgent brute like Guevara. Intuitively no-one could possibly say a half-kind word for communism…etc.

    I have found Lomborg’s book largely impeccable – the great heat and virtually complete lack of substance in the many ‘rebuttals’ it provoked have essentially convinced me that I can take it as gospel.

    But your example is pretty good, anyway – plastics are mainly just petrol, of which there is more than we will ever need, and the manufacturing process can be made pretty clean – it wasn’t always, and I don’t doubt still often isn’t, but it can be and increasingly is.

    I live in Melbourne. A century of brown coal burning hasn’t yet condemned the place to hell, although a decade of labor government did come close… :)

  17. Ben says:

    I quite like this quote from Prof Ian Lowe – president of the ACF:

    “The controversial book by Danish statistician Bjorn Lomborg is called The Skeptical Environmentalist. I have read it. He is neither sceptical nor an environmentalist in any normal sense of those words. A better title might have been “The Gullible Economist”. ”

    …though I confess I am yet to read his infamous book.

  18. Patrick says:

    That, of course, is perfectly typical of the criticisms that convinced me that nothing in the book was in fact wrong.

  19. Russell Hamilton says:

    Patrick: “My own experience teaches me mainly not to trust my intuition too much.” Do tell ……. it wasn’t you wearing the Che T-shirt, was it ?

    I ask, seriously, because 35 years ago at university I sort of fell in love with information and sidetracked myself into a library career. But over the last couple of decades I’ve become more and more suspicious of “data” and it’s interpretation. I haven’t quite embraced the New Age but I do trust my own intuition a lot more – I’m not as impressed with the usual good credentials – prestigious university, quality publisher etc. as I once was.

    This might be just ageing (you’ve absorbed a lot more stuff to consider) or disillusionment (the Watergate generation) or just that there’s a lot more diversity of opinion around: you could probably provide the same data to Clive Hamilton and yourself and get two completely different interpretations. So what bad experiences are holding you back from going with your intuition a bit more?

  20. Patrick says:

    But how excitable you are – I thought I had told! People still believing in socialism, etc.

    I’m not generally impressed by credentials, either, I recently read an Oxford LLD thesis published by OUP and it was simply illiterate junk. I still can’t comprehend how someone with such a tenuous grasp of the actual use of the English language was awarded a doctorate, let alone published.

    I prefer to go by the quality of argument and statistical analysis. I think that intuitive reasoning is best adapted to specific situations: those in which analysis would be overwhelming. I don’t doubt that generally, where the analysis is possible, it will yield superior results.

    Incidentally, the more experience you have in a given field the better your ‘intuition’ will obviously be. But it will remain subject to your biases, particularly ideological ones. An example is people with years of experience claiming that the Iraq war was clear-cut illegal, when frankly that conclusion, if true as stated, generally negated some of its key premises. That is a key indication of ‘intuition’ underperforming actual analysis, and a key reason why lawyers aren’t supposed to care about the desirability of their client’s position.

    PS I never wore a Che T-shirt. I had a marxist phase of about six months, but even then I had too much moral sensibility and intelligence to actually admire any practical exponents of it. That silly moment was practically forgotten by my 18th birthday. I spent a lot longer in my Randian phase, you’ll be delighted to know :)

  21. Russell Hamilton says:

    That’s James Randi, right ? http://www.randi.org/

    You mean to say you never admired, say, Juliuis Nyerere ?

  22. Russell Hamilton says:

    “I prefer to go by the quality of argument and statistical analysis.”

    Yes, but …. this is where I start to go a bit vague, because you might read something beautifully expressed and quite convincing, yet if there is an overwhelming consensus of experts saying something else …? Take Greenhouse, you might read something that seems good by a greenhouse sceptic, but you still have to take into account all the presidential commissions etc. that say the opposite. So mostly I don’t have very definite positions anymore – just bobbing about on a sea of contradictory data.

  23. Patrick says:

    Er, admirable a chap as Mr Randi does seem…having never actually heard of him until now…

    That’s quite a sensible position; well (and cleverly) met!

    Certainly one could make an argument that I do allow, with respect of global warming, ‘intuition’ to tell me that so much hysteria is inevitably ill-placed, or alternatively that so many people who have never been right before are unlikely to all get something right now. So, whilst taking into account the quality data, I remain as sceptical as that data permits…

    …ah well, another one of those things you chase out the front door just to see it sneak back in from the back, I guess :)

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