Wednesday, February 29, 2012

Revisiting the Limits to Growth Ideas

By Gary Berg-Cross

I see that the ultra free market Club for Growth (CfG) has gotten into the news again today teaming with The Wall Street Journal against a legislative proposal to subsidize the adoption of natural-gas-based transportation vehicles. They say they aren’t against natural gas vehicles but like good conservatives they don’t support the idea of government should be picking winners and losers (aka "helping" a particular industry) to solve a big problem like energy. The Club, however, has been pretty active in picking winners and losers in political campaigns. They keep score. As Jonathan Weisman reported in The Times recently, a seeming moderate like Oren Hatch had a lifetime rating of 78 percent from the CfG, but, with the rise of the T-Party in the past two years, Hatch has radically elevated to close to a 100 percent rating – a fact bemoaned even by David Brooks.

Too bad
for many reasons including the naivety of its ideas on growth. The Club for Growth argues for a “high growth economy” believing that markets invisibly provide prosperity through market ideas couched in phrases like economic freedom. You hear the call to grow out of our woes all the time. Given the big downturn under the conservative Bush administration and its market policies one can understand the Club’s angst in this political season. But there may be real limits to simple bubble like growth that we are approaching. We saw some of that in the financial realm where artificial growth was pumped up by debt, leveraging and rapidly moving money with nothing real behind it. The fiscal problems in Europe as well as here suggests that we may have reached the limits of our current economic approaches.

Perhaps an equally important factor to consider is the long disparaged nemesis of growth advocates - the Club of Rome‘s (1972) The Limits to Growth. It is having a 40th anniversary this year and its conclusions looking more relevant all the time. The book modeling the consequences of a rapidly growing world population and finite resource supplies. Reflecting some of the concerns and predictions of Thomas Malthus in An Essay on the Principle of Population (1798) the research used the World3 model based on a technique known as systems dynamics, developed by Professor Jay Forrester at MIT to simulate the consequence of interactions between the Earth's and human systems.

One conclusion of the study suggests that without major change in the physical, economic, or social relationships that have traditionally governed world “development” human society will run out of the nonrenewable resources within a time span of less than 100 years (2072 usually rounded to 2100 for convenience). When resources like oil, clean water, rare earths etc. have been depleted, a decline and eventual collapse of the economic system will result. The results would be manifested in massive unemployment, decreased food production etc.

The report was about behavioral tendencies and population, capital, resource and pollution system activity. The intent was to stimulate debate and discussion about the challenges of these interactions and how to plan for the projected “overshoot” of global carrying capacity which their modeling revealed. What they got was a fierce attack against the warnings. People generally have the feeling that it was shown to be essentially erroneous. Whenever the limits to growth argument came up in later days it was denounced as disproven by claimed facts of continued growth. In particular it was attacked by people who fervently believe in the power of markets and market forces to silently, and wisely, overcome whatever needs arise. These are some shallow claims that get repeated s often they seem like facts but are only pseudo claims as shown by Graham Turner’s (2008) A COMPARISON OF THE LIMITS TO. GROWTH WITH THIRTY YEARS OF. REALITY. If you listen closely you can hear some pseudo claims about growth in some of the conservative politician arguments. Indeed they are attacked if they don't promote these beliefs. But perhaps these types of claims are more than a little bit due to a 1 % principle and confirmatory hypotheses at work. Perhaps this and the current downturn argues for a renewed view of natural limits to growth as we celebrate the idea's 40th year.

What are some of the real facts of depletion, decay and peaks? Have they been too threatening to the established industrial culture to be contemplated. Certainly that’s not the view one gets looking at 10 year update reports. The study team published both a 20 year (Meadows, Donella, J. Randers and D. Meadows. Beyond the Limits.) and a 30 (Meadows, Donella, J. Randers and D. Meadows. Limits to Growth: The Thirty Year Update 2004) year follow ups. These add measures and improvements in the computer simulation model, but the analyses came to the same conclusions as the original study – continued growth would lead to overshoot, leading to a collapse of growth with its consequences. In Revisiting the Limits to Growth After Peak Oil System Ecologists Hall and Day said:

The original projections of the limits-to-growth model examined the relation of a growing population to resources and pollution, but did not include a timescale between 1900 and 2100. If a halfway mark of 2000 is added, the projections up to the current time are largely accurate, although the future will tell about the wild oscillations predicted for upcoming years.

A recent review article in American Scientist of Revisiting the Limits to Growth After Peak Oil commented on the research this way:

“They have re-examined some of the data that led to the discrediting of the “limits to growth” theory and have shown that both resource use and costs have only risen, and are no longer being mitigated by market forces. Although new sources of energy have been found, they are much more expensive to extract, a declining return on investment that Hall and Day think could lead to large societal problems in the near future.”

It will probably be a few years before an analysis of the 40th year comes out, but it will probably have quite a bit to say about diminishing resources and increased pressures on a sustainable world. It will, I hope, spur some reasonable debate and discussion about how to manage the global carrying capacity.

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