Limits to Growth

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LIMITS TO GROWTH

For demographers, limits to growth is an old subject, at least as it relates to population growth, harking back to political economist T. R. Malthus (1766–1834) or even earlier writers. Since the 1972 publication of the Club of Rome study Limits to Growth the term has come to refer to both population and economic growth–that is, growth in population and growth in per capita resource use, the product of which gives the growth rate of total resource use. This total resource use is a flow from nature's sources (mines, wells, forests, fisheries, grasslands), through the transformations of production and consumption within the economy, and back as wastes to nature's sinks (atmosphere, oceans, a neighbor's back yard). Just as an animal lives from its metabolic flow, beginning with food from the environment, and ending with the return of wastes to its environment, so the economy lives from its metabolic flow, or "throughput." The throughput, like the metabolic flow, is entropic and irreversible. That is not to say that most waste materials are not recycled by biogeochemical processes powered by the sun. It is only to point out that such recycling is external to the animal or economy–whose life therefore depends on these natural services provided by its environment.

Two Kinds of Dissipative Structures

In physical terms human bodies are dissipative structures, which is to say that their natural tendency is to decay, die, and fall apart. The same is true for artifacts that we accumulate as wealth. A car, a house, or a shirt is a dissipative structure that requires a throughput to be maintained and replaced. A population of inanimate objects (e.g., shirts) inevitably wears out and depreciates over time, requiring new production to make up for the loss, as well as maintenance expenditures (replacing buttons) to slow down the rate of depreciation to a minimum. For demographers it is easy to think in terms of two populations of dissipative structures, one consisting of human bodies, the other of artifacts–basically extensions of human bodies. Each population, if it is to remain in a steady state, has both short-term maintenance requirements and long term reproduction requirements, each supplied by the entropic throughput from and back to nature. If these two steady-state populations are so large that the throughput necessary to maintain them requires inputs from nature's sources and outputs to nature's sinks at rates beyond nature's replenishing and absorptive capacities, then the throughput flow becomes ecologically unsustainable, and so do the two populations.

Definition of Limits to Growth

The limits to growth, in twenty-first century usage, refers to the limits of the ecosystem to absorb wastes and replenish raw materials in order to sustain the economy (the two populations of dissipative structures). The economy is a subsystem of the larger ecosystem, and the latter is finite, non-growing, and, in terms of materials, closed. Although the ecosystem is open with respect to solar energy, that solar flow is also nongrowing. Therefore in a biophysical sense there are clearly limits to growth of the subsystem. The difficulty in perceiving this is that these limits are not experienced as a rigid barrier, like an unyielding brick wall hit by a car. Instead, they are like the limits imposed by a budget that allows borrowing against the future or deferral of maintenance and replacement costs. Although limits to growth are ultimately physical and biological in their origin, society feels their effects economically long before they experience any absolute physical crash. The challenge for policy making is to express these limits in economic terms, and institutionalize them in decision making. Society needs to know not only what scale of economy and throughput will terminally disrupt the ecosystem, but also when the extra ecosystem disruptions required by a growing throughput begin to cost more in terms of sacrificed ecosystem services than they benefit others in terms of extra production. In other words, one must think in terms of the optimum scale of the economic sub-system (the two populations) relative to the total ecosystem. Beyond this optimal point further growth becomes in an ultimate sense uneconomic.

Harmful Effects of Economic Growth

The term "uneconomic growth" will not be found in the index of any textbook in macroeconomics. All growth (typically as measured by Gross Domestic Product [GDP]) is considered economic growth. Yet the concept of the optimum is central to economics, and nothing could be clearer than that growth beyond the optimum must be uneconomic–in the strict sense that it increases costs by more than benefits, thus making society collectively poorer, not richer. Politically it would be extremely inconvenient to discover that society has exceeded the optimal scale and that growth was now uneconomic. How could one fight poverty without growth? Society might have to redistribute existing wealth. How can one trust the demographic transition to automatically limit births as incomes increase, if growth no longer makes society richer? Society might have to purposefully limit births. How can society clean up the environment without growth to make people richer so that one can afford the costs of cleaning up? Society might have to pay those costs out of a lower income. The radical nature of these responses suggests that a world without growth has become politically unthinkable. Is it any wonder that there is a relentless intellectual effort devoted to debunking the notion of limits to growth or minimizing its relevance?

It is true of course that GDP growth can be made less material-intensive. (The analogous adjustment of making people less material-intensive–smaller–in order to allow for a larger population might meet more resistance.) But the scope for this substitution is itself limited, and appeal to it only serves to highlight the extent to which growth is the dominant value around which modern societies are organized. The reasoning in support of the ultimate reality of limits is unaffected.

The Future of Economic Growth

In the early twenty-first century it seems that society is witnessing the conflict between a physical impossibility (continual growth) and a political impossibility (limiting growth). But in the long run the physically impossible is more binding than the merely politically impossible. The hope is that growth will not prove politically impossible to limit, once society accepts that growth can be uneconomic. But society may have to suffer a bit before that becomes clear.