Nothing Grows Forever

Meet the economists who are rewriting the gospel of consumption


| November-December 2010



Nothing Grows Forever Image 1

Gracia Lam / www.gracialam.com

Peter Victor is an economist who has been asking a heretical question: Can the earth support endless growth?

Traditionally, economists have argued that the answer is yes. In the 1960s, when Victor was earning his various degrees, a steady rise in gross domestic product (GDP)—the combined value of our paid work and the things we produce—was seen as crucial for raising living standards and keeping the masses out of poverty. We grow or we languish: This assumption has become so central to our economic identity that it underpins almost every financial move our leaders make. It is to economics what the second law of thermodynamics is to physics.

But Victor—now a professor at York University in Toronto—felt something tugging him in the opposite direction. Ecologists were beginning to learn that Earth does have limits. Pump enough pollution into a lake and you can ruin it forever; chop down enough forest and it might never grow back. By the early ’00s, the frailties of the planet were becoming even more evident—and unsettling—as greenhouse gases accumulated and chunks of Greenland’s glaciers began breaking off into the sea. “We’ve had 125,000 generations of humans, but only the last eight have had growth,” Victor told me. “So what’s considered normal? I think we live in very abnormal times. And the signs are showing up everywhere that the burden we’re placing on the natural environment can’t be borne.”

In essence, endless growth puts us on the horns of a seemingly intractable dilemma. Without it, we spiral into poverty. With it, we deplete the planet. Either way, we lose.

Unless, of course, there’s a third way. Could we have a healthy economy that doesn’t grow? Could we stave off ecological collapse by reining in the world economy? Could we do it without starving?

Victor wanted to find out. First, he created a computer model replicating the modern Canadian economy. Then he tweaked it so that crucial elements—including consumption, productivity, and population—gradually stopped growing after 2007. To stave off unemployment, he shortened the workweek to roughly four days, creating more jobs. He also set up higher taxes on the rich and more public services for the poor, and imposed a carbon tax to fill government coffers and discourage the use of fossil fuels. The upshot? It took a couple of decades, but unemployment eventually fell to 4 percent, most people’s standards of living actually rose, and greenhouse gas emissions decreased to well below the levels outlined in the Kyoto Protocol climate agreement. The economy reached a “steady state.” And if the model is accurate, then something like it, say some ecologically minded economists, may be the only way for humanity to survive in the long term.

philip meguire
11/12/2010 11:41:11 PM

I believe that economic growth only requires human ingenuity, which I assume is unbounded. Therefore economic growth can continue forever. Total human population will have to stabilise, and the sooner the better. We badly need human ingenuity to reduce the impact we make on our planet's material resources, the natural world, and climate. The fraction of people who will earn their living by manipulating ideas as opposed to matter will continue to rise. I foresee a world where city driving will be in battery powered cars recharged off the grid, and where long distance travel will be substantially replaced by extensions of internet videoconferencing. A world where metals are extracted from ores without using large quantities of energy and toxic chemicals. Where solar and geothermal energy dominate. A world where we will buy cheaply the intellectual and creative property of others, via automated PayPal. People will earn a decent living by trading on volume.


zeal wanes
11/10/2010 7:22:33 PM

I admire the ends (no work, more parenting, more play), but not the means. I forecast the someday capitalism may bring about the end of work in my first book: http://www.authorhouse.com/Bookstore/BookDetail.aspx?BookId=SKU-000252605. I really have trouble understanding the idea that anyone would want increased regulation, but not increased happiness. Some other thoughts on article: “The government then steps in and covers the salary difference.” This is quite popular when using other people’s tax dollars, and is usually resented when done with one’s own. “In the mainstream view, these labor efficiencies make goods cheaper, which leaves consumers with more disposable income—which they invest or spend on more stuff, leading to more hiring to fulfill demand.” The author betrays his Keynesian roots. Investment or job creation by fiat does not create demand. Demand creates demand. Hence, the purpose of production is consumption. That is, we supply things (production) when there is demand (consumption.) Creating jobs or making things when there no demand is a recipe for bankruptcy (I have learned this the hard way.); unless you are the government, in which case you merely risk not being re-elected. At the very least, it’s bad policy and an inefficient allocation of resources. This statement simply leaves me breathless: “Victor, for his part, points out that 1983 was the last year that ‘the world economy was just at the level of the capacity of the planet to support it.’ Since then, of course, world population has exploded and global resources have dwindled.” Really? Really, Victor? In constant 2007 dollars, wheat is cheaper today than it was then. ‘Nuff said. “To prevent climate change and resource depletion, no-growthers favor a heavy tax on carbon and other pollutants.“ I bet they do. However, just as we don’t know if a no-growth economy would be good or sustainable; we don’t know that limiting carbon emissions would have a net effect on the environment, or that c


m parker
11/9/2010 3:15:31 PM

Nature grows but recycles everything. Why can't people learn from the natural world, and somehow grow by recycling.