The Pernicious Myth of Perpetual Economic Growth

Economic growth is destroying the biosphere

Economic growth is destroying the biosphere

Nothing grows forever. The myth the economy can is destroying the biosphere.

By Dr. Glen Barry

The present human condition is predicated on one of the biggest lies ever – that the economy can grow indefinitely. In a self-serving logical contortion, economists in service to the oligarchy measure the well-being of a society by how fast the economy grows, with little regard to the state of natural capital, human inequity, the welfare of ecosystems and other species, or the extent to which people and society are happy. Natural capital is defined as Earth’s stocks of natural assets including ecosystem services which make all life possible, which is unmeasured and thus undervalued by indices of economic growth.

Measures such as Gross Domestic Product utterly fail to tie increases in economic output to human and natural well-being. Spending on militaristic drone attacks and the rich’s conspicuous over-consumption are equated with social expenditures to meet basic human needs. Clearcutting old-growth forests for toilet paper is of equal worth as providing homes and food for the poor. Ravaging Earth’s last natural ecosystems for every last drop of oil is deemed economically beneficial (despite being terribly inefficient as externalities remain unpriced), while we are told restoring natural ecosystems is unprofitable because of large discounting of future benefits.

Living as if Earth’s nature has no worth other than to be liquidated for consumption degrades ourselves and ecosystems, and can only end in utter ruin as first society, then the economy, and finally the biosphere collapses. It is blatantly obvious that infinite growth on a finite Earth is impossible. Yet we run our economy with this goal.

Economic growth is worshiped as if it were holy and divine, rather than acknowledging that growth can come at enormous economic, social, and environmental costs. There is little understanding of ecological overshoot and the limits to growth, as we seek ever more material possessions at the expense of all else, systematically degrading not only our habitat, but also our future resource base and potential for broad-based community advancement.

Growth appears to be benign and pleasant, iPhones and foreign travel are intoxicating, yet perpetual economic expansion comes at an unknown price whose deleterious impacts sneak up upon you. Such is the nature of exponential growth. The exorbitant costs of an exponentially growing economy are best illustrated by imagining a pond whereby the extent of lily-pad coverage doubles in extent every day, on the 30th day fully covering the water. On which day is the pond half covered? When is it a 10% covered? We shall return to this question.

By falsely equating exponential growth with societal well-being, capitalism may well be irredeemable. Its foundational idea of people coming together in markets to exchange their surplus has been bastardized to suggest that creating something of worth and selling it is the same as every manner of speculative financial trickery. Yet for markets to serve human’s and nature’s well-being, there are some basic out-right lies that need to be addressed now.

Firstly, growth cannot fully measure economic well-being; we need a richer measure that determines the extent to which economic activity is sustainable and widely beneficial. A much richer measure is the rate of economic growth per unit of natural capital (drawn down or replenished), and by the extent to which economic advancement is equitably shared. Such a truly green economy is said to be at a steady state, whereby both population and consumption are stable at a sustainable level. How dense are we to not understand that Earth is everything, and that without ecology there can be no economy?

Given the current state of ecological overshoot – as terrestrial ecosystems, climate, water, oceans and biodiversity are collapsing – achieving a steady state economy would require decades of degrowth and redistribution of wealth. Urgent measures would have to be taken to provide incentives that cap both population and disparities in consumption, even as aggregate draws upon natural capital are reduced to below replacement levels to allow for decades of ecological renewal.

Other times and cultures pre-industrial capitalism have understood the need to build circular economies that sustain and regenerate natural capital. Indigenous Amazonians invested in the future by planting islands of useful species in the savannas, which they returned to decades later for sustenance, leading to present day ecosystems mistakenly called wilderness. The pioneer homesteading culture’s use of animal manure to replenish soil on small holdings was particularly efficient in terms of using waste to replenish the soil, albeit it was most often practiced on stolen land.

It is possible to live in a manner where the future is not by design degraded by overusing natural capital. Imagine a world where advancement is equated with maximizing the well-being of all humans, indeed all life. Where there are guarantees that there will be more tomorrow than there is today. Imagine an economy concerned primarily with broad-based community advancement that also focused upon efficiency, conservation, equitable sharing, and increasing natural capital; rather than simply always more economic throughput regardless of waste streams and diminishment of future development potential.

I consider myself a deep ecologist, yet I have taken a job on Wall Street. I have come to realize that environmentalism cannot seek the necessary changes in isolation; we must engage with the means of production and seek to advance a vision of sustainable development that regenerates natural capital and meets all of humanity’s basic needs. This is not some unattainable communist nirvana. It is a democratic, steady state economy whereby our means of livelihood don’t needlessly pull down the biosphere. Those that are smart and hardworking will have more, but not ridiculously so, to the detriment of others and Earth.

It is basic Systems Biology 101 that perpetual growth is a positive feedback that at some point must by definition destroy the underlying system. In a very short period of a few centuries human industrial growth has rapaciously stripped land, air, water, and oceans of their life-giving ecosystems in the name of economic development. Modern day sooth-sayers called economists chant meaningless mumbo-jumbo endorsing brazen stripping of natural capital as necessary to feed ever growing human populations, while hundreds of millions are stripped of their land, their natural ecosystems destroyed, and left abjectly destitute; to in sum create more wealth for the already uber rich. Such is modern day capitalism.

Asked to explain how the loss of primeval naturally evolved old-growth forests, ocean fisheries, fertile soil, and wetlands will be handled as destroyed by industrial capitalism; we are told by free market advocates with a great deal of earnestness that an invisible hand will guide substitution. We are assured that an atmosphere can be geo-engineered, forever digging ourselves deeper into ecological overshoot. Yet ecologists know with certainty there are no substitutes for water, soil, food, and air; and that a biosphere can never be engineered. And that sustainability on a living Earth means an end to the digging.

The industrial economic growth mirage is the greatest economic bubble ever and can only end in wanton collapse of ecosystems and eventually the biosphere. Before we get there we are set to endure brazen authoritarian demagoguery that rolls back centuries of human advancement, plays us off against each other, and falsely attributes economic decline to regulations upon enterprise. We fail to understand the real source of economic decline is the underlying resource scarcity, ecosystem loss, and human predation found in an economic system devoid of ethics, ecologism, and basic human decency.

For any chance at redemption, capitalism must immediately forswear growth as the measure of economic well-being. And a price must immediately be placed upon carbon and other externalities which are social and environmental costs not factored into production. This is not rocket science, it is Economics 101, yet again and again assigning a price to ecological degradation is talked about academically but not put in place practically. Even given these reforms, it is questionable whether capitalism’s gross objectification of people and nature can be overcome. Yet without embracing the idea of a steady state and pricing the loss of natural capital as a start, industrial capitalism is an assured death-wish.

Humanity has become little more than a yeast colony in a petri dish gorging upon a limited resource base, which will ultimately collapse when gone. We are so fucking stupid, how do we fail to recognize that we are one with nature, particularly animals – who have mouths, and eyes, and reproductive organs, and feel pain just like us – yet somehow we feel superior? How have we come to believe that we are not of, and utterly dependent upon, the naturally evolved world? Why do we have to needlessly destroy our habitat for sustenance?

Think of how to bridge the present environment and economic divide, and work to make sustainability reality. It is crucial that green ideas engage with and transform the means of production and change it from within, or capitalism will have to be overthrown, a highly risky venture. If we don’t want humanity’s last days to be spent in slavery and economic misery, we will price environmental decline and measure economic growth by the amount of equitable advancement per unit of natural capital. Otherwise we face biosphere collapse and the end of being.

Note exponentially growing lily-pads doubling in extent daily cover half of the pond on day 29, and cross the 10% threshold whereby a problem may be identified on day 26, with only four days until fully covered. Exponential growth will bury you without revealing itself until the very last minute, when it is too late to respond. Such is the pernicious myth of perpetual economic growth.

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7 Responses

  1. Glenn, wish I could get a couple hours of your undivided attention to help you see further through the mists of myths. You/we are disturbed by the awful symptoms of the disease and some of us have even identified the disease as Capitalism but most do not understand the disease well enough to see the obvious remedy. Some of this is in how we define Capitalism, often defending it while blaming some perceived permutation of it as the problem. Capitalism, going to the root of what it is, should be defined as “The private control of monetary authority for personal gain.” To address the disaster of private control of everything for greed we must remove that power from them and institute the public control of monetary authority for care, care of society, care of the planet. When money is issued by sovereign government, as it should be by all and is not done by any, save what Iceland is about it do, the issue of cost will no longer be an issue of money, because gov can print as much money as it needs by fiat, instead cost becomes a matter of resources, which is why a public money system is the only appropriate money system for humans and the planet. We and the planet are systematically robbed by the current system, we know this, but its not the people in that system, as they come and go, they live and die, but the destructive system remains and this is what we must address. Most people seem willfully ignorant of the money system, refuse to consider it at all as the problem/solution, and instead increasingly freak out over the symptoms of Capitalism. If such a change, and a global movement is building as people begin to demand sovereign money, were to achieve this monetary transition from ‘private money as debt’ to ‘public money as asset,’ we would have enough to create a heaven on earth for everyone.

  2. Thanks Howard, very interesting thoughts. I look forward to reading your essay on the matter 😉

  3. Campbell Sturrock says:

    Excellent article thanks. Totally agree with what you have written about. Have you heard or read of The Natural Step – http://www.thenaturalstep.org/our-approach.
    It’s strategic sustainability framework provides for the development of a truly sustainable future.

  4. Howard Switzer says:

    Campell’s note (I like the approach) reminded me, Glen, I hadn’t addressed “growth” in my comment getting a bit ahead of myself. The current monetary system has to grow constantly or it does not work, which is why it is critical that we change that system. It is just a human agreement, after all. In a system where money is issued as debt it has to grow or there is no money. This worked great for the industrializing/centralizing capitalists but we now see the limits of such growth. Often likened to a cancer, growth for it’s own sake, the monetary system is based on issuing money for personal gain by those who issue it, giving them awesome power and profit, directing much human activity world-around. Awareness is rising motivated by a plethora of issues, not the least of which is the sixth extinction, proceeding at breathtaking speed, that this system needs to change. Movements have erupted most notably in Iceland but also the people of Switzerland are holding a referendum on banning private capital creation and implementing a sovereign money system. The Brexit vote was a revolt against our unelected rulers and despite what the banker owned media says it will spread because of the economic/ecologic imperative. BTW, only the Green Party has the important essentials for monetary transition in its platform. Transitioning from a privately controlled system where money is issued as debt for personal gain (which our government then borrows at interest!?) to a public system where money is issued as a public asset and spent or gifted into the economy for the general welfare of society. It would be changing the world from an economics of greed to an economics of care. The money we use is a big lie too though we don’t see it becasue it is the water we swim in and its kept secret by public incredulity that such a system would be allowed.

  5. Geoff Mosley says:

    Glen has described the current unsustainable situation well and the obvious two questions that follow are: 1) what is the alternative?; and 2) how can we get there? These are the two missing items in the general dialogue. I was, of course, pleased to note that Glen endorses the steady state alternative. It is going to be a long and difficult road to get there. The Center for the Advancement off the Steady State Economy provides some route guidance in the form of a macro statement re the steady state economy and others have outlined a ore detailed vision and the necessary transformation steps. For more see http://www.steadystate.org and our recent book ‘A Future Beyond Growth’ (Routledge).

    • Howard Switzer says:

      Geoff, I believe I had just answered your questions, what the alternative is and how we get there. Herman Daly also has identified what we need to do in order to get to a ‘steady state economy,’ which I prefer to call the “care economy” becasue that is clearly what this is all about. care for people, care for the planet. Please read what Herman Daly says, http://steadystate.org/nationalize-money-not-banks/, this is the key and to change it is the political project I mention above. Now, don’t just give up becasue it is a political project, there is no way around it and our lives depend on it becasue the current system is so corrupt and on automatic pilot flying us into the mountain. As I mentioned the Greens have the proposal in their platform and Greens are getting more support this year than ever, a real challenge to the system. There is also a Bill already written (the NEED Act HR 2990) that would transform the system with those identical 3 reforms, introduced in Congress by Dennis Kucinich in 2011/12. http://www.monetary.org/wp-content/uploads/2013/01/HR-2990.pdf I think it is what got him gerrymandered out of office, still it is what we need. We know the steps, we just need to get the power to implement them and that is the political project we ignore at our own peril. This is a global movement to address the global problem, which is the international monetary authorities ruling our nations, the people need to take their nation’s sovereignty (the right to issue public money) back. Our rulers are in fact trying now to make it illegal for us to do so via the TPP TTIP and TiSA trade agreements, which are much more about corporate rule than trade. To see somewhat how they operate check this film out; https://www.youtube.com/watch?v=p5Ac7ap_MAY&feature=youtu.be …and join the effort.

  6. Howard Switzer says:

    To be clear, here are the revolutionary reforms I refer to;
    1. The Federal Reserve is moved to the US Treasury and becomes part of our government, precisely what most of us mistakenly think it is now.
    2. Bank creation of money as debt is decisively stopped. Instead, banks will only loan money that already exists, exactly what most people mistakenly believe happens now.
    3. The federal government creates and spends into existence US Money in non inflation/deflationary amounts for the needs of the nation and its people. Again, what many mistakenly think is now happening.

    All three of these reforms are informed by history and must be implemented together to assure the success of the sovereign, public, money system for the following reasons:
    • The Bank of England was nationalized in 1946 (Reform #1). But because bank creation of money was not stopped (Reform #2), private banks now still create 97% of the UK’s money as debt.
    • Jackson and Van Buren revoked the Second Bank of the U.S.’s charter, effectively ending most bank created money at the time (Reform #2). But, misunderstanding the true nature of money, they failed to create and spend, debt-free money into existence (Reform #3), bringing on the deep depression of 1837.
    • Debt-free Greenbacks (Reform #3) were created under Lincoln to fight the Civil War and save the nation. But because bank creation of money (Reform #2) was not decisively stopped, the bankers methodically got the upper hand and quashed the Greenbacks.
    Those interested should read the NEED Act to discover what some of the possibilities are for real solutions to our long list of neglected problems facing us today. The question is do we want to continue with a system based on greed, where money is created as debt for personal gain and private oligarchic control of public policy? Or do we want a system based on care, where money is created as a public asset by elected government and spent debt-free into the economy on society’s needs? After all the very purpose of government is “To form a more perfect Union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity..,” The current system is impoverishing more than 99% of the world and half the planet has been consumed.

    Like the icebergs being created by global warming most of the 6th extinction is in the unseen world and our money system is like that too, mostly unseen.

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