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The end of growth - going mainstream? - Oct 10

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Why America’s Economic Growth May Be (Shh!) Over, a New Marketplace Podcast

Stephen J. Dubner, Freakonomics

What if the massive economic growth the U.S. has experienced through most of our history is a thing of the past?...

It is largely based on a recent paper by the Northwestern economist Robert J. Gordon, called “Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds” (abstract, PDF). It is an impressive and interesting piece of economic history; among the writers who have taken note of it are David Warsh and Tim Harford...

You’ll also hear from recurring guest Tyler Cowen, whose recent book The Great Stagnation echoes much of Gordon’s argument. But Cowen is more optimistic than Gordon that the U.S. can recapture its economic momentum, as the subtitle of his book spells out: “How American Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better Again.”...
(4 October 2012)


Living Well: Explorations into the End of Growth

Peter Victor, Center for Humans & Nature
Looking back over the twenty-first century, future historians may well see it as even more tumultuous than the century that preceded it. [1] In the twentieth century the human population more than tripled, average life expectancy at birth more than doubled, and real gross domestic product increased nearly forty times. Huge numbers of people experienced very real improvements in living standards as economic growth spread around the world, yet huge numbers were living in extreme poverty when the century ended. Political systems from Nazism to Communism rose and fell, while democracy in its various forms survived. Well over 200 million people died in wars and conflicts, and nuclear energy was unleashed with the specific purpose of annihilating many tens of thousands in a flash. Seemingly magical technologies in transportation, communication, entertainment, and computation proliferated, as did enormous cities and corporations with global reach. Societies were transformed for better and worse, as was the planet itself.

Despite claims to the contrary, nature was not conquered. Instead, human societies and economies became ever more dependent on increasing quantities of materials, energy, and wastes (i.e., increasing “throughput”), as well as transformation of land as more and more was brought into direct use by humans. Toward the end of the twentieth century, attempts to gain a quantitative picture of these environmental changes yielded new indicators such as the ecological footprint, the human appropriation of the net products of photosynthesis (HANPP), and various measures of direct and total material throughput—all of which, with some local exceptions, point in the same threatening direction. In the second decade of the twenty-first century, humanity’s impact on the rest of nature is on the rise and shows little sign of reversing. In the language of planetary boundaries, we are exceeding the safe operating capacity of the planet to sustain us.[2]...

In Prosperity without Growth, Tim Jackson argues that developed economies require economic growth if they are to avoid the downward spiral of deflation, recession, and depression.[5] He also argues that such growth cannot be sustained because of its resource requirements and the unacceptably high burden it places on the environment. He refers to this as the dilemma of growth. We can’t live with it and we can’t live without it, or so it appears, unless we open our minds to a broader range of alternative futures than is normally contemplated. The essence of my recent work and the main theme of both this paper and my collaborative work with Tim Jackson is to investigate how achieving the ecological benefits of lower growth is compatible with social justice and social welfare/equality objectives...
(September 2012)
Link to full pdf



And now: Peak growth theory

Terence Corcoran, Financial Post
One of the more persistent economic ideas rattling through the intelligentsia is that the last 250 years of amazing innovation, productivity and growth —from the steam-engine birth of the first industrial revolution in the 1700s to last month’s launch of the iPhone 5 — have come to an end. The nations of the developed world, especially the United States, have seen their best centuries. Growth has peaked. The future is flatlined.

Serious economists are throwing their good names behind this speculative idea, the latest being Robert J. Gordon, at Northwestern University. In a U.S. National Bureau of Economic Research working paper, Prof. Gordon raises the possibility that the last 250 years “could well turn out to be a unique episode in human history.” The opening words of the paper’s title are designed to provoke: “Is U.S. Economic Growth Over?”...

Another economist who has been trumpeting a long-term decline in U.S. growth is John Ross, Visiting Professor at Antai College of Economics and Management, Jiao Tong University, Shanghai. He sees a “long-term deceleration” in U.S. economic performance, a trend he pins in part on the failure of “Reaganite/neo-Liberal policies.”...

Canada’s leading end-of-growth theorist is Jeff Rubin, the former CIBC economist turned green activist who wrote The End of Growth, a 2012 book that reached its conclusions based on the narrower idea that the world is running out of resources, especially cheap energy, and the result can only be reduced growth. Peak growth, in his book, is a function of peak oil, which is a function of the idea that the world is running out of innovation.

Not that Mr. Rubin has a problem with no growth. He accuses his profession of being “hooked on growth” and sees global warming as a threat that can only be removed with reduced growth rates across the board—in population, “conspicuous” consumption, resource extraction, energy...
(5 October 2012)


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