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In all the discussions of this recession, I've yet to hear a major politician call for a steady-state economy. All they talk about is endless growth of fiat-money and resource consumption, which they claim will fix problems that those very things are exacerbating. Surely they have some advisers who know better?
In the human body, we see endless growth as a negative, like morbid obesity and cancer. The economic term "recession" is odd, because with cancer we call a lack of growth "remission." People also recognize that trees can only grow so tall or wide before they collapse under their own weight. There was a gravity limit to the size of dinosaurs. Even when it's not fatal, we see nonstop growth as weird and unsightly, like fingernails that never get cut.
Why then, is economic growth, which ties into population growth (sheer human mass) considered exempt from those same laws of nature? Is there an explanation other than anthropocentric favoritism? Man must try to consume every possible resource? Remember, it's business as usual to claim that America can grow its economy indefinitely. The can of physical limits gets kicked down the road with each generation (see Social Security).
Imagine trying to grow the economy indefinitely on New York's Long Island with only its native resources (physically impossible) then extrapolate that to the entire world with no other planets to borrow or steal from. It should be self-evident that the time scale to terminal growth is the only real difference between Long Island and the whole planet, unless one tries to finagle the definition of "growth," like saying that financial derivatives have intrinsic value. We saw where that led.
The cheap oil that enabled rapid growth has mostly peaked (circa 2006) and energy costs as a percentage of GDP are a major cause of this recession. But you don't hear leaders calling for an end to growth itself. They keep pushing the supply-side angle, as in "more jobs!" and "boost the GDP!" as if those things have no boundaries on a finite planet. And then there's the Julian Simon fan club.
To biologists, geologists and climatologists, the futility of endless physical growth is well known, but most people still complain about surface issues (taxation, crime, traffic jams, etc.) and claim to have "solutions" that just call for more growth. To me, that's like telling a 700-pound bedridden person that their only real problem is the price of cake.
I don't think your analogy between the body and economic growth applies. I'm not saying we can't overconsume resources. But humans can also innovate. They can learn to use resources differently or more efficiently or new ways of doing things that don't involve as many natural resources (email vs. snail mail).
Many see endless economic growth as a possibility because the human ability to innovate is endless and humanity is currently tapping only a small portion of that potential.
With growth in population there has to be growth in the economy or there will be a decline in the standard of living. Are you suggesting that there is some organization wise enough and capable enough to manage population?
Look at it from the viewpoint of someone living centuries ago. How many goods and products were even envisioned back then that have been invented and developed in the years since, that have created entirely new sources of economic activity?
In all the discussions of this recession, I've yet to hear a major politician call for a steady-state economy. All they talk about is endless growth of fiat-money and resource consumption, which they claim will fix problems that those very things are exacerbating. Surely they have some advisers who know better?
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Originally Posted by cdelena
With growth in population there has to be growth in the economy or there will be a decline in the standard of living.
^^This is the reason why. Well, the theory at least.
There is a raw number ceiling implicit in the "growth" end... and yeah, we've passed it.
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Are you suggesting that there is some organization wise enough and capable enough to manage population?
Well there sure doesn't seem to be one that can manage trade & industry such as to fully employ
every warm body that is getting produced let alone at wage rates that could actually support a family.
Maybe it's time to change public policy to what might actually benefit the public?
I don't think your analogy between the body and economic growth applies. I'm not saying we can't overconsume resources. But humans can also innovate. They can learn to use resources differently or more efficiently or new ways of doing things that don't involve as many natural resources (email vs. snail mail).
Many see endless economic growth as a possibility because the human ability to innovate is endless and humanity is currently tapping only a small portion of that potential.
I agree with you. There are tremendous opportunities for increasing conservation and improving how efficiently we use and deliver resources. In my opinion, currently the biggest roadblock to solving our economical problems is a lack of community on all levels. People have to realize that the choices they make have an affect on others.
Money is a resource too but it is not the only one. Maximizing one's personal wealth does not justify abusing other resources. Historically, a basic tenet of property law was to enjoy the highest and best use of one's property so long as it did not inhibit the right of others to enjoy the highest and best use of their property. The second part of that tenet has largely been forgotten over the past several decades.
Just something from history: in 1985 Gorbachev came to power in USSR, and used his huge public support to begin very questionable reforms. Almost all economists cried out loud. In 1991, following political and economic troubles, as well as massive brainwashing, the Union was dissolved. Then it's economy was unmade.
Too much power in too few hands may easily lead to disaster.
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energy costs as a percentage of GDP are a major cause of this recession.
This recession is nothing more than a bubble bursting. American economy became way too virtual - and that's unsustainable.
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But you don't hear leaders calling for an end to growth itself. They keep pushing the supply-side angle, as in "more jobs!" and "boost the GDP!" as if those things have no boundaries on a finite planet.
Actually, for now there're no boundaries. It's just that growing, especially responsibly, becomes more and more expensive - hence the slowing growth rate.
In case of the 1st world, the problem with growth lies in recent tremendous overconsumption not backed by domestic production. Once the correction to the economies is done, growth can continue.
But beauty is in the eye of a beholder... Some people believe in things, that can't possibly be realized - like Gorbachev did. And sometimes such people gain power - like Gorbachev did.
It is about impossible to sustain society without economic growth. Productivity takes away some jobs so we need growth to allow more people to be employed. Perhaps we could support people on welfare but that has never worked, neighborhoods with a high welfare population are crime-ridden wastelands. Make-work projects are only slightly better. Communist countries tried that but even the workers could see the futility. Fortunately, while cheap oil may have run its course, (natural) gas is in plentiful supply and is the moral equivalent of half the price of gasoline. The Honda Civic Natural Gas model has been selling like crazy despite almost no advertising.
Last edited by pvande55; 07-29-2012 at 05:11 PM..
Reason: Add gas note
It is about impossible to sustain society without economic growth...
...of one sort or variety. The old model of plowing over raw land and starting from scratch is easiest.
Other approaches to maintaining productivity like by rebuilding the existing WILL cost more...
and few will volunteer to pay even a little more.
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