Well, actually that is just bad headline writing again.
The point is that the end of growth is not far in the future if we haven't already passed it, and we had better get used to it.
Gilding made the key point:
commodity prices, which have been going through a pretty steady fall since you know, the turn of the last century, so for 110 years or so we've seen a consistent decline averaging about 1.5 per cent per year, 70 per cent over that time frame.
And they've only really gone up during period of extreme demands like WWI, WWII, you know, sort of price shocks have seen it go up otherwise they've gone down.
Those commodity prices have now gone up again during a recession and so of course what that means is that the prices are going up because demand is out stripping supply and this is not just one or two items, this is like the entire range of commodities across food, minerals and so on. So of course that's in a recession.
What that means of course if we could get the global economy really growing again, then of course those prices would spike and would stop growth again and I think that's probably the biggest example we've got.
And those resources, those commodities are actually coming from Mother Nature and what we're now seeing of course is that now we're running right now at about 150 per cent of the sustainable capacity of the planet and we're planning to grow the economy to three or four times this size by 2050.
It's just not going to happen. Not because we don't want it to not because it wouldn't be nice or because polar bears will die, because physics and chemistry and biology as Tom said, I mean it's just not physically possible for that to occur.
I actually think that goes too far. I don't think any economic outcome is physically impossible in the usual sense, myself, because money. hence "growth" is just a sort of fuzzy abstraction. But if something continues to grow, it will be different from what we currently construe as wealth.
The way I look at is this: if we define the maximum ethical consumption level of a society as the consumption level that would be sustainable if everybody in the world achieved it, then we are far past our limits in America.
Hi Michael,
ReplyDeletemaybe Paul is just citing Jeremy Grantham, the famed investor and his great paradigm shift in comodity prices, worth to look at:
http://www.businessinsider.com/jeremy-grantham-commodity-prices-2011-6
Maybe. This is not the first incident of Friedman's saying something clever and thought provoking a few days after I say almost exactly the same thing.
ReplyDeleteOf course, it could be coincidence. After all, mant people are thinking this thought right now. And I certainly don't begrudge anyone my ideas; after all what would be the point of blogging them if I did?
Still, I'd appreciate attribution where it's warranted...
This begs the question of what would happen if we started making things to, you know, last, assure resource recovery from the things that by their nature can't, etc., i.e. made a commitment to actual sustainability? That would also imply a lot more jobs. Of course this has been getting said for rather a long time now.
ReplyDeleteExample: Higher-end hand power tools. The quality and design of these has gotten much better over the years, they are extremely reparable, and yet once the warranty has expired if something goes wrong they tend to just get tossed.
(That said, an extensive system of tool lending libraries woulod be a good way to eliminate the perceived need for an awful lot of this equipment.)
Similarly, when I first moved to the SF Bay Area ~35 years ago, there were a considerable number of small appliance parts/repair shops, now gone or nearly so. Now, the resources are wasted and the jobs are gone.
Well, we can sit on the beach in a circle and sell each other buckets of sand and call it economic growth.
ReplyDeleteEventually, somebody is going to want a hot dog. Probably made of meat from a named animal. I suspect a soda or iced tea will be on the list of demands also.
Those items, like all similar items provided to people who engage in fictional economic activity, (cough, Wall Street, cough) have to come from the domain referred to as "physical reality."
The only physical reality providing resources to humans is this tiny skim layer between a ball of rock and an infinitude of hard vacuum. That layer is oversubscribed and actual production is falling in several resource areas due to overuse.
So, nope. Economic growth that includes growth in the use of real materials is a no-go in the long run.
Somebody please tell Congress.