The good news and the bad news

 

Time series showing the decline of growth in advanced (or "fully grown"?) economies since the 1960s suggesting an end to growth within one generation.  Growth in developing economies increased enormously between 1990 and 2005 but is now showing the same trend towards zero as advanced economies suggesting the entire world is hitting the same resource limits.  This graph took me 10 minutes to plot using publicly available data, but the obvious conclusions for the feasibility of long term growth are beyond the imaginations of almost all political leaders today.  Are we in the midst of a societal-scale shared delusion?

Which do you want first...?

Let's start with the bad news.  The bad news is that growth in industrialized, high income economies has been falling for the last six decades and looks like it will reach zero sometime within a generation.  (That's assuming it hasn't already reached zero with the positive growth figures that countries report just creative accounting.)  This is disastrous for governments that depend on growth to be able to spend more than they raise in taxes without increasing their debt to GDP ratio.  It's also disastrous for firms that need investment from institutions that look at the general "health" of the economy rather than considering in detail what individual businesses actually do.  However, none of this should come as a surprise given that growth is directly linked to consumption of non-renewable resources, and the major ones - such as oil and gas - are over half exploited.  It simply isn't possible for resource exploitation to continue to accelerate when all that's left are the dregs.

What about the good news?  The good news is also that growth is falling.  Growth in the economy is directly related to damage to an ecosystem that we absolutely depend on to survive.  It has to end one way or another.  The best one can hope for is a soft landing, and the sooner we reach zero the more likely a soft landing becomes.  However, a soft landing does require that our leaders recognize growth will end, and take steps to restructure the economy so that it doesn't continue to depend on the impossible.  In short, it requires leadership.

 

12 monkeys

I recently re-watched this film from 1995.  My understanding of how the world works has changed dramatically since I last saw it, and one exchange between the film's "Dr Evil" and it's heroine - something I'd ignored in previous viewings - suddenly jumped out at me:

Dr. Peters: I think, Dr. Railly, you have given your alarmists a bad name. Surely there is very real and very convincing data that the planet cannot survive the excesses of the human race.

Dr. Kathryn Railly: This is true.

Dr. Peters: Proliferation of atomic devices, uncontrolled breeding habits, the rape of the environment, the pollution of land, sea, and air. In this context, isn't it obvious that Chicken Little represents the sane vision and that Homo Sapiens' motto, Let's go shopping! Is the cry of the true lunatic?

Indeed.

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