“The world can, in effect, get along without natural resources”

As almost every societal movement, the sustainability movement has its personalized evils, its specific foes. One of them is Robert M. Solow, the famous creator of the growth model that supposedly is the source of all evils in this world. Moreover, a quote of his can often be encountered (including in the German Wikipedia article about him) that comes from a lecture he gave in 1974, where he said:

The world can, in effect, get along without natural resources, so exhaustion is just an event, not a catastrophe. Continue reading

The “Limits to Growth” Obsession

When a typical conventional economist wants to show somebody (e.g., her students) that all the talk about the “alleged impossibility of infinite economic growth” is rubbish, it is very probable that she take the 1972 Club of Rome’s report “Limits to Growth” as her starting point. This modeling work about the limits population and resource scarcity pose to economic growth, done by a group of young PhD’s, made extrapolations of historical trends of population growth and natural resource extraction to conclude that “sustainable” economic growth is not possible and that it is likely to seize during the 21st century due to these constraints. So, the economist’s arguments goes, as you can see, population growth has slowed, we do not seem to run out of natural resources – and, if you look at the widespread Cobb-Douglas production function, you will see that this wouldn’t matter either. Ergo, infinite economic growth is possible, and Meadows et al. (the authors of “Limits to Growth”) are naive doomsayers. However, this line of argumentation is a) “too easy”, and b) wrong. Continue reading

You Cannot Just Define Away the Impossibility of Infinite Growth

More and more people in the world are questioning the possibility of human economies to grow infinitely. The ongoing destruction of global as well as regional ecosystems and the overuse of Nature’s resources are signs that something is going wrong. Nevertheless, mainstream (or neo-classical) economists – especially macroeconomists – seem not to be bothered. They still are claiming that economic growth is not only possible, it even is necessary to improve our well-being (for a critique see here). In some cases this may be true – nobody sane would argue that, let’s say, Nigeria doesn’t need economic growth. But one cannot (and should not) generalize this. Confronted with such arguments, (macro)economists either ignore them, or they answer by showing that in their models infinite growth is possible. They are just defining away the contrary. Continue reading