THE ECONOMIC PAMPHLETEER: Limits to Economic Growth

Abstract

First paragraphs:

I am often asked why so few agricultural economists seem interested in sustainable agriculture or sustainable community development. Perhaps it's because unlimited growth is one of the foundational assumptions of neoclassical economics. If there are no limits to economic growth, questions of sustainability are needless or pointless. Ecological economists challenge this assumption and call for a steady-state economy, meaning one "that develops qualitatively without growing quantitatively... maintained at a level that is both sufficient for a good life and within the assimilative and regenerative capacities of the [natural] ecosystem" (Daly, 2013). However, most economists seem to believe that human imagination and creativity is capable of finding a substitute for any natural resource we may deplete and finding a technological solution for any problem we might create — given adequate economic incentives.

One argument for unlimited economic growth is limitless dematerialization, meaning an infinite ability to extract more economic value from fewer natural and human resources. As ecological economists point out, this conflicts directly with the law of entropy, which is the second law of thermodynamics. Everything of any use to us, including everything of economic value, ultimately depends on the usefulness of energy. According to the law of entropy, whenever energy is used to do anything useful, some of its usefulness is lost. Accepting the law of entropy, there are physical limits to dematerialization and thus limits to economic growth. Unlimited economic growth would requireephemeralization, a term coined by Buckminster Fuller, meaning the ability of technological advancement to do "more and more with less and less until eventually you can do everything with nothing" (Ephemeralization, 2013, para. 1). It doesn't seem reasonable to bet the future of humanity on this possibility....