No, they don\’t say this

Nonetheless, in recent years a few economists have advanced a contrary view. Tim Jackson in the UK, Herman Daly in the US, and Serge Latouche in France have argued that growth is not always good for the environment or for the real health of communities, and that GDP growth is impossible to sustain over the long run anyway because we live on a planet with limited natural resources.

What they say (at least, Daly does and I\’m not sure how much the other two have misunderstood him) is that resource limits are a limit upon economic grwoth but not the limit.

Leave aside for a moment whether they\’re correct that we are currently anywhere near actual resource limits (I don\’t think so at all, other than overloading the atmosphere with CO2 but….) and concentrate on the logic for a moment.

Yes, it\’s true, we cannot use more copper atoms than there are copper atoms on the planet. Iron, iron etc. Cannot use more human labour than there are people and hours.

Leave aside all of the economist\’s stuff about substitutability etc as well.

OK, they\’re right, there\’s environmental limits to the volume of goods and or services (energy and time being the limits there perhaps) that we can produce. Thus there is an environmental limit to the physical size of the economy we can build.

Lovely: but GDP is not the physical size of anything. It is \”the value of goods and services produced\”. Within our environmental constraints we can change the value of what is produced. One obvious method is by adding more value to those environmentally restricted physical inputs.

The process of discovering those new methods of adding value is also known as inventing new technologies.

Which is what Daly actually says is the steady state economy. It\’s not one in which GDP stays constant. It\’s one in which the abstraction of resources from the environment stays constant and GDP rises as when and if we can invent technologies which add more value to them.

Which is where all of these no growth Jeremiahs go howlingly wrong (and Daly himself is known to ignore his own studies in his rhetoric). Resource availability is a constraint upon GDP growth but not the, not an absolute and not the defining one. Even with constant, shrinking or artificially limited resource use we can still have GDP growth.

4 comments on “No, they don\’t say this

  1. The astonishing thing about this argument is that the Greens don’t realise how much it helps them out. Rather than claiming that we have to stop growth in order to save the biosphere, they could be praising the possibilities of ‘green growth’. But the hippies of my acquaintance are terrified of this concept, viewing it as heretical. It’s as though they think the value measured by GDP is in some way objective, rather than market-driven and hence subjective.

  2. Adam-

    There’s nothing astonishing about it. Anti-Capitalism has always been part and parcel of the “environmental” movement. Greens abhor markets not because they won’t work, but because they are a substitute for command and control.

  3. The Augustans also believed in limits to growth and that human felicity had reached a permanently high plateau. They could not know what the discovery of the laws of thermodynamics, the circulation of the blood, the combustion engine, interchangeable mass produced parts etc would bring, and many were fearful when these advances arrived.
    Same today?
    Perhaps history teaches that the people actually living through it don’t know shit.

  4. Whatever reason civilisations moved out of the Stone Age, it sure as hell wasn’t because they ran out of stones.

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