Limits to Growth: Implications?

There will be a small amount of mathematics in this post. Please bear with me. My dumb question is, as limits to growth exist, why don’t we as a population of humans “get with it” and focus on conservation and sustainability?

I recall I think Wall-Mart being criticized because their revenue had failed to grow at ten percent one year. This bothered me. Worse, the assumption is widespread that any endeavour that is not growing is bad. I maintain that steady-state is the ideal system end-point, whether an ecology, economy, or organization. Now for the mathematics.This should not hurt. {8;^>}

Assume there is some upper limit for inflation over all the time period we need to consider. Let that be i. Each year prices rise by a factor of 1+i. Assume there is some larger lower limit for the growth of “something”, eg W-M as an example. Let that limit be g. Each year the endeavour grows by a factor of 1+g. Taking out inflation, if we write r=g-i, in any year the “real” growth beyond inflation is r and the real size multiplies by a factor of 1+r.

Assume r is strictly > 0. Then if I want the endeavour to grow by some large overall factor L, I need to multiply by (1+r) some (large?) number of times. Here comes the mathematics.   I write (1+r)^N = L, that is, I apply the r-sized growth N times and claim I can make that as big as L. (You get to choose L, I have to find N).

Taking logarithms, N * log(1+r) = log L.     N = logL / log(1+r).

Any size L can be reached, in real, after-inflation terms, with a sufficiently large N – you just have to wait N years.       So if I set L to be the worth of the entire continent of North America, in real terms, today, I can get Wall-Mart’s revenue that large, eventually, by waiting long enough.I am not picking on Wall-Mart here, it’s just a business example I remember reading about.

One thing I learned from Didier Sornette (Why Stock Markets Crash) is that, when the mathematics gives an absurd result (infinity in his case, wealth of the planet in ours) there is something wrong. If you shift the focal point of a lever far enough, the math says you can get unlimited force – but really, the lever just breaks. Similarly, any endeavour that was able to grow in real terms with a definite lower bound of that growth, will eventually overwhelm everything else. This clearly cannot happen in the real world.

Thus nothing can grow, in real terms, forever. We cannot continuously make more energy. We cannot continuously make more profit. We cannot continuously increase world population. We cannot continuously increase wages – in real terms – overall. (We can increase the value of wages in “terms of trade” sense, ie get more for a buck due to smarter value creation – but we cannot keep increasing the level of consumption of anything. We will eventually run out.)

The point of all this is to ask this question. If unlimited growth is unsustainable, why do we insist on companies having it? Is it to make a quick buck this year, while admitting it can’t go on indefinitely?

The greeks had a single word which means, “greed for more than one’s share”. I think this is our problem too.

5 thoughts on “Limits to Growth: Implications?

  1. I don’t pretend to understand the math but I do understand the concept and the question, which, if I may add, is applicable on a personal level as well as corporate.

    Let me throw this into the mix: what about stewardship? Growth, more and gimme seems to circumvent that concept totally. But are we not responsible for care, upkeep and continuation of all that ‘growth’? It seems to me that the slash and burn policy has replaced TLC.

    What do you think?

    • I am fascinated by your mention of slash-and-burn. This is a very old method of farming. You burn off an area, farm it for maybe ten years, and move on. As long as the jungle is large enough to recover before you run out of burnable area, you have “renewable” sources of food and energy. What grabs me about this method is that it is done without scientific measurements, and continued “because it always worked”. Those cultures for which it did not work failed, of course. There are two attitudes at play here: 1) we always do this, and 2) we do this because it works for us. The latter is close to the viewpoint of a psychopath: do what works (for me). The former reminds me of C.S.Lewis’ key essay (imho), “The Inner Ring”. Both statements sound sort-of OK but can conceal greed for more than one’s share.
      The slash-and-burn method fails quickly if population explodes. Then suddenly stewardship of the land’s resources become a visible need. I think the current corporate largesse, with its incredible increase in income disparity, is slash-and-burn by CEOs at the expense of the forest of peons who work for them. Jobs move offshore, profits rise. Taxes drop, profits rise. Customers lose purchasing power, profits rise because new customers are sought, also offshore. The country gets burned.
      The unfortunately stalled US recovery is evidence of this kind of trap.
      To quote Noam Chomsky, the North American Free Trade Act was not a trade agreement, it was an owners’ agreement. They agreed they can move the means of production to anywhere they want. They did.

  2. I heard an interesting comment recently. The person said he’d met with the founder and leader of the World Wildlife Federation shortly before he retired. The leader said (basically) “I’ve been working at this for 50 years and I haven’t saved a single species from extinction. In retrospect I think we should have taken all that money and bought condoms.” Clearly, uncontrolled population growth is the greatest threat to our world. Interestingly, most developed (read educated) countries have low birth rates (below replacement) but the less-developed nations are breeding like crazy. When I was a teenager the world has a little over 2billion people. By 2050 the forecast is for 9billion. How do you find jobs, food, energy, housing, for all those people? It is also unlikely these masses will be the ones to find the answers to these challenges. They will also contribute to the social upheavals which are only now really starting to rock the more advanced world.

    • Yes. The greatest threat to our way of life is the number of us. We are destined to live in “interesting times” and to leave growing challenges for the next generations. Famine will be the trigger in impoverished countries, rising food prices, in those with distorted distribution of wealth.

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