Limits to growth, again

More than 200 years ago, Malthus argued that the world was going to run out of resources, because population inevitably increased faster than our ability to provide for it.  The argument has been disproved time and again, but its adherents  remain convinced that it must be true sooner or later.  It doesn’t seem to matter how often the arguments are shot down in flames – there is always someone ready to pick up the standard.  This week’s New Scientist has four pages praising The Limits to Growth, the book that argued that come what may, we were going to run out of the things we need.  Part of the problem is the flakiness of the predictions – the birth rate has not followed the projected path, and nor will most of the consequent projections.

The NS article comments that economists claimed that “Limits underestimated the power of the technological fixes humans would surely invent.”   If you can’t counter an argument, misrepresent it.  The basic objection from economists is not that new technologies will inevitably appear – even if they might.  The point is that many alternative technologies  already exist, and costs are relative. If a resource becomes scarce, it will cost more, and other technologies which are initially too expensive become  preferable.

The fundamental economic mechanism is one which pushes people to use substitutes. As coal has become more expensive, options for producing energy which once seemed unrealistic – nuclear power, bio-fuels – start to be feasible.  As wood has become more expensive, plastics have expanded.  If food production through conventional methods becomes unsustainable, there is a range of viable technologies, such as hydroponics, which stand in readiness.  There is, certainly, an incentive to develop new technologies, such as electric cars, water purifiers or solar power, and many will be developed, but that is not the central mechanism. We will never use the last piece of coal, the last drop of oil, or the last lump of copper; long before then, it will cost too much.  The argument that we are about to run out of resources is just plain wrong.

4 thoughts on “Limits to growth, again”

  1. You say that “Part of the problem is the flakiness of the predictions” but the predictions were actually rather good. There are a series of charts showing the predictions and observed data at The Limits to Growth. This link also considers the problem of “overshoot” in growth curves, economists know all about this from the boom-bust cycles that happen all the time. Are you seriously suggesting that natural growth curves are immune from “overshoot”?

    You argue that “.. many alternative technologies already exist, and costs are relative. If a resource becomes scarce, it will cost more, and other technologies which are initially too expensive become preferable.” This argument only avoids overshoot if there is a smooth transition from one set of resources or technologies to another. Had it been easy to replace oil for transport we would have done so in the 1970s just to avoid being held to ransome by OPEC but we didn’t. Oil is not the only resource that has this problem of dislocation rather than smooth transition, rare earth metals, platinum, copper etc. all have substitution problems and these resource scarcities are all hitting simultaneously.

    The advantage of a computer model for making projections of what will happen when we get a simultaneous dislocation is that it can include feedback factors appropriately, these factors sharpen and prolong the overshoot.

  2. The main predictions that are tracked in the New Scientist article are births, deaths and food calories per capita; none of them has been predicted accurately over thirty years (there are signficantly fewer births, fewer deaths and more calories from food than Limits imagined). The predicted collapse of industrial output in the near future depends on balancing these factors against a catastrophic reduction in resources. The supposed reduction in resources has not been tested in the article, possibly because it has not happened. The argument that I have made here – it is a standard argument, which you will find for example in Mishan’s book “21 popular economic fallacies” – explains why the predictions about resources were bound to be wrong.

    There is no suggestion, and no reason to suppose, that we will need to find substitutes overnight. (The oil crisis was a different kind of issue, brought about through the concerted action of producers. Something of the kind could happen again – there are parallels with the Russian control of gas supply to several countries – but this is not about environmental constraints.) It is true, and important, that the process of changing the resource base will be neither trouble-free, nor painless. That is not, however, what The Limits to Growth was arguing.

  3. The key feature of the World3 model was that it modelled numerous scenarios. One such scenario was the “high tech” world in which resources were substituted and food technology improved. In this scenario the “Limits to Growth” could be delayed by decades or more. Yes, World3 modelled exactly the fluid, economics/technology savvy world that you say should be happening. The World3 model, when modelling this scenario, agreed with your analysis, if sensible substitutions had been made then there is no immediate crisis. It also considered numerous other scenarios. We can now compare the projections of World3 with the actual data for the past 40 years to analyse which scenario we have actually been following.

    What the New Scientist article focussed on was the fact that we seem to have been pursuing the “business as usual” scenario and not doing what the economists say should have occurred.

    The strength of the World3 model is that it combines the data into a few key variables. In principle this should provide a more robust forecast because random deviations in forecasts for individual component variables cancel each other out. The forecast, combined variable was population and this forecast was accurate for the “business as usual scenario”. World3 also had a scenario for the Mishan type of economy (what Mishan thinks is the “real” world) and the observed population, resource, food availability data are widely discrepant from the projections for this scenario.

  4. No, Limits to Growth did not model this. The fundamental proposition Limits worked to in all scenarios was based in the idea that resources are finite and used at constant rates. That is a mistake. The economic argument does not rely on improving technology, or on sophisticated adaptation, or new, non-existent substitutes.

    The comments are very much longer than either the original post or my replies, and as I do not want to make turn this blog into someone else’s page, I will not take further comments on this.

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