Limits to growth

When I was writing my manuscript, I was struggling with the aspects of scarcity and abundance in the economy, since peer to peer seems predicated on abundance. I concluded, largely inspired by Herman Daly that 1) natural resources are scarce 2) productive resources are abundant; 3) mental resources are limitless. This naturally points to a shift in our economy towards immaterial production, prefigured by the emergence of peer production. We are creating new common goods which make our life richer. The key would seem to be able to have an economy, in which we return to nature what we take out of it (but growth is still possible through growing efficiency), and to replace these limits in material growth, by a focus on qualitative, immaterial, cultural and spiritual growth.

This point is made in the conclusion of a remarkable analysis of Catallaxis, a blog that attempts to develop an integral economics, which I recommend you read in full:

The primary goal of our post-visionary analysis is therefore to craft public policies, business strategies, and personal practices that will move the economy toward a pattern in which physical growth is systematically replaced by mental growth even while overall growth in terms of aggregate prices continues to rise.”

The vision of Herman Daly that there are limits to growth and that we need a throughput economy has a scary aspect: that we have to stop any material growth, and that, in order to relieve povery and want, those in privileged positions can only loose what they have.

Kevin Carson however, shows the solution to this conundrum, by pointing out that we can move towards more efficiency, but for that, we need a system with the right incentives, that doesn’t consider nature as an externality and heat dump:

it doesn’t matter all that much how big the economic subsystem is compared to the larger ecosystem, or what its rate of throughput is. All that matters, in determining sustainability, is its net intake from and output into the larger ecosystem. If all the resources that go into the economy are renewable, there is no net loss, and the economy doesn’t use the ecosystem as a heat-sink, it doesn’t matter at what rate the economy processes resources into goods, so long as they are replaced as fast as they are used. Efficiency, not scale, is what matters in determining the economy’s effect on the ecosystem.

I tend to agree with those Georgists who downplay issues of population overgrowth. So long as we put back into the land everything we extract from it, and don’t use the environment as a heat or pollution sink, the only effective limit on population is how small a parcel of land can be used efficiently to feed each person. I don’t doubt that there is an ultimate carrying capacity, but it’s a long way from where we are now, and its boundary is very blurry.

My sympathies are very much with the Green camp. I do believe the economy is presently doing a great deal of harm to the ecosystem. But that’s because of huge inefficiencies in the way energy and other inputs are consumed in the production of goods and services, and carelessness in the generation of pollution, not because of the absolute magnitude of the standard of living.”

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