>Somewhere I read that the market must expand for it to work as a system.
>
>Could some of the economists fill me in on that one?
>
>REH
>
>Somewhere I read that the market must expand for it to work as a system.
>
>Could some of the economists fill me in on that one?
>
One answer to your question is that, if population is growing and the
expectation is either a stable or rising standard of living, the economy
must produce more goods and services. But expansion increasingly cuts into
the resource base, which is finite. An isolated, closed system such as the
Earth cannot expand indefinitely.
However it can grow for a very long time before it loses momentum. People
often refer back to classical economists like Ricardo and Malthus, who lived
in an agricultural age in which the primary resource, land, was limited, and
in which just about everything that could be done to land to make it more
productive had already been done, given the science of the times. The more
society attempted to wrest out of land, the more it ran into diminishing
returns. Inevitably, the expansion of population quickly ran into limits. As
Malthus recognized, the growth of population needed to be curbed if even a
minimally satisfactory standard of living were to be maintained. The curbs
he saw operating were "vice, misery and moral restraint". What Malthus, and
others of his time, did not foresee was that innovation, based on growing
scientific and technological understanding of the natural world, would lead
to phenomenal increases in productivity, and that new resources, including
those of the new world, would come heavily into play. Instead of collapsing
within its then imagined limits, the world underwent nearly two centuries of
growth, making possible both a huge increase in population and rising
standards of living.
But what many people, including many economists, now fear is that the growth
spurt of the past two hundred years is ending. New limits have been
identified. There is a widespread, infectious pessimism about how much
further innovation and given resources can carry us. Many now see the world
as perilously dependent on a single bundle of resources, not land as in
Malthus' day, but energy from both fossil and current renewable sources. We
also see ourselves as geographically contained. We cannot move off to new
lands as excess populations did 150 years ago – there are no new lands in
our current horizons.
I've often wondered whether such concerns are grounded in reality or whether
they are a reflection of a collective angst. A much referenced article by
Colin J. Campbell and Jean H. Laberr re in the March, 1998 issue of
Scientific American (The End of Cheap Oil) argues that our global
conventional oil resources will become depleted within a few decades.
However, other articles in the same issue suggest that fuels from other
hydrocarbon sources will be available much longer. And, while it is true
that fossil fuels are finite, other possible sources exist. For the past
fifty years or so, we have flirted with nuclear energy, but we have backed
off because our technology can not as yet safely handle the safety problems
that go hand in hand with such energy. These problems are largely
technological, and therefore probably surmountable when the real need
arises. Other solutions may also lie on the horizon; for example, fuel
cells to power automobiles. And why, from time to time, do people get
excited about cold fusion? Might there be something there? I'm not a
technocrat, but I've been around long enough to develop a considerable, if
foolish, faith in mankind's ability to solve problems of a technical nature.
For much of the world, energy resources may not be the most immediate
problem or even the most significant problem in the long run. The most
important limitation to what is possible and sustainable may in fact be
centered on land, as it was in the days of Malthus. Desertification is
progressing in north Africa, water tables are falling in India, forests are
disappearing in tropical and sub-tropical regions, and vital resources and
human skills are being destroyed in endless inter-tribal wars. At the same
time, the world is undergoing a process of economic bifurcation – the rich
are getting richer and the poor are getting poorer. Access to vital
resources is increasingly in the hands of the rich and increasingly beyond
the control of the poor.
Meanwhile, a cynicism appears to be enveloping the world. The rich,
increasingly recognizing that they are afloat in a luxury-liner lifeboat,
need an enormous proportion of the world's resources to keep themselves
afloat in comfort. It has long been recognized that the world is divided
into rich and poor. But until quite recently there was a belief abroad that
the rich, by becoming a little less rich themselves, could help the poor
become less poor. This is implicit in much-used terminology such as "less
developed", "more developed" and "developing", which suggests that global
poverty is temporary – that with enough aid, education and goodwill global
standards will rise. UN conference after UN conference has affirmed this.
Recently, with the failure of the Asian miracle, with the continuing
impossibility of economic progress in parts of Africa and parts of Asia, and
with chaos abroad in post-communist Russia and eastern Europe, we have begun
to be more careful about using the terminology of hope. We have, I believe,
come to think that for a large part of mankind there is no hope. Poor is
poor. Poor will always be poor. Failure to progress is failure to
progress. It is implicit in the situation.
Speaking personally, it is this kind of pervasive moral rot that I believe
comprises the greatest danger to mankind. I believe that we are capable of
solving most technological problems, even those arising out of rapid
economic growth and consequent resource depletion. But for only brief
periods of our history as a species has there been much evidence that we are
morally and intellectually capable of lifting ourselves out of the despair
and self-centered cynicism that has killed well over a hundred million
people this century and which may account for billions in the next.
Ed Weick
