The limits to growth?

A question from Yahoo! Answers:

Can economy grow indefinitely?

Our whole country seems to revolve around economic (or GDP) growth. Economic growth in turn ultimately depends upon utilizing/developing natural resources. Since these resources are finite, is the economy set up for some major flameout unless we expand off Earth????

There are two ways of answering your question.

One is to say that the absolute growth of the economy does have limits. If population grows indefinitely, at some point the whole planet will be covered with housing and fields (although one must wonder to what extent hydroponics and genetic engineering can lessen the sprawl of agriculture). However, the patterns of demographic transition suggest that the population is not going to increase indefinitely and is in fact likely to stabilize around 2100. So a more pertinent question would be, “can per capita GDP grow indefinitely?”

And that’s where your assumptions, both of them, start unraveling.

  1. Economic growth, when viewed on a per capita basis, does NOT “ultimately depend upon utilizing/developing natural resources”. It depends on productivity of labor. For example, food production in the world consistently expands, while areas under cultivation consistently decrease. Today, about 70% of any advanced country’s GDP consists of services, which are not that resource-intensive.
  2. Natural resources are finite only at a given level of technology. As technology improves, usable natural resources expand. For example, right now, heavy oil, whose known reserves exceed those of conventional oil, is thought to be largely non-recoverable. However, this is beginning to change, as steam-injection technology is being refined.

So, all things considered, it is highly likely that the economy can indeed grow indefinitely…

Original poster’s reply

I disagree with most of your answer but at least you have an opinion.

  1. Increases in efficiency will delay but not prevent depletion of essentially non-renewable resources.
  2. Your argument violates the 1st law of thermodynamics. Even if we start eating rocks-there’s only so many rocks.

Let’s start at the end.  The first law of thermodynamics applies only to closed systems.  The Earth, however, is not a closed system; it continuously receives energy from the Sun.

As to the first point you made, you are right, but only up to a point where rising prices of non-renewable resources make switching to renewable resources (including recycling) economically feasible.

1 thought on “The limits to growth?

  1. Matt Ashby

    Hey NC,

    Love to continue the discussion! I am under the gun to get some things out right now and must defer a [proper] response for a day or so.

    Cheers, -Matt

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