Why We Can’t Grow Our Economy Forever

Laura Shin
Posted

In our “Money Mic” series, we hand over the podium to someone with a strong opinion on a financial topic. These are their views, not ours, but we look forward to opening up the floor to conversation.

Today, author Rob Dietz shares why he thinks the economy can’t grow forever.

Politicians, newscasters and pundits are united around an idea I find wacky: that we can grow the economy forever on our finite planet.

We have 7 billion people on Earth, and almost 1 billion of us go to bed hungry each night. 2.7 billion of us live on less than $2 a day, and there’s 394 ppm of carbon dioxide in the atmosphere.

We would need one and a half Earths to keep producing, consuming and wasting at the rate we do now. Instead of a pursuing an economy chasing after more, why not pursue an economy asking for enough? That’s what I describe in the book I co-wrote with Dan O’Neill, “Enough Is Enough: Building a Sustainable Economy in a World of Finite Resources.”

The economy of “enough” is called a steady-state economy: A steady number of people consume a stable amount of energy and materials, all within ecological bounds. The goal of this kind of economy, rather than increasing consumption, is to improve quality of life.

Do you want more stuff or a better life? Our current economy aims for the first. A steady-state economy aims for the second.

Why the Current System Is Broken

The strategy of perpetual growth is failing on both environmental and social grounds.

Our ecological footprint (the area of land and water we need to operate our economy) shows we’re consuming resources 50% faster than they can be regenerated. If we continue, we’ll diminish reserves of our natural capital like food and water and set ourselves up for collapse.

Socially, economic output per person has more than tripled in countries like the U.S. and U.K. since 1950, but people are no happier. And despite impressive global economic growth over the last several decades, nations continue to struggle with unemployment, poverty and income inequality.

How to Fix It and Reach a Steady-State Economy

Here are four proposals for achieving a steady-state economy:

  • Guest

    See “Small is Beautiful” by Schumacher, cf approx. 1970…

  • Jen

    Thank you for this sane response. These ideas are catching on and taking hold. Enough is enough indeed.