Why We Can’t Grow Our Economy Forever

Laura Shin
Posted

1. Limit the flow of materials.

Because we’re using resources faster than they can be regenerated, we’re living on borrowed time—or, in financial terms, going into debt. To limit consumption, we could:

  • Use a simple (although heavy-handed) approach like a ban. This worked for removing lead from gasoline, which has made the air we breathe safer.
  • Try less restrictive programs such as cap and trade, in which we agree to a cap on a resource, divvy up the right to use it and allow people to trade that right.
  • Choose indirect methods like tax reform, in which we tax bad things society wants less of (e.g. tailpipe emissions and resource depletion).

RELATED: Which Costs More: Preventing Climate Change or Dealing With Its Effects?

2. Stabilize the population through compassionate and non-coercive means.

Population is a delicate subject, but roughly 80 million people are added to the global population each year, and 80 million unplanned births happen each year. And all of those people are competing for a share of global resources.

With better education and access to contraceptives, we could go a long way toward stabilizing the population. Development economist Jeffrey Sachs says girls in school are likely to postpone marriage and childrearing; when girls learn about sex, contraception, reproductive health and the trade-offs associated with having lots of children, they’re more likely to aim for smaller families. Education also empowers young women to develop careers.

For developed nations with high income and low fertility, most population increase comes from immigration. If our population is growing because we’re taking the best and brightest from other countries, we’re contributing to global inequality. I hate the idea of closing the doors, but if we want more sustainable systems of trade, our immigration policy should not be about pushing economic growth in the U.S. at the expense of other countries.

RELATED: How Will Obama’s Immigration Order Affect the Economy?

3. Achieve a fair distribution of wealth.

If you have a pie that’s always getting bigger, you don’t have to worry so much about how you cut up the pieces. But the economic pie can’t grow forever. Societies with greater equality in wealth and income do better on many social fronts: People are healthier and rates of crime, drug abuse and teenage pregnancy are lower.

How do you shrink the wealth gap? Taxation strategies aren’t a long-lasting solution, because any new government could change them. A longer-term strategy would be to equalize pay from the start. Some businesses have maximum pay differentials between the highest- and lowest-earning employees. Others are employee-owned companies in which the employee-shareholders have a say in wages.

RELATED: The Paycheck Fairness Act Failed. Should We Panic?

  • 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.