Collision Course: Endless Growth on a Finite Planet (5 page)

The case of Cuba since the collapse of the Soviet Union is worth noting, though what happened there after the sudden disappearance of Soviet oil and food would be unlikely to have occurred if such imports had remained available. The immediate aftermath was extremely difficult, and many Cubans verged on starvation. Nonetheless, fifteen years later, about half of Havana’s vegetables were being grown in the city, a fraction rising close to 100 percent in smaller towns.
²⁴
In response to the crisis, the government restructured over 40 percent of state farmland into 2,007 new cooperatives managed by the workers, who were also allotted a gardening space to grow their own family’s food. By 2000, more than 190,000 urban residents had also claimed personal lots on vacant city land. In both arenas, farming methods are organic, easing the need for imported petroleum. The process has reconnected rural workers to the land and helped urban Cubans transcend the town/country divide—producing what sociologist Rebecca Clausen calls a metabolic restoration.
²⁵

Cuba’s struggle after the Soviet collapse brings into sharp focus the consequences of having to do without oil, synthetic fertilizer, or pesticide—as well as imported food. If cheap oil is in decline, as peak oil proponents argue, Cuba will have a head start on the rest of the world—and a big advantage over countries like China and India, which have bet their futures on fossil-fueled agriculture and fossil-fueled economic growth.

The massive economic growth of the twentieth and twenty-first centuries is unprecedented in history. It gathered pace as the mercantile proceeds of the Age of Discovery were applied to domestic production back in Europe. This was in turn boosted to an industrial scale in the early nineteenth century with the mounting use of fossil energy; a further lift was provided from the late nineteenth century when liquid petroleum was tapped. After World War II, a period of explosive economic growth held sway for three decades, a unique event in history. Although it slowed down in the 1970s and was actually arrested in 2009 after the global financial crisis, the immense human economic system continues to double in scale every fifteen to twenty-five years. In the next chapter I look at conflicting views of this incredible phenomenon.

2

Economic Growth: Perceptions

There is no magical New York investment cowboy who’s going to suddenly develop a product which overcomes physics and biology. They were designed a long time ago, possibly intelligently—we don’t know—but they were certainly designed a long time ago and they are absolutely set in concrete.

—Paul Gilding, 2009

Which Comes First, the Planet or the Economy?

Ecological economists see economic growth very differently from mainstream economists and most policymakers. First, and most fundamental, is the question of which is primary: the economy or the planet’s ecological systems? The answer chosen is crucial, since all questions of the limits, boundaries, and scale of the human economic enterprise hinge on whether or not the economic system can be theorized independently of its physical and natural context.

Many standard economics textbooks introduce students to a diagram of “the economy” that includes only the relationship between businesses and households (producers and consumers), depicted as a circular flow and not represented in any wider physical context. The ecological economist Herman Daly contextualized this circular diagram by drawing an outer frame around it to represent the natural world, a world that “contains and sustains the economy” by regenerating renewable inputs and absorbing unavoidable wastes. In
Ecological Economics
, Daly describes his exchange with the World Bank’s chief economist:
¹

I asked the Chief Economist if, looking at that diagram, he felt the issue of the physical size of the economic subsystem relative to the total ecosystem was important and if he thought economists should be asking the question, “What is the optimal scale of the macroeconomy relative to the environment that supports it?” His reply was short and definitive: “That’s not the right way to look at it.”
²

Daly characterizes this approach, borrowing Joseph Schumpeter’s term, as “pre-analytic,” meaning that the assumptions involved are implicit and held to be axiomatic—and thus not susceptible to analysis. The key assumption here is that the economy is the overarching system, while nature, if it is considered at all, is a sector of the economy, such as the extractive sector.
³

This paradigm, which treats nature as a subset of the economy, underlies numerous unexamined verities of mainstream economics: that the planet is functionally infinite, both as a source of materials and as a sink for wastes; that substitutes for depleted resources will be generated automatically by price increases; and that the limitations of the physical world and the laws of thermodynamics are not relevant to economic processes. These ideas inform the conduct of economic activity and the current public debate about it. They have immense consequences for the way people think about economic growth, and they underpin a widely held confidence that economic growth as we know it on earth today can continue indefinitely.

Usually assumed rather than stated explicitly, the idea that nature is a subcategory of the economy gets short shrift from ecological economists. Daly’s primary or overarching system is biophysical rather than economic—human endeavor is necessarily proscribed by the laws of physics and the physical constraints of a finite planet. That we live and produce within the boundaries of such an entity means that the human economy has inevitable limitations of scale.

As far back as 1966, Kenneth Boulding, a pioneer of ecological economics, argued that a transition had begun: from the “open” to the “closed” earth, from the “empty” world with ever more frontiers for exploitation to the “full” world where it is no longer possible to go somewhere else when resources fail or pollution destroys. The “illimitable plains” of the endless frontier no longer stretch into the unknown. There are no more “unlimited reservoirs of anything, either for extraction or for pollution.”
⁴

On the face of it, the economists’ basic view—that the human economy is the primary system—seems an astonishing claim. Life on earth, after all, is about 3.8 billion years old, and human life is an infinitesimal fraction of that. The capitalist economy is at most five hundred years old, a small part of the 200,000-year span our species has been on earth. Even what we call “civilization,” with settled life in established cities and the cultural complexity that accompanies it, is considerably younger than the 10,000 or so years since we started farming. Understanding the human economy as a primary system independent of the earth it arose upon would appear to defy common sense.

Actual constraints or limitations, of course, were far less obvious before the accelerated growth of the past 250 years—and especially the twentieth century, which by 1999 was delivering an
annual
increase of at least half the entire global economy in 1900. Through most of our history, humans could ignore natural limits. But, as the development sociologist Wolfgang Sachs has put it, the more “the rate of exploitation increases, the faster the finiteness of nature makes itself felt on a global scale.”
⁵

Self-evident as these boundaries might now seem for ecological economists and allied scholars, they remain invisible or contested in mainstream economics and are of little concern to politicians in most countries and to most of today’s citizens. Hardly a news bulletin goes by without reports about growth expected, growth threatened, or growth achieved. Growth is the sine qua non of everyday economic language and expectation and the much-touted solvent for critical problems such as poverty, pollution, and debt. Yet, however necessary ongoing growth is to our current economic arrangements, and however desirable from the point of view of our expectations of material well-being and comfort, it is hardly a practical aim if it is based on a misperception of reality.

The unexamined assumption that a high and increasing level of material consumption is normal stands in the way of a perception of the peculiarity of our times and an ability to engage in the kind of hard scrutiny our path to the future now requires.

The Timing of Economic Change: Which “Growth”?

Some mainstream economists concede that modern economic growth is unprecedented. In his Boyer Lectures of 2006, titled
The Search for Stability
, retired Australian Reserve Bank governor Ian MacFarlane remarked that “viewed against the span of human history, economic growth is a relatively new phenomenon, dating only from the Industrial Revolution in the mid-eighteenth century. In the many centuries prior to that, it had been negligible.”

MacFarlane’s insistence on the recent emergence of economic growth contrasts radically with that of economists who responded to
The Limits to Growth
when it first appeared in 1972. Many prominent economists characterized growth as a continuum throughout human history. Robert Solow, who later won the 1987 Nobel Prize in Economics, argued that “the world has been exhausting its exhaustible resources since the first cave man chipped a flint.”
⁶
The British economist Wilfred Beckerman thought that problems associated with exponential growth in the use of finite resources have “been true since the beginning of time; it was just as true in Ancient Greece.… This did not prevent economic growth from taking place since the age of Pericles.… There is no reason to suppose that economic growth cannot continue for another 2500 years.”
⁷
This “continuous progress” view allows the economic history of recent centuries to be subsumed under a static notion of transtemporal human culture in which our present system is seen as just a phase of the permanent and normal state of a healthy economy.

Clive Ponting points out in his
Green History of the World
that “for all but the last few thousand years … humans have obtained their subsistence by a combination of gathering foodstuffs and hunting animals”
⁸
—a way of life involving virtually no resource extraction, and no changes we would describe as economic growth. Ponting identifies two great transitions in human history—the first, to farming, starting about 10,000 years ago, and the second, in the last few hundred years, to the dominance of fossil fuels and the development of an industrial economy.
⁹

The first agricultural revolution took place over millennia as humans began to grow crops and improve pastures and, for the first time, to cause major alterations to the ecosystems around them. People were able to settle in villages and towns and to produce a surplus above their subsistence needs. Though the elites—always a small minority of the population—could be supported without having to produce their own food, for the majority of people these developments led not to plenty but rather to an arduous life of scrabbling in the dirt. It was a system more vulnerable to the vagaries of climate, drought and famine than the hunter-gatherer mode of life had been and, according to Ponting, it was “most definitely not an easier option.… The one advantage agriculture has over other forms of subsistence is that in return for a greater degree of effort it can provide more food from a smaller area of land.” Ponting suggests that a world population of approximately four million, reached around 10,000 years ago, was the maximum that could live comfortably by hunting and gathering, and that it was this expanded population that precipitated the shift to farming.
¹⁰
Other scholars argue that factors such as climatic variation or intentional risk reduction may have sometimes played a role.
¹¹

The transition to farming initiated the first episode of severe local ecological damage, mainly as a result of the progressive clearing of the forests.
¹²
The paleoclimatologist William Ruddiman suggests this might even have affected atmospheric levels of greenhouse gases several thousand years ago, with a discernible impact on climate.
¹³
Nevertheless, though economic growth quickened, it remained barely perceptible over the subsequent 10,000 years or so. Before 1500, improvements in technique were only occasional, and the world’s population took a thousand years or more to double.
¹⁴

In the 1994 edition of Worldwatch’s
State of the World
, Alan Durning used the metaphor of a ten-minute satellite-view film of the deforestation of earth over the last 10,000 years to demonstrate the immense change of pace and scale involved in the second great transition to industrialization. There is no obvious sign of change until the eighth minute, with the disappearance of forest around Athens and on the Aegean islands. Forests in Europe, China, India, and Central America can be seen contracting from the beginning of the last millennium (from 1000 CE), but they do not shrink appreciably until the years from 1800 to 1950, coincident with the Industrial Revolution, when about 6 percent of them disappear. From 1950, in just 3 seconds of Durning’s film, a further 60 percent of the original forest vanishes. Although trees still grow on about three quarters of the original forest area, less than half of these represent intact ecosystems; the rest are “biologically impoverished stands of commercial timber and fragmented regrowth.”
¹⁵

Durning’s short film serves as a graphic depiction of the pace of economic expansion through the lens of forest clearing, corroborating MacFarlane’s timing of economic growth. Ecological effects of human economies, local in scale for millennia, became global very recently—and very rapidly. The historian John McNeill characterizes modern times, especially the last fifty years, as “bizarre, anomalous and thoroughly unsustainable.”
¹⁶
Although the earth has changed environmentally for some four billion years and our genus,
Homo
, has altered earthly environments for the last four million years or so, the twentieth century has no parallel. Its peculiarity is largely a matter of scale and intensity; however, a quantitative increment can cross a threshold (or tipping point) and trigger “a grand switch,” leading to qualitative change—such as when ice melts as 0°C is exceeded.