I think nothing will change as long as economic growth is understood as economic Good.
Current economy can't work if there's no economic growth.
Banks are among the biggest culprits. If banks lend money at a 5% interest rate, their customers must grow their businesses by 5%.
A new, sustainable economy is needed. I think about it each time I see the Race for the Galaxy card. I've seen a radical example of this among African tribes, in a documentary Africa serries by Basil Davidson. He argued the tribe (sorry I don't remember its name) can fully sustain itself by taking things from nature around it. All their wealth is external. They possess little, but whenever they have a need for something - food, medicine, water, paint, clothes, containers(...) they go to a forest, harvest a specific plant and get it. They have recipes for everything they need.
I like growth. I want to be wealthier or be able to work less (which is really just an aspect of being wealthier). I want everybody else to be wealthier too. I want my children to be better off than I am.
The problem is growth without care for the consequences. Making some people wealthier at the expense of killing the planet is a bad plan.
But I think that it goes too far the other way to turn around and say that growth itself is the problem and should be eliminated. We should strive for sustainable growth, not stasis.
The story of the African tribe with external wealth is nice, but doesn't seem like a good goal. What happens when some change in the climate (which can happen even without human intervention) wipes out a plant they rely on, or a long drought shrinks their food supply by half for a couple of years? Heck, what happens when somebody gets cancer, or cataracts, or an abscessed tooth?
I think one of the main problems is that GDP is used as the measure of national prosperity. GDP goes down when people decide to work less. Some kind of net wealth measurement would be much better parameter for a country to try and maximize. Include natural resources and the biosphere in that wealth. In this scheme taking oil from the ground and burning it would likely be a net negative on national wealth while using oil to make carbon fiber for an airplane would be a net positive. Growing a crop that builds the soil instead of depleting might add more to Gross Domestic Wealth than a more "profitable" crop.
When a company produces 1000 cars and pollutes a river in process, this counts as economic growth. When another company spends time, money and resources to clean that river, that also counts as economic growth, even if was just to get natural environment back to its original health. Some food for thought.
This is a great example of how we don't weigh externalities in GDP, why we should, and why we need market based solutions to those externalities. For example, a cap on river pollutants so low the river and wildlife can't be poisoned and each company has to buy rights from the limited pool, or if too expensive, find ways to limit their pollutants.
I once read (from Milton Friedman IIRC) that some european countries passed a law to limit river pollution by requiring companies to have their river water intakes downstream of their outflows. Supposedly this made a huge difference in the amount of pollutants they dumped in the river. That is a simple but limited way of imposing the externality costs on the persons who inflict the damage.
What? You're making a serious stretch there. The profit from the cars contributes directly to GDP, but even if individual people get paid to help clean up the river, where is that money coming from? It's a DRAIN on resources to get the river back to normal, there's no profit. Therefore it's not growth.
I think the point is that the cleanup effort is "on the books" and calculated as part of the gross domestic product.
The issue that people are trying to make is that there are many activities that do contribute to the overall wealth of a country, which don't get counted in the GDP. And there are things that are counted by the GDP which don't contribute to wealth.
GDP is a poor measure of the overall wealth and health of a country.
Right, I agree with you. From the tone of the post, it seemed like the author was justifying the GDP calculation as it's made. Perhaps there was some sarcasm there I didn't detect. But yeah, if we want to count the cost of services produced for, say, digging a giant hole and then subsequently filling in said hole, we may want to rethink our logic. I'm becoming disillusioned with the idea of economics being a valid human science when it can't seem to deal properly with the concept of externalities.
nothing is neither created nor destroyed, by that very law there cannot be a crop that does not take from the soil. If I eat a banana that has potassium in it, it lends to the fact that it took potassium out of the soil.
farmers do add fertilizer and other stuff back to the soil, though we are finding that maybe there is more to the equation. certain methods like tilling are done to kill parasites, etc, but it may also make the soil vulnerable to erosion. luckily engineers and farmers are looking at these things more closely now.
its also important to note this is just 1 study. just 1 region. 1 particular type of trap. there is still lots to know / find out, but I think its wrong to be jumping to huge conclusions just yet.
> If I eat a banana that has potassium in it, it lends to the fact that it took potassium out of the soil.
This is true. However the little-known fact is that healthy soil contains all the "machines" required to break down the abundant insoluble potassium (along with every other necessary element) present in rock particles into plant-soluble fertilizer. This "insoluble pool" contains enough nutrients for literally thousands of years of plant growth, if only the soil life is present to unlock it.
The problem is that tillage kills this soil life, and that dead land now requires the constant import of external fertilizer to grow food. Pesticide and fertilizer application also kills these organisms, which out-compete pest species (as mentioned here: https://news.ycombinator.com/item?id=15515209). Spraying becomes a vicious cycle for the farmer, and a lucrative cycle for their chemical supplier.
In other words, functional soil isn't just an inert "tank" for holding nutrients. It's a two-dimensional factory for converting in-situ rock and air and rain into biomass.
True, for some farming elements are removed from the plot of land faster than natural replenishment. These will have to be added back by humans in some way. The main constituents of food, on the other hand, come from the atmosphere. Hydrogen, Carbon, Oxygen, and Nitrogen (with the right plants/bacteria). Soil is a mixture of organic matter, minerals, gases, liquids, and organisms that together support life [1]. This soil is needed for efficient agriculture and certain farming practices increase the amount of soil and other decrease it. Once it is gone, farming stops.
Why wealthier? Will you be more happy with three cars than with two?
I think a lot of people have a limit to their material needs, when they are more happy catering for their real interests instead of chasing more wealth. It may be a cliché, but probably for a reason.
I think you might have missed the part where being able to work less is one potential result of being wealthier. Will I be more happy with another car? Probably not. Will I be more happy if I work 30 hours a week instead of 40? Probably.
You may have a limit of how much you need, but your neighbor may get the kick of owning more cars than you. I have a personality disorder which makes me less competitive, so I'm rather sensitive to it.
There is absolutely 'growth' without consuming resources. Economic growth also includes improvements in efficiency, which typically reduce the amount of physical resources used.
Also, look at the transition in our lives from physical media to digital media. Digital channels have brought massive growth while reducing the need for paper, CDs, DVDs, etc.
That kind of growth requires constant inventions, rather than occasional inventions to use in existing factories. Also I think efficiency improvements offer diminishing returns (sorry I can't prove it). But there's only so much value you can get from a handful of matter, especially if it has to be cost-effective. At some point you bump into limits of physical properties.
A silly tale I read in an old popular science book: Aliens arrive at the Earth. They make peaceful contact with humans and want to exchange knowledge. They get every single human book ever printed, they drop them on a pile, then... one of them takes a metal rod out of his pocket, and makes a scratch on it somewhere in the middle. THERE, it's archived. All they need is to measure the exact spot where the scratch is made and calculate the ratio of rod below the scratch to the rod above the scratch. The decimal representation of that irrational number encodes entire human knowledge.
Hmm, reducing the need for long lasting and easily recyclable paper by replacing it with mostly-plastic stuff (including packaging) that becomes obsolete in less than a decade?
Imagine an economy in perfect stasis, no growth, no shrinkage, just the same stuff year after year. Now introduce some efficiency improvement, like shaving some weight from a car design, or a computer chip that performs the same computation for less power, or an agricultural technique which requires less land for the same yield. Voilà, growth without consuming additional physical resources.
Of course, this is not our main source of growth at the moment. But surely it could be?
It makes me so happy to finally start seeing others on HN post links from the Do The Math blog. If I could make one website mandatory reading for all policy makers, economists, etc., this would be it.
I have thought about that often. The conclusion I have reached is this Earth's way of keeping the population of a species at a natural state - droughts, plagues etc... At first this appears harsh based on our preconceived notions of humanity. Many people will die due the environmental conditions in which they live - regardless of pollution levels.
Earth does not have a bias towards one species, such as political/economic policies will have. Mother Nature's laws determine the strongest/fittest will survive, but our current system puts wealth that leads to power as the strongest.
Switching to a system which does not value materials, money and power over others but focuses strictly living off the land such as the African Tribe will result in a drastically different social construct than we see today.
Most able to adapt, most responsive to change. Not the strongest / fittest.
It's an extremely important distinction.
Wealth isn't the ultimate strength or source of power. It's #2 on the list behind political power, which is backed up by armies in most cases. Just ask rich people in authoritarian nations who is in charge (in recent times see: China, where rich people are routinely disappeared, or Russia where their wealthiest person was put in a gulag for opposing their dictator; all Russian oligarchs are universally terrified of said dictator).
Does anyone actually question whether Xi Jinping is weaker than Jack Ma? He could disappear Jack Ma tomorrow and nobody would do anything about it. Just look at what has been done to Wang Jianlin, his business is being diced up piece by piece by edict of the State (which arbitrarily cut off bank funding access for his business, forcing Wanda Group to being liquidating its holdings).
Was Sergey Brin more powerful than Barack Obama while Obama was president? The notion is laughable. Obama was not an especially rich man when he took over the Presidency, his power was entirely political in nature.
If you want a convenient example in the West, see what happened when tech companies ran up against the US military in the form of the NSA. They all lost universally across the board. All were forced to comply, or else. If the military didn't get what they wanted up front, they illegally circumvented the front door and tapped the link between data centers anyway. Qwest's CEO was put in prison when he attempted to disobey. Yahoo was threatened with vast fines [1] over trying to resist PRISM (they could trivially destroy any given tech company in this manner). It's clear who has the greatest position of power: the people with the stealth bombers, tanks and FISA court.
True and I agree, but you can't have political power without wealth. It is a catch-22 in my opinion, which came first the chicken or the egg type scenario.
Ultimately of course, when you work less someone else has to work more to sustain you. And what if that person wants to work less? Well someone else has to work more to sustain them. And that person, when they want to work less, ends up in the same position.
When you work less it doesn't automatically mean someone has to work for you. Each time a more efficient method is discovered, you could - in theory - work less to accomplish just as much. The trouble is, I think, that capitalist business owners respond by tightening the screws. I guess the idea is "why should my employees work less ? I will have less money than my pal business owner." If he doesn't tighten the screws, he will lose competition to another company.
Is it growth you want (presumably capital/resource-based), or the things you associate with that growth? eg. Self-improvement (personal growth), stability, security, happiness, leisure...?
> Making some people wealthier at the expense of killing the planet is a bad plan.
Reminds me of this quote:
"When the last tree is cut, the last fish is caught, and the last river is polluted; when to breathe the air is sickening, you will realize, too late, that wealth is not in bank accounts and that you can’t eat money."
Exponential growth as we’ve become used to is fundamentally limited, whether we like that fact or not. We simply cannot expand exponentially into a finite supply of resources indefinitely, and in doing so we appear to have rapidly surpassed our planet’s ability to support that growth.
Growth does not necessarily need more planet. The same amount of natural resources produces a lot more wealth today than it did a thousand years ago. The style and amount of growth we've seen in the past couple of centuries uses up more and more, but that doesn't have to be the only way.
It doesn't have to be that way ? What else could people compete for ? Facebook likes ? So far, almost all wealth is material in nature. As for digital rewards, data-centers and other computer infrastructure needs constant input of energy. Human population is growing, humans love to copulate and take pride in having children. We need bigger and bigger internets for bigger facebooks.
> humans love to copulate and take pride in having children.
Developed countries are actually experiencing a population decline. As people get wealthier they tend to have fewer children, in some places less than 2 (replacement level).
"All wealth is material in nature" ignores centuries of intellectual property.
> Developed countries are actually experiencing a population decline.
Japan left aside, all developed countries populations are growing. It has been 20 years that half of those countries are supposed to experience a population decline and it does not happen. At worst a handful stagnate. Even Germany is at its record high. France exploded each of the forecasts which promised its population decline, so the next ones are revised upwards and then exploded again.
Most wealth is material, but that doesn't mean you need ever more material for ever more wealth. The obvious common example is electronics. Shrink a computer or smartphone to use half the materials while otherwise maintaining the same capabilities, and you've increased the amount of wealth it represents.
Raw materials aren't worth much. We mostly pay for the arrangement of matter, not the matter itself. A person who owns a few dozen tons of lumber and plastic and metal is not equally wealthy to a person who owns a house of similar mass. The average human today is far better off than a few centuries ago, not because the average human has more material, but because they have access to material that's better arranged.
Population growth is one thing that needs to be limited. People need space. But there's no inherent requirement for economic growth to be the same. We "just" need to grow through more efficient use of natural resources rather than through greater use.
You bring up many good points, but I don’t think you need to accept the main point of the original post:
>Most wealth is material...
The wealth/value of the companies that control the intellectual property that the world relies on, are at least as valuable as the companies that control the materials we rely on. Microsoft was maybe the first company to grow huge that didn’t rely on control of oil/railroads/etc for its wealth and there are plenty others. I don’t see that trend reversing - as you said we mostly pay for the arrangement of matter, not the matter itself.
It consumes energy/creates entropy to sustain itself. In its current state it already consumes more than the earth/sun can supply. Having it grow even more means consuming ever more energy (fossil and nuclear fuel is finite, the sun light is constant), and generating ever more entropy (i.e. pollution, heat, and ecosystems destruction).
Edit: also, improvements in efficiency have historically lead to a global increase in energy consumption because of the growth they spurred, and you can't get past 100%.
The sun can supply an awful lot of power. Humans use something like 10 or 20 terawatts of power (constantly), the sun smacks the earth with ~100 petawatts of power.
Human energy consumption isn’t anywhere close to what the sun supplies. We just don’t capture much of it.
Life is a dissipative system too. It consumes energy and generates entropy. This can’t go on forever, but I wouldn’t take that as an argument against life.
But life had up to now evolved to function at a sustainable level.
It can't go on forever indeed there's a thing called the heat death of the universe, but it is sufficiently far in the future that I don't care about it.
The shit that happens now means that my kids won't be able to have children in good conscience (I already feel sorry for them for the mess I put them in).
Discussions of "sustainable" are, to me, disingenuous and incomplete, because nobody ever wants to confront the root issue: population size. Really, no ecological practice is "sustainable" in the face of ever-increasing population size. If we could achieve stability and predictability in the size and scope of the human species, then we can find truly sustainable practices. Without that, it's just a buzz word.
Food limits how far the population can grow anyway.
AFAIK the energy consumption (and thus the pollution) for the benefit of developed nations far outweighs the one that benefits the poorer ones whose population increases.
Modern capitalism can be easily sustainable. You just have to do two things.
1) Legislate frameworks for market based solutions to externalities i.e. tragedies of the commons such as air pollution, water quality, etc. Cap and trade would be one framework for addressing CO2.
2) Eliminate mercantilism, where government policies are used to interfere in market forces, usually for the benefit of wealthy business owners. I.e no more subsidies, of any business, no more "incentives" to overbuild, overproduce, etc.
Boom done. For those of you who say yea, but it's impossible that those 2 things could ever be legislated successfully, I say, yea, your right. But that doesn't mean we can't acknowledge the solution. And for those of you who say, but capitalism bad! I say, yea but those two things are just as impossible to implement under socialism, communism, marxism or any other system you can devise.
In reality, the only solution is to have a Julius Caesar conquer the known world, declare himself or herself dictator for life, and then say, you idiots, we need to have a sustainable planet, and just implement those changes by edict.
Unfortunately the new Caesar would then drop by the senate for a session, and senators backed by the dozen biggest corporate welfare recipients would stab him or her to death. And the senate would immediately repeal the new laws.
>For those of you who say yea, but it's impossible that those 2 things could ever be legislated successfully, I say, yea, your right. But that doesn't mean we can't acknowledge the solution. And for those of you who say, but capitalism bad! I say, yea but those two things are just as impossible to implement under socialism, communism, marxism or any other system you can devise.
It is curious to argue that something is a solution, and also assert that it is impossible.
How much pollution is OK? What is the market price for a pound of carbon in the air or part-per-billion of mercury in waste water? Those decisions would be made by regulators, meaning there would be influence-peddling.
Too much and for too long, we seemed to have surrendered personal excellence and community values in the mere accumulation of material things. Our Gross National Product, now, is over $800 billion dollars a year, but that Gross National Product - if we judge the United States of America by that - that Gross National Product counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage.
It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl.
It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities. It counts Whitman's rifle and Speck's knife, and the television programs which glorify violence in order to sell toys to our children.
Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials.
It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile.
And it can tell us everything about America except why we are proud that we are Americans.
That's circular economy at the purest level. More and more I think we need to degrow. It's not a question of starting the green economy. That should had happen years before now. We were informed by environmentalist about the limits of growth. Now we need to act fast on reducing unnecessary consumption and also unethical/unsustainable productivity.
Very hard do to. Chinese population envy Americans their consumerist lifestyle. Various developing countries watch Hollywood movies and TV serials want some of that. Even if Americans led by example, that kind of economically wasteful lifestyle has become so associated with success it would take a long, long time to change culture.
The monetary system is based on debt, debt requires growth to service the interest, growth, at some point, is unsustainable. Collapse occurs at the point of 0.0 growth, i.e. the top of the curve.
The question is : does growth stop voluntarily or when one of the feedstocks of growth reach a limit ?
I find it odd that the people most associated with 'green' thinking, climate change etc, are the ones that seem to want growth in other areas, i.e. immigration to offset natural western population decline. I read comments from leftward progressives that they want to take Canada's population to 100m from 35m, given Canadian's comsume the most energy per capita, that sounds insane.
5% interest rate does not imply 5% business growth. Interest rate simply reflects the fact that people prefer $1 right now to $1 a year later. In this context banks are time machines, moving money through time (glossing over credit risk, inflation, and other complexities).
Right, and maybe the best way to describe it is if your business borrows at 5%, it has to earn more than 5% on that borrowed money. It has little to do with growth, and everything to do with profit margin.
For example, lets say you want to start a business is investing in bonds. You work for wall street and are great at picking high yield bonds that aren't as risky as they look. You average a 7% return over time, which includes losses on your mistakes. But you have no money to invest to start the business, so you approach a bank and show them your long term results. The bank sees you as a good risk and offers to loan you $10M at 5% a year, so you can gross $700k a year, pay the bank $500k, and net $200k.
But if the bank ever raises your rate to 7%, you are then out of business.
> He argued the tribe (sorry I don't remember its name) can fully sustain itself by taking things from nature around it. All their wealth is external. They possess little, but whenever they have a need for something - food, medicine, water, paint, clothes, containers(...) they go to a forest, harvest a specific plant and get it
IMO, one of the biggest myths is the myth of the primitive but efficient savage. Its almost always a "obscure tribesman" of some kind, be it a native American, or maybe an African tribesman... but the myth is always the same.
Apply the "Mythical Efficient Tribesman" to real life, and things start to go awry. The mythical Tribesman poops in the river when he needs to use the bathroom for example... if a city of 1-million+ people poop in the river however, it creates contamination and disease... and probably isn't good for the general environment either.
IIRC, the most efficient places on earth, as far as lowest environmental impacts, are generally cities. Cities with central sanitation to clean up sewage BEFORE it enters rivers for example.
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A sustainable economy is about closing the loop, keeping track of trash and doing something about it. Landfills and recycling centers are actually hugely efficient in the USA, especially some materials like Aluminum.
Waste Disposal centers have huge bins for a wide variety of items: textiles, metals, electronics, plastics, paper, oil, bio-wastes... each of which can be efficiently turned into new products.
For a lot of people, simply being aware of your local waste disposal center and their services would greatly improve your environmentalism. Don't throw away old Jeans, send them to the "textile" center to be recycled. Purchase "Plastic 1, 2, 3, 4, 5", but not Plastic 6 (which is harder to recycle and very few centers actually recycle it). Etc. etc.
Know what your city can offer and use their services. You don't need to run your own compost pile, just send your leaves / eggs / food waste to the landfill for it to be composted into mulch.
In my experience: rural areas of the USA have very few waste disposal services... and may even be running local "septic tanks" as their primary means of treating sewage. But even these more primitive means of sewage treatment are far superior to "primitive tribesmen" who resort to effectively dumping their sewage untreated in a river.
Those "mythical tribesmen" produce no plastic or other materials which take very long to decompose. Poop, bone, leather, wood re-enter the system very quickly.
> Poop, bone, leather, wood re-enter the system very quickly.
I suggest you study the River Ganges and then reevaluate your position. Poop alone can destroy a river on the scale of citywide human populations.
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Plastics are actually INCREDIBLE for preventing waste. A plastic bag for groceries is composed of roughly 13mL of LDPE, or roughly 260 "drops" of plastic! LDPE is so incredibly efficient at manufacturing that there's much less waste in its creation than textiles or other materials.
The issue with LDPE is that it doesn't biodegrade very gracefully and thus becomes a pollutant if its disposed of improperly. But from an engineering / manufacturing perspective, its one of the most efficient materials to make and manufacture.
In contrast, a leather bag required you to raise, feed, and then kill an animal. Indeed, the mammoth was likely hunted to extinction by primitive humans, and demonstrates that even at the small scale... humans can affect the environment.
And sure, the leather biodegrades gracefully (at least, more gracefully than an LDPE plastic bag). But you have to consider the environmental costs in creating the leather (water, food, and waste created by the animal before its leather was harvested)
The human waste that contributed to the pollution of the river Ganga (or Ganges) was generated by a population that was supported by modern medicine and a whole lot of other modern inventions. It wasn't always this polluted, even though there have been cities on its banks for millennia. And of course industrial waste also added to the problem. You can't compare that population with the "mythical tribe" that is under discussion here.
It makes absolutely no sense to "cargo cult worship" the mythical tribeman's lack of pollution, when our society is funadmentally built differently.
There are some incredibly simple solutions available to us that the "Mythical Tribesman" doesn't have. IE: We can pass a law and regulate pollution in our country, if we can convince enough other people that the costs are worth it.
The self-sufficient tribe is romantic, and it worked once upon a time. I believe we're now 1-2 orders of magnitude away (in headcount) from the possibility of returning to the "sustainable tribe" stage.
Exponential growth is a pipe dream sustained only by exponential inflation and destroying Earth. Economies have overcapacity, with ML coming into play it's going to be evident everywhere. We will need a big political change; I hope people won't go with the traditional solution - war, genocide etc. Technology now enabled a few people to literally own the whole planet, so while they were playing this pointless domination game, environment suffered and might never fully recover.
That's called a subsistence economy. It has downsides, such as very high rates of violence and other preventable deaths (like death during childbirth).
One could imagine trying to solve these problems, but all the solutions sound more like dystopia rather than utopia.
In any case, there is a fair amount of unsettled land. You can probably buy some or even squat, and try to make your own tribe.
How about reliable birth control and treatments for childhood diseases? Without those 2 things, women in the tribe are basically consigned to being pregnant and rearing a lot of children hoping some of them survive.
That is the dark side of going back to some mythic close to nature society. It will make inequality many times worse than it is now.
I think the idea of "external wealth" is interesting. But how are banks culprits here? Are they forcing you to borrow money? Should they charge no interest so your business doesn't need to grow? Also, I don't follow. You need revenue to pay the interest (and principle), not constant growth.
I'm repeating that argumentation after Marcin Popkiewicz, a Polish climate expert. He wrote a few fat books about it.
No one forces you to take bank loans, but banks definitely foster geometric growth. They want geometric returns on investment. If you don't have constant business growth, borrowing money from bank is losing money.
I don't know what would be the right answer. I know what human population is growing at a geometric rate, and the planet is finite in size. If a colony of bacteria doubles in size every 30 minutes, and it fully covers a petri dish at 12:00 am, the dish would be half covered at 11:30. 25% covered at 11:00. My point is that when there's geometric population growth, saying "oh, we still have 75% of the planet left" is just stupid. At that point the time is almost up.
Also, countries have a geopolitical interest to have as high population as possible, to have a manpower advantage over neighbors. This is why birth control - probably necessary at some point if the planet is finite - is bloody unlikely to happen. It would need to be introduced simultaneously in all countries. It reminds me of the story of Europeans buying African slaves at African shore. If there was a kingdom which refused selling slaves, they went to your neighbors and sold them rifles.
I'm no economist, but: If I borrow from a bank to buy a hotdog stand, and the payback is two years at $500/month, I need to earn $500/month + other expenses + profit every month for two years (or default and give the bank the stand, which is the collateral). I don't need to grow. The bank gets its interest, and I get an income from my business. Win-win. Where is "growth" required?
Your hot dog stand was the growth and now they need a 10% bigger next investment for their return on it. They need you to have a competitor with a better stand so they can loan you both money or they need prices to have gone up thanks to other Banks finding speculations and you wanting to sell. Otherwise, they now have 10% more money they need to invest and less of a solution than 2 years ago.
Population growth is slowing down as more and more women have access to birth control and choose less children. The estimate is that we'll top out at 9.5 - 10 billion people around mid century.
A problem that often gets overlooked are the (geo) political ramifications of differences in economic output. I’m not sure if this is an existing hypothesis, but it seems evident to me.
If one actor grabs the bigger share of economic growth that puts it in a position of power over others. Nation states that can grow their population, resource extraction and have export surplus can use those things to exert political power over others. This means that states have a strong incentive for growth.
Likewise, if a population is dependent on money for their necessities, and there exists a limited stock of it, those who command a large fraction of it have defacto leverage over those with little.
Oh come on. There were no investment banks in Soviet Russia yet the Soviets drove economic growth as hard as they could.
If banks lend money at a 5% interest rate, their customers must grow their businesses by 5%.
So what? You can easily grow an economy without consuming more raw materials and a simple thought experiment will prove it: consider that you buy some paper and a pen and write a book. What is the economic value? Well it could be zero, or negative because you've wasted perfectly good paper and the time of everyone who read it. Or it could be billions because it's the next Harry Potter. But the raw materials consumed in the process are the same either way.
>You can easily grow an economy without consuming more raw materials and a simple thought experiment will prove it: consider that you buy some paper and a pen and write a book. What is the economic value? Well it could be zero, or negative because you've wasted perfectly good paper and the time of everyone who read it. Or it could be billions because it's the next Harry Potter.
Isn't that dependent on the economic school of thought you subscribe to? While that may generate economic activity, unless you're exporting it won't generate economic growth, as no new tangible value has been realized. As per the current trope of selling houses to each other at ever-increasing prices.
A billion dollars flowing from thousands of people to a few, all within a single economy, doesn't seem like growth, it just seems like activity.
Now, foreign market sales or flogging off the international film rights to said book - That's growth.
Current economy can't work if there's no economic growth.
Banks are among the biggest culprits. If banks lend money at a 5% interest rate, their customers must grow their businesses by 5%.
A new, sustainable economy is needed. I think about it each time I see the Race for the Galaxy card. I've seen a radical example of this among African tribes, in a documentary Africa serries by Basil Davidson. He argued the tribe (sorry I don't remember its name) can fully sustain itself by taking things from nature around it. All their wealth is external. They possess little, but whenever they have a need for something - food, medicine, water, paint, clothes, containers(...) they go to a forest, harvest a specific plant and get it. They have recipes for everything they need.