Have we entered the era of 'de-growth'?

By Steven Smith
Winthrop Professor, Plant Energy Biology, ARC Centre of Excellence
Posted on 1 November 2011
Filed under Energy, Food

The financial woes of 2008-9 are expected to be minor compared to 2012 and beyond. My understanding of the state of global finances, based on discussion with people who understand the economy, combined with my knowledge of resources, food production,  technology and climate change, leads me to conclude that we are on the cusp of ‘peak growth’.

I am told that the default of several Euro-zone countries on their debt, and the collapse of the Euro, is inevitable. Too many countries have borrowed far more than they can repay and the wealthier countries cannot cover the losses. Someone (sorry I forget who) likened it to going out to a restaurant with friends and eating more than you can pay for. So what do you do when the bill arrives? Order more food!

For an informed economic perspective please read Philip Lawn's earlier post, who describes the relationship between economy and resources thus:

The economy is a subsystem of a finite, non-growing ecosphere (Earth). The relationship between the economy and ecosphere is akin to one between a parasite and its non-growing host. Since the former cannot outgrow the latter, continued growth of the economy or continued growth of real GDP is biophysically limited irrespective of whether the growth is ‘economic’ or ‘uneconomic’.”

The financial crisis in Europe will spread to North America, Japan, South Korea and around the globe. China will be a key player because it holds so much debt in the form of American bonds and loans to Europe. It is impossible to predict how all this will play out, except that ‘recession’ and then ‘depression’ will be the result.

The historical way of battling out of recession is investment in consumption and growth. But investment requires confidence, and real growth requires energy and resources. The World has reached peak oil production and many other key resources such as fertilisers and metals are heading for peak production for two major reasons:

  • We have depleted the ‘best’ mineral reserves over the last 50 years of exploitation
  • Exploration, extraction, refining and manufacturing depend on oil

We have cherry-picked the best resources and from here on, it gets much tougher.

Now add to the mix increasing cases of extreme weather events such as drought, flooding and storms. These will hit food production and will cost money to rebuild damaged infrastructure.  Population growth and immigration will make further demands on finite resources to build new infrastructure.

In poor countries there will likely be more unrest as people go hungry, and in rich countries more unrest as jobs, people’s spending power and pensions decline. More unrest means lower productivity and more conflict between neighbours.

I have previously made the case that we are already constrained by resources here and here. I have also argued that alternative energy sources cannot maintain the current lifestyle despite hopes to the contrary, Moreover, we must be concerned that food production is seriously threatened.

So when I refer to ‘peak growth’ I mean that material wealth production per person is set to decline now, and absolute or total material wealth will decline in the longer term.

This analysis is not intended to be pessimistic or morose.

Quite the opposite! For one thing, carbon dioxide emissions might increase more slowly. Crises will help to force more realistic ambitions and changes in values. People will come to realise very quickly that continued consumption and materialism is neither possible nor desirable.

Whereas ‘recession’ and ‘depression’ are negative terms, I see ‘de-growth’ or ‘deconsumption’ as really positive.

Bookmark and Share


Comments 1 to 25:

  1. This site is a wonderful fountain of clear thinking.Thank you.
    It's plain to see that the economic model of continuous growth which has been such a successful driver of development must now be changed.
    We have exceeded our sustainable global population size, and in conjunction with consumption patterns are now eating the future of the planet.
    The new economy model for sustainability must be built on principles of equity and modest demands that would seem to be at odds with our aquisitive "human nature".
    While this seems to be improbable , necessity is a great teacher, and the under developed human quality of altruism may yet save the day( and the future )
    We have after all exploited greed, fear and status
    drives remorselessly through commercial advertising to generate demand for goods that we could often do without.
    " Degrowth and deconsumption" need a bit of tinkering.
    This is the century in which we either take control of our human destiny to become an enduring civilization with a near magical technology at our fingertips, or do a global "Easter Island ".
    Whats the right term to capture this necessary revolution in every aspect of our lives?
    Perhaps "eternal economy"? The 10,000 year programme?
    Perhaps wealth measured as wisdom?
    Why should the sharp operators who make money without doing anything useful hold the reins of power?
    Lets get this show on the road before I die of old age.
  2. We are probably past the cusp of growth. According to the following book, The Depletion Wall: Non-Renewable Resources, Population Growth, and the Economics of Poverty, it will either be voluntary and planned degrowth or forced and chaotic degrowth if we do nothing.

    It proposes as a solution a Depopulation-Green Economic Environment strategy that could deliver degrowth globally while allowing personal incomes to stabilize or even increase. See the logic at the link above.
  3. This is highly informatics, crisp and clear. I think that everything has been described in systematic manner so that reader could get maximum information and learn many things.
    dj und hochzeit
  4. japan.comp234 at 18:03 PM on 7 October, 2015
    Excellent .. Amazing .. I’ll bookmark your blog and take the feeds also…I’m happy to find so many useful info here in the post, we need work out more techniques in this regard, thanks for sharing.
    event management singapore
  5. Great info! I recently came across your blog and have been reading along. I thought I would leave my first comment. I don’t know what to say except that I have.
    facebook photo auto liker
    youtube view booster
  6. japan.comp234 at 22:50 PM on 8 October, 2015
    This was really an interesting topic and I kinda agree with what you have mentioned here!
    event company singapore
  7. japan.comp234 at 23:42 PM on 10 October, 2015
    Superbly written article, if only all bloggers offered the same content as you, the internet would be a far better place..
    how to increase followers on twitter
    free subscriptions
  8. This type of message always inspiring and I prefer to read quality content, so happy to find good place to many here in the post, the writing is just great, thanks for the post.
    electrical contractors Birmingham
  9. very interesting keep posting.
    Social Video Consultant Review
  10. Very good points you wrote here..Great stuff...I think you've made some truly interesting points.Keep up the good work.
    how much are dental implants
  11. It proved to be Very helpful to me and I am sure to all the commentators here!
    ScaleSocial Review
  12. Wonderful article, thanks for putting this together! This is obviously one great post. Thanks for the valuable information and insights you have so provided here.
    amazing selling machine review
  13. I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.
    Build My List 2.0 review
  14. Your website is really cool and this is a great inspiring article.
    Commission Gorilla
  15. Thank you for another great article. Where else could anyone get that kind of information in such a perfect way of writing? I have a presentation next week, and I am on the look for such information.
    backlink builder
  16. This is a great inspiring article.I am pretty much pleased with your good work.You put really very helpful information...
    ecom premier academy bonus
  17. Im no expert, but I believe you just made an excellent point. You certainly fully understand what youre speaking about, and I can truly get behind that.
  18. This is a great inspiring article.I am pretty much pleased with your good work.You put really very helpful information...
  19. brad.haddon234 at 23:31 PM on 28 November, 2015
    I went over this site and I trust you have a considerable measure of brilliant data, spared to my bookmarks future technology
  20. It is a great website.. The Design looks very good.. Keep working like that!.
    birthday sms
  21. japan.comp234 at 17:50 PM on 12 January, 2016
    Hey There. I found your blog using msn. This is a very well written article. I’ll be sure to bookmark it and come back to read more of your useful info. Thanks for the post. I’ll definitely return. treecare.tv
  22. amsbosstoolsmobi at 18:30 PM on 14 January, 2016
    I have bookmarked you to check out new stuff of your blog. A must read!!!!
    India angel investing
  23. amsbosstoolsmobi at 20:41 PM on 14 January, 2016
    I have bookmarked you to check out new stuff of your blog. A must read!!!!
    Buy High Pagerank Backlinks
  24. amsbosstoolsmobi at 21:45 PM on 16 January, 2016
    You have a very inspiring way of exploring and sharing your thoughts.
    lettre en bois
  25. brad.haddon234 at 23:02 PM on 5 February, 2016
    Cool stuff you have and you keep redesign every one of us. nicolas
Comments Policy

Post a Comment

You need to be logged in to post a comment. Login via the left margin or register a new account.