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Exponential economic growth is possible because it is not a measure of natural resources. It is a measure of many man-made or artificial forms of capital, including knowledge, which have no obvious constraints. Many of the 'laymans' critiques of economics confuse exponential economic growth with exponential gorwth in natural resource consumption, when in fact a technology that allows you to get the same service with fewer natural resources is highly valuable, even though it manifests as a reduction in consumption.

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A long time ago, bread on the table made up most of the economy and many of the other 'natural' resources were worthless because we didn;t even use them. As our economy grows, the fraction taken up by food diminishes. As it is were are killing ourselve by eating too much high density food. Likewise, the natural resources that are currently mined will eventually become a less significant part of the economy as we find ways to achieve what we want without them.

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They do not actually rely on it. Many claim they would go bankrupt if the price of these reosources went up, but this is only if they assume it does not go up for their competitors. They are taking advantage of the cheap resources, but not reliant on them. Of course, there are many that would go out of business do to a change in the way we do things, but that would be because we changed how we do things, not because we stopped getting the services we want.

The 'arts' as you dismiss it is only an insignificant fraction of our wealth that is unrelated to resource availability. Consider the others:

Knowledge
Technology
Social capital (how we learn to get along socially, and similarly how we learn to organise a business differently)
Engineered capital - even if iron and concrete were to become scarce, we would still have a lot of bridges and buildings sitting around for years to come

Also consider that most of our basic forms of natural capital are renewable - like food and water.

Also consider that all of the apparently non-renewable forms are all used in some form of technology which can be adapted to their absence.

Consider the pyramid given here - only one of the forms of capital listed is nominally non-renewable, but is so plentiful it may as well be:

http://www.sustainablemeasures.com/Sustainability/KeyTermCommCapital.html

I hesitate to count energy as it is only currently from non-renewable sources but is dead simple to get from renewable ones.

Also consider that current economic growth in industrialised nations is not linked to increased food supply, is not dependent on growth in energy consumption - certainly not to growth in fossil fuel consumption. A large chunk is in the form of computer software and knwoledge and technology conveyed via computers. Yes, this currently consumes an increasing quanity of energy, but need not do so. It is only increaseing because despite it's apaprent scarcity, it is still getting cheaper in real terms.

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No it does not. History merely shows a correlation. We consume those natural resources because we can - because we have the wealth and it is cheap to do so. Car technology has remained almost stagnant for a century not because our transport depends on oil, but because the cost of oil keeps going down in real terms. That is, there has been no incentive to change. Our wealth has caused the increase in consumption of oil, not the other way round.

Any apparent causation is merely short term. What costs a lot is changing. When the oil shocks hit, we incurred a cost to adapt and use less oil. Once adapted, we kept those changes and the price of oil went back down because we stopped using it in many of the ways we had been. Eventually one of those shocks will force us to stop using it completely, we will adapt, incur some short term cost, then our economy will keep growing.

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Our economy does not depend on energy being cheap. Human labour is far more necessary for our economy to function, yet it's price has been skyrocketing compared to oil. The economy simply adapts.

One last point. Compare your life with that of someone from 200 or 400 years ago (just a few generations). You can see that an increase in population or food consumption is a minor part of your wealth. What really makes up your wealth is all the technology you use and people use to keep you satisfied. All of these technologies would be indistinguishable from magic to those people from the past. Given this perspective, it is hard to see how things like oil could cause anything more than a short term impact.

We have the basics right for sustainability - a plateuing population and a concern for natural capital. If we maintain there, there is no reason at all why our wealth cannot continue to grow.

FD, there's far too many points there to debate, but IMO, you are missing the general vein of the argument which is : Profit (in a manufacturing sense) = produce output minus energy input.

Of course there are many ways to achieve better outputs which don't  soley rely on the quality of fuel input.
Nowadays, every last drop of efficiency is being squeezed out of staff in order to keep profits flowing, and (fairyland hopefully) growing forever.

In case you hadn't noticed, gone are the lackadaisical days at work whiling the hours away..for most anyway. Nowadays, you have to produce for every minute that you are voluntarily (?) submitting yourself to a dictatorship workforce.
But there is a limit isn't there? There is a limit as to how much you can produce for your company (owner).
Amidst the miriad slogans of working smarter, working safer..ect., there is the age old bottom line of "more work, less pay".

I admit that at times during my working life, I had felt almost guilty collecting my pay packet. Profits were plenty and unions got what they wanted. Those days are long gone, and they will not return in our current expected lifetimes. I'd bet your left nut on that one.

So, maybe we can eek a little more efficiency out of the workforce in order to keep profits growing, but not much IMO. Not much at all.

If you add to the nearing saturation point of realistic human efficiency, the economic disaster (considering our self-imposed fragile economy) of having to transgress to a far less (profitwise) efficient fuel source, then the house of cards will surely collapse in a big way.

It's all fine and dandy to say that we have the means for self-sufficiency, and that's good for me, but the result will mean a sharemarket collapse. The economy must shrink before it gets realistic and accepts finite resources as being finite.
Maybe we can go to the moon and mine there. Maybe we can expand to Mars..or maybe not.
Maybe we just need to accept that in the end, exponential economic growth requires exponentially growing fuel.

You mentioned a host of other economic sources which don't concern food and shelter. Where are they on the list of priorities in third world nations? They are very low.
We in the west are frollicing in a playground compared to third world nations, primarily because we have machines to do the work of 10, 20..or more people for us. We have the luxury of being able to idle away on Xbox, chat rooms, or whatever takes our fancy. We have become like choosy pussycats who snub our noses at anything less than gourmet cooking.

But the fuel is our staff. A reduction in fuel will require more manual input from each and every one of us lazy sods. Any available alternative that we currently have at our disposal will mean a reduction in fuel.

Forget about killing your fellow man to sustain bs economic growth. Forget about the bs ponzi sharemarket, it's stuffed already.
Take the hit. Take it like a man, 'cause the truth hurts sometimes.

As has been displayed, if our known oil reserves are equivilant to every drop that we have ever used, then at our current levels of demand for growth in consumption,  we are good to go for ten years. And that's dependent on being able extract it all. A mathematically correct equation as far as I can see.

Of course there is the problem of not using it all up for economic advantage where another nation will.

That's the thing with the sharemarket isn't it?
The sharemarket has to outperform fixed interest and inflation for it to be a viable choice at all.
What happens when things stagnate or, on the whole, go backwards? Who would even bother looking at the sharemarket? You may as well find a good fillie to back.

And if very few people want to get involved in the sharemarket, then what happens?
Companies rely on their shareholders. There has been a massive push in the past decade to please shareholders because growth is naturally becoming increasingly difficult.

When the cheapest form of energy becomes more scarce and more expensive, growth for many companies will become a distant pipe-dream. The challenge will be to stay afloat.
All the while, shareholders will want nothing to do with such a poor investment risk.
The future challenge for most people will be to hold onto some semblence of value in their dollar.
Superannuation is a rort (as it has been sold), it will be eaten away by clued in governments who produced a "slush fund" for an unavoidable impending disaster.

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How about this - Profit = value of output - value of input.

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You should do an objective measure of this. You will find that people used to work far harder.

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There are physical limits, but not economic limits. We are already producing objects of far greater value than our ancestors could have dreamed of while putting far less physical effort into our jobs.

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Did you just make that up?

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Can you explain why, other than by waiving your arms in the air and insisting that GDP and resource consumption are the same thing?

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Again, can you explain why, or can you do nothing more than repeat it and insist it is true? Humans can't eat electricity. We can't wear it. We can't sit on it and ride around the country. There is no fundamental minimum amount of energy required for anything we actually need that comes close to the quantities being used. Rather, we simply use the quantities we do because it is so cheap, and has been for so long. There is no dependence, just taking advantage.

One will do for now - technology. Most of the factors involved can be loosely described as some form of technology.

Social capital is also crucial, but far less obvious.

freediver wrote on Sep 26^th, 2010 at 9:53pm:


Technology will help us in the struggle for sustainability, but should not be viewed as having an infinite capacity to support us.

Technology is also only one of the major factors that have & will determine Economic Growth.

That said, no amount of Technology will enable us (humans) to continue to exponentially grow the 2 other major Growth factors, those being Population Growth & Energy growth. And, a growing number of other Essential Resources can be added here, including Food & fresh water!

freediver wrote on Sep 28^th, 2010 at 10:10pm:


Is that your "considered" course of action, for 7 Billion people?