The Impossible Hamster

I recently put a long post on the Transition Horsham Forum .

My post continued a discussion about a bit of YouTube video posted by nef (the New Economics Foundation). It's about a hamster that carries on growing at its early growth rate until it's one year old and reaches a weight of nine billion tonnes.

Here is my bit (very slightly improved):-

Andrew Simms, the author of the hamster, is a genius at explaining things graphically. For a fuller explanation of why economic growth eventually won't be possible see this very recent nef publication entitled Growth isn't possible by Andrew Simms, Victoria Johnson and Peter Chowla.

The logic seems impeccable. The big question in my mind is: for how much longer can growth continue? Technically, I think the answer is for quite a few more years, particularly in the developing world. For a while, more and more subsistence farmers will be entering the money economy and so contributing to the figures on GDP. This may not mean an increase in real wealth - if a subsistence farmer becomes a farm labourer and starts getting paid and buying his food instead of eating what he grows, he may be no more productive but he will increase GDP.

In the developed world, an increasing price of oil and other resources will tend to depress economic growth. However, for a while, we may invest heavily in renewable energy and this investment and the jobs it creates may more than offset the reduction in GDP that flows from worsening shortages of raw materials. If investment becomes a major driver of the economy at the expense of consumption, this could mean that GDP goes up while material living standards for households go down. We may see falling material living standards before we see falling GDP. This is one example of how GDP is a poor indicator of human welfare, a point forcefully made in the nef publication.

At the same time, rising oil prices will steer us away from resource-crunching consumption. We may fly off on holidays less and use the money we save to go to the theatre more. Then we'll see fewer people employed as EasyJet cabin crew and more as actors and stage hands. This change in the way we spend our money could help keep GDP up for a while.

Thirdly, technical progress may allow us for a while to get more value for less energy. The nef publication is particularly informative on this, drawing attention to the practical ways in which the Second Law of Thermodynamics sets limits to what can be achieved by technical progress.

Setting out the principles is much easier than making reliable estimates of what will happen and when. I accept that economic growth can't continue indefinitely - unless we are prepared to start paying each other handsomely for services that don't involve using much external energy - reading poetry to each other, teaching each other maths or philosophy?. However, if you were to ask me when it is likely that economic growth will come to an end because we have reached the physical limits of what earth's resources can support, I would have to say that I haven't a clue whether it's in five years, ten years, twenty years or fifty years. I don't suppose I'll ever answer that question to my own satisfaction, but I can recommend the nef publication for the very useful pointers it gives.

Lastly, the issue of whether and how long economic growth can continue is only important because lots of people think it is and public policy is structured round that view. Ask yer average politician and he (the average politician is more male than female) will say that we need growth to keep jobs and to pay for public services and pensions. In the developed world, I think we could sacrifice a huge amount of GDP without an overall sacrifice of human welfare - but it would have to be a well-managed descent. While others fret about how to keep economic growth going as long as possible, some of us are thinking about how we can manage our ultimately inevitable economic retreat - avoiding chaos, mass unemployment and a collapse in public services and trying to create an enhanced quality of life in spite of (and partly because of) falling material living standards. The Transition Movement has a big part to play in all that.