Is unlimited growth a thing of the past?

This is the title of a recent article in the FT by Martin Wolf. In it he describes some work by the distinguished American economist, Robert J Gordon, in which he warns that the productivity gains we associate with the three main spurts of technological innovation - the original industrial revolution from around 1750, electricity, the internal combustion engine etc from around 1880 and the information revolution from about 1960 - were all one-off events. For instance, we don't travel much faster now than we did in the 1960s, by which time the there were plenty of Boeing 707s in the skies.



Furthermore, according to Gordon, America faces a number of "headwinds" - social, demographic, economic (globalisation), educational (standards no longer rising), debt overhang as well as energy an environmental constraints. He makes a plausible case that American annual growth rates (in real GDP per head) could settle down at about 0.2% rather than the 1-2.5% that it enjoyed over the last century.  

For me this article is significant for at least two reasons.

Firstly, I have been privately moaning for a number of years that in the mainstream public discourse - the speeches of politicians and discussions in, say the FT and The Economist - the limits to economic growth are rarely discussed. There seems to be an unchallengeable assumption that we in the developed world can return to respectable rates of growth, with rising living standards for all, and that this will continue for the indefinite future. There is a substantial body of literature on the limits to growth but it feels like an "alternative" way of thinking, divorced from and ignored by the mainstream. In giving prominence to Gordon's work through the FT, Wolf is addressing one of my moans.

Secondly, in my recent critique of Lord Lawson's Erice speech, I questioned the premiss of one of his arguments. He argued that because of continuing economic growth, future generations would enjoy living standards many times higher than what we enjoy today. Therefore we should not today be making sacrifices on their behalf through action to reduce our carbon emissions.

It's nice to see my questioning reinforced in the mainstream press.