Screw the economic growth paradigm

[molecular]

I've been a long-time critic of the dictum, that economies must always grow (and I'm not alone).

I think this paradigm is a remnant of older ages, when the spanish, portugese, british and whoever where in the process of colonializing the world and a little younger times, when nation-state's economies started competing on a global scale.

Taking a global view, an ever-growing economy cannot work in the long run because of earth's limited resources. I actually think we (at least the "western" people) should scale our consumption (and therefore our non-exporting economies?) down. I think if we don't, this will bite us in the ass big time some day. Also: we are still to a certain extent a role-model for people in developing countries... imagine all the world having energy and resource consumption of a US citizen => doesn't work.

Do we really need all the consumer products we buy en masse each day and throw away the next? Does it make us happier? I'm seeing many articles about studies suggesting otherwise.

So why am I telling you this?

Because I think it's a very nice answer to the many people saying "a deflationary currency cannot work as the main global currency, because it just wont support economic growth".

Is it (a good answer)?

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[mewantsbitcoins]

http://www.youtube.com/watch?v=F-QA2rkpBSY

[benjamindees]

http://www.youtube.com/watch?v=kIq8jLj5TzU

[marcus_of_augustus]

Whatever your opinions are on growth, everyone is entitled to one, try to avoid the following trap;

The on-going collapse is monetary in nature, not due to any hyped "resources disappearing". Gross mis-allocation of capital due to dysfunctional monetary systems can cause the appearance that some products and resources are becoming scarce while others are in abundance, due to over-production. It is easy to confuse wildly varying prices, due to unstable monetary flows, with the seemingly simpler explanation that resources are disappearing.

Food, clothing, energy and shelter are historically cheaper than they have ever been to produce (measured in a stable basis). If prices seem like they are going up to you, you are probably saving in the wrong 'currency'.

[benjamindees]

When normal people say "resources", they mean natural resources like timber, fresh water, oil and coal.  They don't mean produced goods like hamburgers, clothing and houses.

[marcus_of_augustus]

When normal people say "resources", they mean natural resources like timber, fresh water, oil and coal.  They don't mean produced goods like hamburgers, clothing and houses.

You are right. But how many normal normal people do you know that are complaining that they just cannot buy timber, fresh water, oil and coal for love nor money?

The myth that normal people have been sold by the green-socialist lobby is that these "natural resources" are becoming more scarce while the actual goods they need to survive, hamburger, clothes, housing, supposedly produced by these "dwindling resources" are in reality becoming more plentiful and cheaper .... happily for the green-socialist lobby normal people are happy to live with this paradox. It is called cognitive dissonance I think.

Resource scarcity is a convenient myth. Convenient for green-socialist lobby to scare people over to their envy and control driven cause and convenient for the inflationistas who can say "see, prices are going up because resources are dwindling" whilst they rape the monetary system.

Unless you have better explanation of how it is that produced goods that are needed by humanity are becoming more plentiful while "natural resources" are dwindling?

Perhaps your definition of what is a resource needs some refining?

Define resources correctly and go from there. Until that point the argument is ill-defined.

[Vandroiy]

• We need further growth. If you don't grow along, fine with me, but nobody should suggest for others should stop. I'm one of those who want to push ever onward, I see no reason to stop before we have a Dyson Sphere, complete with means to expand to other solar systems. If we stop growing, we will vanish like the dinosaurs on the next cosmic event, and that is not my intention.
• The deflationary concept of Bitcoin doesn't hinder anyone from using it to trade. A frozen Bitcoin does not affect the moving of real-world items until it is spent; this scales down hoarders to a tiny fraction of economic activity.
• If deflation has a disadvantage, it currently is negligible against the problem of fiat currencies: not being able to pay cheaply and quickly across borders.

We require a stable, global currency. Further details are unimportant. I don't even see Bitcoin as a nice design. But it's an option people started to accept that is stable and global, and that makes it superior to everything we have had before.

Still, the actual goal of the whole operation -- in my eyes -- is economic growth. It would be kind of strange to abandon the main point just to prove that some tool can work. Luckily, we need not.

[benjamindees]

Unless you have better explanation of how it is that produced goods that are needed by humanity are becoming more plentiful while "natural resources" are dwindling?

wage slavery -> more technology -> more 'resources', fewer 'sources'

[evoorhees]

Taking a global view, an ever-growing economy cannot work in the long run because of earth's limited resources.

Resources are not limited, my friend, they are produced by capitalists. An economy can be ever-growing so long as specialization, technology, and innovation can continue occurring.

This doesn't prove my point but is a fun anecdote... the known global supply of oil is larger today than it was 10, 50, or 100 years ago. How can this be if we use so much of it? The answer is that innovation and technology allow us to get more out of the ground. Eventually, oil won't even be used and a new energy source will take its place.

If you see an economy that is not growing, you will probably find a government that is trying to make it grow.

[lemonginger]

cue all the libertarians who don't understand even basics about ecology....

i agree that a steady state economy is both desirable and necessary.

i spent too many years arguing politics on other web forums to argue about it here though.

[billyjoeallen]

Taking a global view, an ever-growing economy cannot work in the long run because of earth's limited resources.

Resources are not limited, my friend, they are produced by capitalists. An economy can be ever-growing so long as specialization, technology, and innovation can continue occurring.

This doesn't prove my point but is a fun anecdote... the known global supply of oil is larger today than it was 10, 50, or 100 years ago. How can this be if we use so much of it? The answer is that innovation and technology allow us to get more out of the ground. Eventually, oil won't even be used and a new energy source will take its place.

If you see an economy that is not growing, you will probably find a government that is trying to make it grow.

+1 In the Nineteenth Century, Malthusians were fretting about Peak Coal.

[kiba]

I think this paradigm is a remnant of older ages, when the spanish, portugese, british and whoever where in the process of colonializing the world and a little younger times, when nation-state's economies started competing on a global scale.

Taking a global view, an ever-growing economy cannot work in the long run because of earth's limited resources. I actually think we (at least the "western" people) should scale our consumption (and therefore our non-exporting economies?) down. I think if we don't, this will bite us in the ass big time some day. Also: we are still to a certain extent a role-model for people in developing countries... imagine all the world having energy and resource consumption of a US citizen => doesn't work.

The earth give us more energy in one hour than the whole of humanity use in one year. Plus, humanity is becoming more energy efficient over time. The western lifestyle is already transforming into an information lifestyle, rather than a materialistic lifestyle. We will collectively realize that things...are just things. Useful, sometime...but they're just that..things.

Do we really need all the consumer products we buy en masse each day and throw away the next? Does it make us happier? I'm seeing many articles about studies suggesting otherwise.

We provide and consume information. The rest are just support system for our bodies.

Happiness is just one quality to measure in the life of a human being. Happiness is not everything.

Because I think it's a very nice answer to the many people saying "a deflationary currency cannot work as the main global currency, because it just wont support economic growth".

Is it (a good answer)?

That's nonsense because when there's a growth in the economy, the currency deflate.

[marcus_of_augustus]

cue all the libertarians who don't understand even basics about ecology....

i agree that a steady state economy is both desirable and necessary.

i spent too many years arguing politics on other web forums to argue about it here though.

.. a tired and jaded political ecologist ... you are ripe for conversion to libertarianism then, welcome!

Ecology does not provide "resources", people value whichever materials from their surroundings that are most efficient to fulfill their needs. Last century it was iron-ore from the ground, this century it is carbon fibre, 2 millenia ago it was tin, next century it maybe matter transmutators. Resource substitution is the missing link in your arguments for the ecosystem protection.

I like a walk in the forest and playing with the animals as much as the next guy.

[asdf]

If you see an economy that is not growing, you will probably find a government that is trying to make it grow.

Awesome quote! So true...

[ender]

Resources ARE limited period, and REAL science tells us so, no matter what economists want to believe.
If you chop down a tree you have no tree left. You have to wait years for it to grow again, and yet this BASIC thing is not taken into account by our current economic system.
We have built an infinite-growth model based on a finite Earth. Its kind of an anti-economic system, if by economic we mean "economising" resources.

I would recommend watching "Zeitgeist: Moving Forward" to the people that are beginning to open their eyes to the truth: http://www.youtube.com/watch?v=4Z9WVZddH9w
It talks about all these problems but the interesting part is when they propose an alternate economic-paradigm not based on money but on resources. It revolves around the idea of calculating all the resources of the earth and then trying to SCIENTIFICALLY distribute them the best way possible. Its the future, if we live to build it.
Its dumb to hope that profit alone will solve all our problems yet we are made into believing it.

[marcus_of_augustus]

Resources ARE limited period

Define resources.

REAL scientists define the terms of their arguments.

[hugolp]

I've been a long-time critic of the dictum, that economies must always grow (and I'm not alone).

I think this paradigm is a remnant of older ages, when the spanish, portugese, british and whoever where in the process of colonializing the world and a little younger times, when nation-state's economies started competing on a global scale.

Taking a global view, an ever-growing economy cannot work in the long run because of earth's limited resources. I actually think we (at least the "western" people) should scale our consumption (and therefore our non-exporting economies?) down. I think if we don't, this will bite us in the ass big time some day. Also: we are still to a certain extent a role-model for people in developing countries... imagine all the world having energy and resource consumption of a US citizen => doesn't work.

Do we really need all the consumer products we buy en masse each day and throw away the next? Does it make us happier? I'm seeing many articles about studies suggesting otherwise.

So why am I telling you this?

Because I think it's a very nice answer to the many people saying "a deflationary currency cannot work as the main global currency, because it just wont support economic growth".

Is it (a good answer)?

Its not a good answer, for two reasons:

1. Price deflation does not stop growth. The answer to those people is pointing out that their theories are wrong, as multiple historic evidence show. In fact, inflation stops growth because it creates malinvestments.

2. You are asuming that growing means consuming more resources, but growing can mean consuming less resources. For example, we have today computers that consume less electricity and have more computing power than computers built 5 years ago. We have grown increasing productivity by discovering new technology and has allowed us to have more with less resources.

[fellowtraveler]

I've been a long-time critic of the dictum, that economies must always grow (and I'm not alone).

I think this paradigm is a remnant of older ages, when the spanish, portugese, british and whoever where in the process of colonializing the world and a little younger times, when nation-state's economies started competing on a global scale.

Taking a global view, an ever-growing economy cannot work in the long run because of earth's limited resources. I actually think we (at least the "western" people) should scale our consumption (and therefore our non-exporting economies?) down. I think if we don't, this will bite us in the ass big time some day. Also: we are still to a certain extent a role-model for people in developing countries... imagine all the world having energy and resource consumption of a US citizen => doesn't work.

Do we really need all the consumer products we buy en masse each day and throw away the next? Does it make us happier? I'm seeing many articles about studies suggesting otherwise.

So why am I telling you this?

Because I think it's a very nice answer to the many people saying "a deflationary currency cannot work as the main global currency, because it just wont support economic growth".

Is it (a good answer)?

First: The Federal Reserve system has, as its basic premise, that an elite group of bankers have the power to magically reduce (NEVER increase) the value of my money, even after it is already in my pocket. When they do this, the stolen funds appear magically back in their hands, just like a dollar-bill attached to the end of a fishing reel, and now they are able to spend that money, instead of me.

Clearly this state of things is a benefit to them, but is no benefit to me whatsoever.

Therefore the-powers-that-be have a strong interest in convincing me that this whole situation is somehow for my own good, or at the very least is for some "greater good". They also have an interest in convincing me that the topic is extremely advanced, and boring, and beyond my comprehension.

Therefore I think the deflation argument is a bit of bullshit constructed for that purpose. I look at it similarly to the way some people might claim that the Great Depression was "caused by the gold standard", when in fact the Great Depression was actually caused by the Federal Reserve Act and the Income Tax, passed 20 years previously, and all of the ensuing financial misallocation that resulted in the years between.

===> "Economic Growth" is the same way... the very phrase is a drug to lull us to sleep while addicting us to prosperity for its own sake. But such prosperity was originally created through respecting individual rights and virtues. What about "economic liberty" and "voluntary association" ... these are what actually produced our prosperity, not "growth," which sounds cancerous.

----

Deflation. Ebb and flow.

Deflation argument also fails to take into account all the private credit that will arise organically in any free market, as people serve their own currency needs. Somehow I can't believe that all the money will just disappear and be hoarded out of existence, as we all starve, bereft of our Monsanto food, unless we grant a monopoly over the debt-issuance of our money, as well as spending access to our retirement savings, to a tantacled committee of bankers. But hey, it's a "New Economy" and our policies are expertly-designed to reduce unemployment! Uh-oh, there's a bit of a double-dig recession coming in, a squall, really; consumers just aren't confident enough yet, and businesses just aren't hiring enough yet. But we encourage them to start! And housing is still forecasted to go down for a few more years... Somehow I get the image in my head of Baron Harkonnen flying around in his fat suit, pulling people's heart plugs.

It also seems to me that a long, slow appreciation in the price of gold, over the course of years, will do nothing but enrich its holders. I think everyone is ready for such economic security as our institutions have been unable to provide. Certainly such slow-appreciation must be a stability more desirable than the price fluctuations/manipulations we've seen this past century, under the bankers. Why is Bitcoin any different than gold in that regard?  Isn't this a good thing?

Whenever people have hunger for tangible goods, they will spend money to fill that need. Such is the only reason we have money in the first place, which is itself otherwise worthless. Bitcoin wasn't designed to collapse in a sudden deflation. Perhaps I'll live to eat those words but in my vision, I see crypto-currencies like Bitcoin serving an important "lubricant" role between other forms of value online.

[benjamindees]

Deflation argument also fails to take into account all the private credit that will arise organically in any free market, as people serve their own currency needs.

That's true, and actually that's what happened over the past decade or so with the derivatives market.  The problem with private credit, though, is that it acts as a 'dark pool' and distorts the value on the open market.  A currency that fails to capture private credit markets fails to give an accurate view of the real economy.  With the dollar, of course, this was by design, since the derivatives represented a bunch of toxic debt that was hidden from foreign investors.  With Bitcoin, no one need worry about this since there is no government telling us that Bitcoin is the final arbiter of value within any particular region in the first place.

Bitcoin wasn't designed to collapse in a sudden deflation.

Since deflation is the appreciation of the price of Bitcoin in relation to everything else, Bitcoin wouldn't technically 'collapse'.  The threat of deflation is that it would stop being used as currency.  And the risk of this happening is offset by the fact that Bitcoin can be forked, and built upon, and has several competitors.

[ender]

Resources ARE limited period

Define resources.

REAL scientists define the terms of their arguments.

What I presume you would call natural resources. The goods nature produce for us to transform and use.

I'm no scientist btw, if that makes you happier.