Economic growth: it’s not dead yet

Innovation - driver of economic growth

Just before the advent of agriculture during the Neolithic revolution, the global population is estimated to have been a few million souls. These were the super-rich of human history. The entire planet and its resources were at their disposal, shared amongst their small number. In comparison, now that there are 7 billion of us walking the Earth, we should be much worse off since all that land and all those resources need to be spread so much thinner.

Of course, we’re now more prosperous than our Neolithic ancestors could possibly have imagined. We have used innovation to multiply the utility of the physical resources of the finite Earth. A hand held Neolithic stone axe contains atoms of silicon and aluminium amongst others. Using innovation we have learned to rearrange those same atoms to produce a smart phone, which some argue has better utility than an axe. This is the true historical meaning of growth, complexity not just consumption. And there are no practical limits to such growth.

In contrast, in a recent article in the Guardian, Life after the end of economic growth, Richard Heinberg claims that it’s all over. Millennia of growth has now apparently come to a crashing end, from the slow burning Neolithic revolution which re-arranged nature to our liking through agriculture, to the great expansion of the industrial revolution which eventually freed us from the land itself. However, growth sceptics such as Heinberg need to ask why economic growth should end right now, in the early 21st century when we are more prosperous and resourceful than at any time in the past.

Human history is littered with economic and physical bottlenecks which were overcome. The Elizabethans worried they were running out of wood, ‘peak wood’ no less, and began to use coal as a substitute thereby unwittingly precipitating the industrial revolution. They even had their own growth sceptic. Agricultural writer Arthur Standish claimed in 1615 that, “there may be as much timber raised as will maintaine the kingdome for all uses forever”, while advocating a sustainable wood burning society as an alternative to energy dense coal. We can be thankful that Standish was politely ignored. The industrial revolution was just around the corner, leading to an escape from millennia of near Malthusian stagnation and a decoupling of the costs of energy and labour.

While innovation driven growth has delivered immense improvements to the human condition, it is also the means through which human needs can be gradually decoupled from the environment. Growth emerges from productivity, doing more with less.  For example, new additive manufacturing technologies, so-called 3D printers, look set to partly replace the wasteful subtractive manufacturing of machine tools.  In contrast, in coming down from our oil high as advocated by Heinberg, we could regress to using whale oil for lighting, as was the case prior to commercial oil production. But this is hardly constitutes progress, economic or environmental.

The key point to Heinberg’s argument against growth is that it is constrained by the availability of energy. In this he is correct. Physics tells us that we can put order into disordered matter using high-grade energy, generating low-grade waste heat in the process. Consider though that since the formation of the Earth, its finite mass has not changed, but self-organising systems such as rain forests have evolved to manufacture wonderfully complex structures from dead matter. Energy from the Sun is used to photosynthesise complex molecules, while waste heat is radiated to cold space through the leaf canopy. But while unthinking biology can evolve impressive feats such as giant Redwood trees, thinking humans can conceive and create artificial structures such as the sensational Burj Khalifa reaching almost ten times as high.

In the same manner, a growing economy does not necessarily mean a garage of sports utility vehicles for every man, woman and child on the planet. But it does mean a perpetual motion of innovation which can liberate us from the physical constraints of our environment which enslaved us in the past. Mechanical excavators liberated us from back breaking labour, rapid transportation freed us from insularity of village life, while spaceflight has only recently freed us from the limitations of gravity. Just as the directed random walk of evolution seeks out new arrangements of matter in biology, human innovation can continue to re-arrange matter in more useful forms through engineering.

However, Heinberg argues that high-grade energy is becoming scarce, that we have eaten the low hanging fruit. Consequently growth must end as we lack sufficient energy to rearrange matter into more useful forms, whether smart phones, tractors or vaccines. In reality, high-grade energy is anything but scarce.

Fossil fuels represent energy which is not of our time, as energy from the Sun stored compactly in dead plant matter. But nuclear fuels represent energy which is not of our place. Their immense energy density, about a million times greater than fossil fuels, comes from the final moments of collapse of ancient stars which fused lighter elements into uranium and thorium. Even peak oil prophet King Hubbert, beloved of growth sceptics, cleverly recognised that while fossil fuel use will no doubt ultimately peak, such was their energy density, nuclear fuels are essentially forever.

Let’s be clear, there is no shortage of high-grade, carbon-free energy to deliver a future of shared prosperity. But we need the will, ambition and inventiveness to exploit it. We also need to recognise that we have only scratched the surface of nuclear energy. Even modern light water reactors are woefully inefficient at turning the energy of collapsing stars stored in nuclear fuels into useful work. But through future innovation, we can tap almost all of that clean, compact energy considerately provided by nature.

The real worry of Heinberg’s vision of a post-growth world is his straight-faced assertion that “there should be [an] increasing requirement for local production and manual labour”. This chilling claim is more Year Zero than zero growth. A return to carbohydrate fuelled manual labour may be appealing to Heinberg and others as a means of powering down our lives, and reconnecting with the land. But we shouldn’t expect a long queue of volunteers.

Ultimately, Heinberg’s thinking represents a needlessly limit setting view. It would deliver a future of material poverty and intellectual stagnation with hard won advances in the human condition abandoned. It is unlikely that future generations would thank us, and we simply have no right to inflict it upon them. Indeed, unilaterally proclaiming that growth should cease at this entirely arbitrary juncture of human history displays a degree of apocalyptic angst. Insisting that we must regress to a simpler way of life displays a degree of contempt for future generations.

To be taken seriously, Heinberg and others need to articulate a long-term vision of a post-growth sustainable society. Is it a future of permanent energy austerity, but somehow unlimited cultural growth, or is it really a return to agrarian poverty? Fortunately, just like Elizabethan writer Arthur Standish, Heinberg’s own growth sceptic views are unlikely to prevail. Even if some faction of humanity were to choose a future of economic stagnation, they would simply be outcompeted by others who pursue innovation and growth. Thankfully, there will always be some smart ass who wants to fly to the moon.

First published Spiked 13 December 2011