Economic Growth Relevant, Even if Global Population Declines: A Note from Pinxi

Many people are concerned by the current dominant global socio-economic paradigm in which economic growth is expected to continue forever.

I’ve commented at a previous thread that the associated issues, including resource depletion, may become “somewhat redundant” once global population starts to decline which many predict will happen before the end of this century.

A regular reader and commentator at this blog, Pinxi, disagrees. She writes:

“In my worldview, economic growth and resource depletion will remain relevant issues for the foreseeable future. These issues are not about to become redundant, regardless of whether we will achieve a declining (or stable) global population or decreased resource intensity.

I formed this opinion considering:

1) the large gaps in living standards (within & between countries) between the minority ‘haves’ & the majority ‘have nots’

2) the pressures and desires for continually rising living standards

3) that we haven’t decoupled living standards from resource throughput; we haven’t decoupled quality of life from materials

4) that looking at the rich countries with declining (& stable!) populations there is no evidence that economic growth or resource depletion has become redundant

5) MNCs see the huge populations in third and second world economies as massive untapped market opportunities – more sales needs more products & distribution needs more resources

6) more consumption means more resource use, and methods to reduce the linear nature of resource throughput require more energy for reuse, recycling, repurposing etc so there’s more entropy, less exergy

If global population is declining, you could have longterm negative economic growth but that doesn’t make economic growth redundant. Without a paradigm shift, economic growth is still relevant to our socioeconomic mechanics.

Industrialised societies are organised with economic growth at core and now expect continual improvements in living standards (and we get scared of potential threats to our way of life, such as global warming, peak oil, China, and cheap immigrant labour).

The paradigm will still persist unless we have a paradigm shift. What would bring on a paradigm shift (far-reaching disasters aside)? How would such a paradigm shift manifest?

We haven’t managed to decouple economic growth or maintenance of living standards from resource and energy throughputs yet. Until we do so, economic growth and associated resource throughput will remain an ongoing concern.

All those ‘other demanding people’ in ‘the other countries’ though want better living standards & cars, houses, coca cola & Maccas just like us. Meanwhile we still want to get one up on the Joneses, and marketers flog more must have items at us. All this requires resource throughputs.

A decline in birth rates in the third world is linked with education, health, food and women’s rights (self-determination, property, jobs etc) and while in some areas of the Millenium Development Goals we’re making percentile progress, we have huge improvements to make if we want real declines in the number of people living in poverty and dire inequality.

Basic human rights, and reduced risk and uncertainty in livelihoods and survivial, reduce population pressures. But that doesn’t by itself bring people up to speed with our first world standard of living. It simply means meeting bare minimum conditions for life for most people.

So even when/if population growth steadies, there’ll still be massive differences in quality of life and material standards, and bigger markets for marketing more unnecessary stuff that we all simply must have.

That attempt to catch up, and the never ending consumptive drive, will demand more resources.

Thankfully I still have my resource shares!”

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This is a slightly edited version of a comment originally posted here: http://www.jennifermarohasy.com/blog/archives/001779.html at 3.22pm on 11th December.

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13 Responses to Economic Growth Relevant, Even if Global Population Declines: A Note from Pinxi

  1. rog December 11, 2006 at 4:32 pm #

    Probably the greatest depletion of resources is through disease, with the resource being human. HIV-AIDS, malaria and TB continue to decimate developing countries killing an estimated 9 million per year and with many more being incapacitated productivity is reduced and family structures shattered.

  2. Jennifer December 11, 2006 at 6:40 pm #

    Pinxi,
    So do you essentially subscribe to the Robert Malthus world view that the inevitable human condition is one of misery and poverty?

  3. Gavin December 11, 2006 at 7:36 pm #

    Any blog philosophers can afford to be smug, but as mere readers of great wisdom, we don’t have much of an influence. The good times we think we enjoy here today are a bit of an aberration. Most other beings on this planet struggle even today.

    Which ones commenting here have lived through a long war or a deep depression? Certainly not I therefore I must be humbled by those who did. Are we truly resilient with such limited experience? I doubt it.

    It’s my view; it won’t take much of a shock in our cosy system to completely dumbfound a majority. It could be disease, or war perhaps something physical that brings our aspirations right back to a daily issue of individual survival.

    Ladies; Who makes it over the next hurdle and the rocky run round the far side will have more to do with our choice of shoes than the memory of the last reference we quoted

  4. Pinxi December 11, 2006 at 7:51 pm #

    No, not at all. Given varied & numerous global-local developments, part of which being people having more voice and participating in ‘media’ and what IMHO amounts to potential instabilities in national and global economics, I reckon some changes are overdue in the current system of governance that dominates our world. Hence we’re seeing a convergence of pressure points. We’ve had an enjoyable long period of relative calm and prosperity that we can be grateful for, but all holidays must come to end eventually, then after you’ve unpacked and paid off the credit card, you can plan the next one.

    People, social norms and technology change and evolve together. It’s normal that this natural process outstrips developments in socioeconomic institutions because the latter tend to be self-preserving and reinforcing, getting more bureaucratic and irrelevant over time until they are reformed or destroyed. But now this change is pending at a broader, interlinked level and pressures are combining to present unsolvable issues at larger spatial, temporal and cross-cultural scales than we can deal with. We’re not islands but we generally act that way.

    The dominant socioeconomic system today defends concentrated interests and resists change, so it’s unsusustainable. That’s just commonsense physics if nothing changes to alter the way we’re all living and growing. It doesn’t meet the test of basic human decency, it’s clear from the growing resistence it recieves, eg proliferation of civil rights groups and alternative media. eg unprecedented levels of protest and civil disobedience in China (some xperts say this internal trouble will be a huge hurdle that saps China’s expansion & prosperity). In an increasingly open and globalised world it’s unsustainable to go on pursuing a narrowly nationalistic agenda. Just as local borders and old identities have dissolved in the past, and just as the nation state and new identities arose, so they will again. New wider borders will appear in our psyche, it’s just spreading in from the fringes now. The huge obstacle is how we as individuals can match our actions as individuals with collective, indirect, broader impacts that occur at large. By trying to lock down, look inwards and defend a system that only works for the minority we’re only delaying the inevitable and perhaps making ourselves vulnerable.

    As for the resources connection, well I’ll be optimistic again. Big disasters aside, I don’t believe that limits on material resources, if they come to pass, necessarily put limits on our general standard of living. We are the ‘haves’ though. I think we’re innovative and we’ll discover ways to decouple quality of life from resource constraints if and where they exist. People are already trying to introduce such changes. Multiple TV sets and too many shoes don’t bring us happiness anyway. As for equality and ramifications, well I already mentioned that on the later thread.

  5. phil sawyer December 11, 2006 at 8:34 pm #

    pinxi….a definition of a resource would help…the way you use the term its meaningless..looking glass usage…and i’m not sure your confused outpourings of self exploration have a place on a blog dedicated to science in the public debate phil sawyer

  6. Pinxi December 11, 2006 at 9:10 pm #

    It was in response to a general invitation to talk about aspects of links with population, economy and resources phil. To get into specific details with such coverage, well sit down with me for a month, otherwise there are plenty of resources out there – how do you consolidate a large number of highly specialised inputs? With a model, hee hee? Minute details of science get debated to death here on this blog to no avail so why tread that worn path yet again? There are future-focused organisations dedicated to raising the level of public debate and depth and breadth of policy consideration. Yes time to dust off that old joke about specialists v’s generalists. After you’ve finished laughing will you raise your hand and declare on you’re on the only correct side of the fence?

  7. Lamna nasus December 12, 2006 at 11:54 am #

    I think Gavin’s right, if avian flu H5N1 mutates to a form that is easily transmitable between humans and causes a pandemic, we will find out in very short order how resiliant and democratic ‘developed’ countries really are…I suspect we will have very little to be smug about, if SARS was any kind of a pointer.

  8. Pinxi December 14, 2006 at 1:11 pm #

    Or once the terrorists poison/radiate our centralised water supplies..

  9. Russell December 14, 2006 at 4:33 pm #

    Firstly, the UN projections for population growth, are based upon a series of assumptions that might or might not come true, and might or might not have the forecast impact on population growth. The UN and other forecasters have been wrong before.
    If the global population does stabilise, or even fall, would that have an impact on resource demand? In the short term it would appear unlikely, but in the longer term it would probably slow the rate of increase in consumption of resources down, and could conceivably reach an equilibrium point – although personally I doubt it with our current system.
    Can we assume that there is a direct and positive correlation between growth in per capita GDP and resource consumption? If so, then the evidence from the most affluent countries is that “growth” continues to run at about 2-3%, even though the populations of these countries are relatively stable. Indeed if it falls below this kind of level then we have socio-economic problems like unemployment.
    If we look at countries like India and China, can we conclude that their “growth” rates of about 8-10% are currently made up of two independent factors, one is a genuine increase in per capita income (resource use), the other an increase in total GDP (resource use) due to population increase? Given that population growth in China is running at about 2-3%? then it would seem that some 7-8% of their current growth represents an increase in per capita GDP. Presumably as the chinese approach the living standards of europeans, americans, etc, and a relatively stable population size, then the rate of growth will slow in China to the same 2-3% per capita GDP range seen elsewhere (there is only so much room in cupboards for new appliances). Similar assumptions could be made about India and elsewhere, although the current rate of population growth is higher.
    Lastly, is there a point at which, with a stable population, the current world economic system could reach a stable equilibrium with population stable, and everyone having achieved a stable and comfortable standard of living?
    The current increase in human population represents at one level a simple conversion of the biomass of other species into people. Obviously the biomass of other organisms is finite within certain natural limits so one could argue that would represent the upper level of human population size, based upon a pyramid of human food species (crops and domestic animals). But of course we have already shown a marvellous ability to tweak the base of that pyramid with access to the biomass laid down in other times (oil), so perhaps our ingenuity could extend and modify the base of that pyramid much further.
    However, wherever that point may lie in our future, a stable population (which we are likely to overshoot), does not mean stable GDP and therefore stable resource consumption. A glance at recent figures of wealth distribution on earth shows it is still grotesquely distorted and it is hard to envisage that changing in the future. The marketeers keep finding innovative ways to make us consume.
    A great example is in Australia where despite the steady trend of a reduction in family size, family homes are getting bigger.

  10. Russell December 14, 2006 at 4:33 pm #

    Firstly, the UN projections for population growth, are based upon a series of assumptions that might or might not come true, and might or might not have the forecast impact on population growth. The UN and other forecasters have been wrong before.
    If the global population does stabilise, or even fall, would that have an impact on resource demand? In the short term it would appear unlikely, but in the longer term it would probably slow the rate of increase in consumption of resources down, and could conceivably reach an equilibrium point – although personally I doubt it with our current system.
    Can we assume that there is a direct and positive correlation between growth in per capita GDP and resource consumption? If so, then the evidence from the most affluent countries is that “growth” continues to run at about 2-3%, even though the populations of these countries are relatively stable. Indeed if it falls below this kind of level then we have socio-economic problems like unemployment.
    If we look at countries like India and China, can we conclude that their “growth” rates of about 8-10% are currently made up of two independent factors, one is a genuine increase in per capita income (resource use), the other an increase in total GDP (resource use) due to population increase? Given that population growth in China is running at about 2-3%? then it would seem that some 7-8% of their current growth represents an increase in per capita GDP. Presumably as the chinese approach the living standards of europeans, americans, etc, and a relatively stable population size, then the rate of growth will slow in China to the same 2-3% per capita GDP range seen elsewhere (there is only so much room in cupboards for new appliances). Similar assumptions could be made about India and elsewhere, although the current rate of population growth is higher.
    Lastly, is there a point at which, with a stable population, the current world economic system could reach a stable equilibrium with population stable, and everyone having achieved a stable and comfortable standard of living?
    The current increase in human population represents at one level a simple conversion of the biomass of other species into people. Obviously the biomass of other organisms is finite within certain natural limits so one could argue that would represent the upper level of human population size, based upon a pyramid of human food species (crops and domestic animals). But of course we have already shown a marvellous ability to tweak the base of that pyramid with access to the biomass laid down in other times (oil), so perhaps our ingenuity could extend and modify the base of that pyramid much further.
    However, wherever that point may lie in our future, a stable population (which we are likely to overshoot), does not mean stable GDP and therefore stable resource consumption. A glance at recent figures of wealth distribution on earth shows it is still grotesquely distorted and it is hard to envisage that changing in the future. The marketeers keep finding innovative ways to make us consume.
    A great example is in Australia where despite the steady trend of a reduction in family size, family homes are getting bigger.

  11. Russell December 14, 2006 at 4:46 pm #

    sorry about the double post -the first time the blog told me it had failed.

  12. Pinxi December 15, 2006 at 12:01 am #

    since my point above about emerging economic instabilities & us having had a good run for yrs (gavin made the same point)…

    some financial advisors & RBA have gone on the record warning that the growth in private equity deals could cause a deeper crash landing in the event of an economic downturn. Time to load up the reserves. A few creased brows because, as said above, human inventiveness outpaces socioec institutions. When a concentrated group pulls the purse strings in free markets, without adequate awareness & safety checks, if the purse strings snap… we’re more interdependent & too many countries have synchronised growth cycles now. Some experts have tried to sound warnings about flawed operative assumptions & guidelines building up unstable point in international markets. Resource prices are quick to dive in a downturn, requiring increased resource depletion to achieve the same income levels.

  13. Terabanitoss May 4, 2007 at 12:33 pm #

    Hi all!
    You are The Best!!!
    G’night

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