The economic systems of the world today are all built on the concept of continued growth. A Google search on “continued growth and business” will bring up a list of companies, cities and state governments, all extolling the virtues of unlimited growth.
Corporations proudly proclaim their growth rates in the past, and make bold predictions as to how they will continue this growth into the future so as to attract investors to their companies. City and state governments speak of their growth as a positive indicator of the health of the city or state, and they advertise that growth in an attempt to attract businesses with the strength of their ever growing markets. With all of this talk of the virtues of continued exponential growth, one cannot help but to think that growth is a good thing.
The belief in the virtue of sustained growth is, in fact, the one thing most economists agree on. Even in the debate between John Maynard Keynes and Friedrich Hayek, in which Keynes argued for government intervention in the economy and Hayek argued for less government intrusion, they both offer their conflicting ideas as a means to attain the same goal—continued economic growth. The problem is that continued exponential growth is a physical impossibility.
To understand why this is so, one must gain a better understanding of the exponential function, an idea presented by the late Dr. Albert A. Bartlett, Professor Emeritus at the University of Colorado, Boulder in a lecture he gave on this subject posted on YouTube titled, “The Most Important Video You Will Ever Watch.”
In his talk, Professor Bartlett makes a very bold claim. He states that “the greatest shortcoming of the human race is our inability to understand the exponential function.” The “greatest shortcoming?” How is it that this Harvard educated Professor can make such an absolute claim? Understanding this argument will make it very clear that continued unlimited growth must one day come to an end.
Bartlett uses an example of bacteria growing in a bottle to demonstrate how the exponential function works. He tells us that bacteria grow by doubling. First there is one bacterium. That one divides into two, the two divide into four, then eight, sixteen, thirty-two, etc. These bacteria divide at a rate of one division per minute. There is one bacterium in the bottle at 11:00 in the morning, and the bottle is full at 12:00 noon. This is our case study of steady growth with a doubling time of one minute, contained in the finite environment of one bottle.
The professor then goes on to ask this question. At what time was the bottle half full? The answer is surprising. Because the bacteria double in number every minute, the bottle was half full at 11:59 AM. The professor then asks another question. If you were an average bacterium in that bottle, at what time would you realize that you were running out of space? He then answers this question. At 12:00 noon, the bottle is full. At 11:59, the bottle is half empty, at 11:58, the bottle is three quarters empty, at 11:57, the bottle is seven eighths empty, at 11:56, the bottle is fifteen sixteenths empty, at 11:55, the bottle is thirty-one thirty-seconds empty, etc.
One can easily imagine a bacterium, who proclaims itself an “expert,” stating at 11:55: “With all this room left, we can go on growing forever.” But this is a fallacy. There are only five minutes left before all the space is gone even though at 11:55 the bottle is 31/32nd empty.
The professor then says that if, at the last minute, the bacteria found three new bottles so that there is now four times more space than they knew existed, it wouldn’t give them as much breathing room as they’d expect. How much time will these three bottles bring them? At 12:00 noon the first bottle is full. At 12:01 the bacteria double again filling two bottles. At 12:02 they double again and all four bottles are filled. Finding three new bottles bought the bacteria just two more minutes. This is how the exponential function works, and this is the problem with the concept of sustained growth, the very heart of our current economic system.
Businesses regularly promote the idea of a healthy growth rate of 3.5%. But what does this look like in reality? A 3.5% growth rate translates into a doubling time of 20 years, thus, if we have a growth rate of 3.5%, then we will in the next 20 years use as many resources as we have used since the beginning of time. We can now apply this to any resource we use.
If oil use is going to grow at 3.5%, then we will use an amount of oil in the next twenty years equal to the amount used since oil was discovered. If the resource is land to live on, then we will expand at a growth rate of 3.5% such that we will double the amount of land we currently inhabit. If the world population grows at 3.5%, then we will double the number of people on the planet in twenty years from the 7 billion today to 14 billion twenty years from now. If we consider a water treatment plant, then we will need twice the number of plants in twenty years that we need today. The conclusion is inescapable. We cannot continue to grow forever.
Yet all of our economic systems are built on the idea that continued growth is necessary. Because we live on one planet with finite resources, the question is not if we will run out of resources, the question is when. It is now around 11:55 and our bottle still seems mostly empty, but we will run out of space sooner than we realize. We must reassess what we are doing, and we must do so now. The current system that requires growth to sustain itself is quickly nearing its end. The profit incentive at the core of the capitalist economic model depends on growth for profits to be realized, and for more money to exist than before in order to pay off debts created in the initial growth process.
Perhaps it is time to shift our focus from the ever expanding drive for profit, to an economic system designed to provide for the needs of the people. One thing seems certain; if we do not begin to make these changes ourselves, there will come a day when we will no longer have a choice.