How long can we sustain economic growth?

Thinking about the very long term.

Art by @Smokeawayyy

This past weekend I went to a conference hosted by the Roots of Progress Institute. I’m not sure if I’ve ever been to an event where the ideals and ideas of the other attendees so closely aligned with my own. Pretty much everyone there was a techno-optimist like myself. Everyone was thinking and talking about how we could accelerate economic growth.

In the very long run, economic growth is everything. Global GDP has grown at about 2.68% since 1820. If it had grown at only 1.68% instead — just one percentage point less — the human race would be only 37% as rich as it is now, with a per capita GDP of about $6145 instead of $16,677. As Tyler Cowen writes in his book Stubborn Attachments, this means that if you can find some policy that will increase long-term growth, you should do it. The vast difference in the living standards our descendants will experience outweighs whatever small sacrifices we might make today. (That growth must include preservation of the natural environment.)

The most obvious growth policy, of course, is to avoid degrowth. The idea of intentionally forcing the economy to stop growing is a ridiculous, inhumane, unnecessary, and counterproductive proposition. Beyond that, there are plenty of suggestions for how to accelerate growth (while also keeping it sustainable) — research spending, deregulation, industrial policy, metascience, and so on. That’s what most of the discussion at the Progress Conference was about.

But even if we keep growing our living standards as fast as we can, there’s the specter that someday growth will peter out on its own. In fact, some top economists believe that growth will eventually slow — indeed, that it’s already slowing now, and that the factors behind the slowdown will only get more severe as time goes on.

Most notable among these is Chad Jones, a Stanford economist who is probably the premier theorist of economic growth working today.¹ Jones gave a presentation at the Progress Conference called “The Past and Future of Economic Growth”, in which he argued that long-term growth will be constrained by the slowdown in human population — with AI scientists as the only way out.

So the future end of growth is our topic today. But before I get to Jones’ gloomy prediction, I want to cover another, different argument that I see a lot more often. Plenty of people will tell you that future growth will be constrained by scarcity of natural resources. That’s probably wrong.

“Infinite growth on a finite planet” isn’t a good argument

Sir David Attenborough, the man who writes and narrates a bunch of nature documentaries for the BBC, is fond of saying “Anyone who thinks that you can have infinite growth in a finite environment is either a madman or an economist.”

This statement seems simple, obvious, and self-evidently true to lots of people. One thing is infinite, the other is finite! A finite thing can’t support an infinite thing! Duh! If you don’t realize this you must be a dummy.

The usual riposte of pro-growth techno-optimists is something along the lines of: “Why should we only have one planet?” This is typically followed by paintings of Mars colonies, orbital cities, and so on. Occasionally it’s accompanied by references to the Kardashev Scale, which defines a civilization based on whether it can capture the energy of a planet, a star, or a whole galaxy. If economic growth requires infinite resources, well, go out and get infinite resources!

Those replies are well-intentioned — and I definitely support space colonization — but they largely miss the point. Economic growth doesn’t actually require us to keep finding and exploiting more and more resources. Often, growth means using fewer resources than before.