Market bubbles occur when goods are traded at prices that greatly
exceed real value. They burst when they grow so bloated that they
become unstable. The current economic turmoil, widely viewed as the
worst since 1929, is one example of what can happen when the
difference between market value and actual value becomes too great.
Environmentally minded economists have long warned that equally
burstable ecological bubbles can occur if humanity lives beyond
earth's capacity to regenerate. The problem, they say, is that we're
addicted to economic growth. Mainstream economics assumes that the
economy, the engine of modern civilization, can grow perpetually.
But if growth means ever-increasing consumption of natural
resources (and it has, since the start of the Industrial Revolution
250 years ago), then it can't continue indefinitely. Earth and its
resources are finite.
Herman Daly, an economist at the University of Maryland's School
of Public Policy in College Park, says that humanity is already at
or beyond the point where economic growth is counterproductive,
where the environmental and social costs more than cancel the gains.
"So-called 'economic' growth already has become uneconomic,"
Professor Daly stated in a talk last spring. "The growth economy is
For some time, Daly and others have called for a rethinking and
restructuring of our economy before nature restructures it for us.
The notion of perpetual economic growth warrants scrutiny before it
drives us over a cliff, they argue. The science of economics must be
overhauled to better account for earth's physical realities.
Civilization won't have to stop in its tracks, just shift emphasis,
says Daly. The "steady state economy" he foresees emphasizes
qualitative development over quantitative growth. "Growth is more of
the same stuff," he says. "Development is the same amount of better
In his 2000 book, "Something New Under the Sun," John McNeill,
professor of environmental history at Georgetown University in
Washington, D.C., tells how unprecedented the past two centuries of
human history have been.
"Most economists are under the impression that 2 to 6 percent
annual growth is a normal condition for human society," says
Professor McNeill. "A longer historical view would tell you such
growth is a peculiar period in human society."
Growth unprecedented in historyFor the vast majority of human
history, stasis was the norm. After AD 1, it took the human
population 1,500 years to double in size to between 400 million and
500 million. But since 1820, population has increased more than
sixfold, to 6.6 billion. That's an incredible achievement for a
species that, at the beginning of the agricultural revolution 10,000
years ago, was outnumbered by baboons, writes McNeill.
In the past 200 fossil-fueled years, the per capita growth of the
gross world product (the total market value of goods and services)
has far outstripped population increase. People are richer and live
longer. But no one should overlook the cost, says McNeill. In that
period - and especially during the 20th century - humankind has
transformed the earth.
At the dawn of the Industrial Revolution in the late 1700s,
English demographer Thomas Malthus foresaw problems with growth. If
populations grew while resources remained constant - the tendency,
he thought - there would be less for each person. Most people would
end up poorer and more miserable.
That generally hasn't occurred. On average, people are much
richer. (In absolute terms, about the same number of people are poor
today - 800 million - as in Malthus's time.) Malthus failed to
account for innovation and technology, which have let humanity
squeeze more and more from the same quantity.
Or is it just 'the new Malthusianism'?For this reason, Pat
Michaels, senior fellow in environmental studies at the Cato
Institute in Washington, D. …