Analysis | How Much More Economic Growth Can the Planet Sustain? – The Washington Post

by | Sep 29, 2022 | Financial

Comment on this storyCommentGift ArticleFor all we depend on economic growth, there’s still a lot we don’t understand about it. Spectacular growth has brought hugely positive impacts — longer and healthier lives, millions removed from poverty, myriad life-improving innovations. But these benefits have also come with immense costs, including vast pollution, land degradation, biodiversity loss and global warming.Some environmental scientists argue that these environmental impacts mean economic growth is now actually destabilizing society. Economists tend to fire back that the only way to keep society stable is to keep economies growing.Trained as a scientist myself, it’s probably no surprise that I’ve been skeptical of the possibility of infinite growth on a finite planet. I’ve been perplexed as to why economists find the standard economic arguments put forward for growth so appealing, while dismissing concerns about physical limits to growth as being, well, a little silly.AdvertisementHowever, a few weeks ago I encountered the first really convincing explanation of why the economists’ perspective has been so persuasive. It came in a lecture delivered by the distinguished Cambridge University economist Partha Dasgupta. He made the point that it’s hard to appreciate the deep appeal of these ideas for economists without understanding the historical context of their appearance — in the postwar era during which technological innovations in areas like medicine, agriculture and chemistry did so much to generate global prosperity.Even so, growth theory itself, Dasgupta argued, contains serious flaws which have pushed modern economics off track in important ways, with the result that our continued search for growth is now actively reducing the overall wealth of the planet. The key question Dasgupta raised — and then answered — is this: How is it that economic theory got itself into a condition in which it doesn’t even count the natural world as an important part of our economic wealth? An early growth theory, proposed by economist Robert Solow in 1948, held that long-run growth depends on basic factors including population growth, saving and investment, and the rate of technological development. Later growth theories have essentially followed this plan, emphasizing technological innovation — our ability to continually find new ways to use resources more productively — as the real engine of economic growth. AdvertisementDasgupta pointed to this deep faith in innovation — drummed into economists by what they saw happening in …

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