Therefore, the logical inference is that perpetual economic growth is impossible and that at some point the economy must stop growing. — Peter Gray

It is true that economic growth sticks at some point. It happened with the 1973 oil crisis or the 2008 worldwide mortgage crisis. There has always been (and probably will always be) recession. Some countries experience it more dramatically than others due to countless circumstances and reasons.

However, I do not think that perpetual economic growth is illogical. It isn't, actually. We can see many examples that corroborate this. These examples range from the increase in wages during the mid-19th century to the current era of globalisation. Supposedly, the GDP and other economic factors should grow gradually. Otherwise, the nation would be unhealthy and poor, which would indicate a serious problem rather than simply being illogical.

On the other hand, the fact that an economy could stop growing at some point does not mean that it might not still grow in the near future.

So I was wondering, does philosophy and mathematics have anything to say about the possibility, or otherwise, of perpetual economic growth?" — Peter Gray

Welcome to the forum.

There are a lot of issues associated with economic growth. Many of them have been discussed often here on the forum. The one that strikes me as most significant is demographics. The demographers tell us that, although populations will grow over the next 50 years, after that they’ll start shrinking with a maximum population of about 11 billion and then shrinking to about where we are now.

The US birth rate is right about at the replacement level now, and if it weren’t for immigration, our population would not be increasing. Quite a few other first world nations are seeing population reductions already.

Welcome to the forum!

I’m concerned about the paradox of perpetual economic growth. Boosting economic growth is central to government policy (both this government and the last one) but on the face of it, economic growth at any percentage per year is an exponential function and must eventually result in an infinitely large economy. — Peter Gray

It is only exponential if the rate remains constant, and even then it will never become infinite. Anyway, if your point is that perpetual growth is unsustainable in the long term, Maltus beat you to that insight by 200 years.

I’m not the first person to have noticed this. If you Google for “Is perpetual economic growth possible?” the new AI Overview function says — Peter Gray

That's not a good way to do research.

So I was wondering, does philosophy and mathematics have anything to say about the possibility, or otherwise, of perpetual economic growth?" — Peter Gray

Mathematics has little to do with this - except inasmuch as researchers use mathematics, of course, but that is mostly textbook calculus and statistics. Most of the innovation in this area has been in demographic and economic metrics and modeling, and to a lesser degree in computational methods.

Naturally, a simpleminded mathematical projection pointing to unbounded growth is not going to give you the right answer, just like you cannot predict the height of an adult person by extrapolating their rate of growth at a young age. Even your AI overview is right on this point: it is a complex issue with varied perspectives that has been studied and debated for literally centuries.

In a material sense perpetual economic growth is not possible simply because of the laws of thermodynamics - eventually you reach a state where ethe finite physical inputs of the system are reached.

In an immaterial sense I am not so sure - items such as software and services for example are not constrained by finite physical inputs is exactly the same way.

However, I do not think that perpetual economic growth is illogical. It isn't, actually. We can see many examples that corroborate this. — javi2541997

Surely there can be no example of perpetual economic growth, because by definition, to provide an example of perpetual economic growth, you would need to grow the economy in perpetuity, and then say at the end of perpetuity (whenever that is), "See? I told you so". So the only examples of economic growth which can be provided are for economic growth over a finite and relatively short period.

There are, however, numerous examples of societies which failed to achieve perpetual economic growth. Take, for example, the Roman Empire. It grew from the founding of Rome in 753 BC, reached its peak around 180 AD with the emperor Marcus Aurelius, and declined until the fall of Constantinople in 1453.

However, suppose that instead of starting its decline in 180 AD, the Roman Empire had continued to grow its GDP at around 3% per year (a growth rate which most modern economists would be happy with) until the present day, a period of 1845 years. The total size of the Roman economy would now be 4e+23 times larger than its starting point, or if you want it in more traditional notation, 400000000000000000000000 times larger. So all things considered, it's probably a good thing that the Roman economy began to shrink when it did.

However, suppose that instead of starting its decline in 180 AD, the Roman Empire had continued to grow its GDP at around 3% per year (a growth rate which most modern economists would be happy with) until the present day, a period of 1845 years. The total size of the Roman economy would now be 4e+23 times larger than its starting point, or if you want it in more traditional notation, 400000000000000000000000 times larger. So all things considered, it's probably a good thing that the Roman economy began to shrink when it did. — Peter Gray

Could you please share your thoughts on why you believe economic growth might need to stop at some point? You claim that otherwise, it would not be logical that, if the Roman Empire never ended, its GDP would be around 4e+23 times larger than its starting point. The Roman Empire expanded into a lot of territories, and a large population was involved. Thanks to its power and economic stability, the Roman Empire was the main promoter of civilisation. I can´t see how effective to the Western world was the moment when Roman economy began to shrink. Furthermore, there are some countries whose GDP has grown exactly that percentage since their creation, like the USA or modern Japan.

Maybe we could say gradual economic growth rather than perpetual, because I guess you see it as inconvenient since there is nothing that can last forever.

Well, since the value of money (and thus economies) is inter-subjective and not objective, these values can increase indefinitely, if humans agree to give them those (inflated through our current eyes) values.

Could you please share your thoughts on why you believe economic growth might need to stop at some point? — javi2541997

I don't see it so much as a "belief", more a statement of the obvious. All economies have to be based on something, and in any finite system, that something will eventually run out. The Roman economy was based on territorial expansion, conquest and extracting wealth and slaves from the conquered territories. When they ran out of new places to expand to, or the places they might potentially expand to were so far away that their supply lines were over-stretched, the economy stopped growing. (Invade Scotland, anyone? No, I'll pass on that.). The growth of the Sumerian civilisation was based on increasing the food supply by irrigation. When new sources of water ran out, and crop yields declined because of salination of the soil, their economy stopped growing. The growth of the Easter Island civilisation was based on trees. When they cut down all their trees, their civilisation stopped growing. And so on.

Some people say that because the potential amount of knowledge is infinite, therefore a "knowledge economy" can continue to expand indefinitely, but I'm a little doubtful about that. I get sent lots of knowledge every day in the form of emails. I probably get around 50 of them every day, most of which I don't have time to read. Would my life be improved if I got 500, or 5,000 of them a day? I'm not sure that it would.

Honestly, the decay of some empires is a good example of how you used it. However, I personally think that the economic shrinkage came afterwards, and it wasn't a cause of Roman Empire decay. Furthermore, according to a large number of historians, the decay was produced by many things, but most importantly the division in half of the empire in the early 300s AD.

You claimed that the economy of the Roman Empire stopped growing and then decayed. But this only happened to the Western Roman Empire, while the Byzantine Empire (Eastern Roman Empire) endured until 1453 – the fall of Constantinople to the Ottoman Empire.
So there had been many more causes and reasons for why those empires decayed. Subsequent territories underwent significant and gradual economic growth. Look at Italy or Turkey, for instance.

I have never claimed that economic growth is infinite. I know that it can shrink at some point. But, in general terms, both GDP and GDP per capita gradually grow in most of the modern economies.

it is a complex issue with varied perspectives that has been studied and debated for literally centuries — SophistiCat

The way I look at it, it is simultaneously very complex and very simple. Consider crumpling up a piece of paper and throwing it up in the air. Calculating the precise trajectory of the piece of paper might be beyond the ability of the most advanced computer because there are so many variables involved: how tightly you crumple it up, how hard and in what direction you throw it, the weight of the paper, the roughness of the paper, the air temperature, any sideways draughts which might blow it off course, etc.
But despite all of those complexities, you know one thing for certain; when the piece of paper has finished going up, it will come down.

Do you believe that unchecked human population growth will ultimately result in a "tragedy of the commons" scenario, given enough time, then?

Not unlike the so-called proposed "heat death" of the Universe?

I don't think there's much to say about it, other than stating the obvious that perpetual growth is indeed not possible.

The only question then is when will growth stop? And that is largely a question of our ability to keep increasing available energy. Rome had donkeys and slaves... we have fossil fuels but those - being non-renewable in the short term - will run out eventually.

Maybe we will be able to transition to other forms of energy like nuclear or 'renewables' and increase available energy even more, or maybe not... in any case, at some point we would eventually hit some hard physical limits.

Do you believe that unchecked human population growth will ultimately result in a "tragedy of the commons" scenario, given enough time, then? — Outlander

I wouldn't describe future projections of human population growth as being particularly like either "tragedy of the commons" or "heat death of the universe", but since you ask, here's how I think it will probably play out:

For thousands of years, global human population remained static or grew only very slowly, and by the year 1700 there were around 600 million people on the planet. So we know from this past experience that this is a number which the planet can support reasonably comfortably and sustainably over a long period of time.

Since 1700 the human population has increased rapidly and dramatically to its present level of 8.2 billion. We don't know whether this is a number which the planet can support sustainably or long term because it is unprecedented in the history of our species; it's an experiment which has never been tried before. This population increase has been made possible by the unsustainable use of all sorts of natural resources: fossil fuels, topsoils, ocean resources and deep aquifer water to name but four. As those resources gradually run out or become increasingly hard and expensive to extract, then logic suggests that the human population is likely to shrink back to its previously sustainable level of around 600 million.

How long that will take, and what it will look like as it happens, is impossible to predict in detail (going back to my analogy of throwing a crumpled up piece of paper). But as a broad-brush scenario, I think that's the most likely outcome.

In an immaterial sense I am not so sure - items such as software and services for example are not constrained by finite physical inputs is exactly the same way. — Colo Millz

But you can't grow the economy immaterially. While AI and other kinds of software might help to make many kinds of energy consumption more efficient they also require a tremendous amount of energy.

By 2028, the researchers estimate, the power going to AI-specific purposes will rise to between 165 and 326 terawatt-hours per year. That’s more than all electricity currently used by US data centers for all purposes; it’s enough to power 22% of US households each year. That could generate the same emissions as driving over 300 billion miles—over 1,600 round trips to the sun from Earth. — MIT Technology Review: We did the math on AI’s energy footprint. Here’s the story you haven’t heard.

Edit: I suppose if this power usage represents global use of AI with a comparison to US energy usage of households, 326 terawatt hours per year isn't that much... With respect to total current energy consumption (180,000 TWh) the estimated fraction going to AI would represent .18 percent.

Apparently, even if we had supremely cheap carbon free supply of energy, another constraining factor to economic growth in terms of the number of people with standard energy appetites, we'd have to figure out how to vent exhaust heat into space as we exceed the radiative cooling rate of Earth.

The only way to grow infinitely is to escape planetary constraint but here we are getting too far ahead of ourselves with such future speculation.

So I was wondering, does philosophy and mathematics have anything to say about the possibility, or otherwise, of perpetual economic growth?" — Peter Gray

Economic analysts and researchers have something to say about perpetual economic growth. But since this is a big topic, which requires analysis, name your parameters such as inflation and availability of lending so we have something concrete to argue on.

name your parameters such as inflation and availability of lending — L'éléphant

You've hit the nail squarely on the head. Generally speaking, economists like to talk about things like inflation, availability of lending, interest rates, GDP growth, employment rates, commodity prices, stock market indices and so forth, because these are the things their professors taught them were important when they were students, and these are the things they teach their own students are important if they become professors themselves.

IMHO the most important parameter is “carrying capacity”. This is the number of living organisms (crops, fish, trees, people) which a region can support without environmental degradation. This concept explicitly recognises that there are physical limits to growth. However, you rarely hear economists talk about this.

IMHO the most important parameter is “carrying capacity”. This is the number of living organisms (crops, fish, trees, people) which a region can support without environmental degradation. This concept explicitly recognises that there are physical limits to growth. However, you rarely hear economists talk about this. — Peter Gray

Ooh you hear them talking about it, but almost exclusively in disparaging terms. Limits to growth is not to be taken seriously and actively fought against because it's an ideology set on destroying our civilization.

And to be fair, it would probably destroy civilization as we know it, if we were to actually try to take these limits into account, because growth is assumed and necessary to keep the system going. But then again, if we go ahead and reach the limits it's only a matter of time before civilisation collapses anyway because of ecological degradation and resource depletion... so it's not much of an argument.

Carrying capacity, and bio-physical limits are also not entirely fixed, in that one can increase the capacity and stretch limits with technology... but that also is only delaying the inevitable it seems to me. Still that is I guess the main argument against limits to growth, technology will solve the issues as we encounter them. It has in the past, for instance the green revolution or fracking (peak oil), and so it will do so again in the future. Again, a tentative argument at best if one thinks things through for a couple of seconds, but people will believe what they want to believe I guess.

So I was wondering, does philosophy and mathematics have anything to say about the possibility, or otherwise, of perpetual economic growth?" — Peter Gray

If you disregard real prices, of course you can have perpetual growth.

Just how awesome would the GDP of the US seem in 2040, if a Big Mac would then cost 1 million dollars! A lot of millionaires everywhere, also likely trillionaires too.

But seriously, this is a problem for our monetary system as it's based on debt. Taking care of the debt would mean perpetual growth. However, notice what can happen even in our lifetimes now: population can reach it's peak and then start to decrease globally.

Do you need perpetual growth when in the future there will be less people? I don't think so. Sustainability of present global output will take care of a smaller population.

When the world and the societies around us change, so does economics and many of our ideas change too.

@ChatteringMonkey

IMHO the most important parameter is “carrying capacity”. This is the number of living organisms (crops, fish, trees, people) which a region can support without environmental degradation. This concept explicitly recognises that there are physical limits to growth. However, you rarely hear economists talk about this. — Peter Gray

So true. This is a good specific aspect of economic growth.

I found this article to support the sentiment regarding environmental health:

Environmental Kuznets curve
11 September 2019 by Tejvan Pettinger

Definition: The environmental Kuznets curve suggests that economic development initially leads to a deterioration in the environment, but after a certain level of economic growth, a society begins to improve its relationship with the environment and levels of environmental degradation reduces.
From a very simplistic viewpoint, it can suggest that economic growth is good for the environment.

However, critics argue there is no guarantee that economic growth will lead to an improved environment – in fact, the opposite is often the case. At the least, it requires a very targeted policy and attitudes to make sure that economic growth is compatible with an improving environment.

(Diagram of Kuznets Curve -- no need for a diagram -- self-explanatory. But it can be found online)

Causes of Environmental Kuznets curve
1. Empirical evidence of declining pollution levels with economic growth. Studies found that higher economic growth in the US led to increased use of cars, but at the same time – due to regulation, levels of air pollution (in particular sulphur dioxide levels declined). See: Kuznets curve a Primer

2. Spare income with growth. With higher rates of economic growth, people have more discretionary income after paying for basic necessities; therefore, they are more amenable to paying higher prices in return for better environmental standards.

3. Focus on living standards as opposed to real GDP. Traditional economic theory concentrates on increasing real GDP and rates of economic growth. But there is a growing awareness the link between economic growth and living standards can be weak. Focusing on living standards can become politically popular.

4. Improved technology. The primary driving force behind long-term economic growth is improved technology and higher productivity. With higher productivity, we can see higher output, with less raw materials used. For example, since the 1950s, the technology of car use has significantly improved fuel efficiency. In the 1950s, many cars had very low miles per gallon. In recent years, car manufacturers have made strides in reducing fuel consumption and have started to develop hybrid technology.

5. Solar and renewable energy. A good example of how improved technology has reduced potential for environmental damage is the progress in solar technology. In recent years, the cost of solar energy has significantly fallen – raising the prospect of clean technology. See: Solar technology

6. De-industrialisation. Initially, economic development leads to shifting from farming to manufacturing. This leads to greater environmental degradation. However, increased productivity and rising real incomes see a third shift from industrial to the service sector. An economy like the UK has seen industrialisation shrink as a share of the economy. The service sector usually has a lower environmental impact than manufacturing.

7. Role of government regulation. Economic growth and development usually see a growth in the size of government as a share of GDP. The government are able to implement taxes and regulations in an attempt to solve environmental externalities which harm health and living standards.

8. Diminishing marginal utility of income. Rising income has a diminishing marginal utility. The benefit from your first £10,000 annual income is very high. But, if income rises from £90,000- £100,000 the gain is very limited in comparison. Having a very high salary is of little consolation if you live with environmental degradation (e.g. congestion, pollution and ill health). Therefore a rational person who is seeing rising incomes will begin to place greater stress on improving other aspects of living standards.

Criticisms of Kuznets Environmental Curve
1. Empirical evidence is mixed. There is no guarantee that economic growth will see a decline in pollutants.

2. Pollution is not simply a function of income, but many factors. For example, the effectiveness of government regulation, the development of the economy, population levels.

3. Global pollution. Many developed economies have seen a reduction in industry and growth in the service sector, but they are still importing goods from developing countries. In that sense, they are exporting environmental degradation. Pollution may reduce in the UK, US, but countries who export to these countries are seeing higher levels of environmental degradation. One example is with regard to deforestation. Higher-income countries tend to stop the process of deforestation, but at the same time, they still import meat and furniture from countries who are creating farmland out of forests.

4. Growth leads to greater resource use. Some economists argue that there is a degree of reduced environmental degradation post-industrialisation. But, if the economy continues to expand, then inevitably some resources will continue to be used in greater measure. There is no guarantee that long-term levels of environmental degradation will continue to fall.

5. Countries with the highest GDP have highest levels of CO2 emission. For example, US has CO2 emissions of 17.564 tonnes per capita. Ethiopia has by comparison 0.075 tonnes per capita. China’s CO2 emissions have increased from 1,500 million tonnes in 1981 to 8,000 million tonnes in 2009.

Conclusion
The link between levels of income and environmental degradation is quite weak. It is possible economic growth will be compatible with an improved environment, but it requires a very deliberate set of policies and willingness to produce energy and goods in most environmentally friendly way.

Yes globalisation and offshoring would suggest one has to look at things at a global level, and not at the level of national economies. A lot of the most pressing ecological problems and key resource reserves are also to be looked at globally.

The link between levels of income and environmental degradation is quite weak. It is possible economic growth will be compatible with an improved environment, but it requires a very deliberate set of policies and willingness to produce energy and goods in most environmentally friendly way.

I think this is more complex than a simple math formula (which any curve refers to).

The basic idea that more prosperous people can give more easily either tax money or do things like recycling etc than dirt poor people who have to really worry from where the next meal is coming from. But then there's the political institutions an income distribution. Equatorial Guinea seems on paper as a rich country by GDP per capita (20 000$), but the people are as poor as it's neighbors as the wealth goes mainly to the ruling family. Then the difference between the environmental policies of let's say Trump's US and EU are hugely different. This all makes this seem to be a weak link as the US is one of the richest countries, but as with many other indicators, not at all with the best indicators (health, corruption, etc).

Then the difference between the environmental policies of let's say Trump's US and EU are hugely different. This all makes this seem to be a weak link as the US is one of the richest countries, but as with many other indicators, not at all with the best indicators (health, corruption, etc). — ssu

Correct. The article is suggesting that a targeted environmental policy would be the promising solution rather than looking at the link between wealth and environmental health.

Coincidentally, here is an article from this morning's BBC (British Broadcasting Corporation) news:
https://www.bbc.co.uk/news/articles/c62exx578lzo

It suggests that, faced with a choice between meeting its net zero commitments or expanding airports to accommodate more flights and create more economic growth and more CO2, the UK government is likely to do the latter. And that's not unusual or unexpected. The main problem with the inverted U-shape environmental Kuznets curve is that at the end of the day, it's a theory or mathematical model, and like many other economic theories, it has only a tenuous connection with reality.

It suggests that, faced with a choice between meeting its net zero commitments or expanding airports to accommodate more flights and create more economic growth and more CO2, the UK government is likely to do the latter. And that's not unusual or unexpected. The main problem with the inverted U-shape environmental Kuznets curve is that at the end of the day, it's a theory or mathematical model, and like many other economic theories, it has only a tenuous connection with reality. — Peter Gray

Compared to Third World countries, the "prosperity make people take care of the environment" holds.

I remember visiting downtown Manila, the bus we intended to use didn't show up. So me and my family took Jeepney, a local taxi, back to our hotel in Makati district. After going through half of Manila in an open air vehicle, I wiped my nose with a handkerchief and I the insides of my nostrils were totally black. That doesn't happen when sitting on a campfire on when warming a smoke sauna. How cities combat smog is different. London and the British had to tackle this issue last Century.

And then it's simply an issue about aggregates, the global situation.


The real change could possibly happen in the US, but naturally won't happen because of the typical insanity in the US over these issues. Yet from the fact that the EU27 has a larger GDP than the US itself (and just compare the CO2 emissions!), it's the country that could really make a difference... quickly.

The biggest chunk of emissions in those charts is from China, but we (in the UK) ought to take ownership of a lot of that, because most of our manufactured goods these days are made in China. Just look at the labels on the packaging of everything from mobile phones, to washing machines, to garden tools, to Christmas decorations. If we made all our own stuff (as we used to back in the day) our emissions would be through the roof. Same thing goes for biodiversity. While we are congratulating ourselves for reintroducing beavers in Scotland, wildlife is being killed off somewhere else so we can import food.