In a speech to the UN General Assembly,
in the fall of 2019, Greta Thunberg castigated world leaders for their failure to address climate change fast enough and for fixating on money and “fairy tales of eternal economic growth.” In doing so, she shined a light on a critical, overlooked part of the challenge.
Humans are bound by physical fundamentals. The land and oceans of Earth are finite. The population is increasing. Warming compounds like CO2, methane and fluorinated gases trap heat in the atmosphere, in some cases for centuries. We still don’t have a practical, affordable way to remove them.
Economists believe metrics like GDP, unemployment, and consumer spending are equally fundamental. Down to the smallest rural town halls, governments take for granted that a lack of economic growth risks contraction and the evaporation of the tax base. The absence of growth is considered a municipal death sentence.
Those two sets of fundamentals are rushing toward each other like runaway trains.
Believing growth is fundamental requires faith that humanity’s constraints can forever be overcome, usually through technology. That’s what separates us from the other constrained beasts. We can invent things that adapt our environment to our needs instead of the other way around. To believe in eternal growth, we must believe that the supply of technological solutions will also be eternal. The growthers are betting the future that the system which supports our tech infrastructure will always be there for us.
How much lead can you convert to gold before you run out? Physical science is centuries ahead of the science of market economics, and calling economics a science at all is generous. The aggregate choices of humans are subjective. Attempting to quantify them is questionable, especially when you’re using that math to predict future choices. The physical constraints of our environment are not subjective. They’re solid as a rock.
The only reason we imagine a future where technologies (like AI, or decarbonization, or sustainable power) can overcome our increasing depletion of resources is because we’ve lived so long under an economic ecosystem that can support large data centers and the wealth needed to maintain and modernize them. As climate change compromises the health of that system, we will risk losing the ability to maintain the silicone infrastructure that makes these solutions possible. Funding for applied sciences will dry up as more money is needed to mitigate natural disasters and feed the unemployed. Then the whole philosophy of growth through technology collapses, and we won’t have time to readjust the economic paradigm.
Yuval Harari points out that markets existed throughout human history, but the powerful engine of credit, the backbone of the modern economy, is relatively new. The difference amounts to trust in the future. To extend credit, or absorb debt for capital improvements, and expect it to be paid back with interest requires the belief that the future will be better than the present. The invention of that trust is what turbocharged the global economy we enjoy now. It’s the same trust behind the social contract. You can’t choose to put individual freedoms on the shelf for a greater good unless you have faith that the rewards will prove themselves in the future.
The economy and the social structure we’ve invented will collapse rapidly once that trust is gone. I believe we’re already seeing the early stages of this as worldwide political polarization grows and both political extremes in the US are questioning democratic fundamentals as being inadequate to the issues at hand. The shadow of climate change, and our failure to confront it honestly, darkens both.
If economic growth is not eternal, we need to be having more, and better, conversations about how we run a modern economy without it. Some believe GDP should be replaced with GPI, the Genuine Progress Indicator, which was invented in the mid 1990s. GPI builds on GDP and adds metrics about the well-being of a nation and its citizens. It takes into account those living in poverty, the United States’ abysmal infant mortality rate, the incarceration rate, etc. Kate Raworth, author of Doughnut Economics, believes an equitable balance can be struck between growth and a green economy if we do it right.
The lizard brain whispers that though this lifestyle we enjoy today — one which allows the wealthiest humans an eye-popping quality of life, health, and menu of personal choices — has always felt like a birthright of our intelligence, it never was. The creation of wealth through promises about the future and slight-of-hand in the present has allowed us to build a popular opulence never seen on Earth before. But our impatience to possess tomorrow today mortgaged our real future steeply. Climate change is the bill coming due after centuries of borrowing.
There may be an equitable, sustainable economic sweet spot that allows us to continue to grow and still protect the resources tomorrow’s humans will need. Finding it will take intention and honesty about the inflection point we face today. As we search for that formula, we would be wise to respect Greta’s warning. It’s only fair, since her voice belongs to the generation that will take the full force of our failure if we can’t.
Dave Coulter
12/29/2023
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