Can the World Survive Economic Growth?

By GEORGE J. CHURCH

IN biology, growth is a distinguishing mark of life; in economics it has long seemed the sine qua non of the good life. Adam Smith argued in 1776 that "it is not the actual greatness of national wealth, but its continual increase, which occasions a rise in the wages of labor." Economists ever since have insisted that only a rapid increase in output could lift mankind out of poverty. Politicians of every ideology have dedicated themselves to raising production, to the applause of their constituents.

Now, however, many scientists and social reformers have begun to regard perpetual economic growth as malignant. Their increasingly fashionable fear is that production increases will destroy civilization, either by stripping the earth of natural resources or by choking humanity in a cloud of pollution. Sicco Mansholt, outgoing president of the European Common Market Commission, has remarked that in Western Europe, America and Japan, gross national product "has been thought of as something sacred--but G.N.P. is diabolical." Walter Heller, a member of TIME'S Board of Economists, complains that a speaker who ventures a good word for rising output is immediately assailed as a "growth maniac" or an "abominable growthman."

Antigrowth sentiment has been swelling for years, but the biggest push came from the appearance last winter of a 197-page book, The Limits to Growth, which avowedly aims at "a Copernican revolution of the mind" (TIME, Jan. 24). It was prepared by a team of 17 scientists, ranging from an Iranian population expert to a Norwegian specialist on pollution. The study was begun by Professor Jay Forrester, an M.I.T. pioneer in computer analysis of likely future trends, and completed by his 30-year-old protege, Dennis L. Meadows, a business professor who has recently moved from M.I.T. to Dartmouth. The study was sponsored, endorsed and publicized by the Club of Rome, an organization of distinguished industrialists, bankers and scientists from 25 countries.

Meadows is no latter-day Malthus prophesying doom on the basis of intuition; instead he has produced the first vision of the apocalypse ever prepared by computer. His team built a computer model of the world, fed the machine masses of data on population and industrial growth rates, farm yields and the like, and constructed "feedback loops" to gauge the effects of changes in one variable, like food production, on another, like birth rates. In restrained, nonhysterical, at times almost apologetic language, the team insists that unchecked growth can have only one outcome: "A rather sudden and uncontrollable decline in both population and industrial capacity" some time before the year 2100.

Meadows' villain is "exponential growth" at a regular annual percentage. Each year's growth yields a bigger absolute increase because it is applied to a larger base; the result is that growth accelerates rapidly, like compound interest. In the M.I.T. computers, exponential growth showed a terrifying tendency to "overshoot and collapse." The study asserts that if the world's population continues to grow at about 2% annually, and global industrial output expands about 7% a year (as they do now), then some time during the life span of children born today, the world will begin running out of natural resources such as coal, oil and metals. For lack of them, industries will collapse by the mid-21st century (give or take a few decades). Because industries will no longer be able to produce enough fertilizers, pesticides or medicines, famine and epidemic will kill much of the human race, and the lives of the rest will fit Thomas Hobbes' description: "Nasty, brutish and short."

The study closes almost every escape hatch. Technology, it concedes, can multiply usable resources; but if that happens, industries will grow at an exponential rate and will ultimately foul the atmosphere enough to kill most people. Pollution per unit of output could perhaps be cut by three-fourths. But that would do nothing to check the exponential growth of population, and the world would soon run out of arable land, leading to mass starvation. Population growth could be halted; but that would only postpone the cataclysm unless industrial growth were stopped too. If it persisted, output would soon quadruple, canceling the benefits of the 75% reduction in pollution; thereafter pollution would rise dramatically, causing hecatombs by poisoning. There is only one way out, says the report: economic as well as population growth must be stopped cold some time between 1975 and 1990 by holding world investment in new plant and machinery equal to the rate at which physical capital wears out.

This status quo prescription--the report calls it "global equilibrium"--is as chilling as the doomsday prophecy. Halting economic growth is not merely a matter of the already affluent giving up such frills as electric toothbrushes or power windows. Sacrifices would be made by the poor, who have not yet collected the benefits of the industrial revolution. Economic growth does not necessarily guarantee that the unemployed Mississippi Delta black or the Vietnamese peasant will some day enjoy a balanced diet or a private room. But stopping growth could all too easily foreclose even the possibility.

Redistribution of existing wealth is no solution, because the rich and middle classes would not give up their wealth unless it was forcibly taken from them. Thus the redistribution would imply a series of violent revolutions and wars over the ownership of oil wells, ore mines and fertile farm land. At best, even these could produce only an equality of misery.

More than that, a no-growth world would have extreme difficulty providing either social justice or freedom. It is hard to see how growth could be halted, or even substantially slowed, without a world dictatorship--the more so as citizens of underdeveloped countries already suspect that the no-growth argument is an elitist, aristocratic, white man's conspiracy to lock them into perpetual poverty. It would do little good to stop growth in the U.S. if it raged on in Algeria and Indonesia. At minimum, people would have to be told that they could not buy the flush toilets or transistor radios that they desire because computers had decreed that no more resources could be invested in producing them. Corporations would have a hard time expanding; for every one that did expand, another company would have to contract. Could freedom of speech survive? Demagogues would surely promise comfort to the poor if only growth could be resumed; that siren song would have to be silenced.

Even the authors of the Club of Rome report confess that there is only one conceivable reason for stopping growth: that is the only way to prevent certain global cataclysm. But is it really?

The book presents an elusive target because the Club of Rome will not publish until next month the statistics that Meadows used. Already, though, critics are sharply assailing Meadows' methodology. Their most telling point is that the M.I.T. computer shows only the "bad" trends--such as population and economic growth--increasing exponentially. Some tendencies that might save the world are allowed only "linear" growth, as in simple interest rates. The difference is dramatic. At exponential rates, anything that grows 7% a year would double in size in just over ten years and increase by 86,672% in 100 years. But at linear rates, a 7% increase would lead to a doubling in just over 14 years and an increase of 700% in 100 years.

Critics of the Club of Rome report insist that exponential growth is also possible in the technology that enables society to utilize new resources, wring more food from the land and curb pollution. In the resources field, some experts sketch this scenario: long before resources run out, scarcities would force price boosts. The expense would prod industrialists and consumers to substitute one material for another, develop recycling techniques to use existing supplies more efficiently, and redouble efforts to find ways of using materials--for example, oil-bearing shale--that were previously uneconomic or technically impossible to exploit. Before long, commercial harnassing of thermonuclear fusion could make available limitless quantities of low-cost energy, which could in turn be used to unlock new raw materials from the earth.

Ecologist Barry Commoner, a vehement foe of mindless growth, considers Meadows' treatment of pollution "quite simplistic." It assumes that more growth inevitably means more pollution. Yet the alarming rise in pollution, says Commoner, has been caused not by growth per se but by changes in the composition of growth--for example, the postwar shifts from soaps to detergents. Shifting back to cleaner (and costlier) products and techniques could decrease pollution much more than the Meadows team foresees, while permitting output to continue rising. In essence, the Meadows team projected current trends into the future without analyzing how man might alter them. The whole exercise, say critics, proves again that the past is a shaky gauge of the future, and that the value of the conclusions coming out of a computer depends totally on the quality of the assumptions programmed into it. Computer men sum up this idea with the acronym GIGO--"garbage in, garbage out."

Yet The Limits to Growth cannot be dismissed as just another cry of wolf. The catastrophes that it predicts could happen. Indeed, the world is now getting an ominous foretaste of some disasters. In Japan, for example, superexponential growth has so befouled the air and water that pollution has directly caused outbreaks of serious disease and death.

Meadows probably erred in placing the potential day of reckoning around 2050, and whether it comes then or in, say, 3050 makes a gargantuan difference to people alive today --and to their immediate heirs. The later it is, the more chance there is in. the interim of raising the world's poor toward a decent life. But only a superoptimist would insist that growth can continue forever; that would presuppose that resources are literally infinite. Even if the earth's resources and its capacity to absorb pollution could be extended without limit --or if humanity could colonize other worlds--no one could be certain that that could be done rapidly enough to permit infinite growth at the pace and of the type occurring today. To banish the Club of Rome's nightmares, some changes in growth patterns should start now.

Economists,' ecologists and entrepreneurs should strive to increase clean, nonpolluting growth and to restrain the kind of growth that exhausts resources and pollutes the environment. One problem is that there is no reliable indicator that measures and distinguishes between different kinds of growth. Economic performance is gauged by the gross national product, a truly gross and misleading measure. Activities that are useless (like the printing of reports that the recipients throw in the wastebasket without reading) or even destructive (the development of highly polluting production technologies) swell G.N.P. as long as money is spent on them. At best, G.N.P. tends to overemphasize the kind of growth symbolized by steel, stamping presses, cars and dishwashers --precisely the kind that chews up natural resources and pours out pollution. In theory, a dollar of salary paid to a Latin scholar weighs as heavily as a dollar of wages paid to an auto worker; but in practice, hiring six auto workers increases G.N.P. more than hiring six public school teachers. The auto workers turn out a product that is sold for more dollars that further swell G.N.P.; the teachers do not.

A better, even if less precise measure of economic growth might be "an increase in material well-being." In poor countries, the redefinition is not so important: their people still need every cooking pot, pair of shoes and bicycle that can be produced. But in the industrialized world, and especially in the U.S., it is possible to envision a policy that would devote a dwindling share of new investments to traditional industry while channeling more into such tasks as cleaning streets, improving education and law enforcement, upgrading mass transit and expanding low-cost medical service. Such a program in the developed nations might cause G.N.P. growth to slow, though not stop, since stethoscopes use less metal than refrigerators do. For that very reason, this program would conserve resources and minimize pollution, and it could result in a truer as well as a cleaner kind of economic growth. Litter-free streets, safer trains, better medical care and increased protection against muggings might well increase human well-being more than a higher output of cars, chemicals and electric can openers. Unemployment would not rise; fewer people would work in basic industries, but more people would find jobs as teachers, park attendants and medical technicians. Poorer nations could continue to concentrate on increasing G.N.P., though the poor, too, should ponder whether they might not be better off building bicycle plants instead of auto assembly lines, even if car factories raise G.N.P. more.

There are drawbacks. The Government would have to take over more of the direction of the economy, taxing away dollars that citizens otherwise would use for private purchases and pouring them into public investments. How the money left in the private economy would be spent could be mostly left to the market, but the Government would have to intervene there too. Never again, for example, could industry assume that almost any new production technique that is developed must be put into use, regardless of whether it conserves or depletes resources, reduces or increases pollution. Government may have to guide the decisions, though that could be done by tax, depreciation and contracting policy rather than by dictatorial fiat.

To carry out completely such a shift in public policy, and the change in popular psychology on which it must be based, could take decades, even generations. M.I.T. computers to the contrary, society probably has the time. But it must not squander that time in a heedless pursuit of the wrong kind of growth.

This file is automatically generated by a robot program, so reader's discretion is required.