Is infinite exponential growth possible?

Infinite growth in energy consumption on a finite planet is impossible. At some point, won't industrial society start crumbling and free trade begin to disintegrate?

No. This is framing the question in the wrong way.

Thinking about this is kind've fun, but a bit misleading. It suggests that very long-term growth in energy consumption/production is a tenet of mainstream economics. This is highly unrealistic. the volume of goods production levels off in a form of the logistics curve. For example, US car sales (cars & light vehicles) plateaued in the 1970's, and The total number of passenger vehicles per 1000 people declined 3% in the 5 years '03 to '08 ( http://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&ctype=l&met_y=is_veh_pcar_p3#!ctype=l&strail=false&bcs=d&nselm=h&met_y=is_veh_pcar_p3&scale_y=lin&ind_y=false&rdim=region&idim=country:USA&ifdim=region&tdim=true&hl=en&dl=en ) - that decline probably continued since then. Appliance and other durable goods have plateaued in the the same way. Like the demographic transition for population growth, resource consumption does not show an infinite exponential pattern. Instead, it follows an S-curve, levelling off at some point.

Now, goods aren't the only thing an economy produces. Goods production can flatten out, while services continue to grow indefinitely. We need quite a bit more of things like healthcare, engineering, education, the arts, etc.


Besides this basic problem with this idea, there are a number of lesser problems:

1) growth in goods production could continue indefinitely, if desired: the value of goods is a function of both quantity and quality. For instance, the US car industry is still growing in inflation adjusted dollar terms because they keep adding features: anti-lock brakes, electronic stability control, low-energy tires, etc, etc.

2) Energy efficiency wasn't a priority in a low-energy cost environment - energy efficiency could be increased by 2x-10x in general. growth in energy consumption per unit of hard goods could be eliminated permanently - energy efficiency growth could continue at the rate of growth of goods production for as long as needed for the plateau in point 1.

3) large categories of energy consumption could be eliminated entirely, as a practical matter: cars and most other portable times (electronics, etc) could run entirely on ambient solar power, if necessary (yes, I know, that would be inconvenient - don't get distracted by that - it's a theoretical point which is addressing a very theoretical Original Post). Homes can be made zero-energy.

The fact is that wind, solar and nuclear can provide far more energy than we'll ever need. We have more than enough resources for indefinite economic growth, though I'm not optimistic about preventing some of the terrible consequences of our neglect of the environment, like species extinction and climate change.


Can services really grow indefinitely?

Well, until we had all of the services we needed. Knowledge workers like doctor and programmers mostly need a solar powered laptop.

in the end: service would have to comprise essentially the entire economy

On a percentable basis, perhaps, but not on an absolute basis. Everyone would continue to have the same level of goods as they had when production plateaued, and that would work just fine. Think of cars: production levelled off because demand was satisfied. Consumers were happy. There was no deprivation.

Once we are on board that physical resources cannot grow forever, does that impose a restriction for economic activity in general in the long run?

Not at all. Again, we only need a certain level of goods - once we have them, we're fine. Then growth continues for those services we need more of.

Don't services require goods?

Take hospitals, for instance - Much of the their goods consumption is related to the activities of daily living: food, etc. That consumption would take place wherever the patient was.

Arguably some of health care is specialized goods, not services: drugs, medical devices and some treatments. We could spend some time analyzing that, but I'd say the discussion above about goods applies to them: they don't take much energy to manufacture, and their volume is limited - most of healthcare costs are highly skilled services by doctors, nurses, etc.

Radiology requires some equipment, but that equipment is durable. It doesn't grow so much as change: CT and MRI develop increased speed, resolution, etc. Actually, radiology consumes a lot fewer resources than it did 40 years ago, as it converted from silver-based film to digital imaging.

Wouldn't demand for services eventually be satisfied?

Yes, I imagine service growth would eventually end.

A good problem to have.

This, of course, raises a larger question: don't services require a base of hard goods to operate?

Basically.....no. Education requires only people and an IT infrastructure. The same applies to most services.

Doesn't IT require energy?

Sure, but not much in the grand scheme of things, and PC/tablet/smart phone/server energy consumption are declining even as their functionality increase. Infrastructure investment peaks and then declines - highways, churches, homes, etc. That's why we saw a cathedral building bubble in the late Gothic high period, a railroad bubble in the 1880's, an electrical generation bubble in the 1920's, and an internet bubble in the 1990's. IT infrastructure has already peaked and leveled off.

Is the delivery of services subject to productivity gains?

Sure. A lawyer can spend 4 hours drafting a brief with a pencil, or 2 with a word processor, or 1 with software with canned phrases and automated bibliography. He or she can spend an hour presenting a motion in open court, or 5 minutes filing it online. A doctor can handwrite a radiology report, or word process it, or dictate it into software that automatically transcribes it.

I think the price of services is ultimately included in the price of goods.

Healthcare is partially a corporate cost in the US, but not anywhere else in the world. How is education included in the price of goods?

Is it even possible to have a service only economy?

No - no one is suggesting that .

what you are describing is a paradigm shift? you are talking about optimizing consumption and economic management to some boundary?

I think so.

Replacing fossil fuels with renewables; taxing mineral consumption instead of subsidizing it to reduce mining and increase recycling; moving from consumerism to quality of life; etc, etc.

Pretty conservative stuff most of my readers, I hope.

Why insist on using the word 'growth'?

Because that's what most people call it. That's what economists call it.

Growth is generally considered to mean "improvement in our daily lives". Why fight that? Why tell people their lives have to get worse, if it isn't true? That will just destroy any hope of communicating to them that we need to make changes in the way we do things.