Saturday, May 25, 2013

Heinberg: growth will end.period.

End of Growth coverEconomic growth as we have known it is over and done with; only relative growth is possible. The world economy is now a zero-sum game, with a shrinking pie to be divided. According to Richard Heinberg in End of Growth, Adapting to Our New Economic Reality, the three factors that stand firmly in the way of further economic growth are: resource depletion (oil, minerals, fresh water), negative environmental impacts (climate change, pollution, loss of biodiversity), and financial collapse (debt crisis).

The language is vivid and clear, the argumentation is solid. Heinberg clearly has both broad and deep knowledge about many important parts of the marvelous creation that we call society, and why growth will end.

The industrial revolution was really a fossil fuel revolution. Petroleum plays as big role in this book as it does in modern society. “Energy is not just a commodity; it is the prerequisite for any and all activity. No energy, no economy,” says Heinberg, an American journalist and the author of ten books. He serves as a Senior Fellow at the Post Carbon Institute and was one of the first to bring up the huge impact peak oil would have on modern society.

Not only are fossil fuels depleted but also fresh water is being critically overused and degraded. In the US, many mineral resources, including bauxite, copper, iron ore, magnesium, phosphate rock, potash, and zinc, are well past their peak rates of production.

The central discussion in End of Growth, however, is the financial collapse of 2008, and the following global crisis including the Euro crisis, Heinberg says “marks a permanent, fundamental break from past decades.” He says that “the entire economic system had come to depend on impossible-to-realize expectations of perpetual growth and was set to detonate.” Money was tied to banks making money when issuing loans and credit was tied to assumptions about growth. When growth stalled in 2008, there was a chain reaction of defaults and bankruptcy.

I find it very hard to know if the financial turmoil of today is really a fundamental break or just one of many stations on the path of a train downhill. Viewed in the longer perspective, I have no doubt that Heinberg’s link between the economy and resource depletion is real. Whether contraction is chaotic or controlled, and whether it comes sooner or later, a radical simplification of the economy is more or less inevitable, as systems designed for cheap energy and resource depletion reach environmental limits.

When energy declines, the trend toward specialization will be reversed and so will urbanization. Urbanization depends on surplus agricultural production from agriculture, which in turn depends on cheap oil. Whether we like or hate globalization and specialization, we will rely more on local resources and production capacity. “How far we will go towards being local generalists depends on how we handle the energy transition of the 21st century,” says Heinberg.

Heinberg certainly doesn’t sugarcoat his messages. It is possible to have a civilization without fossil fuels, but this civilization will be different than ours. How far will we have to retreat? Can we surrender cars, highways, and supermarkets, but still keep cultural exchange, tolerance, and diversity, healthcare, and instant access to information?, he wonders.

End of Growth is not a comforting book to read, and it shouldn't. “I may seem to have gone out of my way to focus relentlessly on negative prospects, discounting possibilities and opportunities while highlighting limits and dire outcomes,” writes Heinberg and explains that because the end of growth is an unattractive notion most people are likely to avoid considering it.

Heinberg identifies, like many others, that the problems of dwindling resources and environmental destruction are compounded by population growth. Any gains from increased efficiency of resource use are erased by growing populations.

One aspect of demography missing in this otherwise excellent book is that of demographic changes themselves causing growth to shrink or even cease altogether. The importance of population growth for our unprecedented economic growth is underrated. There is a very strong correlation between the phases of the so-called demographic transition and economic growth. Countries that undergo the transition will have a once-in-the-lifetime-of-their-civilization window of opportunity, when workers are many, the number of children has gone down and the number of elderly is still small.

In the same way, once the cohorts of working shrink and population ages, growth will inevitably slow down. Heinberg notes this about China, “Beginning in 2015, China will see a growing number of older citizens relying on a shrinking pool of young workers.” However, this is not unique for China. Japan and most of Europe has already undergone this transition, which is a major reason why their economies hardly grow anymore. Apart for the resource scarcity, environmental problems and financial melt-down, I venture that we also reach Peak Work. In the United States, 67 percent of the people in working age were engaged in the labour force in 1998, up from around 50 percent in the 1950s; this has now dropped to almost 63 percent and the numbers are still falling

The list of critical problems facing civilisation is nearly endless, but for each problem there is a solution. But if there are so many solutions are available, why does the scenario for the future look so dreary? asks Heinberg and explains that most people assume that solving a problem means being able to continue doing what we are doing now. “Yet it is what we are doing now that is creating our problems.”

The mere idea that all challenges are problems to be fixed is perhaps “part of the problem”. John Michael Greer talks about the difference between a problem and a predicament. A problem calls for a solution; a predicament, by contrast, has no solution. Faced with a predicament, people come up with responses. Those responses may succeed, they may fail, or they may fall somewhere in between, but none of them will “solve” the predicament, in the sense that none of them can make it go away.

It seems to me that it is hard to discern what is needed to save the economy from imploding with a big bang – something that will cause enormous suffering and social strife – and what is needed to induce a smooth transition. This is, of course, extremely difficult to know when you are in the middle of it. One thing seems clear – that it can hardly be more of the same that will get us out of the mess.

Heinberg also sees a conflict between the survival strategies of individuals and what is good for society at large, at least in the short-term. Individuals should be disengaging from consumerism, getting out of debt, becoming more self-sufficient. But if everyone did this, it would keep the economy from recovering and would push us further into recession.

Heinberg points to local currencies, Transition towns and cooperatives as useful tools. He also floats the idea of locally-based Community Economic Laboratories established in the center of towns. But he also notes that “there is no hope in hell that Transition initiatives, co-ops, and alternative currencies will spring up fast enough and on a sufficient scale to avert general economic misery.” Heinberg banks on our abilities as social beings; he believes our most valuable assets will be local communities composed of people who are willing and able to work together. To maintain the social cohesion must be our single highest priority.

Heinberg has changed the discourse from discussing why growth should end to that growth will end. Period.

Read more: Richard Heinbers's web site
Other endorsments
"Heinberg shows how peak oil, peak water, peak food, etc. lead not only to the end of growth, and also to the beginning of a new era of progress without growth.”
–Herman E. Daly, Professor Emeritus at School of Public Policy, University of Maryland and author of Beyond Growth

“Dig into this book! It is crammed full of ideas, information and perspective on where our troubled world is headed – a Baedeker for the perplexed, and that’s most of us.”
–James Gustave Speth, author, The Bridge at the Edge of the World: Capitalism, the Environment and Crossing from Crisis to Sustainability
More endorsements for ‘The End of Growth’

I used  End of Growth as a test case for reading an e-book. I liked the book a lot more than I liked reading on the PC-kindle! Admittedly the Kindle was great for copying text and for highlights, but somehow I don't get the same overview when reading on the e-book.  Perhaps it will come with practice.


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  3. I want to support Heinberg's analysis, and to take it a few more steps towards a 'social ecology' perspective.
    At the moment we are living in a world with up to 7.3 billion people.
    As Heinberg explains, this world is suffering from dwindling resources; environmental destruction; financial meltdown; fossil fuel depletion; overuse and exhaustion of fresh water; decine of minerals;poisoning and damage to the 'Garden Earth'; disruption of the atmosphere and biosphere; all stimulated by excessive consumption.
    We all want to assert that if there is to be a sustainable future, all this has to stop!
    I want to remind us that all this damage has been funded, managed, organised, committed by the 1%, the prosperous elites across the world.
    Let us say that all this damage has contributed to the prosperity of the 700 million wealthy minority who are thriving.If they all changed their lifestyles it would make little difference.
    Why? because the 6.5 billion people, the 99%, who form the poor majority are in the process of 'upgrading' their lifestyles in India, China, and the countries of Africa. Unless they can be persuaded to remain poor,with low consumption, and earn less than $10 a day, then demands and consumption will grow as a matter of course.I wish to suggest that there will be growth, accompanied by catastrophe and calamity. The poor majority will assert their rights to a better life and in doing so, will drive the capitalist economy, and the Garden Earth, to ruin.
    The only way out of this dilemma, if there is one, is for all people to change their lives to self sufficiency and sustainability and to abandone the fossil-fuel system and take up solar energy and change their technology accordingly.

    go to 'A Discourse: Social Ecology'

  4. Well Kelvyn, I think we are in fundamental agreement. However, we do need to recognise that the people that are really driving this to a ruin don't make 10$ per day or even 100$ day but rather 1000 or 10,000$ per day. We should recgnise that those earning 1,000 US$ day will consumer around 80 times as many resources than those that earn 10 US$ day. That is a very essential piece of mathematic....