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Inhaltsverzeichnis
About Growth
Most economists love growth: economic growth. Wealth must increase so that there is more to distribute, because people's desires are insatiable. Because this whole connection is, so to speak, the core belief of the branch.
There aren't that many critics - but they do exist. They have well-founded criticism of the central importance given to growth. In contrast to the growth fans, they usually see growth as such and fundamentally as the decisive reason why there are 'more and more problems'.
Here I will present a few points of view that point to a concrete solution to this dilemma. A solution that can be developed and implemented as a transformation in continuation of a process that is already underway. The analysis has several parts:
(1) The historical analysis: Even past growth has not been exponential at all over extended periods.
(2) The role of efficiency factors (such as product lifespans)
(3) Some elementary mathematics: The sum of the infinite geometric series converges - but what does that have to do with growth?
(4) Is it all just theory? A few concrete implementation approaches; Viewed in light: There's actually quite a lot going on!
(1) The historical analysis: Even in the past growth has not been exponential over extended periods
Percentages are usually communicated regarding economic growth. That's easy to understand - and there's nothing wrong with it. However, the fact that the percentage once measured must then be continued year after year at the same level - that of course does not follow from this type of information. This is at the end a question of empirical research: its results exist and are even easily accessible to the general public (given by the statistical offices). An important point must of course be taken into account: for reality, both in terms of prosperity and the required material resources, it is not the nominal gross domestic product (GDP), but rather the inflation-adjusted one that is decisive. The statistical offices are aware of this, which is why the data is available as GDP number series in real values [Statista 2023]. The graphic shows this using Germany as an example for the period after World War II. And there are already two surprises:
- Yes, there has been steady and sustained growth - except for a few (well-known) short-term dips.
- But that was by no means exponential, but, with a surprisingly convincing correlation, linear!
This could not be transformed into exponential growth so quickly, even with enormous efforts. Even if some politicians like to promise that every now and then. Short-term „fires in the straw“ are certainly possible - but this is usually at the expense of the subsequent time after the fire has flared up excessively. This may disappoint some - and perhaps some 'growth critics' too, because under these circumstances there is ultimately no danger of a huge overshoot1). And above all: Under such conditions, the time span for action of the society remains manageable 2).
Conclusion: Excessive growth expectations are an illusion. But also: There is no acute danger that 'growth as such' will become a fatal problem for society in the foreseeable future. The entire problem deserves to be approached a bit more calmly. In other words: let's leave the hyper-hype with unlimited exponential growth or a demand for it3); and let's also stop staring paralyzed at the „snake of exponential growth“ 4).
If the whole thing continues to take place in an orderly (linear) manner, then there is time left to solve the problems5). Time for a sensible transformation towards sustainable business. And whether and how much it will grow - that becomes secondary given this background. This becomes clear if we also add (2) and (3).
(2) The role of efficiency factors
Here I am only talking about material and energy efficiency, which is important in this context. The topic of energy efficiency is dealt with in detail on the Passipedia pages, e.g. here. I will therefore take up the topic of material efficiency here. It is often argued that there is “not much to be had” because a certain minimum amount of material for a given task is obvious. Even that is by no means as clear as it seems at first glance. But there is another consideration: namely the length of time that a material once obtained remains in use for this task. It can be very different in length. 'Any' different length? That would be a pretty philosophical discussion: the Voyager space probes, for example, have been on the move since September 1977; and they're still running! I dare to make the bold thesis here: For the practical questions of today, the useful life can be extended 'virtually' arbitrarily, as long as it is not a consumable material. This requires careful consideration - and as a rule the avoidance of any form of „consumption“ that does not rely solely on renewable raw materials. As has been shown again and again using the example of energy: Improve efficiency at least to the point that the rate of renewable raw materials is sufficient to cover the consumptive part of sales 6).
How good is “good enough”?
Here we are in for the next surprise: This is a purely mathematical question. If a task is currently completed with a system of useful life $t_N$ and the growth is $p$7), then the new lifespan of new systems of this type only now needs to last more than $(1+p)\cdot t_N - t_N = p \cdot t_N$ longer; let's say the new lifetime is $(1+\epsilon)$ times $t_N$, then $(1+\epsilon)$ is a typical efficiency factor. The fact that it can be „multiplied“ every year is undeniable at the beginning - in the long run, of course, worth discussing 8)9). The amount of material required to be eyploited each year then develops according to
$\;\displaystyle q=\frac {1+p}{1+\epsilon} < 1 \;$
with an annual factor $q$ less than 1, i.e. decaying exponentially. This is the crucial point, as is clear from paragraph (3).
(3) Some math: The sum of the infinite geometric series converges!
This is not new, almost everyone has had it at some point in school - of course not discussed with the practical implications that it has; As is often the case with mathematical findings: Many of them are much more relevant than the mostly dry mathematics lessons make it seem; This can be really exciting in many places!
First the facts: Let $q$ be a factor with an absolute value smaller than 1. Then the 'infinite sum' (called: geometric series) is
$1+q+q^2+q^3+...$
a finite value.
For this the notation with the sum sign $\sum$ has become common in mathematics:
$\;\displaystyle { \sum_{n=0}^\infty {q^n} = \frac{1}{1-q} } \;$
We have already given the solution for this sum, namely the reciprocal of $1-q$. For example, if $q$ is 90%, then $1-q=$0.1 and the infinite sum becomes 10 times the current production of the material in question; That's enough for „supply“ in „eternity“. The graphic illustrates this sum for the case $q=$0.9 for up to N=73; That's already very close to „10“, but there is still room for an infinite number of constantly decreasing $q^n$ (we'll put the proof in a footnote10) ).
Here, of course, „eternity“ is just as practically irrelevant as it is in the debate about never-ending material exponential growth: once times have reached a few centuries, solutions can always be found, as long as the need-values are not gigantomanically high - what they cannot be, according to the $q^n$ expansion with a $q<1$. On the contrary: $q^n$ always becomes completely insignificantly small for some $n$, just like the following summands. So small that it is simply insignificant in practice because there are then renewable resources that can easily cover it. It will no longer be valid if we really talk about 'infinite times'11)12).
In short: $q<1$ or increase in efficiency greater than increase in demand actually solves the growth problem.
To put it another way, provocatively: An increase in prosperity is still permitted: As long as it occurs with a „sense of proportion“, that is „better efficiency and renewable resources have to'finance' that growth“13).
Of course it is clear to me that this does not suit any of the two „camps“: not the growth apologists, because they see everything below eternal exponential unlimited growth as unsexy; and not the growth critics, because suddenly a moderate further increase in 'prosperity' seems at least conceivable14).
Let’s approach these questions with an open mind. It would not be the first time that a simple mathematical analysis actually solves a question that has long been considered 'unsolvable' 15). Yes, technical progress does exist; However, it cannot be forced and we have to use it responsibly. I could always put efficiency gains right back into excessive waste - that's what some people seem to want; It must be clear that this only goes as far as $q<1$ remains valid. But that doesn't mean a „standstill“ 16). We can grow as much as we honestly and sustainably deserve - and then no non-renewable resources have to be exploited beyound limists. This is sensible economics in the generalized sense; and that is honest prosperity that is sustainably earned. But let's not kid ourselves: we are currently still a long way from such an equilibrium economy - the excessive increase in consumption based on substance has been driven forward for too many decades; We are only gradually becoming aware of this. The change will be strenuous, but it can be done - and we use relevant examples to show how.
(4) Is it all just theory?
No! This is already in many applications common practice today17). There is already a lot available on Passipedia: namely, concrete descriptions of the measures that go down to the „construction instructions“ that prove to be implementable in practice, at least in the area of the energy system: efficiency measures. The fact that the goals are actually achieved is shown in detail there18).
Furthermore, there is already empirical experience that we have already highlighted here for two application sectors, namely traffic (German) and Heating (German).
In fact, we have successfully realized $q<1$ in each of these two sectors for over a decade. That would then take around 30 (building) or 100 (car) years „alone“ - but because sustainable energy production is also being ramped up at the same time, the improved curves for „renewable generation“ and „consumption reduced through efficiency“ will meet each other in the meantime; This can be achieved within 25 to 35 years - if we make a concerted effort to achieve it. It worked until the lobbyists successfully persuaded us that none of this was necessary19). .
So we have already proven that this can be done successfully, even for an entire economy. However, it is also clear that this does not happen completely automatically and by itself, we have to actively initiate it and then actually carry it out. It's possible - we've already done it successfully once.
The rapid expansion of renewable energy is of course part of this: so that the falling demand curve and increasing renewable generation can meet, and not just in 210020) but around 205021).
To offer a little more positive perspective: From around 2050 onwards, 'renewable overproduction' of energy will be possible in this way (beyond the need for services). We could then, for example, put them back into „even faster cars“, but I don't think that's the best idea. It is better that we then use this energy surplus to actively remove more CO2 from the atmosphere; It has long been demonstrated that this is also possible (so-called “direct air capture”, DAC). This will be necessary in order to correct the sins of the past that have already been committed: Today we have already emitted more CO2 than is good for sustainable development on the planet. If we then make a little more effort, we can still achieve the 1.5°C target by 2100: It would be irresponsible to rely onnly on decisions that won't be made for another 25 years 22). However, this consideration shows one thing: solutions that enable a transition to sustainable development do exist. It's not 'all lost' yet.
To come back to the introductory analysis of the gross domestic product, which in reality only grows linearly (the diagram under (1)): Anyone who has followed and recalculated (2) and (3) will find that both will still hold without the assumption that there is no such thing as long-term exponential growth; Even in (2) a constant percentage growth $p$ was still used. For (2) and (3) it only matters that the percentage efficiency gain $\epsilon$ is greater than this percentage growth $p$. However, the empirical finding that real GDP growth is not exponential but linear is practically relevant: Since the improvement in efficiency (at least for the next 1000 years or so) can correspond to the descending geometric sequence, it always catches up with any linear increase at some point. Real growth in GDP in Germany e.g. is currently on average around 1.25% per year. This is already intercepted with an $\epsilon$ of the same height (1.25%/a); We've already done better than that - and we can/ always do it again: It's just a question of will.
What is important: All efforts to improve energy and material efficiency! This includes, among other things, thermal protection, heat recovery, heat pumps, low-flow shower heads, efficient electronics, electric traction, countercurrent ovens, longer service lives, ability to repair, prevention instead of accepting damage and much more. This means that within just a few decades we will be diving below the limit that must be reached for sustainable economic activity. From then on, further growth in prosperity, if we want it, can follow the increase in renewable generation; Maybe we'll have found so much fun with the efficiency approaches that we'll continue with them and then create even more room for further growth 23). For the next 30 to 50 years, the time that matters, the efficiency potential for around 3% efficiency gain every year has already been proven and demonstrated in practice: We have already built houses whose heating energy consumption is negligibly low - and vehicles that can reach 100 km/h using muscle power alone. And we can always improve with all of this, there is no fundamental “best value limit”.
Sources
[Statista] Statistisches Bundesamt, dokumentiert in 'statista', Internet-Abruf am 13.12.2023 Index des Bruttoinlandproduktes bis 2022