re: Economics: Heinberg and “Peak Oil” (Tor Guimaraes, Brazil/US)

Tor Guimaraes writes:

Istvan Simon (3 November) makes some good counter arguments regarding Alain de Benoist’s (2 November) analysis of Richard Heinberg’s opinion that economic growth is unsustainable. Istvan wrote, “…exponential economic growth does not imply that we must have exponential growth of physical resources to achieve it. A large part of economic growth is in services…” which “… can grow exponentially without needing any exponential increase in physical resources consumed. In addition, technological advances allow frequently the exponential growth in the power of physical devices, for example electronic devices like computers, calculators, MP3 players, TV sets, etc., while actually reducing the physical resources consumed in their making.” “Clearly, more powerful computers allow us to have large increases in productivity in a wide variety of economic activities. This in turn reduces costs while increasing economic output. It is obvious that this will result in large economic growth and yet does not imply corresponding growth in the consumption of physical resources. In other words, tying economic growth to growth in consumption of physical resources is a fallacy. Since Richard Heinberg’s analysis is ultimately based on this fallacy, it follows that his analysis is wrong, and therefore his predictions are very likely to be wrong as well.”

It is true that Moore’s law has remained operational for the last decades and continues to surprise even some ardent supporters. However, Istvan failed to consider some important factors:

Economic growth may be constrained not by great productivity increases in specific areas such as computers but by simpler factors such as drinkable water, clean air, favorable climates, etc. Another critical issue to me is that great capitalist nations such as ours seem to have a strong tendency to revert back to aristocracy, as capital achieves dominance over labor and government, socializing costs and privatizing profits, weakening the middle class which provides the basis for democracy and economic growth. Indeed, even Moore’s law will be useless if people are not buying the damned computers.

JE comments: Don’t damn our computers! Outside of a conference every two-three years, they’re the only thing that glue us together, WAISly speaking. (I’m in my Adrian office right now, looking at the old Macintosh SE/30 on the shelf…it’s rather like contemplating Yorick’s skull.)