Leo Foresta

Politicians and experts all over the world have shared a major obsession for decades: economic growth. Their tune today is that public finances cannot be restored without renewed growth.

However, growth – as they mean it – is a now thing of the past. And this will have major practical implications for all of us.

Economic growth was made possible by a combination of four factors:

–  abundant cheap energy from coal, oil, and gas

–  rapid creation of debt based money

–  demographic expansion in developed countries

–  disregard of natural ecosystems and traditional societies.

But tipping points are now being reached in each one of these four areas.

Coal, oil and gas account for over 80% of energy sources; without them supplied in large quantities and cheaply, industrial civilisation as we know it cannot be sustained.

But increasing their production is becoming very difficult. For oil a production plateau has already been reached and levels can only be maintained with contributions from “non conventional” sources, such as “tar sands”, at great financial cost and with considerable ecological damages.

There is no way fossils fuels can be substantially replaced by renewable sources, such as wind or solar. And this is particularly true for oil, from which are derived fuels for cars, trucks, planes and ships, as well as feedstock for the chemical industry.

The cost of energy will therefore continue to rise substantially, which is soon going to be a decisive obstacle to economic growth.

Over the last three decades, commercial banks have created massive quantities of money through loans, with encouragements from the central banks. A mountain of money and debt has grown faster than the level of physical economic activity, with the result that confidence in the whole system is now in question.

Public authorities with large debts are forced to reduce their expenses and increase their (tax) revenues; but this, by itself, makes growth almost impossible to achieve.

Developed countries have had rapidly rising populations since the end of World War II. But their indigenous populations are now aging and no longer growing.

Many children nowadays are born in poor non indigenous families which can only afford low levels of consumption, which is another impediment to growth.

Finally, and most importantly, the technologies, processes, logistics that are stimulated by the abundant use of fossil fuels have very intrusive impacts on all aspects of nature: destruction of local ecosystems, air pollution, soil poisoning by chemicals, water contamination, greenhouse gases emissions, etc. etc.

The derailment of nature on a global scale is beginning to seriously show its effects in terms of damage to human health and to property.

As these various factors are deeply interacting with ever greater vigour, the conditions for growth as we have known it could only be a temporary state of affairs.

This temporary state, an illusion, a mirage, is now coming to an end.

We are all going to have to adapt, pretty soon, to a post growth age.

Most people fear this to a such degree that they get stuck in denial, whereas a minority (think they) welcome the transformation, without necessarily having thought through its full implications.

These implications we shall explore in future posts.

In the meantime, fear not, keep warm and take care.

Love,

Leo