The End of Growth: Adapting to Our New Economic Reality
Richard Heinberg
Language: English
Pages: 336
ISBN: 0865716951
Format: PDF / Kindle (mobi) / ePub
Economists insist that recovery is at hand, yet unemployment remains high, real estate values continue to sink, and governments stagger under record deficits. The End of Growth proposes a startling diagnosis: humanity has reached a fundamental turning point in its economic history. The expansionary trajectory of industrial civilization is colliding with non-negotiable natural limits.
Richard Heinberg’s latest landmark work goes to the heart of the ongoing financial crisis, explaining how and why it occurred, and what we must do to avert the worst potential outcomes. Written in an engaging, highly readable style, it shows why growth is being blocked by three factors:
- Resource depletion
- Environmental impacts
- Crushing levels of debt
These converging limits will force us to re-evaluate cherished economic theories and to reinvent money and commerce.
The End of Growth describes what policy makers, communities, and families can do to build a new economy that operates within Earth’s budget of energy and resources. We can thrive during the transition if we set goals that promote human and environmental well-being, rather than continuing to pursue the now-unattainable prize of ever-expanding GDP.
Richard Heinberg is the author of nine previous books, including The Party's Over, Peak Everything, and Blackout. A senior fellow of the Post Carbon Institute, Heinberg is one of the world's foremost peak oil educators and an effective communicator of the urgent need to transition away from fossil fuels.
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a healthy equilibrium economy, we will end up with a much less desirable “new normal.” Indeed, we are already beginning to see this in the forms of persistent high unemployment, a widening gap between rich and poor, and ever more frequent and worsening environmental crises — all of which translate to profound distress across society. A Guide to the Book This book began with a sudden insight on the morning of September 16, 2008 (the day after Lehman Brothers filed for bankruptcy). I was sitting
cities and empires — which brought with them writing, mathematics, and money. The industrial revolution, only about two centuries old, liberated the energies of fossil fuels, which replaced muscle power in production and transportation, thereby dramatically increasing the speed and scale of those processes. Fossil-fueled economic growth enabled human population to expand seven-fold and led to an explosion of scientific research, practical innovation, and trade. So much economic activity was now
evaluating the quality of a piece of music solely by counting the number of notes it contains. • A related absurdity is what economists call an “externality.” An externality occurs when production or consumption by one party directly affects the welfare of another party, where “directly” means that the effect is unpriced (it is external to the market). The damage to ecosystems that occurs from logging and mining is an externality if it isn’t figured into the price of lumber or coal. Positive
1929–2010, US Bureau of Economic Analysis. FIGURE 13. Total US Debt as a Percentage of GDP, 1945–2010. Percentages are based on nominal values of both debt and GDP for each year. Government debt (local, state, and federal) remains fairly constant as a percentage of GDP. It is household and financial sector debt that make the largest gains since 1945. We can see financial institutions begin to take on huge levels of debt beginning in the late 1980s, reaching a peak just before the crash of
foreign investments, or by running down reserves, or by obtaining loans from other countries. In other words, a country that imports more than it exports must borrow to pay for those imports. Hence American imports had to be offset by large and growing amounts of foreign investment capital flowing into the US. Higher bond yields attract more investment capital, but there is an inevitable inverse relationship between bond prices and interest rates, so trade deficits tend to force interest rates