Limits to growth

50 years!

Revisited

The main problem underlying conventional economics is its reliance on a conceptualization of the economy that deliberately ignores the physical context of which it is necessarily part, including the most elementary laws of physics. This means combating the assumption that resources and energy are unlimited, without even considering the fallout of the activity or the planet’s limited carrying capacity. In view of the hegemonic nature of economic thought and its ability to mold the framework of social thought, this is crucially important, because it makes finding effective solutions to the eco-social crisis virtually impossible.

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Classical economists, the founders of political economy as a discipline, have nevertheless undoubtedly been aware of what we might call the social metabolism: the relationship between nature and the economy.5 Their predecessor, the physiocratic school, whose principal exponent was François Quesnay, had already interpreted the economic question in the eighteenth century on the basis of agrarian flows and concluded that any surplus is possible thanks to the gifts given to us by nature. David Ricardo, in turn, was aware of differing soil fertility and put together a theory of decreasing land yields that led him to think that capitalism could not grow indefinitely. Reverend Thomas Malthus introduced his now famous thesis on population growth as a constraint on economic growth. Karl Marx and Frederick Engels, too, considered that capitalism would come up against limits to its own development due to the downward trend of the rate of return. Marx was extremely interested in the scientific advances of his time and accorded considerable importance to the concept of social metabolism, which he is widely credited with having introduced into social science.6

In the twentieth century, in striving to make the discipline more scientific, economic thinking moved further away from the physical and even social conditions under which any economy must necessarily operate. Neoclassical thought, as reformulated by Léon Walras, Alfred Marshall, and William Stanley Jevons, among others, permeated economic science as a whole and led to a break with the previous political economy, giving rise to notions of production and wealth completely disconnected from a natural base. Meanwhile, the search for theoretical explanations of economic growth and its possible failures continued with the economists Roy F. Harrod and Evsey Domar, who developed a model that concluded that economic growth was fundamentally unstable and that meeting the conditions for stability was extremely complicated.7 This Keynesian-inspired model provoked a response from neoclassical economists such as Robert Solow and Trevor Swan, who laid the foundations for the paradigm of economic growth and whose models are still being studied as a priority in every economics department around the world. These are the models that, in the end, define to a large extent economists’ scope of thought.