The End of Growth

Richard Heinberg has been a pundit on the Peak Oil beat for more than ten years.  With each passing year, his understanding of diminishing resources has grown.  In 2007 he redefined the problem as Peak Everything.  He came to see that industrial civilization was gobbling up non-renewable resources at a rate that spelled serious problems for the generation currently alive, which included himself.  Yikes!

This mind-expanding learning process provided a miraculous cure for blissful ignorance, and replaced it with a healthy awareness of an unhealthy reality.  Heinberg has been jumping up and down and shouting warnings for a long time, but the world has largely ignored him.  The world perceived our incredibly unhealthy reality to be perfectly normal, because we were all born into it, as were our parents and grandparents.  Normal means normal.  Stop jumping up and down, already!  Get a life!

Heinberg avoided suffering from normal thinking because, late at night, he secretly explored the magic and mysteries of history, which gave him special powers of vision.  He could see that the twentieth century was simply a calamitous freak in human history, powered by recklessly binging on cheap and abundant energy, a nightmare that can never again be repeated, thank goodness.  Hence, normal was insane.  Normal was in big danger.  He kept shouting at us.

In July 2008, the price of oil skyrocketed to $150.  In September, the financial system went sideways.  Was this The Big One?  Had the luxurious unsinkable Titanic fatally impaled itself on an iceberg of powerful reality?  Was the pleasure cruise about to become a life-threatening struggle for survival?  The shadows suddenly became much darker, cold winds howled, thunder rumbled, and the Earth shook. 

This big shift inspired Heinberg to write a new book, The End of Growth.  His thesis was that time is running out on the era of perpetual economic growth (i.e., “normal” living).  Obviously, never-ending expansion was impossible on a finite planet.  Heinberg foresaw that growth might continue for a while in a few places, but growth for the overall global economy was essentially finished.  There were three reasons for this.

First, the days of cheap oil were behind us.  Global oil production peaked in 2005, and this level of production could not be indefinitely maintained.  Eventually production would shift into its decline phase — less oil for sale, and more expensive.  No combination of alternative energy sources could replace the role of oil in industrial society, or even come close.  The supply of oil was finite, and the cheap and easy oil had already been reduced to noxious clouds of carbon emissions.

Second, economic growth was getting more resistance from environmental challenges.  Fresh water was getting scarce in many places.  Climate change was creating costly problems.  Food production could barely keep pace with rising population.  The health of cropland, range land, and forests was declining.  Oceanic fisheries were depleted.  The prices for important minerals and metals were rising. 

Third, on 15 September 2008, the financial system experienced a terrifying near death experience.  Much of what had appeared to be a growing economy was actually a colossal bubble of growing debt, like a Ponzi scheme.  Borrowed money had turbocharged the global economy for almost 30 years.  It was a merry party of intoxicated gaiety and foolish excess, but now it was time for the dry heaves and roaring hangover.  The party was over, and the place was a mess.

Peak cheap energy, by itself, was enough to bring an end to perpetual growth.  But combined with a wheezing planet and a terminally ill financial system, the result was like a perfect storm, hastening the inevitable demise of industrial civilization.  We had crossed a watershed, moving from a time of growth to a time of contraction.  We had begun a long journey back toward traditional normality — a muscle-powered way of life, because muscle power will once again be cheaper than doing work with machines.

Heinberg does an impressive job of describing the crash of ’08 in way that is easy to understand.  It’s not a pretty picture.  Legions of greed-crazed speculators did whatever they could to seize as much wealth as possible, by any means necessary, legal or not.  By 2003, banks were giving mortgages to people with no money and no source of income.  Then they quickly offloaded these toxic assets onto clueless investors, who believed that they were top quality investments.  In this manner, many trillions of dollars were vaporized. 

In the absence of a growing economy, it will be impossible to service today’s stratospheric debts.  The banking system still holds vast quantities of absolutely worthless “assets,” creating a temporary illusion of viability.  We can expect to see continued bank failures, corporate bankruptcies, and home foreclosures.  “At some point in the next few years, stock and real estate values will plunge, banks will close, and businesses will shutter their doors,” warned Heinberg.

If the objective is recovery — returning to the idiocy of unlimited pathological borrowing — there simply is no solution, at any price.  Instead, we would be wise to adapt to the new conditions, and direct our attention to reducing the turbulence and suffering of the contraction process.  We’re not looking at the end of the world here, just an uncomfortable return to stability.  The healing process is likely to take generations, but the final result may actually be quite pleasant.  A tolerable collapse is theoretically possible.  No matter how it unfolds, the end result is that our economic system and lifestyles will be far simpler. 

For most of the book, Heinberg thoroughly discusses why the growth economy is ending.  Near the end, he presents “solutions.”  Like many, he dreams of a future in which the benefits of industrial civilization are preserved, while the myriad problems of industrial civilization are wished away.  He asks, “Can we surrender cars, highways, and supermarkets, but still keep cultural exchange, tolerance, and diversity, along with our hard-won scientific knowledge, advanced healthcare, and instant access to information?”  Well, yes we can, for a while, but this would require disregarding long-term sustainability.  We can't have the benefits without the problems.  Can't we live without Facebook and cell phones?

Heinberg, Richard, The End of Growth — Adapting to Our New Economic Reality, New Society, Gabriola Island, British Columbia, Canada, 2011.

NOTE: Chapter Seven, Life After Growth, discusses what we should do now.  Heinberg has created an online supplement to this chapter that will be updated as new ideas emerge.  Go to www.theendofgrowth.com and select The End of Growth – Exclusive Supplemental Materials.