The Economics of Limits

Article Summary

John S Veitch
John S Veitch
The Network Ambassador

This is perhaps the key concept that makes it possible to imagine a better world, a world with an open future, rather than a world in continuous decline. The idea of "limits" goes against much of the cultural baggage we carry in our heads. The planners of every city are busy making plans for how the city will look in 30 years time when it's double it's present size. This is seen to be both desirable and inevitable.

Growth - How to ensure a Closed Future
Along with economic liberalism and the philosophy of markets, we got the knowledge economy and a narrowing of the debate to a single storyline as Margaret Thatcher said, "There is no alternative". For some time that seemed to be true. Knowledge became contaminated by "spin" and "political truth" and the "bible" or sometimes the "Koran" and far too often by deliberate falsification of official sources by governments. Self deception is the perfect way to close your own future.

Green Politics
I was a member of the NZ Values Party, which in the 1970's was campaigning for zero growth economics and for environmental protection. The Values Party was the first "green party" in the world.

Population Growth
The world's population is continuing to expand. I don't believe we will ever get to nine billion people. I don't think the planet will allow it, regardless of what you and I may think. The best explanation of the folly of population growth I know is given by Prof. Albert Bartlett. The intention of governments and economists is to "grow" the world economy at a constant rate of at least 3% over the next 100 years. That involves doubling our entire use of the world's resources each 23 years. At some stage we need to adapt to the fact of limited resources. We have to learn to live within limits.

The Limits to Growth
I was first introduced to the concept of limits to growth in 1972 when the book "The Limits to Growth" modeling the consequences of a rapidly growing world population and finite resource supplies, commissioned by the Club of Rome, was published. The book's central premise: that growth cannot proceed indefinitely against a finite resource base, was seriously challenged by economic theory.

How to Impose Limits - A partly market method
I'm going to give one simple example. I'm thinking about the river system on the Canterbury Plains of New Zealand. There has been a long standing policy where people who want to use river water or ground water for commercial purposes need to have a permit, a "Water Right". Rights have been allocated on a first come, first served basis, and the history of allocation goes back a long way. Water Rights are seen as property attached to the land.
I'm indebted to Dr. John Fritz Raffensperger who, says that the local political process must FIRST make a decision about measuring the resource and providing scientific information about the water needs of environment. There are political choices to make that cannot be avoided. The environment should be the first priority, and sustainability constraints must be set by a political process backed by scientific information. Some people may have first rights. After those are met, the balance is sold at auction to the highest bidders.
I do appreciate the objections most people will immediately raise, it sounds like discrimination against ordinary people. Understand this. The amount of water isn't strictly in anyone's control. There is a shortage. In the case of shortage someone will go without, there is no alternative. The trick is to get the best possible result from the limited supply.

If you need the original article it's here.

User Comments for Open Future Limited.

You may choose if your comment is to be published or not.

Lots of space here if you need it. (10,000 chrs)
Will NOT be disclosed.
If you include web links above we'll link your comment back to them.