The Dangerous Myth of Endless Growth: Why Our Economy Might Be Heading for a Cliff
We’re constantly told that progress is inevitable—economies will grow, technology will advance, and life will keep getting better. But what if this rosy outlook is built on a dangerous illusion? What if the very foundation of our economic systems is based on the assumption that resources, particularly energy, are infinite? This is the part most people miss: our relentless pursuit of growth might be leading us straight toward a precipice.
Here’s the harsh reality: economists, politicians, and even university leaders often paint a picture of perpetual prosperity. They make promises as if the current state of affairs will last forever, or at least improve. Politicians want reelection, universities want to assure students their degrees will pay off, and no one wants to hear that the future might be bleak. But here’s where it gets controversial: what if the low oil prices and abundant energy that fueled post-WWII growth were a temporary anomaly? What if we’ve been living in a bubble, and the debt we’ve accumulated to sustain this illusion is about to burst?
Let’s take a step back. Between 1920 and 1970, U.S. oil production soared. The oil was easy to extract, close to consumers, and cheap. Physicists like M. King Hubbert warned this couldn’t last, but their voices were drowned out by the optimism of endless growth. Other countries were also producing oil, and the U.S. could import what it needed—for a while. But as domestic oil became harder to extract, requiring complex operations like pipelines in Alaska, the cracks in the system began to show.
And this is the part most people miss: low oil prices weren’t just a boon for the economy; they were essential for maintaining affordable food and discretionary spending. Imagine if food consumed 50% of your income instead of 5-10%. There’d be little left for cars, education, or other essentials. Oil and energy are the lifeblood of our economy, and when prices rise, the entire system strains.
During the era of cheap oil, small businesses thrived, and there was no need for complex hierarchies or energy-efficient technologies. Most goods were made domestically, and the middle class had the buying power to keep the economy humming. But as oil prices climbed, recessions followed, and governments turned to debt to bail out struggling economies. Since 2008, U.S. debt has skyrocketed, with much of it going to support the poor and elderly. Here’s the kicker: the U.S. debt-to-GDP ratio now stands at 120%, far above the 90% threshold that economists warn inhibits growth. Interest payments alone exceed defense spending, and taxes will likely rise just to service this debt.
This isn’t just a modern problem. Historians like Peter Turchin and Sergey Nefedov have studied long-term cycles of growth and collapse, known as secular cycles. They found that societies often surge in population after gaining access to new resources, but eventually hit a wall. Wage inequality, debt, and stagnation set in, leading to collapse over decades. Sound familiar? Joseph Tainter’s work on the collapse of complex societies echoes these findings, painting a sobering picture of our own trajectory.
So, what’s the solution? Some argue that renewable energy sources like wind, solar, and nuclear could extend our growth trajectory. But even if these alternatives have high energy returns on investment (EROI), they might only delay the inevitable. Population growth and pollution would still push us toward systemic limits. Here’s a thought-provoking question: Can we break free from the cycle of growth and collapse, or is it an inherent part of human civilization?
For those interested in diving deeper, my recent talk at the Minnesota Degrowth Summit explores these issues in detail. You can find the full presentation here and the Vimeo recording here. The transcript and timing outline are available on the recording’s front page. Let’s start a conversation—do you think we can sustain indefinite growth, or is collapse inevitable? Share your thoughts in the comments.
By Gail Tverberg via Our Finite World (https://ourfiniteworld.com/)
