Limits to Growth, and What

¶ … Limits to Growth," and what has happened in the intervening years. The first edition was published by the Club of Rome in 1972. The author of this paper contends that the authors of "Limits to Growth" were correct in predicting increasing industrialization, but that the book's predictions of mass starvation, poverty and environmental degradation ignored evidence that was clear at the time which would indicate that their predictions would not come to pass.

The original "Limits to Growth" focused on five predictions:

accelerating industrialization, rapid population growth, widespread malnutrition, depletion of nonrenewable resources, and deteriorating environment.

In predicting increasing industrialization, the Club of Rome predicted that workers would see a reduction in their negotiating power and purchasing power. In fact, the opposite has taken place. The world has welcomed economic growth since 1972 in two countries that were not foreseen at that time, India and China, accounting for 40% of the world population. In each of those countries, peasant incomes have grown by 60% in the 1980's and 1990's in real (not inflated) terms, and purchasing power has been widely distributed amongst the population. More importantly, a rising middle class in many countries where there was poverty in 1972 has brought billions to improved standards of living. In 1972, Korea and Taiwan had per capita incomes barely higher than many African countries. China was in the midst of a destructive Cultural Revolution, and India was barely able to feed its population. Now, India is the 10th-largest economy in the world, China and India have welcomed 500 million to the middle class, and world wealth has grown by an enormous amount.

The world ecosystem is incontestably better today than it was in 1972. One only need have taken a trip to Lake Erie, to Los Angeles, to Karl-Marx-Stadt (in East Germany) or Katowice (in Poland) to see the effects of carbon monoxide, soot and air pollution on children and adults in 1972. Cars in Los Angeles only had PCV's (pollution control valves) for pollution control -- today's cars produce 1/20th the pollution as cars in 1972.

In the 1970's, the major worry was global cooling, not global warming. Time Magazine published a scary cover story about the "Coming Ice Age," noting that the earth had cooled from the 1940's to the 1970's. Man-made global warming was not even a factor of concern. In 2007, despite the concern about global warming, the earth has only warmed 0.8 degrees F. In one hundred years, which can be explained mostly by factors such as volcanoes.

The World3 model of the Club of Rome anticipated higher pollution, global starvation, poorer workers and depleted world resources. The opposite has happened on all fronts. This paper will review each in turn:

Higher pollution: Pollution is generally related to level of income and energy sources. As income starts to grow, increasing demand for electrical power dictates that countries rely on coal for growth. China is now completing two new coal-fired electrical plants per week, which is fueling a significantly higher amount of pollution (sulfates, carbon monoxide and smog) as compared to earlier times.

This process reverses, however, as countries increase in per-capita income. If one were to go to Tokyo, Taipei or Seoul in 1972, they would have found a significant level of pollution. As income levels rose and the people (read: voters) pushed for pollution controls, the air actually cleared. Now, in China, a movement to cleaner energy, autos and other polluters is under way. The 2008 Olympics are being used as a trigger, but rising incomes will assure that China cleans its environment.

The same was true in Eastern Europe. Prior to the fall of Communism, Poland, Czechoslovakia (now Czech Republic and Slovakia), Hungary and East Germany were the most polluted countries on the continent. Now all these countries belong to the European Union, and their air is cleaner than it has ever been.

Global starvation: China and India starved their populations in the 1950's and 1960's, but that was due more to government ineptness than a basic failure to feed their people. Nowadays, India is a net exporter of grain, and China is the third-largest producer of wheat in the world. Starvation is a distant memory in both countries.

The Club of Rome refused to take a look at the beneficial effects of the "Green Revolution," pioneered by American scientists in the 1960's. This revolution increased Indian agricultural production to the point that the country was not only able to feed itself, but to do it well. As soon as China gave its peasants 1/2 acre to farm on their own (in the 1960's), overall food production in China climbed 30%. The freeing of the Chinese farms in the 1980's by Deng Xiao Ping not only increased agricultural production; it dramatically increased peasant income.

Poorer Workers. The argument of the Club of Rome was pure socialism, and should have been recognized as such in 1972. Compare the average lifestyle of an OECD citizen today and in 1972: Home ownership, automobile ownership, richness of diet, ability to travel -- all are drastically improved today as compared to that time. The Club of Rome should have known better, as the 1950's and the 1960's saw the rise of Germany, Japan, France and the UK in average citizens' income. The United States enjoyed a decade of prosperous growth, started by JFK's tax cuts in 1962. In short, workers across the income spectrum grew richer, not poorer.

Depleted World Resources. This is the most disappointing prediction for those of the Club of Rome. How could the world have more resources today than in 1972? Isn't it true that the more we extract, the less we have? Paradoxically, we have more oil reserves, more gas reserves, and more basic metal reserves today than we did in 1972. The reason is that exploration and development technologies have improved our extractive capabilities. More efficient use of the materials extracted means that we can stretch the use of those materials for many more centuries than was thought possible in 1972. Whereas the gas price hikes of the 1970's (1974 and 1979) were 'devastating' to the economy, today's price hikes are much less injurious. That is because energy is a much smaller part of the economy than it was then.

As the developed world grows, it relies less and less on extraction, manufacturing and basic materials. To put it crudely, the materials cost of a single semiconductor is a lot less than that of a ton of steel -- it's what we do with those materials that makes the difference today. As we move more and more to a service-driven economy in the developed world, world resources become people and services, not ore out of the ground.