We literally just turned sand into intelligence

It’s a common enough claim, echoing Boulding. Infinite growth on a finite planet is the dream of madmen and economists. To which an elegant response. One so good that we wish we’d come up with it but as we didn’t we’ll simply steal it.

“We literally just turned sand into intelligence”

Just to be completist, that’s from “gfodor.id”.

Us cornucopians and growthists agree, entirely, that there’re a limited number of atoms on the planet. Going into space doesn’t remove the limit, just expands it. The same is true of energy and everything else physical. Yes, you’re right, the universe has limits (unless the infinite universists are right but let’s not go there). Therefore infinite physical growth in a physically limited universe is not possible.

Good, well done.

One line of attack on that idea is whether those limits are relevant at present - to either the size of our current economy or anything that it will get to in any time scale we should want to care about. We do indeed face limits - CO2 in the atmosphere being one, fish in the sea perhaps one more immediate although to be fair opinions differ there - over the relevant immediacies. We worry more about the fish but that’s just us.

But put that aside and move to something more basic. The economic growth that is being talked about is that in GDP. Something we keep having arguments about as we attempt to enlighten people. GDP is not the number, weight, volume, of things done to physical items. It’s the value added. Not even the value added to the number, weight or volume of physical things but the value added full stop. Finally, it’s not the number, weight, or volume of things that are done to. It’s the value added.

Within this are two different but related observations. One is that usual ecological economics insistence that we should work toward qualitative growth, not quantitative. Well, OK, but to the extent that qualitative growth is the addition of value that’s already included in GDP growth. Because that’s what we’re measuring, value added.

The other again, OK, we should prefer the one q to the other q. How do we encourage this? A possibly slightly extreme but supportable analysis of the planned and socialist economies is that they managed no total factor productivity growth over their entire lifetimes. The Soviet Union, from 1917 to 1991 managed not one whit of this. There was economic growth, most certainly - but all of it was quantitative. To gain one more unit of GDP they needed one more unit of inputs. They grew because they mined more, worked more, grew more, without improving the efficiency with which they did any of those things. Another equally standard analysis is that the 20th century growth of the market economies was about 80% TFP improvements and about 20% increases in inputs. (BTW, these estimates are, respectively, sourced from Krugman and Solow, neither of them known as neoliberal extremists like ourselves. Also both Nobel Laureates, unlike ourselves. So far).

So we can argue that even if the ecological are right, we should prefer, deliberately and with malice aforethought, through policy that qualitative not quantitative growth then we should be preferring market, not planned economies. Entirely the opposite of what is argued but then that’s politics for you.

And here we have an elegant exemplar of that basic contention. Sand is now writing novels. To the extent that they’re good novels this is value addition. Given the average novel they are value addition too.

And yes, we know, there really are people out there claiming that we’re running out of sand. But not that sort of sand that is being turned into computer chips, we assure you we’re not.

Are there limits to physical growth on a physically limited planet? Sure, and obviously. But given that the measure of the economy is value added the limit to economic growth is the knowledge of how to add value.

GDP is value added. The limit to GDP is the knowledge of how to add value.

At which point we’d remind you of this observation which we wish we had come up with but as we didn’t we’ll just steal it:

We literally just turned sand into intelligence

QED