Friday, January 25, 2013

The Great Disruption resting upon faulty logic

By Jon Overton

“The earth is full,” Paul Gilding matter-of-factly began The Great Disruption. For this reader, that immediately threw his credibility into question with the likes of Thomas Malthus who made a similar proposition at the end of the 18th century and since Malthus’ time, our population and economy has grown several times over, but that hasn’t stopped people like Gilding from declaring the end of economic growth is nigh.

Using studies and projections from the United Nations, the International Monetary Fund and Goldman Sachs among others, Gilding calculated that the global economy, which is running at 140 percent of the Earth’s capacity, would reach 300 to 400 percent by 2050, accounting for growth in per capita GDP, population and efficiency.

“It’s not going to happen because achieving it would defy the laws of physics, biology, and chemistry or of mathematics.”

In the Great Disruption, the economy stops growing, governments panic and force it to grow again, but growth is neither sustained nor significant. We then enter a period of “geopolitical, economic, and climate chaos,” which Gilding expects to kill a few billion people.

The author discusses how he felt when he began believing this would occur to help the reader grapple with his startling conclusion, building a strong emotional connection with his audience that he maintains throughout the book with anecdotes from his life.

The response to the Great Disruption includes mass mobilization of resources and rationing directed by governments and attitudinal shifts among ordinary people to tackle the oncoming crisis and curb disastrous consequences.

Gilding bases his prediction that economic growth will stop within a decade on climate change studies, which are conditional by nature and then he tries to predict the economic consequences while accounting for future innovations. However, the pace and direction of change in human attitudes and technology that will affect these forecasts is extremely unpredictable, placing Gilding’s idea in the realm of prophecy.

Although his main assertion falls flat, Gilding makes a respectable argument that economic growth is failing our society and he suggests a new kind of economy will replace it thanks to the Great Disruption. People would live simply and work less, providing more time to strengthen social connections, express creativity and find what truly makes them happy instead of wasting resources on toys that won’t improve their lives. (He mentions a study documenting that someone with a happy friend is seven times more likely to also be happy, compared with someone earning $10,000 more.)

Far from apocalyptic, Gilding articulates a complex vision in simple language that virtually any lay reader could understand. He believes that although we will struggle and suffer to overcome the end of growth and climate crisis, society will be better off in the end.

So is Gilding another Malthus? Not really. His conclusion about the end of economic growth may depend heavily on unpredictable variables, but his critiques of it, suggestions for everyday people, government and businesses to combat climate change and alternative to a society that relies upon consumption as an end in and of itself seem worth considering.

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