Growth in Perspective

Arguably the first industry in the modern sense was textiles and dates to the eighteenth century. Sophisticated machinery appeared for spinning and for weaving; the manufacturing activity moved from homes and small shops into factories; then steam power came to be applied to move that machinery. Ever since waves of innovation have created new industries and transformed the old ones: iron and other metals, steam, canals, rails, electricity, oil, telegraph, lighting, telephone, radio, automobiles, petrochemicals, air travel, atomic power, television, plastics, computers, Internet, and now cybernetic miniaturization.

All depending on where we date things from—say the invention of the flying shuttle (1733) or of the spinning jenny (1765)—we’ve had either a 278- or a 246-year cycle of development.

This development has significantly depended on access to fossil fuels augmented by atomic power. They’ve represented “found wealth” in the sense that we did not have to produce, by human or animal labor, the energy in the coal, oil, gas, and uranium we’ve simply harvested. But while we admire human ingenuity and give it all the credit, the industrial age is unthinkable without found wealth—and has made the exploitation of our innovation possible in the first place. But this process has also distorted our sense of what an economy is. Our economies have developed a dynamic of their own. The growth that we’ve experienced has come to demand new waves of innovation, the creation of new markets. In part this has been necessary because our innovation, combined with our use of found wealth, has also reduced the need for people. We’ve replaced human labor with machines running on fuels. Therefore, to keep pace with the artificial growth to which we have become accustomed, we desperately need the new simply to maintain it. With an absolutely diminishing demand for labor, thanks to automation—but with a growing population—we need the waves to continue unabated in order to accommodate increasing numbers.

We need growth because, to maintain our style of life, we must all continue to consume—and all of the products and services that we’ve already created. Mature markets—thus those that have come to depend on the population’s growth rate, which is lower than that of our economies—don’t contribute to growth. But we must maintain them. Thus the base keeps growing while also shedding jobs. But our need for greater-than-population growth is still there.

Now it is interesting to contemplate that we’re now in an age of miniaturization—and that that miniaturization process is itself beginning to feed on older, mature industries—as e-books are feeding on books. Each recent wave of industrial development has had a similar character. Each has improved functionalities while requiring fewer and fewer people to produce—but the same and growing number of people to consume.

In a word, we’re beginning to run out of legitimate markets. Not surprisingly, our services sector has become the largest sector. It is still absorbing people, but artificial intelligence, perhaps the next wave, will get rid of those people too—but not as the greatly desired customers.

At the risk of beating a dead horse—but in this day and age it might be necessary—let me put all of the above into a simple slogan:

The economy needs customers but has no use for employees.

So what is next? Cybernetic devices implanted in the body to replace organs that will presumably work much better than those that nature has produced? I do not, folks, have my tongue in my cheek. But I have decent eyesight. The solution is coming at us. It is the fossil sunset.

But when I hear the wise men agonizing over the economy, and wanting it to kick into gear again, to resume that growth we desperately need, I wonder if they fail to see what seems patently clear to me. This can’t go on forever. We must return to a situation of equilibrium again—where, as in the hoary past, growth was dominated by population growth—and that growth was limited by the fertility of nature.