Collapse? The "dismal" science doesn't think so: economists' views of the future.

• Author: Whaples, Robert
• Position: FUTUROLOGY - Collapse: How Societies Choose to Fail or Succeed - Book review

In the best-seller Collapse: How Societies Choose to Fail or Succeed (2005), Jared Diamond confronts the reader with stories of the collapse and even extinction of past societies. He claims ultimately to be a "cautious optimist" (521) about the future, but he still sees a strong likelihood that we are headed globally into decline.

Are we likely to live out such a scenario? After briefly reviewing the history of American economists' thinking about the future, I confront the pessimism of the prophets of decline with the findings of a survey of economists about what the future will bring and the most important economic challenges looming before us. As this essay's title suggests, economists do not credit neo-Malthusian predictions of decline. The economists are instead very optimistic about the future. Their worries gravitate more toward problems with governmental programs rather than toward problems with the environment and depletion of resources.

Diamond identifies eight environmental threats that undermined societies in the past, bringing calamity to our ancestors, and he warns that modern societies have added four additional problems, including global climate change and energy shortages. (1) As he puts it, "[m]ost of the twelve threats, it is claimed, will become globally critical within the next few decades: either we solve the problems by then, or the problems will undermine ... First World societies. Much more likely than a doomsday scenario involving human extinction or an apocalyptic collapse of industrial civilization would be 'just' a future of significantly lower living standards" (2005, 7).

If the history of the economics profession were a sufficient guide, Diamond would have been swiftly inducted into Omicron Delta Epsilon (the economics honors society) and solemnly welcomed to the professional fraternity. After all, economists have been historically a fairly pessimistic group. The moniker "the dismal science" surely stuck for such a long time because so many economists followed the lead of Thomas Malthus ([1798] 1976) in predicting that population growth in the face of resource constraints would inevitably squelch hopes for a broad-based rise in standards of living. (2) Most of the world's economic history up to the time of Maithus was fairly gloomy. Discoveries and institutional adaptations brought slow population growth, but the long-term growth rate of income per capita was essentially zero (Easterlin 1996).

Moreover, the economists' pessimism continued even after modern economic growth began, bringing unmistakable evidence of rising incomes to people in Europe and North America by the middle of the 1800s, at latest. As Nobel Laureate Simon Kuznets pointed out to his students, throughout the 1800s most American economists continued this unwarranted gloom: "The economists in 1850 wrote that the progress of the last decade had been so great that it could not possibly continue. And economists at the end of the nineteenth century wrote that the progress of the last half century has been so great that it could not possibly continue during the twentieth century" (quoted in Fogel 2005, 9).

The nay saying continued well into the twentieth century. Robert Fogel (2005) shows that forecasts of economic growth from World War II through the 1950s were too pessimistic as well. Amid a flurry of academic worries about "secular stagnation," however, the U.S. economy charged ahead, with gross domestic product (GDP) eventually expanding more than fivefold between 1950 and the end of the century.

Today, however, there are strong indications that the gloom among economists has evaporated. The evidence of more than two centuries of burgeoning economic growth is difficult to disregard or deny, and economists seem to have revised their expectations and models in the...