An alternative to panicking when GDP stops growing is to view it as a sign of maturity. Human activity cannot expand forever on our finite planet. An economy growing at 3% a year doubles its size every 24 years. Centuries of such growth have brought us to a mature size. As with individual maturity, there comes a time for societies to stop growing, recognize their power, and take responsibility for their impacts.
As a mature species, we have two responsibilities to Earth and, ultimately, to ourselves. The first is to live within the availability of natural resources. Global production of oil has stalled for three years at about 85 million barrels a day, yet demand will continue to increase. While fossil fuels are a well-known resource issue, there is also cause for concern with fresh water, forests, fish, soil fertility, and other resources.
Our second responsibility is to keep our waste within tolerable bounds. What is the logic of policies aimed at doubling our size when current activities, at the present population level, have already brought us to the edge of climate chaos? Climate change is a direct result of human activity having grown to where our C02 emissions are overwhelming the ability of oceans and forests to absorb them, leaving them to accumulate in the atmosphere. Respiratory problems, many cancers, and other illnesses, which result from the accumulation of manufactured toxins, are also wake-up calls.
The sub-prime mortgage crisis rivals the fuel and climate issues in terms of public concern. It, too, can be linked to confrontation with planetary limits.
Over the centuries, the expansion of our growth-dependent, debt-based monetary system has inflated it to gargantuan proportions. To keep the economy healthy new money must constantly be loaned into existence to accommodate the necessary 3% growth. In 2008, that meant 400 billion dollars in new business, over and above the 15 trillion dollars worth of transactions already taking place.
Before humans filled the Earth, there were areas of untapped natural resources, from which we could produce things of tangible value that people were willing and able to pay for--tools, food and the like--to back up an exponentially expanding money supply. By the 1980s, it was becoming increasingly difficult to produce enough real wealth to do the job. Following "junk bonds" and the DotCom bubble, bidding up real estate became a primary means for expanding the money supply. When that bubble...