You've heard them,
politicians, economists, executives - all saying the same thing:
The economy is recovering!
Recovering to what?
To its normal state of constant growth.
In the next five minutes we're going to see why they're wrong,
why economic growth is effectively over,
and what that means for the economy, for you
and for your family.
It started centuries ago. There had been economic expansion before but
it was slow and cyclical.
Empires rose and fell.
But with the industrial revolution
rapid growth became normal.
Economists tell us this was because of innovation,
division of labor and increased trade,
but it was mostly a result of cheap energy.
It takes energy to do things and with cheap coal and oil people could
suddenly do more than ever. First coal then oil sped up trade by fueling
our prized inventions:
Railroads,
automobiles and airplanes.
Economists
assumed that growth could go on forever.
It was an absurd notion.
Nobody stopped to think that all this industrial growth was happening on a
small planet with only so much oil and soil,
only so many forests and fish.
We were growing on borrowed time
and we all got hooked on growth.
Rising GDP numbers became our main measure of success.
More, bigger and faster meant better.
The first warning signs came in the 1970s.
A team of scientists programmed a computer with data about population
growth, rising consumption
and resource depletion.
Their conclusion:
There are limits to growth.
Mainstream economists
attacked those findings using nasty rhetorical tricks, but forty years later
the same conclusion holds.
In fact the industrial economies of the world's wealthiest nations
started stagnating years ago as resources began to run out. Governments,
businesses, and households went into hock up to their eyeballs
gorging on easy credit. The financial system created ever more
complex securities and derivatives schemes to soak up all of that debt
and make perpetually rising imaginary profits on imaginary assets.
But money and debt depend on natural resources piling up debt year after year
doubling it then doubling it again meant piling up claims on resources that were
shrinking as we depleted them.
It was a pyramid scheme,
the mother of all bubbles
and in 2008
it burst.
Governments and central banks tried to reinflate the bubble with bailouts and
stimulus packages funded by public debt.
But there are practical limits to debt
and we're hitting them.
There are practical limits to energy sources
and we're hitting them.
There are real limits to the planet's ability to absorb our wastes
and industrial accidents
and we've hit those too.
We're being told that the economy is recovering
but take away new debt the government has taken on since 2008 to
stimulate the economy
and there's been no economic growth.
There is no recovery
it's all being done with more debt.
We've already mortgaged our grandchildren's future
but to keep the economy from relapsing we'll need to borrow even more.
The game is up.
We've reach the end of economic growth as we've known it.
They're lying to you.
But they can't help it
We're all addicted to growth.
We all want better jobs and higher returns on investments
but we live on a finite planet
The end of growth is not the fault of any one politician or political party
but some people benefited from growth more than others.
We can live without economic growth but we will have to start doing a few things
differently.
We have to measure and aim for improvements in life that don't require
increasing our consumption of fossil fuels and other depleting resources
or piling on more debt.
Freedom. Being with the people we love.
Good health and the time to enjoy it.
A secure happy community.
We have to work together to build local economies where we can live and prosper.
But, and this is a big but...
Without cheap fossil fuels and without borrowing from the future.
The longer we put this off
the harder it will be.
Economic growth. It's over.
LET'S MOVE ON.