Limits to Growth Report
In 1972 Researchers at MIT concluded that society was on track to collapse by the year 2040.
A Follow up study conducted by analysts at KPMG found that we are ahead of schedule.
Advanced human civilisations have existed for at most 10,000 years.
In that time many great empires rose from nothing and returned to nothing, leaving behind little
more than artifacts and crumbling architecture. While it’s hard for historians to definitively
say what caused any of these particular collapses, the determining factors
tend to fall into four broad categories. Political Issues, social and cultural issues,
environmental issues and of course the one that we are specifically interested in, economic issues.
Any civilisation that has been reduced to little more than an entry in a textbook fell
through some combination of these four factors. Some were almost instantaneous, the great city
of Pompeii succumbing to the eruption of mount vesuvius, some took a few weeks,
the Aztec empire collapsed after 93 days of resistance against the spanish, and some took
centuries. three hundred years separate the height of the Roman empire with its eventual collapse.
Our modern civilization is the greatest ever known, hundreds of thousands of times
wealthier and more advanced than even the most massive empires of history could have imagined.
If you are watching this video, you have access to the internet,
if you have access to the internet you have access to a source of knowledge that scholars and kings
could not have dreamt of just a hundred years ago. The same is true for other modern luxuries that
we take for granted. Climate control, worldwide travel, cheap and effective clothing, medicine,
instantaneous communication, plentiful and safe food, water on tap, and even little luxuries
like being able to listen to your favorite song pretty much whenever you feel like it.
A question I get asked alot is who was the richest person in history? The answer is Elon Musk,
or it was about a week ago, when he was worth more than 270 billion dollars, that might have changed
depending on when you actually watch this video. Oh but what about Rockefeller, the Rothschilds,
the Romanovs or even this Mansa Musa fella that people like to bring up? What about them?
Sure they were rich for their time, but their time was one of almost universal poverty.
Despite their relative wealth, they couldn’t dream of all of the amenities that you think nothing of.
Let me tell you if I had the choice between my moderns rented two bedroom apartment
and a sprawling 15th century french palace with no air conditioning, no plumbing and
no food that wouldn’t give me cholera, I would take the apartment ten out of ten times, and
you are a fool if you wouldn’t do the same. The best part is I haven’t even mentioned war
yet. Despite what most people might think based on their diet of cable news and the front page
of reddit, we are living through one of the most peaceful periods in human history, ever!
Overwhelmingly this has all been thanks to a combination of technology,
education, and global cooperation. Even nations that have resentful
hostilities bubbling away beneath the surface are more dependant on one another today,
than even the closest of allies were back in the time of napoleon.
Why get hostile when we can get rich. It sounds vapid,
but it is a good thing, albeit, a fickle one. Comparing our modern global economy to even
the greatest empires throughout history is like comparing a jet engine to a donkey, that’s not
hyperbole, that’s how far ahead we are today. But this is actually the problem. Sure,
a jet engine is faster and more powerful than a donkey, but it’s less resilient. One tiny flaw in
its incredibly complex network of interdependent components could render the whole thing useless.
What’s worse is that it moves so fast and flies so high that even
the slightest hiccup becomes catastrophic. Most of us alive today, and especially those
of us sitting at home watching internet videos on our smartphones would not know how to survive
very long if we didn’t have food within easy reach, sometimes literally delivered to our door.
But I am getting ahead of myself, and probably starting to sound like some kind of deranged
doomsday prepper screaming the end is nigh, so let’s break down exactly how this MIT
study predicted that society would collapse. What metrics was MIT looking at to determine
if the world was headed down a good or bad path? What did these metrics tell us about the way our
society would supposedly break down? And finally
Is the fact that this report is ahead of schedule actually something to be worried
about or is this all just a case of too much weight being given to statistical correlations?
INTRO AD Ok so the MIT study specifically titled
The Limits to Growth, set out to primarily explore if our current usage of the world's resources was
sustainable. Spoiler alert, it wasn’t. The study was actually one of the first
economic studies ever to use computers sporting dynamic systematic models.
I’m not a computer scientist so there are plenty of people that could explain what
system dynamics are far better than me but in brief it is basically a piece of software
that attempts to replicate the workings of complex real life systems by replicating them in software.
It sounds very familiar to us today but remember this was taking place back in the 1960’s and
70’s where computers looked like this and had about as much processing power as your kettle.
Despite these limitations the MIT team eventually created World 3, which was a computer model for
the global economy. This piece of software modeled everything from variable population growth to
industrial capacity, it also crucially modelled how everything would interact with one another.
For example a large population is naturally going to require more resources,
more food, more water, more homes, more of everything, but a larger population
will also naturally lead to more innovation. We have a much better chance of finding a Tesla,
Davinci, Haber, Bosch or whittle with a population of 8 billion
than we do with a population of 2 billion, which is where the world was just a hundred years ago.
It’s a common joke amongst macro-economists that every change you make to the economy
changes at least 3 other things. Sometimes we pave over this issue by assuming ceteris paribus
or all other things being equal in our models. This economic assumption is great for looking at
cause effect in isolation, for example, a soda tax increases the price of and
therefore reduces the demand for sugary beverages all other things being equal.
But this is the real world, nothing ever remains the same just because it’s easier to model that
way. Predicting the future is extremely hard at the best of times and almost impossible
if you don’t account for almost every variable. And that’s what World3 attempted to do.
The World3 program had systems for modeling everything from birth rates to farming technology.
The idea was that all of these variables were very important to maintaining the modern lifestyle that
we enjoy today, but because they interact with one another they were prone to feedback loops.
The idea of a feedback loop actually comes from music performances. If you have ever held a
microphone up to a loudspeaker you will know the horrible high pitched sound that comes out of it.
That’s because the microphone is hearing a loud noise, and is then telling the speaker
to amplify and play that loud noise even louder, only for that loud noise to be
picked up by the microphone all over again. The same kind of effect can happen in economies.
For example declining birth rates can lead to an aging population, an aging population will put
more financial pressure on younger workers to care for the elderly either directly by
caring for them at home, or indirectly through taxes to fund pension schemes and aged care.
This financial pressure will mean younger workers have less time and less agreeable
conditions to make a family of their own and you are left with further declining birth rates.
This is actually a very important example as it pertains to the MIT study.
You see, while the study accounted for hundreds of variables in its computer generated model of
the global economy, it was only actually interested in tracking five of them.
These were, population, industrial output, food production, available resources, and pollution.
It’s worth remembering that this report was published in 1972,
before climate change was more than a blip on the scientific community's
radar and certainly far from being the widely recognised issue it is today.
Chances are if the paper was replicated today it would also include average
global temperatures, but it wasn’t so it didn’t. Now despite that you should be able to see that
all of these individual factors are very important to how we live and work around the world today,
but perhaps what is more important, is again how they end up interacting with one another.
Let’s go back to the economists safe space for a second and assume all other things are equal
outside of food and population. Now these variables are obviously dependent on one another,
if one moves the other will too, all other things being equal. But what
sounds like a more concerning order of events. A decline in population leading to a decline in
food production, or a decline in food production leading to a decline in population. Yeah obviously
two very different scenarios right there. Ok so now that we understand how to
interpret the data generated by this report, what did it actually say?
Well like good economists, the researchers kinda hedged their bets. Predicting the future exactly
is a fool's errand, they could have published their paper one day before a design for a
commercially viable fusion reactor developed, and the researchers realised this, so what they did
instead is they tweaked the initial conditions and ran the simulation over and over again.
In some simulations they would assume that innovation remains at a constant
pace and worker productivity continues to improve at the rate it currently has been.
In other simulations they would assume that technological innovation continues
to compound on itself, meaning things like harvesting resources from space,
or growing food in laboratories becomes possible. And then in other simulations they would assume
that technological progress would slowly plateau. A quick side note is that a technological plateau
might not sound very realistic to us today, but that’s only because most of us have grown
up in a time of constant innovation. Moore’s law is a great example of this,
for the past 5 decades computing power has roughly doubled every two years, but we are
starting to reach the physical limits of how many transistors we can pack onto a microchip.
Promising technologies like quantum computing may solve this issue, and let us continue to
gain access to ever more computing power, but then again it may not, and this is just one example.
A lot of technological innovation these days is just major companies finding
new and innovative ways for you to waste time while consuming advertiser content,
and yes I realise the irony that I am part of the problem here, but here you go have an ad.
What a good little consumer you are. Anyway, technological innovation was
just one variable that the researchers of this report tweaked. They also ran models
that assumed lower birth rates, higher birth rates, higher rates of recycling,
more resource discoveries, greater levels of global trade, reduced levels of global trade.
They basically tried to account for every outcome that would be possible with a realistic
combination of factors in this economic model. They then averaged out the trajectories of five
crucial factors to determine where humanity would end up.
As you would suspect from a range of models with variables changed up every time,
they got a range of different results, but they all sort of had one thing in common. They all
showed a significant decline around the year 2040. Of course it’s impossible to address all of
the thousands of potential outcomes that were modelled, but the researchers really focused on
a few that fit well within the standard deviation of these potential outcomes.
The first and potentially most optimistic outcome was called the comprehensive technology scenario,
this was a model where we continued to live like we currently do today, but technology progressed
fast enough to ensure our productive capacity was able to keep up with all of the new people
that needed to be fed and housed and clothed. The model still predicts a significant drop in
food production brought about primarily due to the pollution of waterways and the misuse of
arable land, but that is addressed through technological innovation.
The population does start to plateau around the year 2040, but that’s due to the natural
tendency of wealthier more urban populations to have less children, rather than people
starving to death due to lack of food. In this model industrial output does peak
and then decline, which would normally indicate lower living standards, but
this is almost entirely counteracted by the more efficient usage of the goods that we do have.
If tomorrow technology got to such a point where we had self driving cars then the need
for individual car ownership would be greatly reduced, this would likely lead to a fall in
industrial output, but it’s not that we would be poorer because of this, it’s just that suddenly
a car that used to service only one household can now be efficiently shared amongst dozens.
This is actually what the World Economic Forum was talking about when they famously said that
“you will own nothing and be happy about it”, they either just really don’t understand how
to communicate with the general public, or they secretly enjoy making people angry.
The more efficient use of resources would also reduce pollution and ensure that raw
materials are never reduced to nothing. This wouldn’t be a totally terrible outcome,
and yeah we might not continue to see the exponential growth in living standards that
we have seen over the past 100 years or so, but it also wouldn’t be a societal collapse either.
If you don’t feel comfortable relying on some new wave of technical innovation to save us
then the researchers who published this report have an alternative.
The so called stabilized world scenario is what would happen if the world just maintained its
current rate of innovation while also investing heavily into things like renewable energy sources,
and materials recycling processes. Again this model was made before climate change
was considered a factor, so when we are talking about recycling and renewables, we are looking at
it purely through the lens of resource depletion, and local pollution while totally disregarding
other externalities like carbon emissions. This stabilized world scenario looks very similar
in many ways to the comprehensive technology outcome that we explored earlier, the main
difference is an almost voluntary reduction in industrial output before it creates problems
like food shortages and excessive pollution. Of all the models based on all of the different
combinations of variables this was what the researchers identified as the most optimistic.
Again most optimistic barring some crazy unforeseen technological development that
radically reshapes how we run our economies. This could happen, and hopefully it will, but it’s hard
to make concrete plans for technologies that we can’t even conceive of yet, outside of maybe a
spiritual sacrifice to daddy Elon, can’t hurt. Anyway, the bad news is that while the original
study in 1972 thought this could be something we could realistically work towards, the timeline of
all of the captured variables in this outcome has the least closest fit to our current reality,
as explored by the 2021 follow up study. Gaya Herringtons study instead suggests that
the path that we are actually on best represents what the 1972 researches dubbed the Business As
Usual 2 scenario… and that’s not good… This is a model that highlights a
very clear collapse. Pollution continues to increase exponentially, and things
like recycling of common materials never become economically viable, or subsidised widely enough.
Industrial output does reach a higher level than in all of the other possible scenarios, but that
is about where the good news ends. A drop in food production causes massively declining birth rates
in rich countries and famines in poor countries. The lack of young workers reduces industrial
output which further hinders economic prosperity. Easily accessible resources also dwindle away
which again further reduces industrial output and economic prosperity.
By all accounts this is what you would consider a complete collapse of society. I said at the
beginning of this video that I would rather be a middle class worker in today's world
than a king from anywhere beyond a hundred and fifty years ago.
If the business as usual model was to play out, then I would rather be a middle class
worker today, then a king just 20 years in the future, and that is a genuinely scary thought.
So if you are feeling a bit anxious like I was when reading this study,
perhaps it’s important to address the criticisms
Of this model. A study that basically
amounts to someone screaming the world is going to end is naturally going to be met
with some cynics, and that was certainly the case for the Limits to Growth report.
It’s worth noting that a lot of these criticisms have been proven wrong simply by the fact that the
data is tracking the predictions in the business as usual model with pretty frightening accuracy.
Other critics point out that this study has a very pessimistic way of modeling human innovation.
These critics conceded that, yeah sure, right now our rate of innovation might not be sufficient
to avoid this kind of a collapse, but necessity is the mother of invention.
As soon as humanities back is against the proverbial wall, a lot more attention will
be placed on researching and investing into technologies that could push us from the doomsday
scenario of the business as usual model into the more palatable comprehensive technology scenario.
We can already start to see this taking place with a huge surge in renewables technologies
becoming available in the public market. Certainly there are still some areas where we are lacking,
waste management being a huge one, but we are much better than we were even a decade ago.
If you want me to tell you what I think will happen, then I am sorry but I would just encourage
you to read these two reports yourself. I generally want to be optimistic about
the future, but I also realise that my opinion does not carry nearly as much weight as research
published by a collection of 17 of the world's top economists and scientists, research that has been
vindicated by another very talented individual. Best case scenario this was all massively
overblown and we could use this as an excuse to learn about the limits of creating systematic
models to predict the future, worst case scenario, well I guess it’s time to start
learning how to forage for food in the wilderness, which you can start right now, with Skillshare.