The fallacy of endless economic growth: What economists around the world get wrong about the future.


The idea that economic growth can continue forever on a finite planet is the unifying faith of industrial civilization. That it is nonsensical in the extreme, a deluded fantasy, doesn’t appear to bother us. We hear the holy truth in the decrees of elected officials, in the laments of economists about flagging GDP, in the authoritative pages of opinion, in the whirligig of advertising, at the World Bank and on Wall Street, in the prospectuses of globe-spanning corporations and in the halls of the smallest small-town chambers of commerce. Growth is sacrosanct. Growth will bring jobs and income, which allow us entry into the state of grace known as affluence, which permits us to consume more, providing more jobs for more people producing more goods and services so that the all-mighty economy can continue to grow. “Growth is our idol, our golden calf,” Herman Daly, an economist known for his anti-growth heresies, told me recently.

In the United States, the religion is expressed most avidly in the cult of the American Dream. The gatekeepers of the faith happen to not only be American: The Dream is now, and has long been, a pandemic disorder. Growth is a moral imperative in the developing world, we are told, because it will free the global poor from deprivation and disease. It will enrich and educate the women of the world, reducing birth rates. It will provide us the means to pay for environmental remediation—to clean up what so-called economic progress has despoiled. It will lift all boats, making us all rich, healthy, happy. East and West, Asia and Europe, communist and capitalist, big business and big labor, Nazi and neoliberal, the governments of just about every modern nation on Earth: All have espoused the mad growthist creed.

In 1970, a team of researchers at the Massachusetts Institute of Technology began working on what would become the most important document of the 20th century to question this orthodoxy. The scientists spent two years holed up in the company of a gigantic mainframe computer, plugging data into a system dynamics model called World3, in the first large-scale effort to grasp the implications of growthism for mankind. They emerged with a book called The Limits to Growth, issued as a slim paperback by a little-known publisher in March of 1972. It exploded onto the scene, becoming the best-selling environmental title in history. In the Netherlands half a million copies sold within the year. More than three million copies have been sold to date in at least 30 languages.

Its message was commonsensical: If humans propagate, spread, build, consume, and pollute beyond the limits of our tiny spinning orb, we will have problems. This was not what Americans indoctrinated in growthism had been accustomed to hearing—and never had they heard it from Ph.D.’s marshaling data at one of the world’s citadels of learning.


The idea for the Limits study originated with a charismatic Italian industrialist named Aurelio Peccei, who sidelined as a philosopher and author on world affairs. Peccei had fought for the resistance in Italy—he had been captured and tortured by the fascists—and had gone on to a spectacular career working in industry, notably as an executive at Fiat. By 1968, he had begun to question the legacy that industrial civilization was leaving its children. He published a book on the subject, The Chasm Ahead, in which he worried about the “suicidal ignorance of the human condition” on a planet of dwindling resources, rampant population growth and material consumption, mounting pollution and waste. Seeking to understand the global system, its trajectory, and its prospects for survival, Peccei co-founded the Club of Rome, a think tank whose purpose was to lay bare the “predicament of mankind.” The club would sponsor the study, and Peccei reached out to MIT, where a 29-year-old professor of system dynamics named Dennis Meadows, who had helped design the World3 computer program, offered to direct it.

Meadows and his team used World3 to examine growth trends worldwide that had prevailed from 1900 to 1970, extrapolating from the data to model 12 future scenarios of global development and its consequences, projected out to the year 2100. They focused on the complex feedback loops—the system dynamics—that play out when we tax the limits of the planet. The team separated those limits into two categories: sources and sinks. Sources are those things we need from nature for industrial civilization to survive: minerals, metals, rare earth elements, fossil fuels, fresh water, arable soil. Sinks refer to the capacity of the planet to absorb pollution of its soil, air, and water, and, most ominously, the capacity of its atmosphere to absorb carbon.

A typical if simplified system dynamic in the study went like this: “Population cannot grow without food, food production is increased by growth of capital, more capital requires more resources, discarded resources become pollution, pollution interferes with the growth of population and food.” The models showed that any system based on exponential economic and population growth crashed eventually. One of the gloomier models was called the standard run, in which the “present growth trends in world population, industrialization, pollution, food production, and resource depletion continue unchanged.” In that scenario, which came to be known as business-as-usual, “the limits to growth on this planet will be reached sometime within the next one hundred years,” the team stated. Things end unhappily: “The most probable result … will be a rather sudden and uncontrollable decline in both population and industrial capacity.”

Sudden and uncontrollable: in other words, a collapse of civilization, a collapse that would mean the loss of human life, culture, and capital on a scale unimaginable. The World3 business-as-usual model did not give an exact date for the collapse, but suggested it would likely begin around the middle of the 21st century.

Limits was immediately the subject of vicious attack by the defenders of growthism. The first salvo arrived in the New York Times in April of 1972, a month after publication, from the pens of three economics professors at Columbia University and Harvard University, two of whom happened to be publishing a book that year about “affluence and its enemies.” Limits was “an empty and misleading work,” they wrote. It was “less than pseudoscience and little more than polemical fiction.” It had the “scent of technical chicanery.” The insinuation was that Meadows’ team had fed bad data into their supercomputer, the result being, as the Times reviewers stated, “garbage in, garbage out.”

The rebukes piled up over the years: in The EconomistForbesForeign Affairs, in the halls of academia, at Yale, Princeton, Harvard, and even at MIT. With an evangelical fervor, article after article assured the public that the book so badly miscalculated our future it should be dismissed outright. The most commonly cited error ascribed to Limits centered on a table of data that suggested the world would run out of gold by 1981, petroleum by 1992, copper, lead, and natural gas by 1993. Other vital minerals—silver, tin, zinc, mercury—would be gone by 2000. But the book’s authors made no such predictions. The data was used only to illustrate how exponential growth quickly depletes non-renewable natural resources. Nevertheless, Limits‘ detractors to this day continue to cite this allegedly erroneous data set to support the claim that the modeling was all wrong.

Worse than any specific prediction, however, was that the Limits team seemed to be questioning the viability of the American Dream. “Limitspreaches that we must learn to make do with what we already have,” grumbled the economists writing in the Times. The study was an affront to the cornucopian credo of mainstream economics, which says that pricing and innovation will always save us from the depletion of sources and the saturation of sinks. If a resource becomes scarce in the marketplace, economists tell us, its price rises, which acts as the signal for society to innovate alternatives because there’s money to be made doing so. If a sink is saturated, technology—priced right—will ameliorate the effect, scrub the smokestacks, disperse the oil spills, and so on.


This unquestioning faith in the magical powers of human ingenuity has led economists to make some preposterous assertions. Oxford University professor Wilfred Beckerman, who dubbed Limits “a brazen, impudent piece of nonsense,” claimed there is “no reason to suppose that economic growth cannot continue for another 2,500 years.” Carl Kaysen, a doyen of economics at Harvard, said that, by some calculations, the Earth’s “available matter and energy” could support a population of around 3.5 trillion people, all living at American standards of affluence. Julian Simon, who publicly expressed his loathing for Limits, assured us back in 1992 that “We now have in our hands—in our libraries, really—the technology to feed, clothe, and supply energy to an ever-growing population for the next 7 billion years.” Elsewhere, he made the bizarre declaration that, “in the end, copper and oil come out of our minds.”

The Limits authors were facing off against a fundamentalist ideology here, one that happened to have the winds of history at its back. In the two centuries of Western techno-industrial civilization that preceded the book, the ceilings to population and economic growth had been shattered again and again by free-market-driven innovation. The doomsayers had consistently been proved wrong. The 18-century political economist Thomas Malthus famously predicted that exponential growth of population would eventually outstrip the capacity of land to produce food, and the result would be mass starvation. But the world innovated its way around hunger with the Green Revolution and genetically modified organisms and the deep-drilling of previously untappable aquifers. So it was that Limitswas relegated to the blinkered realm of Malthusian doomsdayism.

By the 1980s, President Ronald Reagan was citing the book in his speeches only to ridicule it. “Perhaps you remember a report published a few years back called The Limits to Growth,” he said at the University of South Carolina in 1983. There are “no such things as limits to growth,” he declared to the students in the audience. Even the title itself, Reagan said, was offensive, because “in this vast and wonderful world that God has given us, it’s not what’s inside the Earth that counts, but what’s inside your minds and hearts, because that’s the stuff that dreams are made of, and America’s future is in your dreams.”

Algas, 2013.

 Algas, 2013. (Photo: Alejandro Durán)

The effect of this critical backlash was that Limits mostly disappeared from mainstream discussion. It was commonly understood, Meadows said, that it would be very inconvenient to the high priests of the growthist orthodoxy if the public began to take the study seriously. Meadows, who is retired from academia but still travels the world to lecture, met readers in the 1970s and ’80s who said the book had changed their lives. “In the 1990s and 2000s, they said, ‘Your book changed my parents’ lives.’ Now,” he said, “I give a speech and people ask, ‘Did you write a book?'”

Over the last decade, Limits has attracted renewed interest from ecologists and economists, with many having developed their own methodologies to gauge its accuracy. In 2014, Graham Turner, of the Melbourne Sustainable Society Institute in Australia, compared the book’s standard run projections with historical data since 1970. He looked at, among other statistics, birth and death rates as an approximation of population trends, industrial output per capita as a measure of development, and carbon in the atmosphere as a measure of pollution. We are hewing pretty closely to business-as-usual, he concluded, noting that “the alignment of data trends with the LTG dynamics indicates that the early stages of collapse could occur within a decade, or might even be underway.”

In March of 2016, the All-Party Parliamentary Group on Limits to Growth in the United Kingdom issued a report declaring that the 1972 projections were worrisomely spot-on. The author of the report, Tim Jackson, a professor of sustainable development at the University of Surrey, told me, “Numerous analyses have shown that the historical data track very closely the lines of the Limits to Growth standard run.” Ecologists Charles Hall and John W. Day conducted their own comparison of Limits‘ projections with real-world data in 2009, and found the projections to be “quite on target. We are not aware of any model made by economists that is as accurate over such a long time span.” Matthew Simmons, the noted investment banker whose company managed tens of billions of dollars in energy-industry mergers and acquisitions, offered a similar observation in 2000. “The most amazing aspect of the book,” he wrote, “is how accurate many of the basic trend extrapolation[s] … still are 30 years later.”