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Economic Growth is Killing Us: Part 2

Updated on August 9, 2015

Most world leaders and certainly United States politicians argue for more economic growth. They are under the illusion that growth will be never ending into the future, that it is imperative and possible. They do not understand that, “Sooner or later we will hit the biosphere’s buffers…Either a natural resource becomes over-exploited to the point of exhaustion, or because more waste is dumped into an ecosystem than can be safely absorbed, leading to dysfunction or collapse.”

The more we investigate our planet’s biosphere, the more we see that resource exhaustion and habitat destruction are happening at an every increasing rate. And even though neoliberal growth has failed to raise incomes for all but the top quintile of earners for decades, “ mainstream politician argues against the need for economic growth.” (ibid)

When Growth is not Growth
When growth is based on disaster, loss, depreciation, and destruction, it is a net loss, not growth, “So…if the money economy grows at the expense of, and by cannibalizing the services of the core economy…it is a kind of false growth.” The same is true if a nation sells off its natural assets such as resources and land. In the short term it goes on the books as growth, in the long term, it is “ungrowth.”

Growth as it is practiced increases global inequality by funneling the earth’s resources to wealthy people in wealthy nations. The exhaustion of resources will stunt future growth or make it impossible. Only the richest people (for a time) will be able to sustain their life-style. Growth for the few does not mean growth is sustainable. Yet most U.S. politicians ignore wealth inequality.

There are physical barriers to growth. Energy use is not efficient and it leads to an increase in climate change, “The Second Law of Thermodynamics applies a direction to the conservation of energy described by the First Law. It says that not all heat input into a system can be converted into useful work. Put simply, transferring heat into work with 100 per cent efficiency is impossible.” (ibid) This heat transfer leads to decay of the natural systems (entropy) and no increase in renewable energy can stop that process. Only by changing the way we use resources, de-growth and depopulation, can we stop the process of decay. Modern market principles cannot solve the world’s climate change crisis. That would be “like using a gun to heal a gun shot wound.” (ibid)

De-growth will happen with our without the cooperation of humanity, “Peak oil, the time in which the maximum amount of oil will be available in the world, is either with us or passed, regardless of what some people say.” (ibid) A vast majority of experts in the field agree on peak oil, with the exception of energy economists (those with careers working with the petroleum industry) such as Michael Lynch.

Some politicians and fossil fuel spokespeople suggest that carbon storage could be an answer; most scientist agree it would be a disaster, “Hydrogen will only be truly zero carbon if it is produced through zero-carbon electricity generation…Why introduce these inefficiencies if there is zero-carbon electricity generation in the first place? Secondly transportation of hydrogen is expensive (both cost and energy).31” (ibid)

Currently, economic growth is primarily happening in the hedge-fund and commodities markets and many areas that create near zero wealth for a majority of the population. In fact, real wages for the majority have been dropping since 1980. Moreover, growth has been based on using up ever diminishing raw materials such as oil, coal, heavy metals, land and water. And as humanity uses these resources, there are long-term costs that will diminish the possible future of humans on this planet because of the loss of arable land, breathable air and potable water.

Food insecurity
Food insecurity will increase as arable land is lost to erosion and pollution and potable water is lost to salinization and contamination. According to the UN Food Program, approximately 2 billion people live without access to a secure food source and are malnourished. The causes include, “climate change, urban development, population growth and oil price shifts…”

Another effect of the world economic crisis is the austerity programs that have been put in place around the world. Price supports and national food programs are often the first items to be cut in the third world whose budgets are ballooning in part to the rise in world food prices, “Now that governments’ great enemy is inflation, the policies that feed the hungry are precisely the ones under the knife in a global push for market-friendly austerity.”

One obvious solution to the roller coaster of world food prices is to disengage food prices from market speculation. Market solutions to hunger do not work and only exacerbate deprivation in the world. A major problem the United Nations World Food Programme faces is that market prices for food can be and are manipulated by speculators who look to profit off of a captive population that must pay what is required to eat. Unfortunately, the free market is promoted as a solution by those who profit from it, and a few million starving people won’t be enough to change market policies.

Free Trade
Free trade is not a solution to our climate and growth crisis, nor are huge development projects that tear into our environment.

The North American Free Trade Agreement, NAFTA, was sold to us with promises of increased trade and increased employment. The outcome of NAFTA has been a net loss of at least 1 million jobs, environment degradation and stagnant wages for workers in the free trade zone.

The Trans-Pacific Partnership (TPP) is the newest free trade agreement that is being sold to the U.S. and Pacific rim as an answer to our economic problems. It has been rightly called “NAFTA on steroids.” It would lower wages across the region, make national and state environmental protections null and void by labeling them trade barriers and further deregulate food, drugs and other markets. The TTP is the last gasp for neoliberal capitalism.

Concomitant with the trade agreements is the problem of local and indigenous land rights and sovereignty. As we will see in the solutions in part 3, one answer to our economic problems is to localize economies, not make them more international. The TPP removes not only the sovereignty of states but that of native and local populations as well.

The Trans-South American Highway
One particularly egregious example of trampling on local and indigenous land rights and sovereignty is the TIPNIS (Territorio Indígena y Parque Nacional Isiboro Secure) highway across the width of South America from the Atlantic Ocean in Brazil though the Bolivian and Peruvian Andes to the Pacific Ocean. Evo Morales, the indigenous president of Bolivia, has ironically been pushing this plan, “The grandiose rhetoric of Latin American populism often fails indigenous communities who don’t see themselves as part of a national project…they must confront a narrative of economic progress—and, often, face down harsh repression.”

Route of the Trans Oceanic Highway in South America
Route of the Trans Oceanic Highway in South America
Indigenous Areas in Boliva Affected by the Highway
Indigenous Areas in Boliva Affected by the Highway

Morales’ campaign slogan for president, ““Juntos Vamos Bien Para Vivir Bien” (“Working Together To Live Well”)” is disingenuous in this light. If even populist, indigenous leaders get trapped in the gravitational field of neoliberal economics, what hope is there for the economically and politically neoliberal United States?

Indigenous peoples often face the majority of the ecological consequences of massive development projects. Native Canadians and their non-indigenous allies are fighting the Alberta Tar Sands project and the XL Pipeline that would transport oil through the U.S. to the Gulf of Mexico, “In Northern Alberta, laying beneath 10.6 MILLION ACRES (4.3 million hectares), an area the size of Florida, are tar sands that are a mixture of sand, clay, and a heavy crude oil or tarry substance called bitumen….For each barrel of oil produced from the tar sands takes from 110 to 350 gallons of water (or 2 to 6 barrels) of water.” (italics mine)

In 2007, the government of Alberta used 119.5 billion gallons of water for tar sands extraction, 82% coming from the Athabasca River, leaving the river unusable due to chemicals from tar-sands extraction. In 2008, the project released 37.2 megatons of greenhouse gases and 1.8 million cubic meters of toxic tailings. This project endangers native wildlife, including caribou populations. (ibid) In order to maintain growth based on fossil fuels, we pollute the land that sustains life on Earth.

Supporters of the XL Pipeline ignore the ecological costs of the project and try to sell us on the jobs that the project will create. However, the XL pipeline will only create 35-50 permanent jobs.

Again, the oil companies lie to us to sell their products. The government also misinformed the people about the pollution that would be released from the project. Independent studies of the pipeline estimate that the pollution released will be four-times that of government claims.

Tar Sands Pits in Alberta
Tar Sands Pits in Alberta

Other massive development projects that put us at risk

Panama and Nicaragua are competing for trade/canal dollars at a potential risk to long term growth, increased pollution, and the poor health of their population. They are competing for 20th Century trade, with little guarantee of a growth in jobs and an increase, in large ship trade as the world economy collapses under the loss of fossil fuels (see part 1).

The Nicaraguan Canal project is a massive, environmentally perilous project in Central America. Even supposed leftist governments support this capitalist development over the people (much like indigenous President Morales of Bolivia), “Left-wing President Daniel Ortega insists the canal is Nicaragua’s ticket to development. But critics – including leaders of Miami’s Nicaraguan community – say there are too many questions about the financial, environmental and human costs…Some 30,000 poor farmers will also be displaced.”

The Nicaraguan canal project is estimated to create anywhere from 50,000 to 200,000 jobs, and who can deny people work? However, from an ecological standpoint this canal could be a disaster. There are concerns about protected mangroves essential for healthy fisheries and potential damage or destruction of Nicaraguan wetlands and Lake Nicaragua. Again, it is growth at the price of sustainable living.

Widening the Panama Canal
In competition with the Nicaraguan Canal is the Panama Canal which is undergoing widening to accommodate larger ships and increased tanker traffic. That will not only put species like the right whales at risk, but also increase air, water and land pollution and put Panama’s wildlife diversity at risk. Again, we see how unabated trade is damaging the environment that will lead to the loss of future fish stocks and animal diversity.

The widening is being sold to a desperate populous as a job’s program. However, any new jobs created will be temporary and lost to automation immediately after the canal spreading is finished. Moreover, “Low-level employees, such as workers who pack goods, would earn only $20,000 annually, which is well below the federal government’s poverty level of $23,550 for a family of four. Many of these jobs would be temporary and seasonal and would pay even less and offer no benefits...”

Three Gorges Dam
The Yangtze River in China is the largest dam project in the world. It has displaced more than 1.2 million people and contains a reservoir that is over 600 kilometers long, longer than the distance from New York City to Buffalo, N.Y.

The dam will provide up to 3% of China’s electrical needs. However, it has led to a loss of arable land, loss of biodiversity, increasing landslides and earthquake activity along the river and its environs and salt water creeping into the Yangtze River, making parts of the river unusable for farming and drinking.

While the dam does provide energy for millions of people, China’s need for energy has simultaneously lead to an increase in coal burning power plants which supply the nation with 67% of the nation’s energy needs. With their new coal plants, “Just last year, China added 102 gigawatts of generating capacity, as much as the entire capacity of France.”

Three Gorges Dam Construction
Three Gorges Dam Construction

Deforestation and Damage to the World’s Number One Carbon Sink
Since 2000, the Amazon rainforest has faced two major droughts. Researchers have found that, “trees in areas that were affected by the 2010 drought had much lower photosynthesis rates than trees in areas that were not. And, they were also in poorer overall health than their drought-free companions.”

Fewer trees, sicker trees, and less growth means less photosynthesis. Photosynthesis is the process in which carbon combines will hydrogen in water and creates carbohydrates, i.e. plant growth. Under drought conditions, less carbon is absorbed in rainforests. At a time of dangerous CO2 levels in the atmosphere, slightly over 400 PPM (parts per million), this could be a tipping point for our climate. Many scientist consider 350 PPM the safe limit of atmospheric carbon, and it goes further above that mark every day.

Ocean acidification threatens food stocks
As mentioned in part 1 of this report, over-fishing is a major problem in the oceans. Acidification can also lead to a loss of food stocks. Already, snails, crabs, and other mollusks as well as sea turtles and other animals are losing their shells, shells dissolving under increasingly acidic oceans. As CO2 mixes with seawater, “it lowers the pH levels of the water, making it more acidic and sour. In turn this erodes some animals’ shells and skeletons and robs the water of ingredients that those animals require for healthy development…that threatens to scramble marine life on a scale almost too big to fathom…the average acidity of surface ocean waters worldwide is more than 30 percent greater than at the start of the Industrial Revolution.”

Oceans facing major extinction event
Ocean habitat degradation “is the main trigger for the extinction wave we’re now seeing on land, and is probably the biggest threat to cause a similar catastrophe at sea.” We are heating up the ocean, that is ruining habitat, and certain sea creatures are on the brink of extinction. In fact, “Two-thirds of the world's fish stocks are either fished at their limit or over fished. The UN food and agriculture organisation (FAO) has estimated that 70 percent of the fish population is fully used, overused or in crisis.”

As published in Nature, there has been a major decline in species in the oceans since the 1950s, “Only 10 percent of all large fish—both open ocean species including tuna, swordfish, marlin and the large groundfish such as cod, halibut, skates and flounder—are left in the sea, according to research published in today's issue of the scientific journal Nature.”

‘Growth’ is Going to End

As GDP increased in the Last Quarter Century, so did Wealth Inequality
Wealth inequality is increasing, purchasing power is decreasing, and more people live in poverty than any time in U.S. history. In fact, “Regardless of how fast GDP grows, an economic system that fails to deliver gains for most of its citizens, and in which a rising share of the population faces increasing insecurity, is, in a fundamental sense, a failed economic system. And policies, like austerity, that increase insecurity and lead to lower incomes and standards of living for large proportions of the population are, in a fundamental sense, flawed policies.”

That is exactly what the policies of the 2015 Congress will do. They will cut the safety net and funnel more wealth to the upper classes through tax cuts and spending priorities that will continue the downward spiral of the economy.

Sustainable Economic Growth (as we currently envision it) is Not Tenable

Innovation now means creating new ways those with capital can bilk the American people.
Neoliberal economics doesn't work for the majority. Economic growth rates are finite, and unlimited growth is a myth. Neoliberal economists are living in a fantasy land of the 1950s. The fantastical focus on macroeconomics will do nothing to alleviate poverty on the local level. Without systemic change, poor people will not be helped by antiquated 20th Century growth models.

Growth based on Easily Obtained Fossil Fuels is done
The growth that is currently touted by the White House is built on sand. In fact, “The last few weeks has seen bad news for the global economy, with the US and Europe facing growth slowdowns, and even much vaunted economic powerhouses Brazil, Russia, India and China faltering unexpectedly. While mainstream economists continue to predict an ongoing 'recovery', other leading experts point to the end of growth as we know it for the foreseeable future.”

The major growth in the the past 25 years has been in the savings and loans bubble, the dotcom bubble and the housing bubble that left most of us worse off than before. The barriers to growth include rising inequality, population increases, debt, and environmental degradation.

The next bubble with be in tech companies with their saturated markets and lack of growth potential. Moreover, these companies will have a tough time selling new products, for they will be unattractive to consumers at the cost of production. These include products such as Google Glass and Apple Watch. It will be the dotcom bubble part 2 as everyone sees their shares in Google, Facebook, Yahoo and other online tech companies collapse under the weight of growth limits. This will have a cascading impact on computer and cell phone companies and the stock market that is currently floating these companies on a cushion of speculation.

Economic growth and climate stability do NOT go hand in hand
Some politicians think that growth can lead to a reduction in climate change, “But growth-glorifying free-marketism has a dreadful track record for reducing emissions...preventing calamitous climate ruin will require wealthy countries to downsize their economies…The unpalatable truth is…that we now need a phase of planned economic contraction, or “degrowth.” ” (ibid) This is not just producing and consuming more efficiently or shifting to renewables, this means that “the necessary deep emissions cuts can’t be made while growing the economy.”

Stay tuned for the final, Part 3, when radical solutions are suggested by some of the world’s greatest thinkers, and me.

Tex Shelters


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    • texshelters profile imageAUTHOR


      3 years ago from Mesa, Arizona

      Thanks Billy.


      Tex Shelters

    • Dr Billy Kidd profile image

      Dr Billy Kidd 

      3 years ago from Sydney, Australia

      Fantastic research! Best post I've seen in a long, long time!

      It will take a massive shift in public thinking to avoid disaster. The hardest idea to get across probably will be that there are way too many people. I know, famine and epidemics will lower the population. But that will only increase the money spent on the military, as nations fight for the remaining resources.


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