Limits to Growth

Hi. There is an increasing concern that a few — if not all — of our human-made systems are hitting the wall as they are failing to maintain a desired growth rate. Many renown academics have been telling us that there are Limits to Growth. We see a lot of people campaigning around the globe. Others are researching and suggesting models for the new global economic order, political and pension systems, etc.
If one is becoming more and more sceptical about the idea of perpetual growth (contradicting the very basic idea of long-term investing favoured on this forum), where should one put their money? How can one manage their money when the whole game is about to be reimagined?

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Varför skulle det finnas en gräns?

Simply put: because there are limited resources that the planet can provide. We are already overshooting the capacity of several Earth’s sustaining systems (e.g. global warming is just a symptom of this underlying problem).

Du ställer en mycket intressant fråga. Hoppas på intressanta svar. Har @janbolmeson redan nämnt detta i någon podd kanske? Jag kan inte minnas det men vore stort tacksam om någon kunde länka ifall det är så.

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The criticism of perpetual growth has been around for almost as long as capitalism it self. Let’s try this definition:

The idea that population growth is potentially exponential while the growth of the food supply or other resources is linear, which eventually reduces living standards to the point of triggering a population die off.

It’s called Malthusianism and was popularised in 1798. There is no doubt we’ll continue debating this over the next few hundred years. Personally I believe in human innovation and don’t loose sleep over this. However , should the “population die off” happen in my life time, there’d be far larger concerns than loosing money on the stock market.

Vi kommer tvingas expandera till andra planeter.
Universum är väl oändligt vad vi vet för tillfället och så länge universum expanderar snabbare än mänskligheten så klarar vi oss :wink:

I wouldn’t refer to it as another -ism (and wasn’t even aware of the term). But you make it sound like something narrow-sided and something we can dismiss because it hadn’t yet found an adequate response from previous and current generations. Instead, I believe that new powers emerge globally that represent new set of values and with it they can challenge the current paradigm of growth.

I am referring to the “Limits to Growth” by Donella Meadows, “Planetary Boundaries” by Stockholm Resilience Center (Rockström and others), “Doughnut Economics” by Kate Rawort, etc.

I have a hope, too. But I’m convinced that by modifying our existing systems we can solve very problems ingrained in them. Moreover, I see more and more smart people sharing ideas of alternatives systems emerge that can be created to replace them.

I am also afraid that we don’t have “a few hundred years” to debate.

Earth is the only planet we know that can sustain life. Such expansion will take millennia and will require colossal resources. Humanity haven’t yet found a way to thrive within the planetary boundaries. How do you imagine it being able to colonise other planets without degrading the very ground it’s currently standing on?

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It seems like the discussion is derailing towards criticising the idea of unlimited growth. However, I’d like to encourage those who also see the elephant in the room to express themselves. Don’t you see what I see?

Of course, we all se it. But we will fix it.
Your money will grow with the Universe

If you truly believe in a population decline scenario that is predicated in Limits to Growth (that you referred to), then obviously investing in global index funds would be a very poor idea. A doomsday bunker stockpiled with tin cans would be a better choice.

Now why do I people like me not worry about this?

Ever heard about the term ‘Peak Oil’? If not, it builds on the idea that the rate of crude oil extraction will peak at some point. Given how dependent the world has been (and still is) on crude oil, the consequences of this is relatively scary. Particularly for the food industry. The first known prediction for peak oil was made in 1919 and the date was set just 3 years later. Since then we just kept getting this wrong.

Now, why is this? It turns out that we just keep underestimating human innovation. We now possess technologies for extracting crude oil that were completely unthinkable 30 years ago. By the time we finally do hit peak oil, it seems likely that we will have enough alternative sources of energy, plastics, fertilisers, pesticides etc to handle a decline. Who could have predicted this in 1919 or even in 2002 when the term was popularised once more by Campbell and Aleklett?

Another example is the outcome of the 1974 sugar price hike. The price of sugar became so expensive (going from 5 to 66.5 cents) that it changed a part of the food industry. Coca-Cola for example replaced their sugar with HFCS (High Fructose Corn Syrup) and we have been drinking it ever since. Something that would have been unthinkable just years before. However with the high sugar price came an incentive to commercialise an enzym to produce cheap HFCS.

Why is this relevant? People like me keep putting our faith in human innovation. I believe we are extremely capable and that we can overcome the scenario you’re putting forward. Not only do I believe that, I also believe we can do this without reimagining capitalism. Well, at least not for that reason. For most of us, it’s completely unthinkable that we’ll be mining minerals on the moon in our lifetime. Tomorrow we just might …but not without incentives…

Just my 3 cents.

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There are more ways to make money and with new tech comes new ways. What if you got paid a few cents for each pay transaction? :nerd_face:

With 7 billion people that is a lot of transactions.

Transaction fees, just like taxes, still have to be payed with money made somewhere. Sure, you can enrich yourself throgh finacial trickery, but the value you are appropriating still has to be created in the form of good and services that require resources somewhere.

No. More value does not always require more resources. If an indentical product or service can be provided more effieciently and require less resouces. The value/resource ratio goes up.

Absolutery, I was responding to @Maximus.

Vet inte om det är relevant men värt att slå ett öga på.

Sen behöver väl inte tillväxten vara konsumtionsdriven utan den kan vara lönedriven. (Har inte hunnit läsa denna själv än)

Det känns som om den här tråden kanske behöver delas upp i fler trådar. Iallafall en som diskuterar scenariots sannolikhet att det inträffar och en som diskuterar själva frågan. För mig är frågan ytterst intressant:

“If one is becoming more and more sceptical about the idea of perpetual growth (contradicting the very basic idea of long-term investing favoured on this forum), where should one put their money? How can one manage their money when the whole game is about to be reimagined?”

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100 ljusår bort… Det är en braaaa bit det :joy:

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Jag tror du har missuppfattat en sak där, om universum expanderar så kommer det bli längre mellan galaxerna/galaxhoparna, och då blir det svårare att ta sig dit.

Men i grunden så anser jag att du har rätt, mänskligheten kan inte fortsätta utvecklas om vi inte rör oss ut i rymden. Bara inom vår egen galax så finns det nog möjlighet för tillväxt under många miljarder år framåt.

Well, I appreciate the humour, but I didn’t ask whether there is a limit to growth, or to speculate about alternative scenarios and their drives. The question is: if you believed that the growth won’t go forever, what would you do with your money and why? How might we rethink the long-term investment strategy, if we knew that the growth in going to stop or if the whole system is going to be replaced with something else?