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Paul B. Farrell: Myth of Perpetual Growth is killing America

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  • edited June 2012
    Perpetual debt-based growth is a myth, and I think - if we haven't already - we're probably in the neighborhood of bumping up against that. Perpetual growth in terms of things like natural resource availability has not happened yet, but I have a difficult time seeing how it will not become an issue eventually with one or more aspects. I completely agree that infinite growth is a myth, but the endpoint can be a lot further out than we think.

    "Collapse" is a documentary that came out a year or two ago and that's a powerful film that's well-worth viewing. Basically, that's a thought-provoking look at the worst possible scenario - although it does build towards a genuinely emotional and hopeful last quarter.

    I don't necessarily agree with that film's view that we are running into peak oil (although there is a discussion of a "bumpy plateau" that tries to illustrate where we're at, and could well be true - I also remain curious how oil was $4 a gallon/$150 a barrel in 2007, and is now in the high $3's and $80, but was over $4 in many areas earlier this year but didn't get over $110), but I think the film's discussion of world economic structure and how it could be running into limitations and/or breaking down is compelling, as is some discussion in the second half of the film about society and examples of how society reacts/copes to issues. I watched it the other night again and still don't agree with quite all of it (quite strongly agree with some of it), but found it a more powerful - and really more haunting - film than I did the first time I saw it. Trailer:
  • Thanks very much for this suggestion... will see if available from NetFlix.
  • The user and all related content has been deleted.
  • Glad to hear others will take a look at the film - people may not agree with all of it, but it's a very powerful, occasionally quite emotional film on the challenges (primarily focused on economic, but also otherwise) we as a global society are facing. Thoughtful, compelling and really pretty haunting documentary that does offer some hope.
  • Hi Old Joe and Scott,

    When I initially scanned your posts I experienced Farrell fatigue and Collapse confusion.

    Paul Farrell has been singing this song for a long time now, and I immediately dismissed it as an outdated refrain without merit. He’s been a gloomy Gus for a few years. I don’t know why he sees the world with such dark glasses. He was much more optimistic when he was a younger man.

    When Scott referenced Collapse, I mistakenly remembered the book of the same name by Jared Diamond.

    The “Collapse” film was well done with a primary goal to stimulate the box office with yet another doomsday-like forecast. Keep in mind that the film is based on projections formulated by an unscientifically trained ex-LA cop turned reporter, Michael Ruppert.

    Ruppert is called a conspiracy theorist by a legion of his antagonists. He believes that a societal collapse is imminent, mostly caused by economic growth and population expansion.. His concept is a modern-day version of the Malthusian overpopulation hypothesis.

    In the late 1700s, Thomas Malthus seemed to attribute all of life’s unexpected shortcomings to overpopulation and productivity growth. In 1968, Paul Ehrlich carried forth the tradition with his scary book “The Population Bomb”. Doomsday scenarios persist today, and will likely persist into the distant future as the current alarmists are once again proven wrong. We will survive, and we will survival well with increased human imagination, discovery, and productivity.

    The fundamental error that the alarmists camp continually makes is not to recognize negative feedback loops that are always introduced by human interdiction when unhealthy extremes are approached. We learn, and we learn from our mistakes.

    When population becomes burdensome, we adjust downward to limit birthrate. Most advanced industrialized nations now have below and nearly stabilizing birthrates. Malthus was wrong.

    Malthus feared that population growth would outstrip its capability to feed itself. He was wrong yet again as farm productivity expanded beyond his wildest dreams. We used to need 50 % of the population farming to supply enough food to support the 50 % in the cities. With the advancements in farming technique and machinery, we now require less than 2 % of the population directly on the farm to satisfy that basic need.

    Peak oil is yet another red herring. The timetable for peak oil keeps moving outward as new discoveries, more efficient use, and improved drilling methods extend the expected supply shortfalls. In a healthy capitalistic system we dream, we imagine, we invent, we invest, and we improve our productivity. That doesn’t mean that we don’t make mistakes, but we correct them. Our agility is legendary.

    All good things do come to an end, but not in my lifetime, not in your lifetime, and likely not in the lifetimes of our immediate families. Beyond that timeframe, I find no motivation to make forecasts. Science always surprises.

    For a more balanced understanding of why and how the World works, I recommend the books written by Jared Diamond over the spotty predictions of Michael Ruppert. Ruppert is an untaught amateur with a bias; Diamond is a skilled scientist with a keen eye.

    Jared Mason Diamond is well known for his chart-busting science books “Guns, Germs, and Steel”, and, “Collapse: How Societies Choose to Fail or Succeed”. I recommend both volumes. He provides some very compelling insights about our historical development and future prospects. He is definitely not an alarmist.

    Old Joe, on several occasions you expressed some doubts over understanding economic principles. I’m sure some professional economists share your anxieties and uncertainties. Economics is not a hard science, and it does not offer settled, unambiguous solutions given nonrecurring situational scenarios. Every day I try to learn something more about economic interactions.

    For the novice on economic matters, I highly recommend the DVD lectures sold by The Teaching Company in their Great Courses series. I particularly enjoyed “Thinking like an Economist: A Guide to Rational Decision Making”. The lecturer is Randall Bartlett. The set is 12 one-half hour lectures that are both entertaining and highly informative. The DVD set is often sold at an attractive discount price. Please check it out.

    The bottom-line is that without productivity growth our prosperity and wellbeing would stagnate. Personally, I do not find that outcome acceptable. We will continue the march.

    Best Regards.
  • edited June 2012
    Reply to @MJG:

    I don't agree with Rupert on everything, but I think there are aspects and broad issues that are addressed in the film on economic and societal issues that are worth exploration and discussion.

    I don't think society will collapse tomorrow, either, but the amount of agricultural land in this world is considerably less now than it was 10-50-100-250 years ago and population continues to increase. It's not that at some point food won't be available, but in a global economy where everyone has to eat and need energy, it's not that basic needs won't be there but they may become an issue of "at what price"

    As for oil, if we don't have peak oil, we do seem to have an issue where we keep hitting a ceiling where we get demand destruction. Additionally, everyone freaked out when oil was $4 a gallon in 2007, and it's not far from that now, despite oil being about 40% off the peak in 2008. What is a gallon going to be if we go back to the $150 2008 high (for whatever reason, geopolitics, perhaps?) I'm curious what human ingenuity will get us back to gas being what it was a gallon when oil was $80 a barrel 6-7 years ago.

    Still, to dismiss the issues going on in the world and just be optimistic is I don't think even slightly realistic - moreso today than ever. You may not care for what Ruppert or Farrell or anyone the slightest bit gloomy has to say, but to deny there are some severe economic issues facing the world but ignore them entirely out of this idea that "things will solve themselves" is magical realism.

    Beyond anything else, we make no preparations in this country. Anyone know a defined energy policy? Even if you didn't believe peak oil, it would not be a bad idea to diversify our energy use. However, that will not happen until it needs to involuntarily. We don't have these discussions because people would just rather be optimistic and think problems will work themselves out.

    "The fundamental error that the alarmists camp continually makes"

    Does the Pollyanna camp ever make an error? No, because whenever something happens, they go, "No one could have ever seen that crisis coming!" How could anyone have seen the problems they completely chose to ignore?

    What I find troubling is that this has really become a way of things on a broader level - everyone's a cheerleader, everything's great, Europe is way worse than we are (so that apparently gives us an excuse not to look inward at our own issues because we can conveniently point the finger.) Someone else will solve the problems, the next administration will deal with that, etc. No politician wants difficult or unpopular decisions and nothing from banking regulations on down is ever really addressed. We have had some time in the last few years were we could have tackled some of the pressing issues, but we did/have not.

    "He believes that a societal collapse is imminent, mostly caused by economic growth and population expansion.."

    Not really, but that's okay.

    "We learn, and we learn from our mistakes."

    You can't be serious. What's that quote about history repeating itself again?
  • edited June 2012
    Folks of a certain perspective seem frequently unable to discuss the aspects of an issue without resort to dismissive patronization or ridicule. "Farrell fatigue and Collapse confusion" / "singing this song" / "yet another red herring" / "The fundamental error that the alarmists camp continually makes", for example.

    Starting from an unshakable foundation of absolute certainty, there is absolutely no middle ground in a discussion, as it immediately devolves into a take-no-prisoners / "you people" are completely wrong / if you would only go to school and learn the same things that we know you would be able to think like us and understand this stuff.

    I have not the slightest desire to begin "Thinking like an Economist", as to even a casual observer this particular area of human knowledge is about as scientific as astrology. Gee, you mean all those best and brightest at the hedge funds were wrong again? My, those folks at the Chicago School of Economics didn't see this recession coming? Wow, you mean Greenspan didn't know a dangerous housing bubble when he saw one? (And refused to even consider the situation when he was warned well in advance, perhaps because the alarmists were obviously making all of those fundamental errors that they continually make.)

    In any case, I'm currently in the middle of two other "Great Courses", and am a bit strapped for additional time in this area.

    "Science always surprises." (Ignoring, of course, any "inconvenient" science such as global warming or oceanic resource depletion.)

    "He was much more optimistic when he was a younger man": Possibly he's learned a few things and changed his mind to more closely match reality?

    "Our agility is legendary." "We will continue the march." Bring up the music... fade to a Rotary meeting, all standing with hand clasped over heart... Give me a break.
  • I stopped reading his column a couple years ago. Repetitively doom and gloom and conspiracy theories. I wonder why he does not write for Zero Hedge (perheaps he does, I do not regularly read ZH either).
  • edited June 2012
    I understand, and I agree. You'll notice that my original post simply presented his observations as written, without any additional commentary on my part. That said, simply because he has a consistently negative appraisal may classify him as a curmudgeon, but does not automatically make everything that he says wrong.

    Full disclosure: Having been sometimes called a curmudgeon myself in my working career, I do retain a soft spot for such an attitude.

    I notice also that in the other related thread, raising the question of how much competitiveness might be "too much" in the EU, I really have not received a well-constructed answer regarding the inter-country effects of this frequently repeated mantra.
  • edited June 2012
    Reply to @scott: Young man, they do NOT "go": they "say". (Most of the time I wish that they would in fact "go".) Let's keep a tight ship here!
    :-)
  • Reply to @scott:

    Hi Scott,

    The primary thrust of my submittal addressed to you and Old Joe was to distinguish between the quality research of professional Jared Diamond and the agenda-driven research of amateur Michael Ruppert. The professional examines all data fairly in an attempt to construct a cogent story; the amateur examines data selectively to boost a predetermined program.

    I recommended several books that Diamond authored. One of these, “Guns, Germs, and Steel”, was made into a TV series by National Geographic. It is available on the Internet. Here is the address to Part 1 of the 3 Part series:

    http://video.google.com/videoplay?docid=-4008293090480628280

    Enjoy. It is a high quality production that does a reasonable job of summarizing some of Diamond’s findings.

    I admit that I am an optimist, but it is an optimism grounded in plausible expectations. As a professional engineer I fully embraced challenges, but my projects were forever realistically modulated by what was doable and that which was not. If my assigned projects did not deliver the promised contractual performance my organization was financially penalized by various means. Consequently, we were very cautious concerning our commitments. I still am.

    Thanks for your well crafted, constructive commentary. We can always agree to disagree in a respectful manner. I firmly believe that we learn from our mistakes.

    Best Wishes.
  • MJG
    edited June 2012
    Reply to @Old_Joe:

    Hi Old Joe,

    Your sarcasm notwithstanding, I welcome your rebuttal posting. It allows an unbiased reader to directly compare and contrast the merits of my positions and opinions opposite yours on the matter. The controversy permits that reader to make a more informed assessment. That’s good for everyone.

    You said: “I have not the slightest desire to begin "Thinking like an Economist", as to even a casual observer this particular area of human knowledge is about as scientific as astrology.” Your position is crystal clear; you certainly hold that profession in low esteem.

    I am somewhat amazed that you totally reject the economics discipline and its members as a horde of charlatans. That’s an extremely broad brushed condemnation. You toss the composite works of Adam Smith, Karl Marx, Ludwig von Mises, John Maynard Keynes, Paul Samuelson, and Milton Friedman under the bus in your summary dismissal.

    I accept and acknowledge your prerogative to do so. I hope you recognize the dangers of doing so.

    I suppose you do not accept the validity of supply-demand curves, or that incentives motivate actions, or that financial events stimulate other activities that have both short-term and long-term consequences in a complex manner. That’s the working stuff, the basic clay, that economists seek to understand and to mold our wellbeing.

    With your added submittals on this topic, I more fully appreciate why you posted a reference to Paul Farrell’s continuing and damning rant. He too mostly dismisses the conventional economic wisdom. On page 1 of his column that you referenced, he declares that economists are only concerned with short-term outcomes.

    That Farrell assertion is completely false. Economists have always attempted to model both short-term and long-term impacts. Farrell also falsely claimed that population is the primary driver for economic progress. In developed societies, productivity growth integrated over extended timeframes are a more dominant factor over demographics. Population growth does matter, but it is not as influential as innovative productivity. Economic statistics and analysis gives us this insight.

    You and I do share a common belief: expert opinions are overly trusted. Often, their forecasting records are brutally blemished. Their projections are error prone because of modeling deficiencies, changing attitudes, and unpredictable events. Forecasting the future is hazardous business indeed, and failed forecasts are commonplace. That does not mean that the forecasting exercise is futile nor does that translate into a dismissing of the entire economics and financial professions. The forecasts as a minimum yield a flexible baseline The experts do the best they can, and constantly strive to enlarge their toolbox.

    Sorry if my wordsmith style offends you. As a youngster, I consistently read the Reader’s Digest “Towards More Picturesque Speech” article. Each month that section featured a 20 question multiple choice language set. These days I try to incorporate more colorful language in my postings that reflects these early training sessions. It’s as simple and harmless as that.

    Best Wishes.
  • Reply to @MJG: "As a youngster, I consistently read the Reader’s Digest “Towards More Picturesque Speech” article."

    Well, at least we both have that in common.
  • edited June 2012
    I don't usually agree with MJG all that much, but on the two 'Collapses,' I'll take Jared Diamond, thanks. Two of the main theses in the book/film are that (a) societies collapse when elites become so insulated from the life of normal people that they can't see that the society isn't working and is on its last legs, and (b) overuse of natural resources on which the societies depend leads to decline and ultimate collapse. Many of the historical examples he cites have elements of both.

    The section on Rwanda is very eye-opening; the slaughters there were about land first, and ethnicity second.

    Paul Farrell's overdone, breathless style is so tiresome (like the trailer for the other "Collapse"), but the principle he's addressing in this latest article is right on, and is in fact one of the primary themes of Diamond's work.
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