Sat, 18 Oct 2008

New Scientist, Old Nonsense

The New Scientist has published a special report: How our economy is killing the Earth. It's a farrago of economic nonsense. Tim O'Reilly recommended this article on twitter. I told him it was nonsense. He accused me of being an ideologue. Here is my response to him.

Okay, so, an ideologue is someone who continues to apply a theory in spite of contradictory facts. So if you're not an ideologue yourself, then if I supply a contradictory fact to "most important link", then you will stop applying that theory, okay?

The New Scientist article is built around this question:

This one is built on a long-standing question: how do we square Earth's finite resources with the fact that as the economy grows, the amount of natural resources needed to sustain that activity must grow too?

It's NOT a fact that a growing economy requires more natural resources. Here's the extremely obvious fact which refutes that:

If I have an apple and you have a banana, but I want a banana and you want an apple, and we trade, we are both economically better-off, and yet no more natural resources have been consumed. Without this growth, you would have eaten your banana and me my apple and both of us been economically poorer.

Now, you may say "but no money was involved, so this isn't economic growth." If you think that matters, then substitute a dollar for my banana. Same conclusion, except that you weren't going to eat your dollar, and neither am I.

This fact shows that it is indeed possible to have economic growth without consuming natural resources. The New Scientist article collapses in a heap since it's core assumption is false.

Further, you can see that unhindered trade consequently causes economic growth. So if you don't want unlimited economic growth, you MUST stop people from trading. Everyone must be self-sufficient, live on a farm, eat the products of their own dirt, and die when the crops fail.

Posted [11:05] [Filed in: ] [permalink] [Google for the title] economics [digg this]