World War Two was followed by a period of economic growth. Yet in 1968 many young people in developed Western nations were questioning the lifestyles provided by their societies. They wanted a more meaningful lifestyle, and recognised that it had become physically possible to provide universal social services and good living conditions, including well-paid employment for all with liberal conditions and ample leisure time within a workweek of 30-35 hours. The leisure society beckoned.
At the same time, through the late 1960s and the decade of the 1970s, a considerable body of information described looming global problems. Since evidently all was not well, many decided to search deeper, to ask the major questions of the time and find the answers. Modern society, with its rapacious desire for never-ending growth, was foolishly pushing against limits on a finite planet while increasing inequality and joblessness within a consumer society tightly controlled by ubiquitous advertising.
Growth of population, the expansion of Homo Sapiens across the earth has long been accompanied by the extinction of other species. The first great period of human expansion was between 9,000 and 13,000 years ago after the end of the last Ice Age. The consequence was the Holocene extinction, the disappearance of large mammals from many lands. The process has accelerated in the last half-century. This “anthropocene extinction” is on par with the five catastrophic mass extinctions of Earth’s history. Yet how many economics texts mention any requirement to leave living space to what remains of the natural world?
The earth’s ability to cope with human activities has now been passed, as is evident with climate change, and resources are used nonsustainably for short-term gain – including oil and aquifer water. A number of estimates show that it would take more than two planets to support everyone at a Western standard of living; while no more than a few tens of millions could live in full balance with the natural world, perhaps two billion could experience a “developed” lifestyle. Desires for a better future most often fail to realise that equity and full development to a western standard is impossible.
A major question raised was whether the growing world population could be fed, even at a lower standard of living. If such a limit was reached, when would that be and how would events play out? Many global models, led by The limits to growth1 and followed by more complex models have provided the answer. Limits will be passed around 2030, with overshoot leading into collapse.2
The economy is a major defining force in such activity. The holistic scholar must combine information from so many disciplines. Expert information is gathered from many sources and, while suitable analyses of the physical world were available, mainstream economics texts and pronouncements were inadequate, with little or no appreciation of the changes coming. The frequently expressed belief in the triumph of modern growth capitalism is seen in the following two influential sources, the first a popular introductory textbook.
“Today, thanks to the intellectual contribution of John Milton Keynes and his followers, we know how to control the worst excesses of the business cycle. By careful use of fiscal and monetary policies, governments can affect output employment and inflation”, so that “the deepest depressions no longer appear to be a major threat to advanced market economies”.3
“I argued that a remarkable consensus concerning the legitimacy of liberal democracy as a system of government had emerged throughout the world over the past few years, as it conquered rival ideologies like hereditary monarchy, fascism, and most recently communism. More than that, however, I argued that liberal democracy may constitute the ‘end point of mankind’s ideological evolution’ and the ‘final form of human government’, and as such constituted the ‘end of history’. That is, while earlier forms of government were characterized by grave defects and irrationalities that led to their eventual collapse, liberal democracy was arguably free from such fundamental internal contradictions.”4
Despite such claims, the instability of developed economies is evident. It is important to understand why and to consider likely developments as other critical factors increasingly impact. My own search has been guided by experiences in scientific research, in particular by success in understanding non-linear instabilities in both a layer of fluid heated from below and in a shear layer where one body of fluid is moving across another. 5 In each case the system becomes unstable when a defined parameter passes a critical value, at a tipping point. The new flow follows a clear pattern, to cells in the heated fluid and to breaking waves in the shear layer. Then (depending on a number of other physical parameters) those patterns become more complex, eventually becoming turbulent. Each process can be followed, and understood, with the aid of simplified models that identify the key factor defining when the system is unstable, and the further factors that determine the subsequent behaviour. There is nothing random about these processes; there is a reason for the instability and for the resultant pattern, which in each case follows the laws of physics. These principles hold also in economics.
In science, if a model does not fit reality, if evidence is not in accord with a hypothesis, the assumptions are questioned and some rejected. The reason is sought and a new theory evolves. This process should be followed with a national, now global, economic system. Since the system is inherently unstable, will disturbances lead to some new situation, of either another regular pattern or breakdown and turbulence?
1 Meadows et al 1972
2 Robinson 2013
3 Samuelson 1948
4 Fukuyama 1992, Introduction, page xi
5 Robinson 1967 and 1973, 1974 and 1977