The Gross Domestic Product (GDP) is a metric used by economists to describe the state’s economic changes. When the GDP increases, the economy is functioning well, while the decrease is associated with a recession. However, this growth limit is an issue, since one can assume that the economy cannot continue to grow exponentially. There is a limit to the resources, the biosphere’s capacity, and the danger of population growth that can restrain the economy’s growth. This paper will present the analysis of Pareti and Boyce’s arguments on the limits to growth.
In “The limits to growth”: A book that launched a movement,” Parenti (2012) discusses the book by Dennis Meadows and Donnatella Meadows. This book was published in the 1970s, and the authors focused on exploring the prospects for humanity, considering the current rates of production and pollution. Dennis and Dennis concluded that if unchanged, the production will lead to the collapse of society in the middle of the 21st century (as cited in Parenti, 2012). Hence, the limit to growth that Parenti discusses is the harmful effect that capitalist production has on the environment.
The book “The limits to growth” was written based on the method of system dynamics. Any system, for instance, social or economic, can be “either open or closed” (Parenti, 2012, para. 5). The Earth’s atmosphere is a closed system, which means that all the outputs affect the inputs. Therefore, the manufacturing that leads to pollution or the use of oil is the output that adversely affects the biosphere’s finite capacity to absorb the pollutants.
Hence, although the authors of the “Limits to growth” describe several scenarios where resource depletion, population growth, and pollution would become the ultimate limit to humans’ development. Parenti (2012) argues that only pollution will have a real impact on growth. This is because humanity continues to find new sources of renewable energy and other substitutes for non-renewable energy. This is a manifestation of the “demand calls forth supply,” which, from a perspective of the GDP, means that unless the businesses can find ways of limiting the pollution, instead of merely focusing on increasing oil production and finding substitutes for it, the pollution will cause the immense harmful effects to the environment, causing droughts and hurricanes, and making agriculture more challenging.
Boyce reviews the concept of a limit to growth from a different perspective than Pareti. The economist begins by embedding the term “economy” in the notion of “environment” (Boyce, 2018). He applies this to the commonly accepted economic model of households and firms, where the former buy goods and services from the businesses and provide them with the labor necessary to produce those. The latter produces the products and pay salaries to the households. The environment serves as the sink for the disposal of material (Boyce, 2018). Hence, firms take resources for their production from the environment and use it as a sink to dispose of the materials they no longer need or pollutants. As a result, one may think that because there are limits to the biosphere’s source and sink functions, there are also limits to the potential growth of the economy. Hence, humanity will reach its limit in terms of production and GDP growth when there are no resources for production and no ability to dispose of the remains.
Similarly to Pareti, Boyce criticizes the arguments presented in the “Limits to growth.” Boyce (2018) uses two counterarguments” the first one is human agency, and the second is social differentiation. Mainly, humans are capable of recognizing the damage that they are causing and doing something to avert it. Moreover, the social relationships between humans serve as a filter for the human relationship with the environment. Hence, Boyce argues that there is a possibility of reaching a balance between the harm and well caused by people to the environment, and therefore, the limit to growth will not be reached.
The two approach limits to growth differently, since Boyce (2018) argues that people can account for the damage they do, for example, by planting new trees and ensuring that the population of fish is unharmed by environmental damage. In terms of GDP, to grow and continue to produce, firms will have to invest in ensuring that they have resources. However, Pareti (2012) argues that in a capitalist society, competition pushes businesses to grow continuously, which creates the problem of pollution, where the short term growth is prioritized over long term consequences. However, similarly to Boyce, Paretti advocates for adaptation to the current conditions, although Boyce argues that this is a natural capability of humans.
Overall, this paper summarised the views of Pareti and Boyce on the idea of a limit to growth. Pareti criticized the concept because humans have already found ways to overcome the limitation of resources by finding substitutes for energy sources. However, the outputs of production continue to accumulate in the atmosphere and require people to change their behavior. Otherwise, a limit of Earth’s capacity will make GDP growth impossible. Boyce introduces the idea of human agency, where people, as intelligent beings, can reflect on their actions and work towards reducing this harm.
References
Boyce, J. K. (2018). 1. The economy & the environment. Web.
Parenti, C. (2012). ‘The limits to growth’: A book that launched a movement. The Nation. Web.