"If I use sand to make a wine bottle I will add some small amount of GDP. If I use that same sand and make a computer chip instead I will add more value and thus more to GDP with the same use of resources. "

But in practice you cannot do it with the same use of resources. Processing the sand into a microchip takes more energy, tools and auxiliary materials. And if nothing else, more labour. The singer example is better, but there the available growth potential is limited by the number of listeners willing to listen to you (also considering other available entertainment vying for their attention). Ultimately a continuously growing GDB requires a growing number of people making and buying things and services, even if those things are made without adding to the consumption of raw materials.

when the only holes people pick are in the examples!

I wonder why they are not nit picking the singing example?

The point is in future when you can make chips by a highly efficent means then the resources and energy used will be less than the furnace used for glass making.

Growth is about improvement not consumption. (added value of volume!)

NS went to the media lovies too long ago...

You are talking shit again.

Let me get this straight? You are saying that the earth's resources are NOT limited?

That this planet can continue to support more and more people infinitely?

Fantastic - so if we all become bankers we can achieve immense economic growth and save the planet at the same time!

Mine's the one with holes in the elbows

"If I use sand to make a wine bottle I will add some small amount of GDP. If I use that same sand and make a computer chip instead I will add more value and thus more to GDP with the same use of resources"

Granted that is true. But if GDP ergo a nations wealth is low, then they will either a) buy the bottle or b) buy the chip. If a nation is wealthy, then there is the more common option c) buy both, thus comsume more resources.

If I pay Tim 20 units of currency to sing/not sing, we haven't actually increased the GDP, we've merely transfered 20 units of currency from one owner to another. GDP is increased by PRODUCING things (thats why it's the Gross Domestic PRODUCT)

A few comments.

One big factor missed is that 'resources' includes energy. As one example, while the sun's output is certainly limited, we don't have any control over its output (well, not yet, perhaps). So there's a great pile of free extra resources flowing in to the planet every day.

That said, there are real limits to growth. Even if we had free fusion-driven power, we couldn't deploy so much of it that the energy density was such that the average terrestrial temperature rose 100 degrees, for example.

And the simplest (in principle) method of reducing the rate of real or imagined natural resource depletion is to reduce headcount.

Paris, just because

Ok, Parax demands someone pick a hole in the singing example. Well, here goes: It's not actually producing anything of sustainable value. You are turning something without material cost (your voice) into something without material value (a song). Can be done without much magic any day of the week.

But then, you'll say, how come people pay for it!? Well, to be honest, that really is a puzzling question. How many people have bought the winning singles from X-Factor over the years? Loads, I would suggest, given the fact that it is being tried every year again. How many are still proud owners of the winning X-Factor single of, say, three years ago? (I can't for the life of me remember what it was and must, therefore, resign myself to not call it by name)

So, people spent money on something (come to think of it, even for music, resources are actually <strike>wasted</strike> used, for CD production, distribution, recording, etc) which, ahem, did not exactly keep its value... Burning money on nothing is not actually creating wealth, though, is it? For the people involved with the original production, of course, but the purchasers do not get to keep something of equal value. So there is no overall improvement. Which we did not expect from X-Factor anyway.

And now for the actual article, which clearly hails a "dead Reg" icon: Every bit of human experience is that we improve design, yes, but in overall terms increase consumption all the same. You make CPUs faster and cheaper - yet their increased sale increases total use.

By simply claiming that improvements in a single unit of anything clearly means growth can be reached without additional resource consumption is ignoring the bleeding obvious: Growth first and foremost means increasing numbers. There was a time when a computer filled a whole room and had next to no computing power and memory, no graphics, no storage and no sound. I bet, it was a resource hog, too.

Still, at the time, all the computers in the world didn't use nearly as much electricity to run as the computers in a single medium-sized company will today. Despite the current ones being so much more efficient individually.

Scale up any other development in the world and you'll find the same thing. Yes, we improve the designs. Efficiency means less consumption per unit - but the increase in units always makes up for it. More than.

And one final thought on music: There was a time when music was heard by making it. You played in the privacy of your own home. You went to a concert, possibly directed by Mozart of Beethoven themselves. And the energy spent on making the music was nil beyond the living requirements of the musicians.

These days, people have massive audio systems, likely in more than one room in their house, in all of their cars and if they are out and about, iPods and their competitors will happily sap away some batteries' power to play music straight into their ear canals. And you are going to say that growth (i.e. the sale of all those things, because growth is measured in sales values) comes without an increase in resource consumption?

The article simply states that economic growth does not necessarily mean increasing resource usage. That's just a fact no matter how many examples you attempt to pick apart. This is about the theory and lack of understanding thereof on the part of NS. Real-world doesn't come into it at that point.

Anyway, back in the real-world and to join in the missing-the-point debate, there's fantastic amounts of resources we haven't even thought about using yet. We'll just start switching over time. Running out of resources completely isn't something we have to worry about for a while yet.

What's at the bottom of the economic chain.

If you imagine a very simple economy, the thing supporting everything else is food production.

If you produce excess food you can sell it. If food exists for sale then it allows other people to produce other things (instead of growing their own food) and exchange those things for food.

Is this not still the basis of our economy, it has to be, we all work to live (ie to eat), work is analogous with production and live is analogous with eat. So without excess food produced by someone we'd all be back to spending time trying to ensure we had food.

In an economy with that basis, growth is just an increase in food production. If you can do that without using more land and resource then you've increased everyones wealth as they can now exchange a smaller unit of labour for enough food to live.

Maybe I've got it all wrong, it's much harder to keep it all in your head when you scale it beyond an agricultural economy.

...but I think you missed the point of the article in New Scientist.

But as a countries GDP increases, its consumption of materials will increase. This is nessecarily down to the fact that you need to use resources to generate GDP, but the fact that as peoples affluency increase so do there assperations.

This is the way consumerism works, third world countries the main focus for most people is to have enough food and water to survive. In the first world, we consume much more food and water than this (resources) and we want new cars, iphones, etc. Thus down to our increased growth, we have greatly increased resource use. directly or indirectly.

higher GDP == higher employment rates and higher per capita disposable income, which == more consumption, you need power and heat for the extra employees, and they buy stuff. Sure the technical measure of "economic growth" might be tied to GDP, but in practical terms a growing economy uses more resources, all that added value has to go somewhere, or it isn't, in fact, value at all.

Making a chip might add "more value" (here apparently defined as an increment of GDP) than making a wine bottle, but that's not an either/or choice is it ? We make wine bottles _and_ chips, not chips instead of wine bottles. And if making chips has a more pronounced effect on GDP, and therefore per capita income, it actually leads to higher consumption of other resources, especially ones like wine bottles.

@Parax :

"You know the point is correct when the only holes people pick are in the examples!"

Epic fail, if you use examples that are easily picked apart to illustrate a point, then your point becomes suspect even if it is a good one. After all, if it was a good point, you'd be able to come up with some good examples.

And unfortunately for the above commenter, the singer analogy is equally broken, since it it seems to assume that a professional singer consumes no resources which is utter arsewash. Singers consume resources in food, clothing, travel, education, power, construction of venues, travel resources for spectators, promotional materials, etc, etc. The singers (and indeed other musicians and performers) I know have carbon footprints like a charcoal yeti, so what's your point again ?

but then, coming from an Adam Smith Institute fellow, I'm not surprised the free markets ideals are shown to be the best!

It is indeed possible to increase wealth without using more resources, as you demonstrated with your singing example. But then, what do you do with that wealth? Buy land on the moon? No, increase of wealth means increased consumption of stuff, although not all the stuff will be resources-based (singer example again).

WTF. Actually, the world resources are closer to infinite than you think. Currently, we are not using a significant proportion of the world's resources. We're not even close. From a mass balance point of view the total quantity of each element on the planet has remained pretty much constant over the last couple of billion years. What's really being talked about here is that we're taking a material, pumping in energy, and converting it to something we consider to be more useful. The mass goes nowhere, it's still all here on planet earth. All that happens is we shuffle around some chemical bonds. The ONLY resource that is being used is energy but even that's not really a problem; it's still available in quantities we don't even get close to using. Currently most of the energy we use is in the form of energy stored that originally came from the sun. That is being depleted but the amount of energy that hits the surface of the earth every day is massive and we don't really significantly use it. Why is this important? If we could actually capture any reasonable amount of the suns energy or use something like a fusion reaction then energy would cease to have significant value. And at that point we can simply drive chemical reactions backwards and turn all that water and CO2 back into complex organic molecules that we do find useful. It's actually pretty easy (for example syn gas) but the issue is energy. So actually the BIG problem is not finite resources but our ability to capture enough energy to fully and repeatedly exploit the resources that are there. Trust me, there's a lot of carbon out there that isn't being used (carbonate rocks for example). So perhaps it is more accurate to say that there are finite resources that we can currently access. And that will change as it always has done.

Paris, as i think she could of written a better article

Brilliant! Just shut down the oil, gas, lumbar and mining industries and we'll all become Opera singers! Brilliant! Why didn't these whingeing eco-terrorists think of this first! We can just listen to armchair neo-liberal economists called Tim singing Wagner all day. Brilliant!

That's all. Plus, you forgot, the NS innumerate "hockey stick curve" graph that had 8 or so curves plotted on it all heading for disaster with no scale on any of them to give you any idea of what they meant.

Just spreading panic and not science.

The reason people are picking on the examples is that the author wishes to prove a point - that GDP can rise without natural resource usage increasing. If this point is true, it should be possible (easy?) to come up with some examples which, when all variables are taken into account, clearly show a rise in GDP with no corresponding rise in resource usage. Since the author failed to do that, his overall point is basically lost.

For instance, the chip example, it takes 100s of man years of work to just design the chip. The "value" comes from the design, not from the sand-to-chip process. And 100s of man years costs a lot of money in light and heat and computer time. And those computers have to come from somewhere. As does the software they run. And so on, ad infinitum. That "extra rise in GDP" because you're making chips rather than glass doesn't come from nowhere, and the author is disingenuous to claim that it does.

It seems naive to me to think that you can somehow magically "add more value" without actually doing more work.

There's no simple relationship between GDP and resource usage, that's true. But to claim that ever-increasing GDP does *not* require ever-increasing resource usage is a very bold claim that deserves some level of justification over and above this rag's insistence on ridiculing everyone else's points on the subject.

Historically, as GDP has risen, so has resource usage. That's an empirical fact. Until I hear otherwise, I'll take the empirical facts as being representative of the truth.

BTW, Tim, New Scientist did not accept that economics was a valid way of describing the world. On the contrary, by pointing out its hubris and flaws, they demonstrated quite clearly that it fails to do so. AIUI New Scientist accepts only empirical science as a valid way of describing the world.

Wingnut Tim to the rescue of a boring Thursday!

"But that doesn’t change the fact that the basic point that they’re trying to make, that we must curb growth because it will inevitably mean the consumption of more resources, is simply wrong."

And what happens in the case of growth in population and in consumer demand (as we are witnessing in China and India, for example)?

Thanks for clearing up what GDP means but your carping about the central point of the the New Statesman is bollocks. Just playing the purist for the sake of looking smart.

When I think of the term growth in relation to how it's integral to the current system, I look at like this:

Under the current system, a company is only as viable the value of it's shares, and the share price seems dependent on the continued growth of their profits. Thus, no company can be happy with sustained amount of profit, let alone decreased profit, even if it's still a huge monetry amount. Just look at the oil companies.

This leads companies - which are essentially amoral institutaions - to sacrifice human values and morality for the bottom line via efficiency and "working the system", because their survival depends on it. All the bad that we see companies and corporations doing around the world comes down basically to this.

It's not something inherent to companies or the people who work for them that makes them act like this, it's the current system at the root that is built the need for a constant growth of profits.

So what you're saying is that the entire population should sing for a living, and we'd be okay? I think you only have to watch ITV on a Saturday evening to know how wrong that is.