Peak oil, economic growth and the big lie
In the commentary on Peak Oil recently published in the leading scientific journal Nature, James Murray (the founding director of the University of Washington’s Program on Climate Change) and David King (the Director of the Smith School of Enterprise and the Environment, University of Oxford) made the following statement,
Historically, there has been a tight link between oil production and global economic growth. If oil production can’t grow, the implication is that the economy can’t grow either. This is such a frightening prospect that many have simply avoided considering it.
Why do we find the idea of the end of economic growth so frightening? The reason is what I call, ‘The Big Lie’.
The ‘Big Lie’ of our economic system is that anyone can get rich. Most of the world’s population will not see wealth in their lifetimes, either because of the circumstances of their birth, or because they chose the wrong career path, did not work or study hard enough or did not think it so important to pursue personal monetary gain.
However we all take comfort from the idea that it might be possible to improve our lot or even that, if we make the right choices, we could become rich. Most of us believe that anyone can become wealthy if they truly work hard enough for it. But in a world where finite resources are passing their peak extraction rates this is no longer true: if it ever was.
The great majority of people in our society do not understand economics. Judging by economists’ ability to predict the behaviour of the economy, most of them do not understand economics either. Yet, most people believe they understand the idea of economic growth, or at least the “growth” part. The end of growth does not sound positive.
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