Greta vs. growth

Graph of the size of the global economy (Gross World Product) historic
The size of the global economy (Gross World Product) over the long term, 1 CE – 2020 CE

“People are suffering.  People are dying.  Entire ecosystems are collapsing.  We are in the beginning of a mass extinction, and all you can talk about is money and fairy tales of eternal economic growth.  How dare you!”  So spake Greta Thunberg at the United Nations on September 23rd, 2019.

Thunberg, a sixteen-year-old without a university education, has had the insight, clarity, and courage to say what ten-billion-dollars worth of Ph.D. economists haven’t: that continued economic growth is, at best, unsustainable and probably much worse: a malignant illusion driving us to destroy our biosphere, civilization, and future.  The project of making the current global economy four or eight times larger is a suicide pact.

The graph above places our 21st century economy in its long-term context.  It shows the size of the global economy (Gross World Product) from 1 CE to 2020.  The units are trillions of US/international dollars adjusted for inflation (constant 2011 dollars).  The main source is the World Bank, with historical data from Angus Maddison.  (Pre-20th century values are, by necessity, estimates by Maddison.)

The years 1900, 2000, and 2020 are highlighted.  Sometime in 2020 the size of the global economy will surpass 127 trillion dollars.  When it does, it will be twice as large as it was in 2000.  The economy will have doubled in size in just 20 years.  This shouldn’t be a surprise.  Sustained growth rates of 3.5 percent leads to a doubling every 20 years.  (Recall the Rule of 70.)

Going forward, if we maintain current rates of growth—three to four percent annually—the economy will be twice as large again by 2040 or soon after—making it four times larger than in 2000.  Earth’s atmosphere, oceans, land, and biosphere will be hosting four 2000-sized economies.

And by 2060 or 2070, another doubling will bring the global economy to eight times its 2000 level.  And there’ll still be more than enough time left in this century to double it again—at least a 16-fold increase in size in a single century, if we stay the course.  If we accomplish this, we will be reprising the 18-fold increase seen during the 20th century.

Of course, we won’t do this—we won’t make the global economy 8 or 16 times larger.  Within a generation or two nearly everyone on the planet will be living in a post-growth economy: either because we’ve had the wisdom to end runaway exponential growth and put the biosphere first, or because we have not.

The end of growth, inescapable in the medium term, will bring numerous problems, such as how will we deal with the equity claims of the poor if we can no longer rely on the convenient fictions of “a rising tide raises all boats” and “anyone (everyone?) can grow up to be rich.”  While the end of growth must come for nearly all within a few decades, it must come first for those of us who are richest, so that growth can continue in places where people are poorer.  Those of us who enjoy jet vacations need to step off the growth escalator first so that growth can continue for others and deliver to them running water and refrigerators.  The end of growth casts into sharp relief a series of moral problems.

But the end of growth will also solve many problems.  We will be forced to take less of our economy’s productivity and bounty in the form of consumer products and more in the form of free time and low-emission leisure—more time with family, more time with friends drinking coffee or wine, more time with culture and nature; more discussion, poetry, romance, literature, and contemplation.  Most of the people in the fast-expanding (-metasticizing?) global middle class are living high-stress, low-quality, time-impoverished lives.  Stepping off the growth escalator can be part of a larger civilizational, cultural, and spiritual shift in which we rediscover meaning and purpose beyond getting and spending.

Thunberg is neither sage nor prophet.  And one need be neither to see what is absolutely, inescapably obvious: growth must and will soon end.  But we have a choice: We can deny the fact of growth’s imminent end and continue in the fairy tale and massively deplete and damage the planet in a last frenzied attempt to squeeze out one or two more doublings, or we can be as mature as a sixteen-year-old, admit the obvious, get on with the needed changes, and reap the benefits of slower, saner, more sustainable, more enjoyable lives.

Sources for graph:
– 
World Bank, Databank website: “GDP, PPP (constant 2011 international $)”
– 
Angus Maddison, The World Economy, Volume 1: A Millennial Perspective (Paris: OECD, 2001); Angus Maddison, Contours of the World Economy, 1–2030 AD: Essays in Macro-Economic History (Oxford: Oxford University Press, 2007)

 

 

 

Another trillion tonnes: 250 years of global material use data

Graph of Global materials use 1850-2100
Global materials use, 1850-2100

Want to understand your society and economy and the fate of petro-industrial civilization?  If so, don’t “follow the money.”  The stock market casino, quantitative easing, derivatives and other “financial innovations,” and the trillions of e-dollars that flit through the global monetary system each day obscure the real economy—the production and destruction of actual wealth: mining, farming, processing, transport, manufacturing, consumption, disposal.  To understand where we are and where we may be going, we must follow more tangible flows—things that are real.  We must follow the oil, coal, steel, concrete, grain, copper, fertilizers, salt, gravel, and other materials.

Our cars, homes, phones, foods, fuels, clothes, and all the other products we consume or aspire to are made out of stuff—out of materials, out of wood, iron, cotton, etc.   And our economies consume enormous quantities of those materials—tens-of-billions of tonnes per year.

The graph above shows 250 years of actual and projected material flows through our global economy.  The graph may initially appear complicated, because it brings together seven different sources and datasets and includes a projection to the year 2100.  But the details of the graph aren’t important.  What is important is the overall shape: the ever-steepening upward trendline—the exponential growth.

In 1900, global material flows totalled approximately 7 billion tonnes.  The technical term for these material flows is “utilized materials”—the stuff we dig out of mines, pump up from oil or natural gas wells, cut down in forests, grow on farms, catch from the sea, dig out of quarries, and otherwise appropriate for human uses.  These tonnages do not include water, nor do they include unused overburden, but they do include mine tailings, though this last category adds just a few percent to the total.

Between 1900 and 2000, global material tonnage increased sevenfold—to approximately 49 billion tonnes (Krausman et al. 2009).  Tonnage rose to approx. 70 billion tonnes by 2010 (UNEP/Schandl 2016), and to approx. 90 billion tonnes by 2018 (UNEP/Bringezu 2018).  At the heart of our petro-industrial consumerist civilization is a network of globe-spanning conveyors that, each second, extract and propel nearly 3,000 tonnes of materials from Earth’s surface and subsurface to factories, cities, shops, and homes, and eventually on to landfills, rivers and oceans, and the atmosphere.  At a rate of a quarter-billion tonnes per day we’re turning the Earth and biosphere into cities, homes, products, indulgences, and fleeting satisfactions; and emissions, by-products, toxins, and garbage.

And these extraction, consumption, and disposal rates are projected to continue rising—to double every 30 to 40 years (Lutz and Giljum 2009).  Just as we increased material use sevenfold during the 20th century we’re on track to multiply it sevenfold during the 21st.  If we maintain the “normal” economic growth rates of the 20th century through the 21st we will almost certainly increase the volume and mass of our extraction, production, and disposal sevenfold by 2100.

But 2100 is a long way away.  Anything could happen by then.  Granted.  So let’s leave aside the long-term and look only at the coming decade.  Material throughput now totals about 90 billion tonnes per year, and is projected to rise to about 120 billion tonnes per year over the coming decade.  For ease of math, let’s say that the average over the coming decade will be 100 billion tonnes per year.  That means that between 2019 and 2029 we will extract from within the Earth and from the biosphere one trillion tonnes of materials: coal, oil, wood, fish, nickel, aluminum, chromium, uranium, etc.  …one trillion tonnes.  And we’ll send most of that trillion tonnes on into disposal in the ground, air, or water—into landfills, skyfills, and seafills.  In the coming decade, when you hear ever-more-frequent reports of the oceans filling with plastic and the atmosphere filling with carbon, think of that trillion tonnes.

Postscript: “dematerialization”

At conferences and in the media there’s a lot of talk of “dematerialization,” and its cousin “decarbonization.”  The idea is this: creating a dollar of economic activity used to require X units of energy or materials, but now, in countries such as Canada and the United States, creating a dollar of economic activity requires only two-thirds-X units.  Pundits and officials would have us believe that, because efficiency is increasing and less material and energy are needed per dollar, the economy is being “dematerialized.”  They attempt to show that the economy can grow and grow but we need not use more materials or energy.  Instead of consuming heavy steel cars, we will consume apps, massages, and manicures.  But this argument is wrong.  Global material and energy use increased manyfold during the 20th century.  The increases continue.  A business-as-usual scenario will see energy and materials use double every 30 to 40 years.  And just because the sizes of our economies, measured in abstract currencies, are growing faster, this does not change the fact that our use of energy and materials is growing.  “Dematerialization” has no useful meaning in a global economy in which we are using 90 billion tonnes of materials per year and projecting the use of 180 billion tonnes by 2050.  Our rate of extraction and consumption of materials is rising; the fact that the volume of dollar flows is rising faster is merely a distraction.

Sources for material flow tonnage:

Fridolin Krausmann et al., “Growth in Global Materials Use, GDP, and Population During the 20th Century,” Ecological Economics 68, no. 10 (2009).

Christian Lutz and Stefan Giljum, “Global Resource Use in a Business-as-Usual World: Updated Results from the GINFORS Model,” in Sustainable Growth and Resource Productivity: Economic and Global Policy Issues, ed. Bleischwitz et al. (Sheffield, UK: Greenleaf Publishing, 2009).

Stefan Giljum et al., Sustainable Europe Research Institute (SERI), “Resource Efficiency for Sustainable Growth: Global Trends and European Policy Scenarios,” background paper, delivered Sept. 10, 2009, in Manila, Philippines.

Julia Steinberger et al., “Global Patterns of Materials Use: A Socioeconomic and Geophysical Analysis,” Ecological Economics 69, no. 5 (2010).

UN Environmental Programme (UNEP) and H. Schandl et al., Global Material Flows and Resource Productivity: An Assessment Study of the UNEP International Resource Panel (Paris: UNEP, 2016).

Krausmann et al., “Long-term Trends in Global Material and Energy Use,” in Social Ecology: Society-Nature Relations across Time and Space, ed. Haberl et al. (Switzerland: Springer, 2016).

United Nations Environment Programme (UNEP), International Resource Panel, and Stefan Bringezu et al., Assessing Global Resource Use: A Systems Approach to Resource Efficiency and Pollution Reduction (Nairobi: UNEP, 2017).

Organization for Economic Cooperation and Development (OECD), Global Material Resources Outlook to 2060: Economic Drivers and Environmental Consequences (Paris: OECD Publishing, 2019)

Everything must double: Economic growth to mid-century

Graph of GDP of the world's largest economies, 2016 vs 2050
Size of the world’s 17 largest economies, 2016, and projections for 2050

In February 2017, global accounting firm PricewaterhouseCoopers (PwC) released a report on economic growth entitled The Long View: How will the Global Economic Order Change by 2050?  The graph above is based on data from that report.  (link here)  It shows the gross domestic product (GDP) of the largest economies in the world in 2016, and projections for 2050.  The values in the graph are stated in constant (i.e., inflation adjusted) 2016 dollars.

PwC projects that China’s economy in 2050 will be larger than the combined size of the five largest economies today—a list that includes China itself, but also the US, India, Japan, and Germany.

Moreover, the expanded 2050 economies of China and India together ($102.5 trillion in GDP) will be almost as large as today’s global economy ($107 trillion).

We must not, however, simply focus on economic growth “over there.”  The US economy will nearly double in size by 2050, and Americans will continue to enjoy per-capita GDP and consumption levels that are among the highest in the world.  The size of the Canadian economy is similarly projected to nearly double.   The same is true for several EU countries, Australia, and many other “rich” nations.

Everything must double

PwC’s report tells us that between now and 2050, the size of the global economy will more than double.  Other reports concur (See the OECD data here).  And this doubling of the size of the global economy is just one metric—just one aspect of the exponential growth around us.  Indeed, between now and the middle decades of this century, nearly everything is projected to double.  This table lists just a few examples.

Table of projected year of doubling for various energy, consumption, transport, and other metrics
Projected year of doubling for selected energy, consumption, and transport metrics

At least one thing, however, is supposed to fall to half

While we seem committed to doubling everything, the nations of the world have also made a commitment to cut greenhouse gas (GHG) emissions by half by the middle decades of this century.  In the lead-up to the 2015 Paris climate talks, Canada, the US, and many other nations committed to cut GHG emissions by 30 percent by 2030.  Nearly every climate scientist who has looked at carbon budgets agrees that we must cut emissions even faster.  To hold temperature increases below 2 degrees Celsius relative to pre-industrial levels, emissions must fall by half by about the 2040s, and to near-zero shortly after.

Is it rational to believe that we can double the number of cars, airline flights, air conditioners, and steak dinners and cut global GHG emissions by half?

To save the planet from climate chaos and to spare our civilization from ruin, we must—at least in the already-rich neighborhoods—end the doubling and redoubling of economic activity and consumption.  Economic growth of the magnitude projected by PwC, the OECD, and nearly every national government will make it impossible to cut emissions, curb temperature increases, and preserve advanced economies and stable societies.  As citizens of democracies, it is our responsibility to make informed, responsible choices.  We must choose policies that curb growth.

Graph source: PriceWaterhouseCoopers

Our civilizational predicament: Doubling economic activity and energy use while cutting emissions by half

Graph of Global economic activity, energy use, and greenhouse gas emissions, 1CE to 2015CE.
Global economic activity, energy use, and carbon dioxide emissions, 1CE to 2015CE.

My friends sometimes suggest that I’m too pessimistic.  I’m not.  Rather, I’d suggest that everyone else is too optimistic.  Or, more precisely, I live in a society where people are discouraged from thinking rigorously about our predicament.  The graph above sets out our civilizational predicament, and it hints at the massive scale of the transformation that climate change requires us to accomplish in the coming decade or two.

The main point of the graph above is this: Long-term data shows that the size and speed of our global mega-civilization is precisely correlated with energy use, and energy use is precisely correlated with greenhouse gas emissions.  We have multiplied the size of our global economy and our living standards by using more energy, and this increased energy use has led us to emit more carbon dioxide and other greenhouse gases.

The graph plots three key civilizational metrics: economic activity, energy use, and carbon dioxide (CO2) emissions.  The graph covers the past 2015 years, the period from 1 CE (aka 1 AD) to 2015 CE.  The blue line depicts the size of the global economy.  The units are trillions of US dollars, adjusted for inflation.  The green diamond-shaped markers show global energy use, with all energy converted to a common measure: barrels of oil equivalent.  And the red circles show global CO2 emissions, in terms of tonnes of carbon.

Though it is seldom stated explicitly, most government and business leaders and most citizens are proceeding under the assumption that the economic growth line in the graph can continue to spike upward.  This will require the energy line to also climb skyward.  But our leaders are suggesting that the emissions line can be wrenched downward.  When people are “optimistic” about climate change, they are optimistic about doing something that has never been done before: maintaining the upward arc of the economic and energy trendlines, but somehow unhooking the emissions trendline and bending it downward, toward zero.  I worry that this will be very hard.  Most important, it will be impossibly hard unless we are realistic about what we are trying to do, and about the challenges and disruptions ahead.

We must not despair, but neither should we permit ourselves unfounded optimism.  There is a line from a great movie—the Cohen Brother’s “Miller’s Crossing”—in which the lead character, a gangster played by Gabriel Byrne, says “I’d worry a lot less if I thought you were worrying enough.”

Graph sources: GDP: Angus Maddison, The World Economy, Volume 1: A Millennial Perspective (Paris: Organization for Economic Co-operation and Development, 2001)

GHGs: Boden, T.A., Marland, G., and Andres R.J., “Global, Regional, and National Fossil-Fuel CO2 Emissions,” Carbon Dioxide Information Analysis Center (CDIAC), Oak Ridge National Laboratory, U.S. Department of Energy, Oak Ridge, Tenn., U.S.A.

Energy consumption: Vaclav Smil, Energy in Nature and Society: General Energetics of Complex Systems (Cambridge, MA: The MIT Press, 2008); British Petroleum, BP Statistical Review of World Energy: June 2016 (London: British Petroleum, 2016); pre-1500 energy levels estimated by the author based on data in Smil.

Deindustrialization: Or, what are half-a-billion Canadians and Americans going to do for a living?

Graph of United States Gross Domestic Product, by sector, 1947 to 2016, highlighting deindustrialization
United States Gross Domestic Product, by sector, 1947 to 2016

Canada and the US continue to undergo rapid deindustrialization.  Our economies are increasingly service-based, and that should worry us.

The graph above looks complicated, but the key idea is contained in two trends.  And both are negative.  First, note the declining contribution manufacturing is making to United States (US) Gross Domestic Product (GDP).  The red, dotted line shows manufacturing’s percentage contribution.

Manufacturing now makes up just 12 percent of US GDP, and less than 10 percent in Canada.  The decline of manufacturing is even more evident when we look at employment rather than GDP.  According to the US Bureau of Labor Statistics, goods-producing industries (manufacturing, mining, construction, agriculture, etc.) now employ roughly 15 percent of America’s working population.  Nearly 85 percent are employed in the service sector.  The situation is similar in Canada.  According to Statistics Canada data , approximately 77 percent of Canadian workers are employed in the service sector, and this percentage continues to rise.  Both nations continue to deindustrialize.

Second, note the rise in the importance of three service sectors: 1. Finance, insurance, real estate, and rentals (the broad blue line); 2. Professional and business services (green line); and 3. Education and healthcare (red line). A US economy built upon General Motors, General Electric, and U.S. Steel has given way to one built upon JPMorgan Chase, Walmart, and UnitedHealth Group.

Note, especially, the blue line: finance and real estate.  With the 2008 financial crisis still fresh in our minds, and its effects still resonating through global economies, it should worry North Americans that banking and real estate have replaced manufacturing as the one of the largest economic sectors.

Manufacturing is declining, our energy sectors may have to contract as we deal with climate change, most North American fisheries have been depleted and agriculture seems to need fewer farmers and workers each year, low-wage nations continue to claim Canadian and American jobs, and we’re told that the robots are coming.  By mid-century there will be more than 450 million people living in Canada and the US.  Every politician in every party and every engaged citizen should be asking the same question: what are nearly half-a-billion North Americans going to do for a living?

We are not doomed to decline, but decline will be our lot unless we actively engage in a collective democratic effort to build a new, sustainable economy for North America.

Graph source: US Dept. of Commerce, Bureau of Economic Analysis

 

A doubling problem: 21st century exponential growth of the global economy

Graph of stylized exponential growth in the global economy
A notional graph modelling exponential growth in the global economy

When I was in grade-school, an uncle taught me something about limits, and about doubling.  He asked me: How many times can you fold a piece of paper in half?  Before I could reply, he told me that the answer was eight.  I thought this seemed too low.  So, as a child eager to demonstrate adults’ errors, I located a sheet of writing paper and began folding.  I managed seven folds—not even achieving the predicted eight.  I thought that the problem was the small size of the paper.  So, I located a newspaper, removed one sheet, and began folding.  I folded it eight times but could not make it to nine.

Why this limit?  Most people assume that the problem is the size of the sheet of paper: as we fold it, the paper gets smaller and, thus, the next fold becomes harder.  This is true, but the real problem is that the number of sheets to be folded increases exponentially.  Fold the paper once and it is two sheets thick.  A second fold brings the thickness to four sheets.  A third fold: eight.  A fourth, fifth, and sixth fold: sixteen sheets, thirty-two, then sixty-four.  The seventh fold doubles the thickness again to 128 sheets, and an eighth to 256.  When I was a child folding that sheet of newspaper, in attempting that ninth fold I was straining to bend 256 sheets.

Now, if I started with a very large piece  of paper perhaps I could prove my late uncle wrong and achieve that ninth fold.  It’s hard to predict precisely where limits lie.  Imagine a football-field-sized piece of paper and ten linebackers assigned the task of folding.  Those players could certainly make nine folds.  Perhaps they might even achieve ten, bending 512 sheets to increase the thickness to 1,024.  Maybe they could strain to make eleven folds, bending those 1,024 sheets to achieve a thickness of 2,048.  But eventually the doubling and redoubling would reach a point where it was impossible to double again.  Exponential growth creates a doubling problem.

Our petro-industrial-consumer mega-civilization has a doubling problem.  During the 20th century we doubled the size of the global economy four times.  Four doublings is a sixteenfold increase: 2, 4, 8, 16.  Despite this multiplication, today, every banker, CEO, investor, Minister of Finance, shareholder, bondholder, and would-be retiree (i.e., nearly all of us) wants to keep economic growth going.  And we want growth to continue at “normal” rates—rates that lead to a doubling in the size of the economy about every 25 years.  Thus, in effect, what we want in the 21st century is another four doublings—another sixteenfold increase.  The graph above shows the sixteenfold increase that occurred during the 20th century and shows what a sixteenfold increase during the 21st century would look like.

The first doubling of the 21st century is already underway.  We’re rapidly moving toward a global economy in 2025 that is twice the size of the one that existed in 2000.  But the economy in 2000 was already placing a heavy boot upon the biosphere.  By that year, North America’s East Coast cod fishery had already collapsed, greenhouse gas emissions were already driving up temperatures, and the Amazon was shrinking.  Despite this, we seem to believe that a 2025 economy twice as large as that year-2000 economy is “sustainable.”  Even worse, in 2025, we won’t be “sustaining” that two-times-2000 economy, we’ll be working to double it again.

Clearly, at some point, this has to stop.  Even those who think that the Earth can support and withstand a human economy twice the size that existed in 2000 must begin to have doubts about an economy four or eight times as large.  There can be no dispute that economic growth must end.  Though we may disagree as to when.

Perceptive readers will have noted a shortcoming in my paper-folding analogy: That system runs into hard limits; at some point, attempts to double the number of sheets simply fail, and that failure is immediately apparent.  Our civilizational-biospheric system is different.  Limits to Earth’s capacities to provision the human economy and absorb its wastes certainly exist, but they are not hard limits.  Given the immense power of our economy and technologies, we can breach Earth’s limits, at least for a time.  On many fronts we already have.  It will only be in hindsight—as ecosystems collapse and species disappear and the biosphere and climate become destabilized, damaged, and hostile—that we will know for sure that we’ve crossed a terrible line.  Only then will we know for sure that at some point in our past our doubling proceeded too far.  So, unlike paper folding, determining the limits of economic growth requires human wisdom and self-restraint.

China (re)rising: 1,000+ years of data on who dominates the global economy

Graph of China's share of the global economy, and selected other nations, 1000 AD to present
China’s share of the global economy, along with other nations, 1000AD to present

China’s share of the global economy has increased rapidly—from about 5 percent in the early 1980s to more than 26 percent today.  India’s economy has similarly expanded, from 3 percent of the global economy in the early ’80s to more than 8 percent today.  Meanwhile, the percentage shares of the US, UK, Germany, Japan, and other nations are falling fast.  The graph above shows the relative share of global GDP represented by selected nations.  The time-frame is 1000 AD to 2016.

Manufacturing data* similarly shows India and China’s long-term dominance. In 1800, fully half the manufacturing output of the world came from India and China.  In that year, the UK contributed 4.3 percent of manufacturing output and the US just 0.8 percent.  The UK and US came to dominate global manufacturing by the late-1800s, but their rise is recent and, as the graph above suggests, their dominance may be shortlived.

Many people have been surprised by the “rise of China” and that of India.  No one should be.  The global economy is merely returning to its long-term normal—resetting after an anomalous period when European and New World nations were economically ascendant.  Indeed, England and Europe have been economic backwaters for 97 percent of the time since civilizations first arose 5,000 years ago. Our educational system fails to teach us that China and India are the default global superpowers.

To give just two final examples of the long-term dominance of Asia, China  smelted hundreds of thousands of tons of iron in the 11th century using coal rather than wood, a feat not matched in Europe until 600 years later.** A list of the ten largest cities in the world in the year 1500 includes four in China (Beijing, Nanjing, Hangzhou, and Guangzhou) and two in India (Gaur and Vijayanagara), but just one in Europe, (Paris). The three cities rounding off the top-ten list were Tabriz, Cairo, and Istanbul.*** Clearly, the economic and civilizational centre of gravity was in the East. It appears to be shifting back there.

* Paul Bairoch, “International Industrial Levels from 1750 to 1980”
** Hartwell, various pubs
*** Hohenberg, Oxford Encyclopaedia of Economic History

Graph sources: 1000AD-2008, Angus Maddison, 2009-2016 Conference Board

This isn’t normal: 2,000 years of economic growth

Graph of gross world product (GWP) historic, for the past two thousand years
Gross World Product (GWP) over the long term, 1 CE – 2015 CE

The graph above places our 21st century global economy in its long-term context. It plots Gross World Product (GWP), the global aggregation of Gross Domestic Product (GDP). The time frame is the past 2,015 years: 1 CE (or AD) to 2015 CE. The units are trillions of US/international dollars adjusted for inflation (converted to 1990 dollars). The main source is Angus Maddison.  Pre-20th century values are, by necessity, informed estimates by Maddison.

The year 1870 is marked with a white circle. In the millennia before 1870, the size of the global economy barely grew at all. Then, not long before the eve of the 20th century, all Hell broke loose. The most recent ten or fifteen decades appear in our historical economic record like an explosion. For perhaps 98 percent of human history, the economic trendline has been almost flat—horizontal. Over the past century-and-a-half it has been almost vertical.

The late-19th, 20th, and early 21st centuries have not been “normal.” They have been extraordinary and wondrous. Equally extraordinary is how far we have gone to normalize what is clearly an abnormal situation. Though our lifestyles and expectations are now tightly bound to near-vertical trendlines we talk and act as if nothing out of the ordinary is happening, and that we can count on more of the same for the foreseeable future.

Moreover, the 20th and 21st century exceptionalism on display in this graph is not limited to economic growth. Graphs of energy use, population, cotton or iron production, water withdrawals, food production, automobile numbers, air-travel miles, and nearly any other economic metric will look nearly identical to the graph above: millennia of little or no growth, then a sudden spike. There is upon the Earth a wholly new kind of civilization.

Graph sources: Angus Maddison, The World Economy, vol. 2, Historical Statistics (Paris: OECD, 2006) Tables 7b and 8b; and World Bank, “World DataBank: World Development Indicators: GDP at market prices” 

Exponential growth: US and Canadian GDP in the 20th century

US and Canadian Gross Domestic Product (GDP) historic
Canada and US Gross Domestic Product (GDP), 1900–2016

This graph shows the increasing sizes of the US and Canadian economies. The graph plots US Gross Domestic Product (GDP) on the left-hand axis, and Canadian GDP on the right. The time-frame is 1900 to 2016. The year 2000 is marked with an open circle, to highlight the 20th century. The units are trillions of US or Canadian dollars, and all figures are adjusted for inflation, that is, they are stated in 2016 dollars.

How much did these economies grow during the 20th century? US GDP in 1900 was $0.59 trillion dollars (in today’s US currency). In 2000, GDP was $14.3 trillion dollars—24 times larger. Canada’s economy in 2000 was 45 times larger than in 1900.

We can calculate the average annual growth rate. During the 20th century, the US economy grew at an average compound rate of 3.2 percent. We often hear growth rates of 2 to 3 percent described as normal. Indeed, if rates in the US or comparable nations fall below 2 percent, analysts warn of “slow growth.” Moreover, in recent years there has been consternation as Chinese economic growth rates have fallen from 9 or 10 percent per year to 7.

Can the US and comparable economies grow at rates in the 21st century that were “normal” in the 20th? Even if annual growth slows to an average of just 2 percent, the size of the US economy will increase 7-fold between 2000 and 2100. If the US economy grows at 2 percent per year throughout the 21st century, by 2100 the US economy alone will be more than twice as large as the global economy of 2000.

Growth rates of 2 or 3 percent per year, modest when considered over the short term, will, over several decades, cause an economy to double and redouble in size. Can we multiply the sizes of already-large national economies five- or ten-fold this century? Is it wise to try?

Graph sources: United States GDP: US Deptartment of Commerce, Bureau of Economic Analysis, NIPA Table 1.1.5; and Louis Johnston and Samuel Williamson, “What Was the U.S. GDP Then?” MeasuringWorth, https://www.measuringworth.com/usgdp/ . Canadian GDP: Statistics Canada CANSIM Tables 380-0566 and 384-0037; and M.C. Urquhart, “New Estimates of Gross National Product, Canada, 1870-1926…,” in Long-Term Factors in American Economic Growth, eds. Stanley Engerman and Robert Gallman (Chicago: University of Chicago Press, 1986)