What is the possibility that the economy will switch over to one that does not use as many resources, and can continue growing? I say this thinking of ecommerce and the likely invention of a virtual reality that mirrors our own where real dollars will be traded for virtual things. Also, an economy that switches to service economy (a massage, personal trainer, yoga instructor) instead of a toy economy (cars, HD TV’s, 10,000 sq ft homes) would greatly reduce consumption.

- 2% Milk

June 29th, 2007

The size of the economy can be roughly stated as: population x standard of living.

Do you see the population decreasing any time soon? Maybe if China and the USA start nuking each other, or if we have a good plague…

How about average standard of living? People in China and India (not to mention Zimbabwe) want a European/Canada/USA standard of living, so in the short term at least we will see the average increase. On the other hand, it’s easy to see decreasing on average eventually: all we have to do is run out of oil. Think of oil as a savings account of solar energy accrued over millions of years. But until that happens, we’ll do what mankind has always done as something becomes rare: we’ll get better and better at harvesting it. Can you say buffalo or dodo or carrier pigeon? I knew you could.

A service industry does NOT reduce consumption. All it does it distribute labor differently. In a service economy, I have more free time to spend money! Plus, the people making my dinner had to get to the restaurant somehow (consuming resources doing so), as did I. And they used as much or more energy and water creating the meal (there’s probably more wasted food at a restaurant than at home, too).

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