Forty years ago an organisation called the Club of Rome launched a Report called Limits to Growth. It would probably have drifted into obscurity at the time if the first OPEC Oil Crisis had not surprised the world a year later, suggesting in a media frenzy that we were running out of everything. Well the world has clearly not run out of anything (except perhaps wisdom). Indeed the Limits to Growth Report was junked with Malthus as doomsayers of disasters that never happened – there will always be enough resources etc.
A tattered version of the Report is still in the College Library. Unfortunately if you read it the big surprise is that it didn’t predict Armageddon until 2030. Since its models were fitted to the 1970’s growth rates of variables like population, and those growth rates have been maintained for decades, it is not actually a bad predictor of 2005. The 2030 – 2040 bad patch has stubbornly refused to move in subsequent revisions and refinements of the model over the last 30 years. Of course 2030 is just when today’s Imperial graduates expect to take Command of their Ship.
The response to the original report seems rather muddled as far as I can judge from a 2012 perspective. For example, the Review of Economic Studies set aside a special edition on the subject. It was ignored by the major economists of the time with other weighty things to worry about. So a few young unknowns (like Stiglitz and Nordhaus!) had their day. Markets would solve the allocation problem it seemed. Well, in the sense that markets are there to allocate, that was true, but whether Government thought they would get a better deal by just rolling tanks over borders was never addressed.
As was then fashionable in economics, there was little distinction between Main Street and Traders as far as markets were concerned. Today it seems totally implausible to expect markets with liquidity (and so volatility) necessarily provided by traders to deliver the job. No one is going to discover a price for a 30 year asset from algorithmically traded commodities. So all in all it is not going well. On one hand we have Governments hoarding resources and buying helicopter gunships while dead-locking diplomatic texts for embryonic international law. On the other hand we have traders who would view thinking about the next coffee break as horizon scanning. Anterograde amnesia (OK I looked it up because I couldn’t remember) is the sine qua non of financial journalism.
Well this issue of A Global Village, as ever on the ball, has plenty to say about resources and conflict. My estimate is that the world has around 500 million villages. I conjecture that at this moment about 5 million are consumed in disputes about resources. In mine it is fences and driveways but elsewhere it is much, much more serious. I would further conjecture that a few hundred thousand villages are not handling that dispute at all well. The rest will eventually sort it out with a reluctant shake of hands. So the Global Village has two pathways if the metaphor still holds. Which way will it be? The technology that we parade here buys us breathing space providing it is not inflated by public relations delusions of cornucopia. But Captain Jack, if your shipmates have you walking the plank because you tried to steal the gold, asking them to push the plank out further can only be to buy time to make peace with them. Otherwise, 12 feet later, you will still end up in the sea.
Prof. David Fisk
Laing O’Rourke Director of Systems Engineering & Innovation Research,
Imperial College London