Predictions of 1970 economic report now being borne out
SOME FORTY YEARS AGO, when I was a young engineering student at university we were introduced to the Limits to Growth (LtG), a report which had just been published from a group called the 'Club of Rome' (CoR) that, despite it's title, was based at the Massachusetts Institute of Technology but which boasted experts in various topics from all over the world.
This report came to the conclusion that the economic growth that we had all experienced and enjoyed had severe drawbacks. It pointed out that we couldn't just go on and on using up the world's limited resources and at some point in the distant future the world economy would crash and that we would all be reduced to a relative state of poverty.
I must admit to being rather scared of what I read in this report. The CoR had built a massively complex computer model linking many aspects of the world's economy - population, food production, CO2, extractable resources, nutrition, life expectancy, oil reserves and so on, and they predicted that there would be plenty of economic growth until one day it would all run out and there would be a massive crash.
As an impressionable student this all looked all too credible to me and it was clearly a warning that I should take seriously. But then, over the years, I forgot about the report; I had a vague notion that it had predicted that most natural resources - such as copper, tin, silver and so on - were due to run out by the turn of the century and that as that clearly hadn't happened, the whole thing maybe was a bit of a false warning - and it had also been consigned to the 'dustbin of history' by several critics.
But now, suddenly, it has all come back with a bang - a report published this August from Melbourne University in Australia (http//:bit.ly/1tptCYf) reviewed the original report, which was based on information up to 1970, and have updated it with all the data since.
The results show that the world is performing pretty much exactly as predicted in the LtG 'business as usual' computer model. In other words, back in 1970, they predicted the future, and looking back from 2014, it has been an uncannily accurate prediction.
This set me off to find my old copy of LtR, which I eventually found in my garage. It had cost me £1.25 as a paperback in 1974 and as I reread it, I recalled why I had been so scared 40 years ago.
Resources are indeed being used up at a rapid rate, population and pollution are rising, as are industrial output and food per capita, as predicted.
So what happens next? According to LtG, as resources become more expensive to obtain, more capital goes into that as opposed to industrial production. Industrial output per capita starts to fall soon, they actually predict that by 2015.
As pollution mounts and food production becomes more expensive, health and education budgets are cut back and that results in a significant increase in death rates by 2020.
Global population starts to shrink by about half a billion per decade from around 2030. Eventually average wealth per capita shrinks back to the equivalent of the early 1900s.
And the real problem is, the whole political, commercial and economic world that we live in today has been designed to manage growth and won't have a clue of how to cope when it stops.
And that is probably the scariest bit of all.