What are we consuming?
Back in the 70s, a woman who recently passed away, Donella Meadows, who had written and taught widely and searchingly and with great joy and love, wrote a seminal work titled The Limits to Growth. She is missed.
I very much like how economist Herman Daly has divided up many points which are conflated in the "conventional" concept of growth and economics. The biggest is "growth", which can be separated into qualitative and quantitative aspects. Many who talk about growth really want just the qualitative aspect (this is "development"), but are forced to bring in and use the quantitative aspect instead.
The next biggest, to my mind,
is what brings us consumerism. The "conventional" model is a closed circular
flow of value
between firms and households. Firms produce, and flow goods and services to households; households consume, and flow factors of production to firms. The measure of these flows is money. The resources required for any production are assumed to approach zero and thus can be ignored. Since in reality a minimum amount of resources are required for life and to carry this value, this effectively means that value-flow (consumption) must therefore be driven towards infinity in order to make the model work. This is why economics as conventionally practiced is a dismal science -- it's stuck trying to force-fit anamolous data into a model which cannot take it.
Daly presents two alternative models in Beyond Growth, which help improve on this. The first recognizes the "economy" as an open *subsystem* of the ecosystem: matter and energy in certain low-entropy (highly ordered, thus high value) forms enter the economic subsystem; those forms get manipulated and transformed in sundry ways in the economic subsystem; thermodynamics and other processes ensure that high-entropy (poorly ordered, thus low value) forms escape back into the ecosystem. Natural processes then can reconvert those high-entropy forms back into low-entropy forms, but that's outside our reach and control.
The second model helps us
figure out at what rate we can bring these flows into and through the economic
original formulation comes from one Nicholas Georgescu-Roegen, and it's called the "entropy hourglass". It's closed: no sand enters the hourglass, no sand leaves. Sand doesn't appear or disappear; it simply flows from the top chamber to the bottom chamber. The top chamber is low-entropy, the bottom chamber is high-entropy, and useful work can occur with the sand as it drops past. There's also some sand stuck to the roof of the bottom chamber, which doesn't flow by itself but can be chipped free and made to fall. The upper chamber is the low-entropy energy in the sun -- it is abundant, but there's a limit to its flow. The bottom chamber is the high-entropy world in which we live. That sand stuck on the roof is the low-entropy matter in our world, the non-renewables; it can be removed very quickly, but once it's gone, it's gone forever.
This immediately suggests
a missing piece in economics: the concept of "scale" (as Daly terms it).
This is how much
presence and impact humanity has on its ecosystem, by choosing the size of its economic subsystem. Grow (quantitatively) beyond the limits of the matter and energy flows given by the sun (the upper chamber), and the economy needs to tap the stuck sand, which eventually will run out and force the economy to shrink (quantitatively) back until it lives within the constraints of
So, in Daly's terms, what
we're trying to do is "develop" (qualitatively) such that we can live within
the constraints of
the flows ("sustainability"). Meadows et al has shown what can happen when we don't choose to do so, and some ways we can choose to do so which can lead the world into sustainability.
Daly suggests that one rule
of thumb is to use the "terrestrial capital" of that stuck sand to invest
in ways to live off the
"passive income" of the solar flow. By the time we run out of useful capital, we ought to have set up to live the ways we want
within the constraints of those flows. This leads to rejecting GNP (Gross National Product) as a measure for our economic subsystem, which adds together many benefits, most costs, and net investment -- replacing it with separate measures of benefits, costs, and capital, so we can choose more wisely how and whether to use that stuck sand or to act/not-act on something at all.