Back to the Future: Limits of Economic Growth in Latin America

It was back in the days of enormous computers. Massive machines that occupied several rooms calculated the surface area of the earth needed to feed the planet’s population, and the area lost due to urbanization and other uses. The computers vibrated and spit out their results: in a matter of a few years, a situation of abundance could give way to one of food shortages due to supply that cannot satisfy the exponential growth in demand.

Today, similar warnings have become common, but what is shocking about this case is the fact that they come more than 30 years after the book The Limits to Growth. This study, published in 1972 by Donella Meadows and colleagues at the Massachusetts Institute of Technology, questioned whether environmental limits render continuous economic growth possible.1 Immediately, controversy arose on all sides. Conservative groups and businesses rejected the existence of the effect of ecological limits on exponential economic growth, and they also minimized the reduction of natural resources and the importance of environmental impact. But many left-wing groups during that period also questioned the study, seeing it as a bourgeois imposition or a neo-Malthusian demand that would impede the development of third world countries.

Today the food crisis and the question of peak oil once again expose those warnings on environmental limits and confront conventional defensive strategies for continuous economic growth.

Current evidence on the limits of the availability of resources is so overwhelming that even the skeptical must accept it. Possibly the best-known case is that of hydrocarbons. For years now there have been no new important discoveries while consumption continues to rise. The price of a barrel has increased to more than $100 a barrel, and even if there are many factors to explain this dynamic, nobody can deny that one such factor is the reduction in known global reserves.

IRC Americas