[Marxism] Is Growth Over?

ehrbar at greenhouse.economics.utah.edu ehrbar at greenhouse.economics.utah.edu
Wed Jan 16 12:40:58 MST 2013


I wrote:

> Even the mainstream is coming to the conclusion that there
> are conditions making growth possible that we do not
> understand very well.

Ralph asked me to elaborate and to explain better why I
thought this was a summary of Lou's blog post.

Textbook economics has growth models with capital and labor,
with technology determining the growth rate.  This is what I
call a model which takes growth for granted.  All we need is
living labor and past labor (capital) and somehow increases
in technology will fall like mannah from heaven and the
economy will grow.  Technology does not create unemployment
but, since it leads to growth, increase overall labor
demand.

Marx attacked the so-called "theory of compensation", which
was the version of this theory in classical economics, and
more recently Hermann Daly attacked the version of this in
neoclassical economics (Solow's growth models and
derivatives).  Daly says there is a third condition for
growth, namely natural resources, which puts increasing
constraints on growth, and much of what is mistaken as the
effects of technology is really the effect of cheap energy
and increased extraction of natural resources.  There has
been a trickle of papers about this, but recently more and
more mainstream papers and books discuss this issue.  They
look in detail at periods of growth in the past in order to
understand what drove these spurts of growth and when and
why they petered out again. There are also papers about
growth and energy etc.

The times of cheap and abundant energy are over and climate
change is starting to make everything more difficult and
expensive.  I think Lou's blog addresses some of the
symptoms of it without probing the underlying conditions
causing these changes.  This requires a rethinking of
economic theories which only worked during the exceptional
times of the "fossil fuel bonanza".  It also requires
different tactics for the class struggle.

Hans




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