2009 World Economic Forum Meeting |

Politicians and
economists often tell us that job creation requires a GNP growth above 2 or 3%.
According to them, the optimum situation and the end of the crisis will be
reached when a permanent growth is achieved above these figures, the higher the
better. Not many seem to be considering whether such a situation is possible in
the long run.

Let us take the simplest
case: assume that it were possible to achieve a cumulative annual growth of 3% GNP,
indefinitely continued. Would we have achieved utopia, would we be living in
the best of worlds?

*Maybe, but not for long.*

A simple calculation
shows that, with a yearly 3% growth rate, GNP would double in 23 years; would be
multiplied by 10 in 78 years; 20 times larger in a century; 100 times in one century
and a half; 400 times in two centuries; and 7,100 times larger in three
centuries. No natural resources or society can withstand this rate of growth.

Logistic curve |

As every mathematician
knows, a constant cumulative growth rate gives rise to an exponential curve,
but exponential curves are unsustainable. Gordon Moore, famous for his law on
the evolution of computer hardware, put it this way in 2003:

**. In other words, all exponential growth ends sooner or later by the action of natural causes. All the curves that at first seem like exponential growths, in the end become logistic curves, where growth reaches an inflection point and then slows until reaching a maximum.***No exponential is forever*Growth of microprocessor clock rates |

We have had a more
or less positive economic growth for over a century because this growth has
been supported by another logistic curve: the increase in world's population,
but this surpassed its inflection point around 1985, and is expected to reach its
peak during the 21

^{st}century. Economic growth has also been supported by a third logistic curve, technological growth, expressed by Moore's law, but this also seems to have gone through its inflection point. To continue the exponential growth, new important technological advances should take place, which is unpredictable.
In Japan, in 2010, after two
decades of near zero growth, some politicians and economists sought out novel
ways of solving the problem and came up with the following solution:

**by introducing negative interest rates, i.e. charging the customers for saving their money in banks. As this measure could encourage people to save their money at home, cash would be eliminated by forcing all payments to be done by credit card, so that nobody will save and people will spend their salary immediately after collecting it. This solution is also being considered and partially implemented in several countries in the European Union.***increase consumption and discourage savings*
I think the authors of
these proposals have lost their touch with reality. We need far more
revolutionary ideas: we must adapt to a zero growth world, because sooner or
later this will happen. For instance, we should devise means of sharing increasingly
scarce jobs among everybody.

**Manuel Alfonseca**

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