Probably the greatest challenge of our time is for the politico-economic Establishment to understand that we’ve now almost certainly reached the end of economic growth as we’ve come to know and love it this past 150 – 200 years, ie throughout the industrial/post-industrial age.
This is such a shocking proposition for most people that it is generally unthinkable. That we might have reached the end of industrial age rates of economic growth is either never suggested, still less explained in the mainstream media; or, if somebody like me raises the subject then we're immediately classified as naive crackpots who should just keep taking the tablets. Economic growth is a God-given right, of course. It's just economics, innit? People like Tim Worstall at the Adam Smith Institute, for example, tell us that "infinite growth on a finite planet [is] easy peasy!"
Incidentally, without sustained industrial age rates of economic growth it's fair to say that, given our current economic circumstances (we're mired in unprecedented levels of debt, in case you hadn't noticed), we're stuffed. Servicing the world's debts, let alone repaying them becomes difficult nay impossible without the sort of economic growth we've experienced for the past 40 – 50 years. Consequently, re-establishing trend economic growth at rates of, say, 3% - 5% per annum has become the sine qua non – the essential condition of global economic policy makers. Right now, politicians and their collaborators in the debt markets are making an enormous collective bet that the future economy will be exponentially larger than the present. In other words, economic growth to debt-ridden developed economies is as heroin to the addict. Small wonder then that there is often an air of panic in politicians' calls (screams) for a return to economic growth. After all, it's politicians who have as good as bankrupted the developed world with their addiction to debt-fuelled state spending and the votes that such spending buys. Politicians simply don't do economic contraction: there are no votes in it.
So, how on earth could we possibly have reached the end of economic growth? After all, we see countless news reports either demanding that economic growth be restored (usually demanded by politicians and journalists), or telling us to hang on a little longer and economic growth will be restored presently (usually according to economists), or – if you're Ambrose Evans-Pritchard – you advocate the 'nuclear force' of printing more money than you can add noughts on the end with the express intention of restoring growth to an explicitly declared 5% per annum, and Bob's your uncle. Printing money = the surefire route to restoring economic growth.
On the other hand, some people would say that economic growth if/when it comes at all, comes not from human beings printing money, but from human beings doing productive work and exchanging goods and services for profit. Furthermore, energy is a precondition for doing work. And let's get down to brass tacks here: cheap oil is the source of energy that allowed us to spend the past 40 – 50 years on an unprecedented, unsustainable, debt-fuelled, globalised consumer boom that has brought us to the verge of bankruptcy and global financial collapse.
It is absolutely no coincidence that in 2000 Colin Campbell (a petroleum geologist) forecast that around the year 2010, stagnant or declining supplies of oil would lead to soaring and more volatile oil prices which would precipitate a global economic crash. This rapid contraction would in turn lead to sharply curtailed energy demand, so oil prices would then fall; but as soon as the economy regained strength, demand for oil would recover, prices would again soar, and consequently the economy would relapse. This cycle would continue, with each recovery phase being shorter and weaker, and each crash deeper and harder, until the economy was in ruins. Financial systems based on the assumption of continued growth would implode, causing more social havoc than the oil prices themselves directly generate.
Hat Tips to Chris Martenson ('The Crash Course') and Richard Heinberg ('The End of Growth')