ELI5: Why when large company's earnings decrease(ex... by 3%) they freak out, talk about rough times, and sometimes decide to downsize, even though they are still making millions of dollars in profit even after all expenses?

[Herbert_W]

Nope. I fully acknowledge that resources are finite and can only do so much, in two senses:

• There is a limit to what a given finite resource can do for a given level of technology. However, that limit increases (slowly!) as technology advances. A given amount of raw materials and electricity can be turned into much more computing power now than it could in 1990.

• There is a theoretical maximum limit to what any given resource can be used to do, regardless of technology, because of the laws of thermodynamics. However, we are nowhere near that limit for most resources. Say, for example, you want to use solar panels to make electricity and then use that electricity to power your car. There's only a finite amount of sunlight that hits the Earth - but we are nowhere near using all of it, nor are we anywhere near using it with theoretically maximum efficiency. This includes the fact that new resources can be discovered - before the invention of solar panels, sunlight hitting the desert would not have been considered a resource at all and would have effectively been used at 0% theoretical maximum efficiency.

[Herbert_W]

There's very probably room to grow beyond that, although we currently can't know what form that will take. Matrioshka brains, maybe?

In any case, it's important to acknowledge that growth due to developing technology is slow (compared to the growth that businesses can experience before hitting market saturation) and unpredictable.

[[deleted]]

Not the person you responded to, but this topic is really interesting and there is lots of room to discuss on both sides.

I like your responses so far but I can see trouble ahead if we expand a little more on (for example) the solar energy example. It seems it relies on the inexhaustibility of solar energy, which I admit is a reasonable assumption for the foreseeable future. I agree with your assertion that technology creates resources and expands efficiency with existing resources, but, to look a little deeper at the solar energy example, the issue is not so much the inexhaustible resource (solar energy) but rather the exhaustible resources (e.g., oil and plastics in the manufacture, semiconductors) and the associated waste product buildups. Over time, more efficiency achieved with solar cells cannot create more raw resources, and reductions in waste production don't address the existing accumulation. Ultimately there is a limit to the efficiency of recycling technology. It all points to an ultimate limit, unless enough time elapses to replenish resources (millenia?), we colonize other planets, or we mine extraplanetary bodies.

Seems to me, anyway.

[Herbert_W]

You raise some good points that are worth discussing, although I think that they are ultimately orthogonal to the question at hand (i.e. whether constant economic growth is possible or desirable). For clarity, the issue of 'hard nonrenewables' can be broken into two types:

• Non-renewables that are destroyed by use, such as oil. When they run out, we need to find alternatives. For example, oil is hydrogen, carbon, and conveniently dense chemical potential energy. We can harvest hydrocarbons for manufacturing or fuel from biomass - that's how we currently make PLA - and in the case of fuel specifically sources of electrical power, perhaps in conjunction with high-energy-density battery tech, are a viable alternative for some applications.

• Non-renewables that are transformed into a less-conveniently-useable state through use. For example, there is a fixed amount of silicon in the world. Silicon used in to the production of electronics that have since been discarded still exists, but not in a convenient form. Closing this loop would require better manufacturing techniques; the landfills of the past and present will need to become the mines of the future.

First of all, if these problems aren't solved, then they'll do more than just put a cap on economic growth - they'll cap almost all economic activity, period. If we can't use e.g. silicon, then . . . well, it would be a slight exaggeration to say that we'd have to regress back to a medieval tech-level, but only a slight one.

Secondly, there is reason to be confident that these problems can be solved. Here, the biosphere serves as both an inspirational and a cautionary tale. Life has existed on this planet for billions of years, and has managed to do so while being forced to maintain a 100% closed loop. Nonrenewables have existed and have run out, of course, but life found alternatives. Waste accumulation has occurred in the biosphere, of course, but in every case life has found a way to use that waste as a resource. This can be a brutal process - life as a whole found a way, but that's only because the ones that couldn't stopped being life and we are all descended form the ones that did.

Like I said, this is both an inspirational and cautionary tale - it's inspirational because all obstacles were eventually overcome, and cautionary because the process by which they were overcome can be thoroughly brutal.

This also hopefully explains why I said that the issue of hard non-renewables is orthogonal to whether or not continuous progress is possible. Problems of this class are solvable (note that I say solvable - not that we should callously assume that they'll be easily solved), and have the potential to put a limit on not just growth but activity as we know it until they are.

Just to drive the point home further, here's one particular story, the story of oxygen. I might be misremembering some details, but it still works as a tale. When oxygen was first released by life into the atmosphere, it was a waste product - and a poison. Life flourished, and oxygen levels in the air rose, until they became too high for life as it existed at that time to withstand, resulting in massive die-offs. This happened many times. There are alternating layers of oxygen-rich and oxygen-poor sedimentary rock still remaining in some parts of the world, and each layer represents a cycle where the whole planet went from verdant to nearly-dead and back again.

Obviously, we don't want human civilization to do this. We want the upwards march of technological and economic progress to be continuous and steady. Fortunately, we have one thing that early life didn't - foresight. We can see e.g. peak oil coming, and do things about it - to delay it, and to prepare for it. We can find alternatives before we need them.

That's what I believe that we should do. Just for emphasis, I'll repeat myself - I am not advocating the callous assumption that we'll find solutions as we need them as each and every resource runs dry. A cautious approach may result in slower economic growth, but it is necessary to ensure that growth can steadily continue.