books growth sustainability

The End of Growth, by Richard Heinberg

When the first post-growth thinkers began to formulate the possibility of a steady state economy, it was in response to future scenarios. The famous report The Limits to Growth explores some of these scenarios, predicting an eventual peak and decline of industrialisation. At the time, these were speculative, projections and extrapolations. They were warnings: if current trends continued, we’d hit the natural limits of the biosphere, and new economic perspectives were needed to avert that inevitable outcome.

Economics without growth has returned to the agenda more recently. Thirty or forty years on, it’s no longer speculative. We’re not talking about future scenarios, we’re talking about the visible realities of price spikes, shortages, a destabilising climate and a global economy on a knife edge. Look back at those graphs in The Limits to Growth, and you’ll see the forecasted peaking of industrial society falls right about now.

The word ‘unsustainable’ is itself future facing, denoting the impossibility of sustaining something in the longer term. At some point, the practice in question must therefore move from being unsustainable to being unsustained. So Richard Heinberg is calling it: this is that moment. We were warned that sooner or later we’d hit the limits to growth, and now we have. The warnings, he argues, were “a message appropriate to the 1970s and 80s. We didn’t change direction then, and now we are nearing or at the point of declining energy, declining freshwater, declining minerals, declining biodiversity… and a declining economy.”

Heinberg made his name as a peak oil communicator, but peak oil only gets a short section here. The killer factor that makes this the beginning of the end for economic growth is debt. The cheap energy of fossil fuels has driven growth economic growth for over a century, but it is the debts that we’ve run up in the latter decades that make future growth impossible. The US spent almost 20% of tax revenues just paying off the interest on its debts in 2009. Millions of American homes are underwater, consumer credit the millstone around our necks. Having piled billions into bailouts and stimulus packages, there’s nothing left in the kitty to handle the transition that climate change and resource depletion requires.

And that means that growth is pretty much over. There will still be growth, a year here, a quarter there, but sustained long term growth isn’t possible under current circumstances. It relied on debt and fossil fuels, and we can’t secure enough of either to continue. Instead, we need to focus on making the transition to a post-growth economy, that is re-localised, resilient, and that serves human needs.

Needless to say, this is not a popular message. Even now reviewers will be sharpening their quills in readiness to tear Heinberg’s argument apart. It’s a matter of principle. To say that growth isn’t possible, or isn’t desirable, is a matter of economic excommunication. (As Tim Jackson says, politicians “physically recoil” when he tells them the title of his book, Prosperity without Growth.) But that doesn’t mean Heinberg is wrong, and the book deals with all the obvious ripostes (efficiency, decoupling, innovation, etc).

If you’ve been following the post-growth conversation, this book is a must read, putting the economic and environmental limits together to suggest that ‘peak debt’ is just as much a threat as peak oil. If you’re new to post-growth economics, it’s not a bad place to start either. It is meticulously researched and well argued, if a little technical in places. It is bold, wise, and profoundly counter-cultural. Yes, it’s gloomy, but it’s also full of ideas for making things better, and people and movements already headed in the right direction. The End of Growth is likely to be the most hated and ridiculed economics book of the year, but the chances are it’s the most important too.


  1. I have read Heinberg, did some translation work for him, and I agree with almost everything he points out. I don’t fully agree with your assessment that Limits to Growth was speculative. It mainly was about fundamental principles, a new look upon reality from the new vantage point of systems analysis and simulation. The fundamental assumptions, however, were straight forward and are as valid as ever: Exponential growth meets limited resources and carrying capacities. Human ingenuitiy did expand both, but since it is physically impossible to entirely decouple economic growth and resource consumption, exponential growth will quickly hit a wall in any scenario. Considering the implications of that moment I find it the nonchalence of most people rather unsettling. And nobody – absolutely nobody – was ever abel to explain to me how perpetual economic growth could be possible, and why it should be necessary in the first place.

    I won’t consider it the most important economics book of the year, because there have been others preceding it. In my view a landmark book was Prof. Hans Christoph Binswanger’s “Die Wachstumsspirale” (The Growth Spiral). It is a 400+ page technical treatment of the economics of growth by an eminent Swiss economist. Unfortunately the book still is not available in English, which is a mystery to me. What Binswanger did was through technical arguments into the discussion – arguments in the language of his professional peers, arguments that are flawless and have not been countered. And the former German President (and former head of the IMF) wrote last year: “Perhaps coming generations will look back, puzzled by the memories of a relatively short period in human history where perpetual economic growth was considered possible – and necessary.” (Köhler, Horst, in “Post Wachstumsgesellschaft – Konzepte für die Zukunft” / Post Growth Society – Concepts for the Future).

    The warnings are as old as history. Goethe analyzed it, the old Greeks new it (see, for example, the tale of Erisychthon), and more then 1000 years ago Chen Po Tuan wrote in China:

    “If you do not seek the great way to leave the path of delusion, even if you are intelligent and talented, you are not great. A hundred years is like a spark, a lifetime is like a bubble. If you only crave material gain and prominence without considering the deterioration of your body, I ask you, even if you accumulate a mountain of gold: can you buy off impermanence?

    The realm of dust is the world of sound and form, the land of name and gain, where misery is taken for pleasure, where the artificial is taken to be real. Diminishing vitality, wearing out the energy, destroying essence and life, in it there is death only. ”

    And Richard Heinberg writes in his book:
    “There is no “silver bullet,” no magic solution that will turn back the clock to an era of abundant resources and easy growth. For now, all that governments can do is buy time through further deficit spending—ideally, using that time to build infrastructure that will continue to function in the coming era of reduced flows of energy and resources.”

    1. Perhaps I should say most important English language economics title. I’ll look out for Binswanger’s work in English, although I find technical economics hard work. There’s obviously a lot happening in the post-growth conversation in Germany that we’re missing out on. Do you want to write a short guest post to sum up what’s happening?

      And yes, speculative is the wrong word for the Limits to Growth, it was a projection from contemporary data, not guesswork.

  2. Thank you for the invitation, Jeremy. There certainly is a lot that is happening on many levels and there are formidable conflicts under way. A comprehensive article will require substantial research, since I really don’t have an overview of all that is happening. My work load currently doesn’t permit the kind of time commitment that would be required (that is also the reason why I am slow with follow-ups on other threads here). I could offer a “quick and dirty” overview some time this month, or a more thoroughly thought out and researched op-ed piece some time this fall. Actually I can also offer both. A quick overview now and a (hopefully) more insightful article later.

  3. “The cheap energy of fossil fuels has driven growth economic growth for over a century, but it is the debts that we’ve run up in the latter decades that make future growth impossible. The US spends 20% of tax revenues just paying off the interest on its debts. Millions of American homes are underwater, consumer credit the millstone around our necks. Having piled billions into bailouts and stimulus packages, there’s nothing left in the kitty to handle the transition that climate change and resource depletion requires.”

    I think the phrase ‘….there’s nothing left in the kitty..’ (because the burden of debt is too great?) needs to be clarified.

    When governments bailed out the banks they simply created what money was necessary. Remember quantitative easing? They drew on the ‘kitty’ that all central banks have, that is, the right to create new money when they consider it necessary.

    Obviously if they do this to excess they cause inflation but that can be countered by raising taxes on the rich.

    The rich still have a massive ‘kitty’, even if their holdings have taken a decrease recently. Their are trillions used in currency speculation alone, not to mention that the banks can create money out of thin air because of fraction reserve banking for derivatives such as hedge funds.

    Your comments on the above would be much appreciated.

    I agree with you that in a world of finite resources there will be the need for a steady state economics, but am doubtful that it will come about as a result of debt.

    Bill Clarke.

    1. Hi Bill, it’s a good point to clarify – yes, the government can create more money, adding more to the debt. The problem is not so much the total amount of debt, but the cost of repayments. If your credit rating drops, as the US may discover, lenders increase the interest rate to reflect the added risk. With higher payments comes an even greater strain on budgets and possibly the need to borrow more, and the case of Greece shows how far that spiral can go.

      In that sense, there’s little more countries can do. Certainly most cannot afford to bail out banks to the same degree, let along fund economic stimulus. Taxes can be raised, but that appears to be politically impossible in the US and possibly elsewhere. Unless the issue of tax havens are dealt with, getting the rich to actually pay their taxes is impossible anyway.

      As Heinberg’s book explains, debt may not be enough to end growth in itself. But as it comes at the same time as an oil crunch and a series of critical environmental problems, the combined effect is an insurmountable obstacle.

    2. “The US spends 20% of tax revenues just paying off the interest on its debts.”
      Do you have a source for that? It is considerably higher than the figures I have read.

      1. Yes, it’s from the book: “Currently for the US, the total Federal budget amounts to about $3.5 trillion, of which 12% (or $414 billion) goes towards interest payments. But in 2009, tax revenues amounted to only $2.1 trillion; thus interest payments currently consume almost 20 percent, or nearly one fifth of tax revenues.”

        That’s specific to 2009, and won’t be that bad every year, but it could be – if growth falls and the interest due rises because of that credit rating, then the interest payments will eat up a much larger portion of the budget.

        Come to think of it I ought to say that’s specific to 2009 in the post, that’s an accidental generalisation.

  4. Thank you for your prompt reply.

    When I said that central banks can create money I implied that they would not issue bonds and so create more debt, as they did in quantitative easing, but create debt-free digital money, as they do cash. I they do this then the cost of repayment doesn’t arise.

    I appreciate the point you make about the USA’s credit rating but that only applies to the present system. What I (and <<< am advocating is a much more radical and people-friendly system whereby governments don't go into debt (because they issue what money the economy needs) and so would not require credit ratings to suit the interests of the financial markets.

    When I mentioned taxing the rich I had in mind an economic and political system that is not serving their interests, as the present one does. This, of course, requires a very different breed of politician to replace the present sycophantic ones we have now.

    Let's hope the present crises, financial and environmental, will at long last prompt even governments to really reform the system, instead of trying to prop it up.


    Since 1980, we borrowed 14,000B instead of taxing wealth as we did, 1945-1980,
    to pay our way. We borrowed to enrich the rich. Reagan 60% Tax Cut for 1% helped
    them to have a 281% after tax income growth 1980-2007. The middle class had 25% income growth actually a decline due to inflation.

    Today, (10% own 70% net wealth—80% own 15%)—-(10% own 70% financial wealth—80% own 7%)—-(10% get 50% individual Income– 80% get 13%)

    A simple ratio analysis of those numbers yields these sickening numbers.

    Net Wealth—700:18
    Financial Wealth—700:7

    Those ratios are for a Third World Nation or a Dictatorship not a Democracy
    I ask only that one prove me wrong with facts numbers not opinion
    I would love to be wrong.. They hurt when I think of my kids and grand kids
    clarence swinney olduglymeanhonest political historian lifeaholicsofamerica burlington nc

  6. Quick note on interest payments in Germany. As of 2010:
    – total interest payments (all public entities): 63.2 E9 €
    – per capita interest payments: 1448 €
    – total incoming tax (all tax forms, all public entities): 510.332 E9 €

    That amounts to roughly 10% of all federal, state and municpial budgets. In reality regional differences, however, are huge. In any case payment of interest is the 2nd largest single household factor in Germany. The Ministry of work and social affairs being the largest, and defense being the third largest. Perhaps important to note: Interest payment in Germany exceed the defense budget by approx. 100%! Occasionally I have said that we have created a political and economic system where slowly the main goal becomes payment of interest. And the self fulfilling prophecies called ratings do not really ease the situation.

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