Vivek Raj Anand
Aurelio Peccei, an Italian scholar and industrialist, looked at the contemporary national crisis of the 20th century as symptoms of a larger insidious global crisis. He founded the Club of Rome, a virtual think tank —consisting of scientists, educators, humanists, and businessmen who were concerned with global issues— in 1968. Peccei believed that the new problems faced by humanity could not be categorised solely as economic, ecological, social or security problems. Rather, each problem is multi-faceted, where all the aspects are interconnected and interacting amongst themselves. It is the design of these interconnections and patterns of interactions that determine the nature of such dynamic global problems. Furthermore, cause-effect relationships inherent in such problems are counter-intuitive in nature, as the human mind has not gathered requisite intuition for understanding complex systems. Human intuition is trained to work in the context of simple systems; however, complex systems like Earth do not behave in the same way. Dynamic correlations between various subsystems determine the behaviour of complex systems.
System Dynamics is the science that studies interconnections between complex systems and Peccei wanted a system dynamics based scientific simulation model to forecast the future of humanity and planet earth. Dennis Meadows, a professor at MIT Sloan School of Management, took up the project of constructing a simulation model, with funds coming from Volkswagen Foundation.
The team worked on the hypothesis that unlimited growth —propelled by population, industrialisation, pollution, food production and non-renewable resource utilization— is not sustainable because of the limited physical endowment of planet earth. The outcome of this project has been described in this book “Limits to Growth”.
Modern economics presume that despite the peaks and troughs of business cycles, economies would always continue to grow in the long term. This book rebuts the aforesaid presumption of perpetual growth and ascribes the reason to the finiteness of Earth’s physical resources, which would eventually exhaust due to exponential growth in material demand. While authors acknowledge the diminishing marginal utility of material consumption —only after having met the threshold limit necessary for ensuring the basic well-being, the argument presented by the unrestrained growth is not on ethical or ideological grounds.
The book explains the concept of exponential function in a rather lucid and non-mathematical manner, and provides an intuitive understanding of reasons behind the exponential growth in population and industrial output through the use of “feedback loops”. The study group observed the dominance of positive feedback loops in all the studied variables – population, industrial output, pollution, food production and non-renewable resource utilisation.
Further, the book juxtaposes exponential growth in aforesaid variables with a decline of finite physical resources of the planet, so as to ascertain the overshoot and cross point. Those physical resources determine the carrying capacity of the planet, and are hence the ‘Limits to growth’.
The mandate of the research was not to make a doomsday prediction. Rather, it was a mathematical modelling exercise whereby endogenous variables like population growth, industrial output, pollution, food production and non-renewable resources were iterated so as to project different future scenarios of the world. The iterations of these variables represent different growth trajectories adopted by world economies, and hence it was left to mankind to choose a particular trajectory. The team developed twelve such scenarios, which included the collapse scenarios and the equilibrium ones.
The book concluded that human ecological footprint, if unchecked, would grow beyond the carrying capacity of globe i.e. what planet can provide on a sustainable basis. In the long run, it is impossible that humanity can use more physical resources and generate more emissions every year than what nature is capable of supplying and absorbing in a sustainable manner. As demand can never overshoot supply, the human ecological footprint will eventually decline either through “managed decline” or through “collapse” to sustainable levels. An example of managed decline would be limiting the annual catch of fish to a sustainable limit through legislation. An example of the latter would be the elimination of fishing communities because there are no more fish left in water bodies. The authors also argued that while market, technology and government are capable of making positive interventions, such interventions would only defer the crisis and not solve the problem, as long as there is no check on exponential growth. Hence, the cross and overshoot will still happen, but only at a later date.
Standard run. The model was tested under various assumptions, beginning with the “standard run”. Standard run assumes business as usual conditions as it existed in 1972, i.e. in the next one hundred years, there will be no significant changes in the nature of growth in the five variables. Not too surprisingly, the model projected disaster long before the end of the twenty-first century because of complete exhaustion of resources (Refer Figure 1).
Figure 1 Standard Run – Business as usual – Resource exhaustion
Succeeding runs These were made with more favourable assumptions, but all indicated collapse within a hundred years.
Stable model or Equilibrium. The study group wanted their proposed model to be self-sustaining —sustainable without sudden and uncontrollable collapse— and at the same time capable of satisfying the basic material requirements of the world. Authors called such a state as ‘Equilibrium’, a state where population and capital are stable, and the forces tending to increase or decrease them are in a carefully controlled balance. This is possible when birth rate equals the death rate and capital investment rate equals the depreciation rate. Now, this equilibrium —i.e stable population and capital— can be at high or low levels of population and capital. Authors say that the level of capital and population, and the ratio of the two, should be set in accordance with the values of society. They may be deliberately revised and slowly adjusted as the advance of technology creates new options. (Refer Figure 2).
Figure 2 Sustainable development or Equilibrium Scenarios
Authors claim that this equilibrium does not refer to the stagnation of an economy; rather, it is dynamic in nature. Within stable population and capital, corporations could expand or fail, local population could increase or decrease. Services provided by a constant stock of capital would continue to increase due to technological advances. Besides that, human activities that do not require a large flow of irreplaceable resources or cause severe environmental degradation might continue to grow indefinitely. In fact those pursuits which are most desirable and satisfying like education, art, music, religion, basic scientific research, athletics and social interaction could flourish. This could be made possible through an increase in leisure. Such increase in leisure can be made possible only through improvement in production methods using technology. This increased leisure time could be devoted to any activity that is relatively non-consuming and non-polluting.
Readability and Limitations
The book has been suitably written so that general public can understand a rather complex subject matter of system dynamics based simulation model. Mathematical concepts like exponential growth, compounding effect, etc. have been explained in an intuitive manner. However, readers who do not have exposure to mathematical modelling will face difficulty in understanding the scenarios developed by the team.
The book can be critiqued on multiple accounts, more specifically on its assumptions and simplifications made in the model. Authors themselves acknowledge that there are many imperfections in the model, and the same can always be improved upon. However, all those critical comments belong to a single genre, which is the limitation of any modelling exercise conducted in social sciences. No model can truly predict the future that is related to human actions or inactions. Furthermore, history has always advanced through lurching discontinuities, most of them were utterly unpredictable and hence they are not programmable.
The book has significant policy implications, especially for problems that are global in nature. It also exhibits the power of data analytics and computer simulation in making objective future projections. No model can fully represent the complexity of a society that consists of human beings who are invariably guided by bounded rationality and whose response is extremely dynamic. Moreover, no mathematical model can factor in all the tangible and intangible variables that determine human actions or inactions. However, the world model developed by Dennis Meadows’ team was successful in providing a heads-up to an ensuing crisis if business as usual continues. Such a heads up is all the more important for phenomenon related to complex systems with high time-constants as it warrants forthwith action. The book projects a crisis that is a necessary —but certainly not sufficient— condition for inspiring policy actions.
 Overshoot refers to going too far i.e. going beyond the limits. For instance, if too many trees are cut every year, the forests will ultimately vanish despite natural regrowth phenomenon.
(Vivek Raj Anand is a graduate student of Master of Public Policy in the National Law School of India University. He can be reached at email@example.com)