More from Less
Evidence that economic growth has decoupled from resource consumption
Summary
McAfee argues that advanced economies have begun to use fewer physical resources in absolute terms while continuing to grow, which he calls dematerialisation, and that this reverses the assumption that growth requires increasing material throughput. He presents United States consumption data for metals, timber, paper, fertiliser, water and energy showing absolute declines in many categories since around 1970 or 2000.
His explanation has four parts, which he calls the four horsemen of the optimist: capitalism, which creates the incentive to reduce input cost; technological progress, which supplies the means, particularly through digitisation replacing physical objects and through materials science reducing the quantity needed per unit; responsive government, which prices externalities and regulates pollution; and public awareness, which generates the political demand for the third.
He uses this to argue against degrowth positions and to claim that the environmental problems that remain, principally carbon emissions and biodiversity loss, are addressable through pricing and technology rather than through reducing economic activity.
The empirical claim is contested on a specific point. Critics, including researchers who work on material flow accounting, argue that measuring domestic consumption without accounting for the materials embodied in imported goods overstates dematerialisation substantially, since production moved offshore. This is the same objection Smil raises. McAfee addresses it but the disagreement about the magnitude of the correction remains live. Readers should read this against Smil's Making the Modern World, which uses global rather than national data and reaches the opposite conclusion.
Key takeaways 7
- The United States now consumes less of many physical materials in absolute terms than it did decades ago while its economy has continued to grow.
- Dematerialisation is driven by the profit incentive to reduce input cost combined with technology that makes substitution and reduction possible.
- Digitisation replaces physical objects with services, which removes material consumption rather than merely making it more efficient.
- Responsive government pricing externalities is a necessary component, since markets do not reduce pollution or resource depletion that they are not charged for.
- Environmental improvement in advanced economies has occurred alongside growth rather than requiring its reduction, which contradicts the degrowth premise.
- Remaining environmental problems, principally carbon emissions and habitat loss, are addressable through pricing and technology rather than through reducing economic activity.
- Population growth and resource consumption have decoupled, which removes the basis of the resource exhaustion forecasts of the 1970s.
Who should read it
Investors and readers who want the optimistic case on growth and resources, read against Smil's global-data account which reaches the opposite conclusion.
Where it sits in the reference 3
Who recommended it 1 · 1 direct
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