The Myth of Exponential Growth

Posted: 10/03/2013 4:54 pm

By Dave Pruett

http://www.huffingtonpost.com/dave-prue ... _ref=green

In the last post, I came out of the closet. I'm an Occupier. For most of the past two years of my affiliation with Occupy Harrisonburg (#OHB), I've participated in its small but vibrant Economics Working Group (EWG). I've never before had any interest in economics, nor have I any expertise. So what drew me in?

It's simple, really. For much of my professional life, I've taught introductory calculus to college students, and in Calc I, we learn a basic principle that apparently no politician (OK, Elizabeth Warren excepted) or mainstream economist understands.

One of the first powerful applications of calculus, accessible to every college freshman, is the notion of exponential growth and decay. When politicians or economists chant their mantra -- we must GROW the economy -- they implicitly assume that our economy can growexponentially into perpetuity. So enamored are economists of growth that during recessions they often refer to "negative growth" rather than contraction.

The exponential-growth model fits a host of everyday phenomena: the explosive increase of bacteria that sours milk; the initial growth of unstressed populations, in general; the accumulation of interest on investments compounded continuously. However, in no real-world scenario can exponential growth be sustained indefinitely, because growth implies increased consumption of resources, and resources are always limited. When a biological population has to compete for scarce resources, its growth slows, stops, or reverses. Indeed, the sustained exponential growth of almost anything is pathological.

Sustained growth of a population, for example, is a population explosion, and sustained exponential growth of cells in the body is cancer.

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Discuss.