A Ponzi scheme,
also known as a “pyramid scheme,” is a scam in which an unethical financial
entrepreneur promises investors big returns, which he fraudulently generates
from the contributions of later investors. Bernard Madoff is the most notorious
recent perpetrator. He raised tens of billions of dollars from thousands of
investors before he went to jail in 2009.
New investors heard about the
big returns earned by earlier contributors to the scheme and eagerly put their
money in, which allowed the con artist to fool several successive new
generations of victims over the course of two decades. Every Ponzi artist faces
a day of reckoning. Eventually, he runs out of new investors. His actual
returns have never been equal to the dividends he paid out, but he made up the
difference by draining new accounts. Eventually, he can’t pay dividends any
more. He doesn’t even have the money to return to late investors because he’s
spent their money paying off earlier contributors, building his reputation as a
genius.
Our economic dependence
on population growth bears a disturbing similarity to a global Ponzi scheme.
It’s relatively easy to create “economic growth” so long as there are more
consumers every year. Directly or indirectly, we are all dependent on population
growth for our livelihoods. But eventually, resources run short. Every pyramid
scheme eventually collapses when the supply of new investors dries up. If we
accept the obvious fact that this planet’s resources are not unlimited, then
eventually the global supply of new consumers will be constrained.
The connection
between population growth and economic prosperity was clearly recognizable 600
years ago. One of the earliest recorded treatises on economic expansion was
written by an Arabian philosopher, Ibn Khaldun, in 1377:
“When civilization
[population] increases, the available labor again increases. In turn, luxury again
increases in correspondence with the increasing profit, and the customs and
needs of luxury increase. Crafts are created to obtain luxury products. The
value realized from them increases, and, as a result, profits are again
multiplied in the town. Production there is thriving even more than before. And
so it goes with the second and third increase. All the additional labor serves
luxury and wealth, in contrast to the original labor that served the necessity
of life.”
Six centuries ago
an Arabian philosopher understood the basic machinery pretty clearly. Economic
growth is generated by population growth, augmented by technology and motivated
by improving lifestyles.
Fundamentally,
every additional human being in the world is one additional customer. When the
total number of potential customers for the world’s businesses declines, then
the total potential volume of business declines. Our traditional model for economic
growth is sabotaged by a stable or declining human population. We can,
probably, create new systems for distributing value and maintaining prosperity
for a stable population. But we’ve never had to do that before. Maintaining
prosperity in a stable population will require new tools.
For further optimistic discussion about our future, read
Beautiful and Abundant
by Bryan Welch and connect with
Beautiful and Abundant
on
Facebook.
