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On Growth (1974)

On Growth

(1974)–Willem Oltmans–rechtenstatus Auteursrechtelijk beschermd

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15. Leonard M. Ross/Peter Passell

Professors Leonard M. Ross and Peter Passell were interviewed simultaneously since they coauthored (with Marc Roberts, another Columbia University economics professor) a devastating critique of Limits to Growth, as well as Jay W. Forrester's two books, World Dynamics and Urban Dynamics, in the April 2, 1972, New York Times Book Review.
Leonard M. Ross was born in Los Angeles, California, in 1945. Both he and his colleague Peter Passell studied at Yale University in New Haven, Connecticut. Ross went to Yale Law School, while his friend Passell got a Ph.D. in economics at Yale in 1970. Professor Ross is completing his economics degree at Yale as well. They both teach at Columbia University. Together they recently published Affluence and Its Enemies, The Viking Press (New York, 1973).

Professor Ross, you have been one of the critics of Limits to Growth, in the New York Times, for instance.

 

Professor Ross: Our basic feeling was that it was a bold and ambitious attempt but one with very negative consequences. We thought it so far

fell short of decent standards of scholarly inquiry that it deserved reworking rather than republication.

 

Yes, but you speak of a public-relations stunt. From my knowledge of the people involved they have been very seriously trying to create a first planetary model.

 

What we criticized was the decision to issue a very orchestrated barrage of publicity about the results without even presenting the underlying data for scientific criticism. The normal procedure in any serious scientific study is for a period of professional criticism and review. After that worldwide publicity may well be appropriate. Our criticism was not so much of the publicity, but of the decision that the publicity was more important than the underlying study.

 

In the Netherlands funds for a special public-relations effort were not necessary at all. The report was handed directly to the media, and it had an immediate and terrific impact on public opinion.1 But what is your objection to the kind of simulation model that Forrester and Meadows used?

 

Well, we have no objection to simulation as a technique. It has proved very valuable both in the physical sciences and, with rather severe limitations, in the economic sciences. Our objection was not to the idea of simulation but to a twin set of assumptions that underlay every computer run in the Limits model. The bad things in the model, the things that place stresses on the environment - pollution, population growth and so on - are all assumed to be growing exponentially. On the other hand, the things that could relieve those stresses, the good things - technological progress of the right sort - are assumed not to be growing exponentially. Limits makes the assumption, that the maximum potential improvement in antipollution techniques would reduce pollution per unit of product by seventy-five percent. That's a once-and-for-all reduction. After that reduction is made, things can never get any better. Once you make that assumption, it follows as a pure mathematical fact that eventually something growing exponentially will overwhelm something which can only grow by a fixed multiple and can grow no longer. And so built into that assumption is the conclusion - the collapse of the world system.

All that could be justified if the assumption were correct. But the assumption that the maximum improvement in pollution techniques is seventy-five percent is simply nonsense. It has no basis in fact, and no

facts were offered to support it. For many kinds of pollution the technology now existing can reduce pollution by much more than seventy-five percent - what's lacking is not a mysterious and speculative breakthrough but simply a political decision.

Now that does not mean that the right political decision is in any sense guaranteed. We share the Limits' team's concern - and a lot of their pessimism - about the pace of political action on pollution. But it's one thing to say that mankind must make a political decision to stop pollution and it's another thing to say that it must make a political decision to stop production. The last is non sequitur. The first is absolutely correct. If that were the only message in Limits, we would applaud it.

 

But what you are against is this non sequitur?

 

Yes, the assumption that those problems will necessarily be exaggerated by the growth of production, and that they would necessarily be solved by the stoppage of production. It seems to us that the growth itself -

 

What you call from a growth- to a service-economy?

 

Well, that's really a side argument. It's one that the Limits authors only got into very tangentially. The suggestion has been made - I think more explicitly by other people than by the Limits authors -

 

Professor Samuelson also talks about a services economy.

 

Yes, that growth in the future will be more oriented toward services than industrial goods. I think that both as a prediction and as a description, that has a good deal more validity for the developed world than for the underdeveloped world. What someone who is sleeping on a sidewalk in Calcutta needs is not necessarily growth of services but more food and a roof over his head. That's going to require some industrial production, and the only real hope of alleviating the desperate poverty of most of the world's billions involves a stage of substantially expanding industrial production. We quite agree with the Limits authors that industrial production can produce terrible stresses, and that urgent political action is needed to deal with those stresses. But that is very different from saying that political action is needed to shut down the machine entirely.

But they stress equilibrium.

 

They speak of zero growth as their goal. They talk about distribution from the rich nations to the poor. We very much agree with that goal but see no reason to think it will happen. Studies have been done of Britain under the Labour government, of the United States under the New Deal, showing that even these supposed social revolutions produced precisely no movement in distribution of income. Twenty years of Labour government according to recent studies by Titmuss and his associates - twenty years of Labour government which saw the growth and maturation of the welfare state - produced a net change of zero in the relative distribution of income among classes. The same is true of the United States under the New Deal. So with those kinds of precedents from the most progressive social movements in the Western World we see very little reason to think that suddenly Americans will reduce their standard of living to five hundred dollars per capita so that the Indians can increase theirs to two hundred dollars per capita. Regardless of the merits of the proposal that's just not the way the world has ever worked.

 

Do you feel that Limits to Growth overstates the finite sources of energy without taking into account possible new discoveries?

 

We certainly have no basis for predicting the future. There is a clear possibility that the development of nuclear fusion will open up a vast and perhaps enormously cheap supply of power. There is also a clear possibility that it might not. We don't dismiss the problems of the pollution caused by conventional fuels and their eventual depletion. But we see no basis for the kind of undoubting projection of current energy sources into the future. The world has never worked like that in the past. At least historically something else has always turned up.

 

Are there indications that technology also grows exponentially?

 

That's the implication of the best of studies that have been done today. Tobin and Nordhaus2 at Yale have estimated the production function in modern times, and they find an exponential growth in technology and in the productivity of energy sources. Any econometric estimate, including those by Tobin and Nordhaus, has its dangers as a basis for predicting twenty or fifty years into the future, but better sound econometrics than the kind of mindless projection than the Limits authors engage in.

Robert S. McNamara said in the 1972 Stockholm World Conference on Human Environment that the developed world could pay up to two or three percent in helping poor countries to combat pollution.

 

I am all for redistribution and a vastly more generous attitude on the part of the developed nations to the underdeveloped nations. But the target of one percent of the GNP as a foreign-aid objective has never been met, and we are falling further and further away from it in the United States. So I see no reason to think that a new study or a new call for urgency would suddenly prompt a degree of generosity that we have never seen in the past.

 

But how else to get politicians to act than by methods of publicity?

 

Again, our objection is not really to the publicity, but to the uses to which the publicity urge is directed. If the publicity were simply directed against pollution or for redistributing income or aiding the less-developed countries, we of course wouldn't quarrel. But the publicity of Limits to Growth is directed to the worst of nonsolutions - to throwing a monkey wrench into machinery which, if anything, contains the eventual salvation of world poverty.

 

Comparing the Forrester3 and the Meadows models, you have said that Forrester at least left some hope in his global model.

 

Forrester, using the same methodology but a slightly different set of arbitrary assumptions, reached a conclusion which was not as desperate. I think that both sets of conclusions are so fluid in their assumptions as to be worthless.

 

But how then to improve this existing planetary model like the Tinbergen4 group is doing in the Netherlands with Professor Hans Linnemann as team leader, working on the Club of Rome's second world project?

 

Tinbergen, of course, is one of the world's most distinguished economists. I am not familiar with the model, but I am sure it would be an entirely different enterprise than Forrester-Meadows.

 

Professor Passel: My major objection is that the project is an exercise in deductive logic. All the conclusions are built in the assumptions, so

we get an enormous mass of pseudoscience to arrive at the conclusion that was made very transparently from the first.

 

You call that fixing the wheel.

 

Yes, exactly. If you start out with the assumption of exponential growth of bad things and, as they constantly say, linear growth of good things, eventually the bad things are going to overtake the good things, so the collapse is inevitable.

 

So it is a faulty conclusion that the outcome will be unfavorable.

 

Exactly. I personally am not sure what was on the minds of the people involved in the project: whether they understood what they were doing and out of ideological commitment wanted to publicize the danger they believed in; or whether they naively believed they were being scientific.

It does demonstrate the failure of economists to make their points clear outside their fields. Forrester, who is the father of the project, obviously is a very brilliant man; he proved that in other fields. The kind of errors that were made in World Dynamics - and, in fact, in Forrester's other books - are trivial by economists' standards, the sorts of mistakes that earn graduate students C's on term papers. The project really has its tragic aspect. A lot of talented dedicated people were wasting their time.

 

The MIT team lacked collaborators with a basic scientific approach to economics?

 

Yes, surely. What they lacked were some people who understood simple introductory economics, the kind of economics you learn as a major in undergraduate studies in the United States.

 

But that won't be sufficient?

 

Surely sufficient to see the basic errors. There are a couple of places in Limits where I think anyone who is familiar with the intermediate level of price theory would catch the error. Particularly this business of trying to talk about allocation of scarce resources without reference to prices. It's a sort of eighteenth-century approach to the problem.

 

How to improve, to enlarge upon the initial model? Because a world planetary model is needed.

Well, if anything, we don't want to enlarge on the model. We want to simplify the structure of the model. Perhaps computers are not even necessary. What we want to do is have more substantial economic input and less systems-analysis input. The kind of work I am referring to would be the Nordhaus and Tobin paper, which is a much more conservative attempt to look at what's happening to the world resource base today and what will happen to it the next fifty or sixty years - a major input of economic theory and a minor input of econometrics and model building. The bulk of the work ought to be a careful construction of the problem. Not a long series of estimates of numbers which are very difficult to estimate and the arbitrary construction of models where misspecification entirely destroys the meaning of the project. That strikes me as the most efficient approach to the problem. It's not if it is not a problem. It surely is a problem. Just as Meadows and Forrester suggest, we might find ourselves in a hundred years with a tremendously reduced resource base. It is surely very useful to know if there are ‘limits to growth.’

 

It seems to an outsider like me, flying in from the other side of the ocean, that it could be extremely interesting to see the Nordhaus-Tobin and the Forrester-Meadows teams get together and build a new model.

 

Well, it might be arrogance on my part, but I don't know the Forrester people have much to offer. I don't think that their particular kind of skills have much place in the analysis of a problem which is essentially economic. They may have done a service at least to bring the problem to the public attention. But Forrester's skills are in systems engineering not economics. And for the near future I am pessimistic about the value of applying systems analysis to most areas of social science.


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