There is a growing body of thought that capitalism and, more specifically, continued growth, is unsustainable. A lot of the literature focuses around the environment [1], but we should also think about businesses that perform a useful community service or product to their community - must they always grow? If not, must their competitor?
"We have a finite environment—the planet. Anyone who thinks that you can have infinite growth in a finite environment is either a madman or an economist." David Attenborough
That quote always bugged me because it disregards that our economic growth is not really tethered to natural resources. Sure a company like Coca-Cola can only grow so much before it effectively covers the entire planet, but they can still reduce costs to improve their profit margins and displace existing drinks from other companies with a new product.
The cloud as a business is mostly about building products that address ever changing needs and making the clients more dependent on said products. There are no environmental restrictions here you could grow for as long as user needs grow.
> There are no environmental restrictions here you could grow for as long as user needs grow.
All this demand for software and ever changing needs, and more cloud computing environment is coming from somewhere. You want to know where?
Merely 2 decades ago, the average household had one computer in the house, and it was typically a desktop, and the adults and teenagers had had cellphones.
Now, almost everyone that is middle class or above has multiple computing devices in their possession at all times. Every member of the family has their own laptop or tablet and cellphone, probably even a smartwatch or two, even kids as young as 4. There's probably multiple TV screens and gaming consoles as well. Devices that are designed to be replaced in a mere 2-3 years through planned obsolesce. We have more cheap shit than ever before and it gets thrown in the trash at an ever increasing rate. There are screens literally everywhere now: My gas station pump, the wine and beer isle at my grocery store, at the checkout line, walking out into the parking lot, on my wrist, in my pocket, at my coffee shop, in my restaurants.
That results in more companies needing to have digital presences, more apps, more games, more features, more data collection and spyware tracking you around the internet, more ML models being trained and draining energy, more crypto-mining and 4,000 watt PSU's coming online, so on and so forth.
All this stuff requires an ever increasing amount of rare earth materials and burned fossil fuels to produce and operate.
That kind of economic growth requires more resources, but not all does. When Google tweaks a caching algorithm to enable 10% more with the same hardware/energy input, that contributes to economic growth with less resources. Same as if we discovered a new steel smelting technique that uses 10% less coking coal for the same quality steel.
> When Google tweaks a caching algorithm to enable 10% more with the same hardware/energy input, that contributes to economic growth with less resources.
Sure, but that also increases Google's net profit and allows its users to make more queries. That profit is then maybe invested to penetrate new market segments like transportation or hardware production, or is distributed among CEOs who buy bigger houses and more cars.
In essence, the efficiency gains of improving the algorithm are lost because of the free-flowing streams of capital.
I don't think it allows its users to make more queries. When is the last time you've done a google search and have seen "too many queries, try again later"?
The efficiency gains of improving the algorithm ARE free-flowing streams of capital.
Fiat-denominated economic growth may not be tethered to natural resources, but real economic growth is.
We may well develop technologies that allow us to generate more with less, but there are limits to this.
Yes, Coca-cola may invent a new soda, but that soda will always have some material inputs.
Cloud computing most definitely does not escape this - it relies on massive networks of physical infrastructure that require huge investments of natural resources and human capital to build.
Even the monetization of things that appear at first blush to avoid this issue such as the monetization of human attention do not do so in reality as our mental faculties themselves rely on the continued sustenance of our physical bodies.
It's a never-ending vicious cycle between the strive for more energy- and resource- efficient production of goods, and the dispersion of these efficiency gains through increased consumption and market expansion, both geographically and through new classes of products/services. The "airy" fiat currency together with the impersonal profit-seeking multinational corporations create this fairy-tale illusion of infinite growth, which may look efficient from the perspective of a single company, but isn't when viewed holistically on a global level.
This is a wildly out of touch view of how economic growth works.
First off, where do you think "the cloud" comes from? Even if we assume 100% renewable grid (which is currently impossible) the computers that run the cloud require an enormous amount raw materials and labor to manufacture.
But far more importantly, where does your clients capital come from?
The greatest accounting trick capitalism every pulled was to get people to think of individual parts of a system rather then the entire thing.
There's real magical thinking involved to think that capital just appears in these clients at now real cost. At some point labor and resource exploitation is required to create economic value which is then passed around throughout the system. Just because you can skim off some surplus value selling some SaaS product in the cloud doesn't mean that the value you are paid with doesn't come from the exploitation of resources.
Finally, you can easily dispel this myth by looking at the current state of our global environment. Show me any period of economic growth that isn't also tied to increased energy and resource usage.
The only growth that could be tied to non-natural resources is something like the combinatoric possibilities between a set of options.
Everything else links back to matter. Even my "internet points" on HN are tied back to the food I had to eat to type in that sweet sweet snark.
This notion that economics isn't ultimately a resource scheduling theory that falls out of a base set of behaviors (commerce). If we removed choice, we get operations research.
Capitalism is akin to wanting to cook a hotdog on a campfire and burning down an entire house to do it.
But the result is more consumption, because you spend the money saved on inefficiency on more consumption. If coca cola produces 1m bottles of coke in 1 year and finds a way to produce that many in half a year, they're not going to produce 1m bottles a year anymore, they're going to produce 2m bottles a year.
Probably not, no. They're already selling as many as they can at the current price -- there's no shortage of Coke out there. They might lower the price and thereby sell more (though they're unlikely to sell twice as much without more than halving the price), but that's not necessarily a bad thing; it means people are having to do less to get the same amount of Coke.
Do you have any data to back this claim? Because Jevon's Paradox is a real, observed phenomenon. In reality, the only thing our economies optimize for is profit. Sometimes profit comes from reducing costs or increasing efficiency. Other times it comes from manipulating consumer psychology. Or did you think that Red Bull cans are tall and skinny because that's somehow an efficient use of aluminum?
I think in a Jevon situation where there is a game-changing technology jump in a consumable commodity, there will be pent-up demand being expressed at the same time better efficiency means prices can decline and profits can rise simultaneously. This can be more sustainable if these factors are better in balance to begin with and stay that way. The improved efficiency is then enjoyed and absorbed into the regular operation of everyone involved and soon or eventually becomes the new normal. Ideally the companies never need to go back to the old normal which may likely not be very economically viable any more so that becomes completely forgotten.
But with growth beyond a certain point, cash flow becomes so significant and so many fewer people are handling it that the room for misguided actions, not just unforseen but often hidden or obscured, can quickly overcome the profits from much earlier technology milestones which took much longer for the entire org to implement. Which can not be replaced unless more technology breakthroughs are forthcoming, but even when a steady stream of excellent new technology keeps coming down the pipeline it could still be a sinking ship. Then if only the top people think it's not seaworthy, or know what they've done that might make it so, they're going to completely deceive the rest of the crew as effectively as possible or all the lifeboats could be used up.
When it comes to building cash flow, profits, shareholder value, and overall company valuation not every economically sensible executive is going to pursue or achieve the same balance among these, regardless of motivation.
When a company originally thrives because the early talent can make profits that are good, it can be the firm foundation for what could be long-term, even exponential growth.
Later leadership which does not always have equal talent for profits will often have more experience utilizing cash flow itself to substitute as a resource for bonuses, dividends, and things like that when much needed technology boosts are not the windfall they once were.
The net effect is people make money for a while then the technology is wasted.
Because profits actually weren't pursued enough, and cash flow too much instead
Like when a huge company acquires a rapidly-progressing technology group but no more progress occurs after that, or progress becomes intentionally discontinued or even reversed.
Like a gravitational field so massive that it draws in other planets and absorbs their potential for continued growth, rather than leveraging progress using the overwhelming resources.
A smallco that made excellent profits primarily from innovation itself, looks excellent on paper because it is actually a good acquisition target. When absorbed into a bigco their impressive profits no longer add up to more than a drop in the huge bucket so focus ends up being placed elsewhere besides the profit-making innovation that was supposed to be so promising.
When efficiency is achieved, the economic growth is later converted to "everybody should use this new efficiency".
And more importantly, efficiency in the consumption is not translated in efficiency in the use of resources (which is the important one): transporting goods by horse vs faster transportation with combustion engines.
You can have unending growth even with finite resources.
It's Zeno's Paradox - if you have use half of the resources, and then half of the remaining, and then half of that remaining, you could continue forever.
Is it? Earth is, or was, extremely hospitable to humans. Mars is, and will be for a very long time, extremely inhospitable to humans. If we can't even take care of the Earth, what hope is there of taking care of Mars? The more likely scenario is that greedy Martians destroy their own Martian environment very quickly and make themselves extinct. It's much easier to destroy Mars (for human life) than it is to destroy Earth.
We need to focus on sustainability, otherwise Mars will also be unsustainable.
Just wait until oxygen itself becomes a commodity, like in the film "Total Recall". Except unlike in film, there's no deus ex machina native ancient technology to suddenly make the entire atmosphere breathable.
Your mistake is thinking that the plan is to move humanity away into space, instead of bringing space (or more accurately mineral-rich asteroids and solar energy) to humanity. That way we can just externalize all industry & pollution to a lagrange point somewhere and let the earth take care of healing itself.
Given the timescale of building an endurable self-sustaining civilization on another planet, and the speed with which we are destructing our own environment for humans to live in (and capability to provide high-tech support for this space adventure), my guess is that this is a pipe dream. And that the Mars thing is a nice rich man's hobby, scientists playground, and bread-and-games diversion tactic for the rest of mankind.
Taken to its absolute limit, space travel is limited by the speed of light. So when you get to that limit, you are limited by space, as you can only expand in a sphere--i.e. O(n^3). Space is so enormous that even the tiniest exponential will overrun O(n^3) before even getting out of our galaxy. Result. That exponential is going to flatten out and look more like a sigmoid.
That thought that continued growth is eventually unsustainable has been there since at least the 1840's. The core of Marxism is the idea that capitalism is the most effective method of increasing productive capacity, and that this is fantastic (the first chapter of the Communist Manifesto is fanboy-level praise for capitalism), until it runs out of room to grow into.
Whether or not you agree with the analysis, the core problem it posits - that capitalism will grow out of markets to expand into, and that once it does, it will fundamentally change the game - matters.
We can necessarily not have growth forever - if not before, eventually we run out of exploitable energy within our light-cone. In practice we'll hit limits far sooner that will cause competition to drive down production cost will be far harsher than it needs to be in an environment where you can compensate by expansion.
Marx thought that would happen "soon" - when capitalism has spread to the entire world. But it's a question when, not if, we hit a ceiling where further demand growth can't physically happen, and quite likely we'll reach a ceiling long before there where it's not happening fast enough to counter competitive pressure. The world population is expected to stabilise and start dropping - at least for a while - possibly as soon as towards the end of this century. What happens to growth then?
Whenever we reach a point where capitalism is no longer getting growth by growing into expanding markets, the question becomes whether capitalist competition will drive us to a level of automation that threatens to kill capitalism. Marx believed that would happen by causing crises of "overproduction", where improved efficiency would cause mass unemployment and by extension kneecap demand by taking away peoples incomes. Alternatively, whether we'll be able to as a society reign things in and ensure people share in enough of the improvements in efficiency for capitalism to survive - be it with UBI, or shortening working hours, or other means.
Because it's easy to forget that one of the "promises" of capitalist competitive pressure is to drive margins towards zero, because a company that can survive with lower margins can out-compete one that can't. And ultimately that means driving every cost that can be reduced down, and that means ultimately driving labour costs down as far as they can go...
I agree with a lot of what you just said, I think Marx was correct about the idea that capitalism requires the growth. I would state his thesis as follows: If you reward continued production of goods (which requires investment) with property, eventually you will run out of property to give away.
I believe in the 20th century, this conundrum was resolved in enormous growth of what we consider to be property assets. We have not only reached the limit of exploitation of natural resources on the planet, but also added intelectual property, military-industrial complexes, various financial instruments, healthcare, and as of late, we have monetized human attention and behavioral data. On top of that, we monetized human servitude, now lot of well-off people are in debt (at least with mortgages and student loans).
It's not so much that you run out of property, but that you run out of ability to expand your customer base fast enough to see fast growth, and the slower growth capitalists can get from external factors, such as new markets, the more incentives they have to look to internal factors to maintain their competitive advantage.
Ultimately that means addressing labour costs. For an individual capitalist it makes sense to drive labour costs towards zero. But if everyone does it, then their markets shrink unless there are external factors (e.g. UBI or similar) that counters the market-wide effects of their reduction in labor costs.
This is also why UBI is a "liberal" (in the classical, not US sense) policy, and not something the socialist left is very interested in - from a socialist point of view UBI is bread and circus to keep capitalism from imploding.
I think capitalism is being misused in this sentence, and that is making it hard for people to make sense of. Capitalism is simply an economic system where the means of production are privately owned. Growth is not a requirement or even feature of capitalism. Being able to own companies, property and hold currency are all features of capitalism. If you are trying to say "infinite growth is unsustainable" that stands on it's own and is worth discussing.
> Capitalism is simply an economic system where the means of production are privately owned. Growth is not a requirement or even feature of capitalism.
The problem is that private ownership leads to the classic collective action problem, where actions that are individually rational to each private owner have consequences that are collectively irrational and make the world worse off.
This is not to say that private ownership should be abolished. But there has to at least be a heavy collective counterweight to self-interested wealth accumulation.
A problem with capitalism may be that it is a very broad category, and that currently we have a particular nasty flavour of it, that deserves its own name (e.g. hypercapitalism?) to avoid the endless discussion & confusion whether its all good and natural, or utterly broken (at least for the common folks participating in it).
It seems to me we had a form of capitalism that flourished (piggy-backed) well on top of democracy, and now it has morphed into a form that thrives best in a plutocracy (where democracies are eventually just Putin-style husks of their former glory).
> currently we have a particular nasty flavour of it, that deserves its own name (e.g. hypercapitalism?)
Corporatism.
It's publicly-traded corporations that cause many of these negative effects:
* Since investors treat corporations as black boxes that are just numbers going up or down, they are separated from the non-financial ethical consequences of what the business does. We all, through our 401ks, probably own stock in companies doing outright horrendous things to human rights in developing countries or harming the environment.
* Investors put pressure on corporations to grow at the expense of all other things. Corporations that fail to prioritize that will be replaced by better-capitalized corporations that do. It is an evolutionary environment where the primary selection pressure is growth.
* An effective way for a corporation to grow is, instead of competing, simply acquire competition to reduce selection pressure and then do things like regulatory capture to rig the system.
> Capitalism is simply an economic system where the means of production are privately owned.
Just a nitpick, there is another condition, which is that the labor is traded on the free market under capitalism. I can imagine a society where everything is done in cooperatives where the workers are also the owners (they have shared private ownership).
The natural state in capitalism is that a worker owns their own means of production - their time. If one wants to trade their time into a collective, that is their time to trade. Slavery breaks this, and one of the more interesting facets of the American civil war was that the North (anti-slavery side) was much more efficient than was the South (which favored slavery), even in agriculture.
Labor is not capital (means of production), it's not being "owned", since one cannot accumulate it. That analysis is deliberately obfuscating problems with capitalism, which stem from capital accumulation. (And if anything, it is slavery that turns labor into actual capital.)
People with no imagination, knowledge of history, or capacity to think about anything but themselves. People who think humans have a right to obliterate all other forms of life in order to carpet this planet with...whatever we want. People who go to zoos and watch Ow My Balls.
There are many flavours of Capitalism. Some work extremely well (Scandinavia) others less so (Russia/China). However Capitalism still beats anything else humans have ever tried.
Continued growth: absolutely. Capitalism itself only exists because resources are finite though. It's the most practical method we have right now for efficiently allocating those resources.
Allocating resources is a hard problem to solve. If we had infinite resources we would not need to solve it.
Unfortunately, a transition to a more planned economy is going to be necessary, because individual actors working independently of the needs of others might be a surprisingly good way to allocate resources, but it's not smart enough to be done sustainably.
It doesn't need to be planned. The markets just need to be constrained and regulated. In some extents they can be expanded. E.g. you can force companies to buy and trade quotas for different types of externalities to cover undoing those externalities and let the markets sort out the most efficient way of addressing them.
There is complexity there (you need to ensure there aren't any easily exploitable loopholes), but markets have lots of uses.
> It's the most practical method we have right now for efficiently allocating those resources.
This is where true why is our way of life less sustainable today than it was 1000 years ago?
Nearly all first nations tribes lived in a way of live that was sustainable indefinitely. In 250 years of developing capitalism we have destroyed most of the biosphere, and trigger climate change that has the potential to undo civilization as we know it.
Capitalism and rapid hydrocarbon extraction has allowed the species to surpass the carrying capacity of the planet in away that cannot possibly be sustained.
Personally, I think this was always our destiny, but to try to delude yourself into believing that capitalism is making things better is a strange form of denial.
Because there are many, many more of us than there were 1000 years ago. Per capita, sustaining the lifestyle of a 21st century Westerner requires less land than that of an 11th century peasant.
It requires less land because of the heavy use of fertilizers and non-reproducing hybrid grains. It's literally and unquestionably and unsustainable process.
The CO2 emissions per person, which is a much better way to measure how much energy it takes to sustain a persons life style is unimaginably higher.
[1] https://www.tandfonline.com/doi/pdf/10.1558/jocr.v5i2.197