Are We Doomed?

NOTE: The Growth Economics Blog has moved sites. Click here to find this post at the new site.

The Guardian ran a piece on a forthcoming paper in Ecological Economics by Safa Motesharrei, Jorge Rivas, Eugenia Kalnay. The article is titled “Human and Nature Dynamics (HANDY): Modeling Inequality and Use of Resources in the Collapse or Sustainability of Species”. The model they construct has the feature that under certain conditions, either extreme inequality in wealth or overuse of resources will result in the collapse of society, in the sense that the number of people goes to zero.

This is a fairly standard “We’re all gonna die!” kind of model. It mechanically delivers the possibility that society could collapse. This is not some kind of blazing hot insight, it’s the equivalent of saying that you could get in a car wreck today if the conditions work out just right.

Here’s a simple way of thinking about this kind of model. Assume that you are driving on a one-way road, with a car in front of you and one following you. Those other cars are going a constant 40 mph and do not deviate from that speed ever. You drive according to two simple rules. (1) If you are getting closer to the car in front, slow down. (2) If you are getting closer to the car behind you, speed up.

Now, if your accelerator and brakes are sensitive enough, and you have particularly good reflexes, then this system is sustainable. You’ll find yourself travelling 40 mph as well, exactly between the two cars. But, if your accelerator and braking skills are a little sluggish, then eventually you are going to hit one of the cars.

That’s it. That’s the model. The Motesharrei et al model does this, except renaming the various components of the model. But in the end all they are asking is: given the existence of these other 40 mph cars, is it possible you will crash? The answer is, of course, yes. In fact, it’s almost certain you will unless your reactions are calibrated exactly right.

So why don’t we see widespread mayhem on highways? Massive fifty-car pileups multiple times a day in every city? Because the assumption that all the other cars will always go 40 mph is ridiculous. The rest of the system, the other cars, will all react to the situation as well. If you put on your brakes because you get to close to the car ahead, the car behind you will slow down as well, preventing you from being rear-ended.

Models like Motesharrei et al, in order to focus on some simple dynamics, ignore the possibility that the actors in their model will change behavior. They assume all the other cars just go 40 mph all the time. But just as other cars respond to your actions, technology can change (for better or worse in terms of using resources), people will alter their consumption behavior, the composition of the elite and commoner groups will change, and the distribution of wealth will be shifted. The system responds.

This is why economists always scream “you ignored prices!” when they see models like these. Because prices are like brake lights and turn signals, they provide information to those around you. They inform the system about what is scarce and what is abundant. They induce changes in behavior in the rest of the actors in the system. Behavior changes mean it is not inevitable that the system will collapse. Just like it is not inevitable that every time you get in a car you are going to get into a wreck.

Could we create some ecological disaster that dooms the planet? Sure. The ecology of Earth is so complex that I’m sure if we did something wrong we could unravel the whole thing. But this is not inevitable, whatever the equations in Motesharrei et al tell you.


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