In “Peak Capital”, ASPO-Italia cofounder Ugo Bardi discusses the Limits to Growth theory first expounded by Meadows et al. in the seminal 1972 book, which was followed up by a 30-year update book in 2004. Specifically, Ugo puts forward his view as to which limit we are likely to hit first.

In Ugo’s view, which is shared by an author of the original book, Dennis Meadows, that limit is likely to be capital. In plain English, the capital infrastructure base upon which our modern economy has been built is ever-expanding, ever-depreciating and in need of constant upkeep. The limit that Ugo and Dennis believe will finally bring about the reversal of growth will be when rising hand-to-mouth pressures (such as rising costs of maintaining resource extraction levels and rising costs of dealing with pollution and soil degradation) cause the diversion of so much capital to those urgent problems as to make us unable to afford the maintenance of the installed capital base that is used for all other goods and services. This is the force that, it is argued, will tip industrial output and with it, civilisation and economic growth, into decline.

Quoting from the relevant passage in the “Limits to Growth: the 30 Year Update” book, the eventual failure to maintain the capital stock that produces the industrial output had been framed in the context of running out of “time” and “ability to cope”, as follows:

…the more successfully society puts off its limits through economic and technical adaptations, the more likely it is to run into several of them at the same time. In most World3 runs, including many we have not shown here, the world does not totally run out of land or food or resources or pollution absorbing capability. What it runs out of is the ability to cope.

“The ability to cope” in World3 is represented, too simply, by the amount of industrial output available each year to be invested in solving problems. In the “real world” there are many other determinants of the ability to cope: the number of trained people; their motivation; the amount of political attention and intention; the financial risk that can be handled; the institutional capacity to develop, disseminate, and service new technologies; the managerial ability; the capacity of the media and political leaders to remain focused on crucial problems; the consensus among voters about important priorities; the degree to which people look far ahead to anticipate problems. All these capabilities can grow over time, if society invests in developing them. But at any one time, they are limited. They can process and handle just so much. When problems arise exponentially and in multiples, problems that could theoretically be dealt with one by one can overwhelm the ability to cope.

Time is in fact the ultimate limit in the World3 model – and, we believe, in the “real world”. Given enough time, we believe humanity possesses nearly limitless problem-solving abilities. Growth, and especially exponential growth, is so insidious because it shortens the time for effective action. It loads stress on a system faster and faster, until coping mechanisms that have been adequate with slower rates of change finally begin to fail.