Infinite Growth in a Finite World

We're all aware of the Bernie Madoff Ponzi scheme. He used money from new investors to pay unreasonably high, consistent rates of return to his old investors.

Two recent articles by Thomas L. Friedman, The Inflection Is Near? and Mother Nature's Dow ask if we are engaged in a global Ponzi scheme of accelerating consumption and growth.

Most for-profit companies I've worked with as an advisor or Board member measure their success in quarter per quarter growth percentages.

In the economy of a bygone era, local businesses were considered successful when they made a high quality product, maintained the livelihood of a few employees, and built relationships with customers. There was a focus on service to the community rather than endless growth in value for shareholders.

Just as Bernie Madoff promised double digit returns, the US economy experienced rapid growth (likely unsustainable) via credit cards, speculation, and mortgaging our children's future.

If our resources are finite - we have a limited amount of fresh water, a fixed set of raw materials, and a cap to the population that can be sustained in the environment - infinite growth is not possible.

I believe that the era of "growth is good" is coming to an end. It is my hope that the era of quality, employee retention, customer satisfaction, and sustainability will replace it.

Call me old fashioned, but does it make sense for hedge fund managers, venture capitalists, and option traders to make such high returns without really contributing to society? Do they create new ideas, innovative products, or value added services? Or are they no better than sophisticated speculators in a global Ponzi scheme? The vast sums of money they make come from somewhere and we're all paying the price now for their creation of derivative investments that were based on the notion that home prices and businesses would have infinite growth in a finite world.

As I approach 50, my view of the world and my own needs have changed significantly. In my 20's I measured success by the amount of stuff I owned, the size of my house, and the speed of my car. Now I measure my success by the amount of stuff I do not have, the smallness of my house, and the carbon footprint of my car.

If we all endeavor to focus on the quality of life, the sustainability of our environment, and the future of our children rather than endless growth, the world will be a better place.