Really great blog post by Tom Murphy, who argues that the economics profession is probably mostly deluded when it comes to the assumption that economic growth can continue indefinitely. Reads well, too, because it comes in the form of a dialogue between him (a physicist) and an economist. Main point: there are certainly physical constraints on the possibilities for economic growth, so long as human beings remain here on earth. Energy is limited, and the more energy we consume the more heat we generate. Efficiency also has theoretical limits. What's the end result? The best we can possibly do, in the long run, is converge to a steady state economy--one in which energy consumption and GDP are fixed, and the only chance for "growth" is simply in improving the quality of life that remains for those of us still on this planet.
In my opinion, the convergence to such a steady state may not be pretty. It will be a huge test of our morality when the world's population exceeds a readily sustainable level. I'm thinking wars and eugenics haven't seen their last days. But maybe I'm too cynical.
I agree with Tom's major point, and I think economists are wrong to be unaware of the physics. But I do have two ideas I want to throw out there. One is a question: what means do we have of calculating the natural equilibrium between population size and consumption, scarcity, and overall well-being? I claim that the only real "computer" we have for this is the "catallaxy," as Hayek liked to call it. In other words, the global free market--regulated by property rights and negotiated through individual transactions. The main point is that this global system of organization has a mechanism of adapting to new or undiscovered information, and I think it's probably the only way we have of making the overwhelming set of calculations necessary to ensure humans can still live peacefully on this planet.
Second, I just want to say that, as silly as it can sound, I'm optimistic about space travel. Seriously. And I imagine that one day in the future when we start to truly feel the squeeze on our ability to consume, some scientists might just feel desperate enough to make space travel a more feasible idea. But I admit, optimism can't buy bread.