Other worlds are possible

And in fact, we're going to be living in one sooner or later.

Currently, we have an economic system based on growth and the private accumulation of profits. (I don't think that it's sufficient to describe this as a "free market" system. For one thing, it's possible to have market exchange without either growth or profits. For another, large parts of our economy aren't governed by markets but by central planning systems of some sort - from government provision of public goods to corporations' internal allocation of resources.) However, this can't continue indefinitely.

In order to produce things (tangible or intangible), we must consume resources: energy, raw materials, food, clean air, etc. Although we have made significant gains in efficiency over the last several hundred years, and made some important moves towards better recycling and reuse of nonrenewable resources, additional production still requires additional resources. On a finite planet, the resources needed for further growth will have eventually run dry. At that point, our economic system will collapse.

[This doesn't necessarily have to be the case. Looking at the "Energy use per $1,000 GDP (constant 2005 PPP)" series from the World Development Indicators, it looks as though worldwide energy intensity of production fell by 25% from 1980 to 2009. Unfortunately, world GDP grew by 54% over the same period, so total energy use increased nonetheless. If those numbers were reversed - i.e. if resource efficiency of GDP was increasing faster than GDP growth, we could continue growing after hitting our resource limits. But even under that scenario, we'd eventually be constrained by the laws of thermodynamics, which imply that increasing order and complexity in any physical system is only possible if increasing amounts of energy are put into the system from outside it.]

These are not contestable matters; they are physical principles. However, there is a legitimate debate over how close we are to our planetary limits to growth. The matter hinges on judgments of two somewhat uncertain matters: First, how much we will be able to improve resource efficiency (e.g. by moving to renewable energy and biofuels), and second, how long we have until exhausting the planet's resources and climate. I am inclined to believe lower-bound estimates - which predict sinificant shortfalls within five or ten years - as overshooting our resource limits will have catastrophic and unpredictable consequences.

CUNY graduate student Peter Frase has written an excellent article laying out four possible economic futures for humanity. I recommend reading it. It follows up on his earlier blog post on the "anti-Star Trek economy", which would maintain current property rights regimes even after producing things had become free or arbitrarily cheap. (Some sectors of our economy already resemble this scenario - e.g. it's possible to infinitely duplicate a movie or record for almost nothing, yet intellectual property rights regimes have been maintained.)

But rather than repeat Frase's whole argument, I would rather quote an excerpt or two and then send you there. I think he does an excellent job laying out the broad choices that we will be presented with in the near future:

Much of the literature on post-capitalist economies is preoccupied with the problem of managing labor in the absence of capitalist bosses. However, I will begin by assuming that problem away, in order to better illuminate other aspects of the issue. This can be done simply by extrapolating capitalism’s tendency toward ever-increasing automation, which makes production ever-more efficient while simultaneously challenging the system’s ability to create jobs, and therefore to sustain demand for what is produced...

Taken to its logical extreme, this dynamic brings us to the point where the economy does not require human labor at all. This does not automatically bring about the end of work or of wage labor, as has been falsely predicted over and over in response to new technological developments. But it does mean that human societies will increasingly face the possibility of freeing people from involuntary labor. Whether we take that opportunity, and how we do so, will depend on two major factors, one material and one social. The first question is resource scarcity: the ability to find cheap sources of energy, to extract or recycle raw materials, and generally to depend on the Earth’s capacity to provide a high material standard of living to all. A society that has both labor-replacing technology and abundant resources can overcome scarcity in a thoroughgoing way that a society with only the first element cannot. The second question is political: what kind of society will we be? One in which all people are treated as free and equal beings, with an equal right to share in society’s wealth? Or a hierarchical order in which an elite dominates and controls the masses and their access to social resources?

There are therefore four logical combinations of the two oppositions, resource abundance vs. scarcity and egalitarianism vs. hierarchy. To put things in somewhat vulgar-Marxist terms, the first axis dictates the economic base of the post-capitalist future, while the second pertains to the socio-political superstructure. Two possible futures are socialisms (only one of which I will actually call by that name) while the other two are contrasting flavors of barbarism.