A Simple Physics-Based Model of Growth-Based Economies Dependent on a Finite Resource Base

Philip Mitchell () and Tadeusz Patzek ()
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Philip Mitchell: Energy Geosystems Group, King Abdullah University of Science and Technology, Thuwal 23955-6900, Saudi Arabia
Tadeusz Patzek: Energy Geosystems Group, King Abdullah University of Science and Technology, Thuwal 23955-6900, Saudi Arabia

Sustainability, 2024, vol. 16, issue 18, 1-33

Abstract: Mainstream economics describes virtual wealth with theory that is at odds with the physical laws that govern a nation’s physical resources. This confusion fundamentally prevents the realization of “sustainable” economies. The relation between debt and the metabolism of a country (measured by GDP or power consumption) appears to follow a diffusion relationship, in which debt encodes the temporal evolution of an economic potential. Debt enables the production of resources and the realization of a country’s economic wealth potential (the sum of its environmental, geological, and societal endowments, among others). Any economic scheme dependent on finite stocks of free energy for growth must eventually collapse, and as such cannot be considered sustainable. Our simple debt–diffusion model is shown to closely match the trajectories of 44 different economies.

Keywords: diffusion; debt; free energy; Cartesian economics; limits to growth (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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