Rapid economic growth, the source of most additional jobs in the 1960s, is losing momentum all over the world in large part because of the limits to "the earth's natural systems and resources."
The ultimate results may be a need for "simpler life-styles among the affluent and new population policies that stress stability rather than (economic) growth."
These are among the principle conclusions of a new study by Lester R. Brown of the Worldwatch Institute, a Washington-based non-profit research organization on "The Global Economic Prospect: New Sources of Economic Stress."
The report calls for restricting demand for scarce resources, slowing population growth, and "re-designing the economic system so that all raw materials are recycled."
The ways of restricting consumption would include rationing, voluntary limitations and the operation of market forces through higher prices. Some limits on how resources can be tapped and used already are in effect in various countries, the report points out.
But this process needs to be vastly - and quickly - accelrated, the report says. "Is the rate of economic growth slows, societies will need to distinguish more clearly between the volume of consumption and the qualify of life . . . The hallmark (of the future healthy economy) would not be the rate of economic expansion, but the efficiency of resources use."
Brown's report notes the advent of simultaneous high inflation and unemployment rates in the 1970s, and faults the economics profession for failing to notice that "the expanding gobal economy, fueled by both rising affluence and population growth, has begun to outstrip the carring capacity of some of the earth's biological systems and to deplete some of its key resources."
At a news conference called to discuss his report, Brown added that "is no longer sensible" for less developing countries to depend on the industrialized countries as a main sources for their own growth. Instead of depending only on greater access to the rich nations' markets, he said, the third world should also attempt to "integrate" their economies more fully with each other.
But Brown admitted that if economic growth can no longer be relied upon in Western countries as the main source of additional jobs, there would have to be a re-examination of many economic policies, and that not all the answers are clear.
He and his colleagues suggested that part of the answer lies in a simplification of major consumer goods for the sake of reduced energy consumption - for example, smaller cars with manual transmissions instead of larger ones with automatic transmissions. There should also be a shift to more labor-intensive manufacture, they said.
The main stress of the report itself is that four biological systems - fisheries, forests, grasslands, and croplands - from the basis of the economic system, but that economists are used to thinking more about demand for finished products than the underpinning of supply coming from these main resource systems.
"In large areas of the world," the report says, "human claims on these systems are reaching an unsustainable level, a point where their productivity is being imparied. When this happens, fisheries collapse, forests disappear, grasslands are converted into barren wastelands, and croplands deteriorate."
Brown forecast that the decline in U. S. petroleum production will be followed by downturns in other oil-producing countries, with the Soviet Union likely to lose its exportable surplus "within a matter of years." The world has no "coherent idea of what will fuel the economy when the oil wells begin to go dry," the report says.
A dramatic current example cited of "diminishing returns," an economic principle first discussed in the 19th century by David Ricardo, relates to world grain production and fertilizer use. In 1948-52, each million tons of fertilizer resulted in about 15 million tons of additional grain supplies. In the past few years, the ratio has droped to less than 6 to 1.
The report cites other authorities who suggest that the same law of diminishing returns applies as well to socialist economies.