Illusion and reality of the physical economy

The financial crisis simply highlights the serious disconnect with our physical world, also known as reality. Our physical world around us is finite matter and cannot be made to grow. Growing food and mining and manufacture are simply transformations of the finite number of atoms at our disposal.

In the two centuries from the outset of the Industrial Revolution, economists characterized the improvements in people's lives as a growth model, through cleverness in improved technologies taking more and more resources from farther and farther away.

David Ricardo in his 1817 treatise on resources enshrined in the discipline the notion that nature was bountiful, and so such resources as water and distant lands were free.