Here’s Robert Shiller in Project Syndicate talking about the “new normal” of slow economic growth:
There is a name for the despair that has been driving discontent – and not only in Russia and Ukraine – since the financial crisis. That name is the “new normal,” referring to long-term diminished prospects for economic growth, a term popularized by Bill Gross, a founder of bond giant PIMCO.
The despair felt after 1937 led to the emergence of similar new terms then, too. “Secular stagnation,” referring to long-term economic malaise, is one example. The word secular comes from the Latin saeculum, meaning a generation or a century. The word stagnation suggests a swamp, implying a breeding ground for virulent dangers. In the late 1930s, people were also worrying about discontent in Europe, which had already powered the rise of Adolph Hitler and Benito Mussolini.
The other term that suddenly became prominent around 1937 was “underconsumptionism” – the theory that fearful people may want to save too much for difficult times ahead. Moreover, the amount of saving that people desire exceeds the available investment opportunities. As a result, the desire to save will not add to aggregate saving to start new businesses, construct and sell new buildings, and so forth. Though investors may bid up prices of existing capital assets, their attempts to save only slow down the economy.
“Secular stagnation” and “underconsumptionism” are terms that betray an underlying pessimism, which, by discouraging spending, not only reinforces a weak economy, but also generates anger, intolerance, and a potential for violence.
So this is the old “animal spirits” argument. There is almost never commentary from economists or financiers about the possibility of ecological limits having something to do with this. There are two ways ecological limits could manifest themselves. One is by making us gradually poorer through high prices of food, energy, and various raw materials. That could happen slowly and gradually, be obscured by the ups and downs of business/credit cycles and geopolitics, and not be obvious until it is too late. We could theoretically innovate our way out of the problem, but there might be a downward spiral where as we get poorer and poorer, we devote less effort to innovation and more to making ends meet. The second way ecological limits could manifest themselves would be through a sudden, catastrophic tipping point or climate shift. This would be a point where supplies of food, energy, water, and critical raw materials get so tight they cause a catastrophic breakdown of the systems of civilization, rather than just high prices. Of course, if you are poor enough, high prices and system breakdown have roughly the same consequences for you and your family. If you are rich enough, you can withstand the former just fine, but not the latter.