Lessons from Garrett Hardin’s Living Within Limits

Living Within Limits by Garrett Hardin is a polarizing book, but love it or hate it; it’s definitely thought provoking. Hardin draws upon a wide variety of disciplines — psychology, sociology, physics, ecology, economics, biology, and politics, to name a few — to tackle the issue of population control.

Hardin’s basic premise: The Earth’s resources are limited, but demand for them by human beings is potentially unlimited. Nothing can grow forever and every ecosystem has a carrying capacity. It’s better to confront the problem now than wait until we reach that point. However, given a general human bias towards optimism, it’s challenging to get people to face reality.

Harden explores proposed solutions including interplanetary travel, nuclear power, birth control and economic development (i.e. the idea that more affluent people have fewer children, so increasing overall affluence reduces population growth), and identifies flaws in each. He stops short of offering a definitive solution, but offers some important guidelines for thinking about the problem.

Here are a few of my favorite passages and concepts that are broadly applicable beyond just thinking about population control.

“Planning for the future demands the best possible assessment of where we are at the present, regardless of who is to blame for the misfortune.”

This is a critical point in business and in life. We must be able to look critically at our lives and business and make honest assessments of problems, regardless of how unpleasant it might be. We can’t move forward or solve a problem if we deny that it exists. Plenty of us are guilty of ignoring precarious personal finance situations or looming competitive threats because thinking about them makes us feel uncomfortable. Problems are unpleasant, but they’ll be even more unpleasant in the future if we don’t intervene.

“…it helps to have a checklist of viewpoints to use in the process of discovery….three approaches that we can call literacy, numeracy, and ecolacy.”

Hardin defines literacy in numeracy in the typical ways. Ecolacy is his term for thinking in terms of whole systems, considering secondary and tertiary effects. Hardin covers all three “filters” in depth in his book Filters Against Folly. The ecolate point of view is an important one and one that is often neglected in favor of simple cause-and-effect thinking. Hardin goes on to propose three “Laws of Human Ecology” (described below) to help guide our thinking.

The ecolate point of view is synonymous with the idea of “systems thinking”. Systems thinking frames problems holistically in terms of the entire system and tries to capture all of the interactions and feedback loops among different parts of the system. The systems viewpoint is prevalent in engineering but largely ignored in business, politics, etc.

If you’re interested in exploring the topic, here are a few good books on systems thinking:

Thinking in Systems: A Primer by Donella Meadows
Seeing the Forest for the Trees by Dennis Sherwood
The Fifth Discipline by Peter Senge
Business Dynamics by John Sterman

“We can never do merely one thing” (The first law of human ecology). “There is no away to throw to” (The second law of human ecology). ”I = P x A x T. The impact (I) of any group or nation on the environment can be viewed as the product of its population size (P) multiplied by per-capita affluence (A) as measured by consumption, in turn multiplied by a measure of the damage done by the technologies (T) employed in supplying each unit of that consumption.” (The third law of human ecology).

The first law ties into systems thinking. There is no simple linear cause-and-effect. There are always feedback loops — either negative, self-leveling feedback (like a thermostat) or positive, runaway feedback (like a nuclear explosion) — to be considered. For example, a company’s revenues decline so it cuts costs by eliminating some back office functions. As a result, its customer service suffers and it sees further customer defections. Revenue decreases further. It makes additional cuts. Etc.

The second law is a helpful reminder to be more environmentally friendly and conscious. It’s easy to have an “out of sight, out of mind” mentality. But, everything we throw away ends up somewhere — in a landfill, in the ocean, being burned and creating harmful emissions, etc.

The I = P x A x T equation captures much of Hardin’s argument in Living Within Limits in a few characters. It’s a simple model that captures a lot of information. All things being equal, a rise in the population, a rise in affluence of the population, or an increase in the damage caused by the population’s technologies will all have a negative impact on the environment.

“Whenever the scale is shifted upward, one should always be alert for possible contradictions of conventional wisdom that served so well when the unit was smaller.”

“Ultimately a point is reached at which diseconomies start to creep in…the onset of diseconomies is seldom foreseen.”

“The technical factors that create economies of scale are easy to define intellectually. The psychological factors that make for diseconomies of scale are more difficult to foresee and define”

All three of these quotes tie to the idea of diseconomies of scale. At some point a system, organization, or government, becomes so large and cumbersome that diseconomies of scale begin to creep in and it is actually less productive than it was at a smaller size. To Hardin’s point, this effect happens gradually and is seldom foreseen, as people are terrible at detecting subtle changes over time (“creeping normality”).

Managers need to cognizant of these effects and recognize that what worked for a 10 person team doesn’t necessarily work for a 100 person team and what worked for a 100 person team almost certainly doesn’t work for a 1,000 person team. Diseconomies of scale are often tied to human/ psychological effects — freeloader problems, latency in transferring information through multiple layers of bureaucracy,

“With coal-as-a-fuel as with petroleum-as-a-fuel, the mining of the energy resource should be stopped when the energy used in extracting it from ever deeper strata becomes greater than the energy obtainable from burning the fuel.”

I really love this model in regards consuming fossil fuels for energy. The dollar value that people are willing to pay for fuel isn’t the limiting factor. Energy is. When the energy expended to acquire the fuel exceeds the energy provided by the fuel, it makes no sense to acquire it. I’m still thinking of other applications for this framework, but it struck me as a unique (and correct) way to view the issue.

“…a stable carrying capacity must be tied to the least favorable conditions…”

This is self-explanatory and is relevant in a lot of contexts: a bridge must be able to handle more than the largest load it will ever experience, investors needs to build in a “margin of safety” to borrow Benjamin Graham’s terminology (Note: need to write a post on The Intelligent Investor soon), etc. It’s critical to be prepared for (and design for) for a worst-case scenario (or at least a seriously negative scenario).

“Exceeding the carrying capacity in one year diminishes the carrying capacity in subsequent years.”

This is an important effect that ties back to ecolate thinking / feedback loops. We can apply the same idea to the stock market where demand for securities is the carrying capacity and supply of securities for sale is the population. If the supply exceeds demand, prices begin to fall. When prices fall, some investors get scared and decide to sell which increases the supply and causes prices to fall even further.

“In Idaho, as of 1990, the grazing fee on public land was only one-fifth what it was on private land. We can assume that a private land-owner sets his fee to cover the true cost of maintaining the carrying capacity of the land indefinitely. Obviously, the government is not following this prudent rule….Who paid the deficit? Taxpayers, of course. Costs were commonized while the profits (from the sale of beef) were privatized to the stockmen. The formula for this sort of game is simple: Commonized Costs — Privatized Profits, which can be abbreviated the CC-PP game.”

This is another model from systems thinking related to “The Tragedy of the Commons” and it pops up in a lot of places when you start looking for it: the government bailout of the big banks and automakers in 2008; companies that create pollution (we all bear the “cost” of that pollution), sports stadiums subsidized by municipalities, and the list goes on. These systems create misaligned incentives and almost inevitably lead to abuses by the people, companies, or entities that profit from them.

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