ABSTRACT
To appreciate the importance of the distinction between growth and development, we must first understand how the economy is related to its environment. The economy, in its physical dimensions, is a subsystem of the earth ecosystem. The ecosystem is finite, nongrowing and closed. A "closed" system is one that matter neither enters nor exits, but one that energy does enter and exit. In the earth ecosystem solar energy enters and exits and it is this throughput of energy that powers the material biogeochemical cycles on which life depends. Within this earth ecosystem the economy exists as an open subsystem. That means that both matter and energy enter from the larger system, and that both matter and energy exit back to the larger system. All physical economic processes of life and production are maintained by this metabolic flow-through of matter-energy from and back to the environment. The economy lives off the environment in the same way that an animal does—by taking in useful raw material and energy and giving back waste material and degraded energy. The rest of the ecosystem, the part that is not within the economic subsystem, absorbs the emitted wastes, and by biogeochemical cycles powered by the sun, reconstitutes most of the waste into reusable raw materials.
