ABSTRACT
The chapter offers an analysis of the standard economics (neoclassical) response to the Malthusian prediction of imminent biophysical limits to growth. Neoclassical economics challenges the classical assumption of resource scarcity and offers arguments and empirical results to demonstrate the viability of decoupling natural resource use and environmental impacts from economic growth. The specific theoretical concepts explored include the environmental Kuznets curve (EKC), the demographic transition, and human capital theory as related to fertility. The neoclassical position on scarcity and growth suggest that perpetual economic growth is possible. This optimistic conclusion is primarily based on (1) the belief in the flexibility and resilience of human institutions, especially the market system, and (2) the claim that the pace of technological advances that humanity has witnessed in the past two centuries will continue unabated into the indefinite future. The faith in human institutions and technological progress, as well as the methodologies used by neoclassical economics to assess natural and environmental resource scarcity, is often criticized. The chapter thus concludes by offering a thorough and balanced discussion of the views critical to the neoclassical worldview on scarcity and growth.
