PERPETUAL GROWTH IS IMPOSSIBLE: We’ve all heard the story of the clever merchant who asked the King to pay him with grains of wheat placed on a chessboard. On the first square he was to receive one grain; on the second, two grains; on the third, four grains — doubling with every square up to the 64th. The King readily agreed to pay such a small sum; How much could it add up to in just 63 doublings, after all? The answer is that more grain than exists in the entire world would have to be placed on the 64th square. That is “the magic of compound interest” and it is 1)Â the reason that perpetual economic growth is impossible and 2) the reason that economies based on the creation of money as interest-bearing debt (read: all modern economies) inevitably go into crisis and fail.
The maverick Jewish writer Israel Shamir has just published Tom White’s extensive treatment of the subject which is well worth reading.