Kenneth Boulding was among the first to recognise limits to growth due to natural resource depletion. He pointed out that the Earth is not limitless, and everything we use comes from this Earth, and all our wastes have to remain on this Planet. Hence he asked (in 1966) to control consumption and production, otherwise we would run out of natural resources, while fouling our own nest.

1. ECONOMICS OF THE COMING
SPACE SHIP EARTH
KENNETH BOULDING
Prof. Prabha Panth,
Osmania University

2. Concept of the Earth
• Earlier people thought that the Earth was
without limit.
• It could supply natural resources infinitely.
• Earth was “Open Access” – i.e.
– Anyone can use the natural resources.
– No problems of disposal of wastes.
– Natural resources can be exploited without
limits, as they were infinitely available.
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3. Cowboy Economy
• Kenneth Boulding calls this as
the “Cowboy Economy”.
• Humans were exploitative and destructive.
• After using and wasting an area, they would
move to new areas to exploit.
• They did not bother about natural resources
depletion, because new areas are always
available.
• They did not bother about pollution, for when
one area is polluted, they can move to a new
place
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4. Cowboy Economy
• More and more Consumption is regarded
as a good thing
• So also more and more production.
• Assuming that natural resources are
available infinitely, then this is possible.
• Also it is assumed that the Earth can
dispose of the wastes created by
production and consumption.
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5. Boulding’s criticism
• Boulding pointed out that the Earth is
limited.
– The total stock of natural resources on this
Earth is finite.
– All economically available areas on Earth are
occupied.
– No new areas to conquer and exploit.
– Not possible to have the “Cowboy” type of
economy – of using and discarding land and
resources.
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6. Closed System
•Therefore the Earth is a closed system.
• In a closed system, all inputs and outputs
are interconnected.
– Nothing comes from outside, except sunshine.
– Nothing can be thrown outside the Earth into
Space.
– The economies of the Earth should sustain
themselves with the available resources of the
Earth.
– The wastes also have to be retained on this
Earth.
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7. Econo-sphere
• The world economy can be thought of as
an "Econo-sphere"
– It is a subset of the Global system.
– Inputs: production adds to stock of economic
goods,
– Outputs: consumption which subtracts from it,
– Natural resources flow into the economic
system,
– And wastes flow out, but do not enter the
economic system.
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8. Space Ship Earth
• Boulding points out that the Earth is a
closed system, circulating in space.
• It is like a SPACE SHIP.
• It is completely self reliant.
• Only solar energy comes from
outside.
• Humans cannot dispose off their
wastes outside.
• There is no “outside”.
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9. Space ship Economy
• All natural resources have to be recycled
to sustain the economies.
• Stock of natural resources should be kept
constant not wasted.
• All wastes created have also to be kept
within the Earth.
• Necessary to reduce output
• And reduce consumption.
• Minimisation not maximisation
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10. In a Space Ship Economy:
• Technological change should aim at the
maintenance of a given total stock of
output.
• Reduce output (that is, less production
and consumption)
• Reduce depreciation and obsolescence.
• Develop technology that can recycle
wastes.
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