It makes sense that economies should follow rules analogous to those that govern biological systems. Plants and animals tend to grow quickly when they are young, but then they reach a more or less stable mature size. Beyond a certain point, growth becomes more of a problem than an advantage.
But economists generally don't see things this way. That is probably because most current economic theories were formulated during an anomalous historical period of sustained growth. Economists are merely generalizing from their experience: They can point to decades of steady growth in the recent past, and they simply project that experience into the future. Moreover, they have ways to explain why modern market economies are immune to the kinds of limits that constrain natural systems; the two main ones concern substitution and efficiency.
If a useful resource becomes scarce its price will rise, and this creates an incentive for users of the resource to find a substitute. For example, if oil gets expensive enough, energy companies might start making liquid fuels from coal. Or they might develop other energy sources undreamed of today. Economists theorize that this process of substitution can go on forever. It's part of the magic of the free market.
Increasing efficiency means doing more with less. In the United States, the number of inflation-adjusted dollars generated in the economy for every unit of energy consumed has increased steadily over recent decades. That's one kind of economic efficiency. Another has to do with locating the cheapest sources of materials and the places where workers will be most productive and work for the lowest wages. As we increase efficiency, we use less—of resources, labor, or money—to do more. That enables more growth.
Increasing efficiency and finding substitutes for depleting resources are undeniably effective adaptive strategies of market economies. Nevertheless, the question remains open as to how long these strategies can continue to work in the real world—which is governed less by economic theories than by the laws of physics. In the real world, some things don't have substitutes, or the substitutes are too expensive, or don't work as well, or can't be produced fast enough. And efficiency follows a law of diminishing returns: The first gains in efficiency are usually cheap, but every further incremental gain tends to cost more, until further gains become very expensive.
Unlike economists, most physical scientists recognize that growth within any functioning, bounded system has to stop sometime.
But this discussion of limits has very real implications, because “the economy” is not just an abstract concept; it is what determines whether we live in luxury or poverty, whether we eat or starve. If economic growth ends, everyone will be impacted, and it will take society years to adapt to this new condition. Therefore it is important to be able to forecast whether that moment is close or distant in time.
Hence the Limits to Growth study and book. Its authors fed in data for world population growth, consumption trends, and the abundance of various important resources, ran their computer program, and concluded that the end of growth would probably arrive between 2010 and 2050. Industrial output and food production would then fall, leading to a decline in population.