Ted: Can the Economy Grow Forever?

Yes, it can.

If you think of "the economy" as some collection of physical goods that get produced, or the amount of energy "consumed", then obviously there is a limit. The Earth is of a finite physical size, and even if we project outward, the solar system contains a finite supply of matter. Our Earth system has an energy budget, and even if we somehow were to capture all of the energy output of the sun, that is still clearly finite.

But the size of the economy isn't the contents of all of the goods and services created, but the value of those services -- and there is no limit to the amount of value that can accrue to either superior goods or superior services.

Our economy produces goods which are consumed, but it also produces capital. Because our society today is so financialized, we normally think about capital in terms of money. Especially in tech, where the only capital really required to do top-tier work is available as a commodity and thus a stack of money to spend hiring engineers or buying compute is almost interchangeable with the actual capital of the engineers[1] and compute.

But capital is anything that is used for the purposes of creating more output from work, and there's no inherent limit to the force-multiplying effect that is possible (since there is no concrete definition of "value" beyond that which people assign it, there is no limit or cap to the maximum possible value of a good or service)

We can continue to create goods and services both of increasing and compounding value. Adam Smith was correct when he pointed out the capital stack and the fact that the value added at each level of the stack is larger than that at lower levels of the stack. There is no inherent limit to the depth of the stack.

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[1]Engineers aren't strictly capital by the usual definition, but at the same time, the primary value caught up in most big tech firms is the large body of staff which make the firm go. At least in big-tech-firm-space, the Ship of Theseus remains so long as you exchange parts slowly enough.