Critique of Limits to Growth

[jsterman@MIT.EDU (John Sterman)]

Re Wayne Wakelands comments on Bill Nordhaus:

The article Wayne is refering to is "World Dynamics: Measurement
without data" and appeared in the Economic Journal in Dec 73.

It is a very interesting article, not least for the many errors and
misunderstandings it contains. Nordhaus is a distinguished economist,
and has done excellent work in some areas. This work, however, is one
of the least civil and most rude pieces of ad hominem invective Ive
ever seen in an academic journal. The article does little to advance
the cause of civilized discourse for the purpose of greater
understanding, something I was taught was important as a foundation for
the advancement of scientific knowledge as well as just being good
manners.

More to the point, the substance of the article contains numerous errors
and misunderstandings. Wayne refers to the claim, advanced in the
paper, that the relationship between some variables in the world2 model
is "backwards", i.e. has the wrong slope compared to the data. This is
indeed what Nordhaus claims, but his analysis is flawed. The particular
relationship has to do with the impact of food per capita on birth
rates. In world2 this is an upward sloping curve (no food, no births;
low food: high infant mortality; lots of food: the relationship
saturates at something close to the biological potential). Nordhaus
shows that as food per capita has risen in the developed world, birth
rates have fallen (which is true). The problem is confounding of
causation with correlation: food per capita has risen along with income
per capita, and the birth rate has fallen. But it is not the greater
access to Big Macs that reduces births, but the higher costs and lower
benefits of children in an industrial society compared to an agrarian
society that drives birth rates down (this is the essence of the theory
of the demographic transition). Rising income increases food
consumption; rising income also reduces desired family size and thus
births. Hence birth rates and food per capita are negatively
correlated. The causal relationship between food per capita and live
births, however, is positively sloped, as Forrester assumes (No food, no
live births - no doubt about it). What Nordhaus did was to compare the
structural assumptions of the model to the aggregate behavior of the
real system. In fact, the behavior of the world model is consistent
with the behavior of the real system. If you run the model with, say,
the initial conditions for the United States, it generates the same
negative correlation between food and births seen in the actual data.
Nordhaus made some good points in the article, but the claim that some
model relationships are "backwards" is false and based on erroneous
analysis.

Interested readers should refer to the rebuttal of the Nordhaus article,
Forrester, J. W., Mass, N. J., & Low, G. W. (1974). The Debate on World
Dynamics: A Response to Nordhaus. Policy Sciences, 5(2), 169-190.

Model critiques cut both ways: readers might be interested to see the
modeling errors and hidden technological optimist assumptions in
Nordhaus well-known model of global climate change, documented in Tom
Fiddamans paper from the 1995 System Dynamics conference in Tokyo. The
errors include non-conservation of mass (in this case carbon) and DT
error; the technological optimist assumptions include a high discount
rate on utility (the welfare of future generations is not worth as much
as the welfare of people today: your grandchildren simply dont
count), exogenous population growth, lowball estimates of future
economic growth, high estimated costs of GHG abatement with no
technological advance in abatement but high technological advance for
aggregate productivity, and so on. The lesson for us as modelers is
that we are all blind to the underlying axioms of our own world-view,
and must take great care to expose our biases and assumptions in our
modeling work. This is why the system dynamics community has always put
such great effort into documentation (the world2 and world3 models are
among the most heavily critiqued models ever published in large measure
because all equations, assumptions, and data were fully documented and
the simulations were fully reproducible -- shocking as it may seem, this
is not the norm in economics or the social sciences).

I strongly object to Waynes unsubstantiated attribution about "the
tendency of S-D modelers to make assumptions that are not backed up with
data." We have worked hard to find ways to confront our models with
data. Good system dynamics work is solidly grounded in data of all
types. Waynes statement is simply false as a characterization of the
field of system dynamics, and it is highly debatable even regarding the
world models. Lets keep unsubstantiated generalizations out of the
discourse on these issues and focus on documented specifics.

John Sterman

Sloan School of Management
MIT, E53-351
30 Wadsworth Street
Cambridge, MA 02142
phone: 617/253-1951 fax: 617/258-7579 e-mail: jsterman@mit.edu

[wakeland@ccgate.leupstv.com]

For what its worth, one rather scathing critique of "Limits to
Growth" was written by an economist named Nordhaus. The article
was called something like "System Dynamics: Measurement without
Data." It appeared in an ecomonics journal in the late 70s, I
think. I dont recall the name of the journal (no doubt someone
will remember, or I can dig it out next time Im at my office at
the U.).

In any case, Nordhaus makes some good points about the tendancy
of S-D modelers to make assumptions that are not backed up with
data...even when appropriate data IS available. As the article
points out, many of the relationships posited in the original
World model do not match the available data. In fact, some are
completely backwards.

I believe the article should be compulsory reading for all
would-be modelers, especially those of us who have a tendancy to
"wing it" when building models (as I do).

Wayne Wakeland
Adjunct Assoc. Prof.
Systems Science Ph.D. Program
Portland State Univ.
wakeland@ccgate.leupstv.com

[D.C.Lane@lse.ac.uk]

Wayne Wakeland is correct in saying that Nordhaus 1973 article
critiqueing LtG is worth reading. However, I feel that he is wrong about
the reason why one should read it.

The Nordhaus piece illustrates the difficulties of communication between
different modelling approaches. For example, he repeatedly criticises
parameters/table functions from a basis which confuses non-linear
relationships between variables and consequent dynamic behaviour.
However, I will describe no further since the case is MUCH better made
by the the authors of the responding paper:

Forrester, J.W., G.W.Low & N.J.Mass. 1974. "The Debate on World Dynamics: A
response to Nordhaus". Policy Sciences 5:169-190.


Yes, all system dynamicists should read the Nordhaus piece . . but ONLY
if they then read the response. Those so doing will learn a lot about
global modelling, about system dynamics modelling in general and about the
points to look out for when we are describing our work to others.


================================================================
Dr. D. C. Lane
Operational Research Dept.
London School of Economics and Political Science
Houghton Street
London EC2Y 8HB
United Kingdom
D.C.Lane@lse.ac.uk

Tel: (UK) 0171-955-7336
Fax: (UK) 0171-955-6885

[N JOHN PEET]

LIMITS TO GROWTH

Has anyone thought of asking the authors of LTG, and of its follow-up
volume, "Beyond the Limits", about _their_ opinions?

In my opinion, LTG is one of the most severely misunderstood,
misrepresented, lied-about and generally trashed pieces of work of
the last two decades. It was actually a very modest effort, which
made few of the grand claims generally attributed to it, but brought
together and successfully exposed as nonsense, many of the myths
of growth that were dominant then, and persist to this day.
Remember, it was about scenarios, not forecasts - they are not
the same!

If people want to find out about what LTG said, PLEASE READ IT!
And then please read BTL. And if you want any further information,
write to Donella Meadows (donella.h.meadows@dartmouth.edu) and/or
Dennis Meadows (d_meadows@unhh.unh.edu).

Danas syndicated "Global Citizen" article on June 22 1995 is a
valuable summary of some of the main points about the LTG study, and
of the misrepresentations that continue to be made about it.

In peace,

John Peet
========================================================
Dr John Peet
Department of Chemical & Process Engineering
University of Canterbury
Private Bag 4800 Phone: (64)(3)364-2538
Christchurch Fax: (64)(3)364-2063
New Zealand Home Ph/Fx: (64)(3)384-1281
Email: j.peet@cape.canterbury.ac.nz
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