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Conventional economics is a con job wearing a lab coat. I mean that literally, not as some cute metaphor I cooked up for shock value. An entire discipline has convinced billions of people that setting a forest on fire and putting the ashes in a savings account is “wealth creation.” That’s not an economic theory. That’s a swindle with footnotes.

Here’s the thesis, stated plainly, the way this voice always states things: the true cost of economic growth is never on the balance sheet, and the fact that nobody in a suit seems bothered by that should terrify you a great deal more than it currently does.

Let me walk you through why.

The Slide They Show You On Day One

Take an introductory economics course — I have, more than once, out of morbid curiosity — and within the first twenty minutes the professor throws up a diagram of “the economy.” Raw materials. Extraction. Manufacturing. Wholesale. Retail. Arrows looping back and forth between them like synapses firing in a very confident, very well-funded brain.

It looks impressive. That’s the point. It’s supposed to look impressive, because if it looked like what it actually is — a closed loop drawn by people who left out the entire planet — you’d ask questions that nobody in that lecture hall wants to answer.

Here’s the part they don’t put on the slide: economics is not a science. It’s dressed up like one — regression lines, Greek letters, the whole costume — but underneath the equations it’s a set of values wearing a lab coat. Real sciences build models that have to survive contact with reality. This model doesn’t survive contact with reality. It was never asked to. (I’ve met actuaries with more epistemic humility than the average tenured macroeconomist, and actuaries get paid to be paranoid about how the world might kill you.)

So ask the guy at the whiteboard a direct question. Where, in that lovely diagram of arrows, does the ozone layer go? Where does he put the deep aquifers — the fossil water that took ten thousand years to accumulate and that we’re currently draining like a frat house drains a keg? Where’s topsoil? Where’s biodiversity, the literal infrastructure that keeps the food supply from collapsing?

The answer, every single time, is the same tidy little dodge: “those are externalities.”

Where Do You Put the Ozone Layer? The Externality Alibi, Dissected

Sit with that word for a second. Externality. It sounds technical. It sounds like something a serious person says in a serious meeting. What it actually means, translated out of the jargon, is: this matters enormously, and we have decided not to count it.

That’s the whole racket. Let me break down what’s actually being assumed every time an economist waves a resource away as “external” to the model, because there are three assumptions stacked underneath that one word, and none of them will survive daylight.

• (1) They assume the biosphere is a subsidiary of the economy, rather than the other way around — as though the stock market could still open on a planet with no pollinators.
• (2) They assume that anything nature does for free has no value, when in reality “free” and “worthless” are not the same word, no matter how badly a quarterly earnings call needs them to be.
• (3) They assume the bill for all this never comes due — that soil degradation, aquifer depletion, and a collapsing ozone layer are permanently someone else’s problem, filed under a fiscal year that never arrives. Or, if it ever does, it will be someone else’s future problem and there’s no need to worry themselves, nor risk any profit potential, in the present day.

Researchers have actually tried to put a number on what gets waved away as “external.” A landmark 1997 valuation published in Nature pegged the annual worth of the planet’s ecosystem services — pollination, water filtration, soil formation, climate regulation, the whole unpaid labor force of the biosphere — at somewhere between $16 and $54 trillion a year, averaging around $33 trillion, against a global economy at the time worth roughly $18 trillion. Most of that value, notably, sits entirely outside any market. Updated work using the same methodology bumped the 2011 figure to roughly $125 trillion a year — more than twice global GDP at the time. A more recent 2024 accounting using satellite data across 179 countries landed even higher, estimating that global ecosystems contributed somewhere between $112 and $197 trillion to the global economy in 2018, averaging around $155 trillion.

Let that sit there for a second next to the word “externality.” The thing they’re filing under doesn’t count is worth more than the thing they’re calling the entire economy. That’s not an accounting oversight. That’s a man burning down the barn to warm his hands and calling the smoke a rounding error.

Same Shit, New Ledger

I’ve written before about how a lot of institutional bullshit follows the same underlying pattern no matter what century you find it in — different costume, identical machinery. This is one of those. Ancient priesthoods declared that certain knowledge belonged only to them and that the masses should simply defer. Modern growth cultists — and yes, I’m calling them that, because a belief system that treats infinite expansion on a finite planet as an article of faith rather than a math problem has earned the label — do the exact same thing with a spreadsheet instead of a robe. Defer to the model. Don’t ask what’s outside the model. The priest says the gods are pleased. The economist says GDP is up. Same shit, new ledger.

And look — I’m not an anti-growth zealot reflexively hating capitalism because it’s fashionable in certain rooms to do so. I distrust the people cheering for “degrowth” with the same energy I distrust the people cheering for infinite growth, because both crowds tend to be a little too in love with their own certainty. What I actually distrust is a measurement system. GDP doesn’t ask whether the growth it’s tracking made anyone’s life better. It counts a divorce, a car crash, and a cancer diagnosis as economic activity, because lawyers, tow trucks, and chemotherapy all generate transactions. It counts clear-cutting an old-growth forest as a gain. It has no column — none, not one — for what got destroyed to produce the number. That’s not a measurement of prosperity. That’s a scoreboard that only tracks one team.

The Man Who Sold His Own Foundation for Firewood

Here’s an analogy, and I want you to actually sit with it rather than skim past it, because it maps onto this argument with uncomfortable precision.

Imagine a man who inherits a house — a genuinely beautiful, structurally sound house, built to last centuries. Instead of living in it responsibly, he starts pulling boards out of the foundation and burning them in the fireplace to heat the living room. Every night, he checks his thermostat, feels warm, and declares the evening a success. He keeps meticulous records of how warm the room got. He does not keep any records of how many support beams are left. Eventually a neighbor points out that the walls are starting to lean. “Nonsense,” he says, “look how warm it’s been in here — best winter on record.” He is, by his own metric, thriving. He is also, by every metric that actually matters, roughly four winters from the roof caving in on top of him.

That man is conventional economics. The “warm room” is quarterly GDP growth. The foundation is topsoil, aquifers, forests, coral reefs, a stable climate — the load-bearing structure underneath the number everyone applauds. And here’s the kicker, the part that should make you angry rather than just amused: the man in this story isn’t stupid. He might have an economics degree from a very good school. He can build you an elegant model explaining exactly why burning the foundation was the rational move given current heating-oil prices. He is, in other words, a very, very, very smart idiot — intelligent enough to construct an airtight argument, and small-thinking enough to never once ask what the argument is built on top of.

The True Cost of Economic Growth: What the Bank Balance Doesn’t Tell You

This is the actual mechanism the monologue behind this piece is describing, and it’s worth stating in cold, unpoetic terms: clear-cut a forest, bank the proceeds, and conventional finance tells you you’ve made 6 or 7 percent. Move that same capital into a jurisdiction with weaker enforcement and you can clear another forest for 30 or 40 percent. Money, unlike a forest, doesn’t need decades to regenerate — it just needs a new target. So when the forests are gone, the same logic gets pointed at fisheries. When the fisheries collapse, it gets pointed at whatever’s next. The model never asks the one question that actually matters, which is what happens when there’s nothing left labeled “next.”

That’s the true cost of economic growth under this framework: it isn’t a cost that appears anywhere in the transaction. It appears afterward, off the books, in the form of collapsed fish stocks, drained aquifers, and a climate system running warmer than at any point in recorded human history. Economists have a name for people who try to smuggle a real cost into the calculation anyway — biophysical economists, ecological economists, the “genuine progress indicator” crowd — and mainstream departments have spent decades treating them the way a cardinal treats a heretic. (Institutional contempt for people who point at the foundation tends to be swift. Ask anyone who’s tried to get “planetary boundaries” onto a first-year syllabus.)

Two Choices, Neither Flattering

So here’s where this actually leaves us, and there are only two possibilities.

Either the natural systems that produce breathable air, drinkable water, arable soil, and a stable climate are genuinely worth something — in which case a model that assigns them a value of zero is not a rigorous science, it’s a fantasy dressed up in regression tables, and every policy decision built on top of it is built on a fantasy. Or those systems really are worth nothing, in which case go ahead: drink the aquifer dry, breathe whatever’s left of the ozone layer, and watch the “smart idiots” explain in a calm, confident voice why the collapse wasn’t in the model. Neither option reflects particularly well on the discipline currently running the show. Take your pick.

What Kind of Species Do We Want to Be?

What kind of world do I want to see, generations from now? I want a species — mine, ours — that finally understands what the actual bottom line is. Not the quarterly one. Not the one printed in a shareholder letter. The one written in topsoil depth, aquifer levels, and how many pollinator species are still alive to do the work no economist has ever figured out how to bill for.

We don’t need another growth cultist standing at a whiteboard telling us the arrows all point up. What the world needs is people willing to ask where the ozone layer went on that diagram — and to keep asking, loudly, until somebody in the room admits that “externality” was never an economic term. It was an alibi. And the true cost of economic growth has been sitting there, unpaid, the entire time.

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Further Reading:

• Stockholm Resilience Centre – Planetary Boundaries – The definitive scientific framework for understanding the “safe operating space” for humanity. This site is essential for readers who want to see the quantitative data behind why the ozone layer, biodiversity, and aquifer levels are not mere “externalities” but core infrastructure for human civilization.
• International Society for Ecological Economics (ISEE) – The leading global organization bridging the gap between ecology and economics. This site is a valuable resource for understanding “biophysical economics”—the school of thought that treats the biosphere as the primary system, not the economy.
• St. Louis Fed: Alternatives to GDP – Beyond GDP: Three Other Ways to Measure Economic Health – A mainstream financial perspective that acknowledges the limitations of GDP.
• Journal of Ecological Economics – The flagship peer-reviewed academic journal for the field. A gateway to deep-dive research into how we can account for the value of ecosystem services.
• Carnegie UK Trust: Assessment of GDP Failings – A comprehensive report that breaks down the history and “absurdity” of current GDP metrics. This is an excellent, highly readable PDF resource for readers looking for a detailed, non-academic breakdown of the “con job” narrative.