How to make a theoretical economy grow when both average consumption of nonrenewable resources per person and total population are constant?

This is a problem of my imaginary country Zeroth Reich. I imagined that this country is populated with literal eco-fascists. Both the people and the government care about Mother Nature a lot and demonstrate this by restricting and self-restricting consumption of nonrenewable resources. For example, cars are officially banned from individual use. People are supposed to use public transport instead. Population growth is restricted and regulated too, so the size of the population is held constant.

Zeroth Reich uses a regulated free market, because government officials believe that competition in free market allows to use resources more effectively than in a planned economy.

Customers from Zeroth Reich don't buy things made from nonrenewable resources without very good reasons, because everybody wants to keep his/her individual consumption of nonrenewable resources as low as possible. For example: If it's for short-time use(like comics and books), then they prefer to borrow or rent it. If it's broken, then they try to fix it. If it's still useful, but they don't need it anymore, then they try to sell or gift it. If they can buy required thing from second-hand shops, then they buy it. So average consumption of nonrenewable resources per person is more or less constant.

As for firms, they are under pressure from both the government and customers. Overuse of nonrenewable resources without good reasons is frowned upon, legally risky, and costly. For example, even if one is the CEO of a prosperous corporation, it doesn't mean that they can have a car for individual use, they must use public transport as everybody else. Another example, helium is very cheap (in case of unregulated free market), yet it's a nonrenewable resource. In order to limit its consumption the government limits the overall quantity of helium that can be sold on local market during this year. The same goes for other nonrenewable resources. The limits are held constant. So the total maximum of consumption of nonrenewable resources is constant.

In order to keep things simple let's suppose that there are no other countries.

So, how can one MAKE an economy grow in such circumstances? Give me your ideas.

P.S. As for me, I think that Zeroth Reich needs to fix minimal prices of goods. In this case firms that use nonrenewable resources wisely would receive more profit than wasteful firms. So firms would be always able to increase their profit by using less nonrenewable resources. Otherwise (without fixing minimal prices) competitors would make them lower their prices. What do you think about it?

posted almost 9 years ago

user161005‭

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