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Example of the principleScenario Thinking (#88)

Education

The Limits to Growth and Scenario Thinking

In 1972, a team of researchers at the Massachusetts Institute of Technology calculates several futures for the world and stresses that it is not making a prediction. Many people read the book as a prophecy anyway. This misunderstanding reveals what scenarios can and cannot do.

A gold dot stands at a fork in the fog and first follows a single line, above which a bright frame hovers; the line breaks off. Back at the start, four arcs of light open up the fog and reveal four paths, each with a small gate as a sign; when one lights up gold, the dot sets off without hesitation.
Principle #88

Scenario Thinking: If you think through several possible futures instead of betting on a single forecast, you recognize turning points earlier and act faster when it counts.

4 min read5 sectionsSituationLink to the principle
Contents

Hardly any nonfiction book has caused as much controversy as “The Limits to Growth.” To this day, it is alternately celebrated as a warning and mocked as a refuted forecast of doom. Both miss the point. Above all, the book is an early lesson in Scenario Thinking: it asks not what is coming but what could come under which conditions.

Several curves run beneath a fixed ceiling; one hits it and plunges, one bends away in gold – as in “The Limits to Growth.”
Several curves run beneath a fixed ceiling; one hits it and plunges, one bends away in gold – as in “The Limits to Growth.”

Commissioned by the Club of Rome

Situation
In the early 1970s, the Club of Rome, an association of business leaders, scientists and civil servants, commissioned a team at the Massachusetts Institute of Technology. Its task was to investigate where the growth of population and industry would lead on a finite planet. The book appeared in March 1972. Its authors were Donella H. Meadows, Dennis L. Meadows, Jørgen Randers and William W. Behrens III, representing a team of 17 researchers. It was based on the computer model World3, which built on work by Jay W. Forrester. The model linked five variables: population, food production, industrialization, pollution and the consumption of nonrenewable resources.
Link to the principle
The team asked an if-then question, not a what-will-happen question. Precisely there lies the difference between a scenario and a forecast.

Several futures instead of one

Situation
The researchers ran the model under different assumptions. In what the team called the standard run, nothing changes in policy. Population and industrial output then peak in the course of the 21st century and collapse afterward. Further runs tested what happens if resource reserves double, if pollution is limited, if the birth rate falls or if population and capital are stabilized. Some runs showed overshoot followed by collapse; others showed a stable world. The authors wrote explicitly that their curves were predictions only in the narrowest sense of the word.
Link to the principle
If you set several runs side by side, you see which levers make the difference. The result is not a number but a map of possible paths.

The most important variable: timing

Situation
One of the most revealing variants was a run in which the same stabilizing measures are taken, not in 1975 but only in the year 2000. In the model, they then came too late to prevent the decline. The team thus showed that what counts is not only the direction of a decision but also its timing.
Link to the principle
Scenarios show when a window for action is closing. That is often more valuable than any statement about the end result.

Read as a prophecy

Situation
The book became a worldwide success and was translated into many languages; a German edition appeared in 1972. The criticism was fierce. Economists such as Robert Solow and Julian Simon considered the assumptions too pessimistic and stressed that human ingenuity opens up new resources. In April 1972, a review in The New York Times called the book empty and misleading. Later, it was often said that the book had predicted the resources would run out by the year 2000. The Italian scientist Ugo Bardi and others consider this a misreading: the tables on resource reserves were sample calculations, not forecasts.
Link to the principle
Scenarios are easily misunderstood as predictions, especially when one run turns out dramatically. If you present scenarios, you therefore have to say just as clearly what they are not.

Fifty years on

Situation
In 2008, Graham Turner of the Australian research organization CSIRO compared 30 years of real data with the model runs. Industrial output, food and pollution were closer to the standard run than to the runs with stabilizing policies. In a 2020 study in the Journal of Industrial Ecology, Gaya Herrington used updated data and reached a similar finding. The model’s limitations are well known: the authors themselves admitted that they did not model disruptions such as wars or epidemics. The financial system, inequality and politics did not appear in the model. In a 2012 interview, Dennis Meadows said that political and economic questions had been outside the scope of the study.
Link to the principle
Whether a scenario “was right” is the wrong question. The right one is: did it help decision-makers recognize connections and levers? The book set off this debate worldwide.
Key takeaways

Key lessons

  1. Formulate scenarios as if-then statements, not as predictions.
  2. Set several runs side by side so that you can see the levers.
  3. Pay attention to timing: the same measure can come too early, in time or too late.
  4. Say clearly what your scenarios do not include.
  5. Be prepared for a dramatic scenario to be read as a prophecy, and take precautions.
Summary

In 1972, “The Limits to Growth” calculated several futures for the world and explicitly did not present them as predictions. Its strongest insight was that the timing of action matters. The book shows both how scenarios open up debates and how easily they turn into a supposed prophecy.

Sources
  • Donella H. Meadows, Dennis L. Meadows, Jørgen Randers, William W. Behrens III: The Limits to Growth. New York: Universe Books 1972.
  • Donella H. Meadows et al.: Die Grenzen des Wachstums. Bericht des Club of Rome zur Lage der Menschheit (in German). Stuttgart: Deutsche Verlags-Anstalt 1972.
Back to the basics

Read what lies behind Scenario Thinking: with explanation, animation, video and research.

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