I am more pessimistic than Becker that the world in general or the United States in particular can sustain its current rate of economic growth even when economic welfare is defined to include, as I agree it should be, utility or well-being. My pessimism is not rooted in any concern about running out of fossil fuels, however. As the quantity of reserves of such fuels (mainly coal, oil, and natural gas) fall or the cost of extraction rises (or, more likely, both), prices of the fuels will rise and the rise will both moderate demand and accelerate the search for substitutes. There will be effects on the distribution of income (the owners of the reserves will be enriched at the expense of many consumers), but this will not affect average per capita income worldwide. Indeed, I think average income ("full" income, including nonpecuniary components, consistent with my earlier remark about the definition of economic welfare) will rise as a result of increased prices of fossil fuels, because of the negative externalities associated with the use of fossil (i.e., carbon-based) resources for generating energy. These externalities include traffic congestion and, what is much more serious, increased atmospheric concentration of carbon dioxide, a major factor in global warming--which I take very seriously. (The New Orleans flood may be the first disaster to which global warming has contributed; it is unlikely to be the last.) The higher the price of coal, oil, and natural gas, the better, as far I am concerned.
However, a distinction should be made between long-run and short-run effects. A very large unforeseen change in the price of an important input such as energy could precipitate a national or global recession because the economy could not adapt instantaneously to such a change.
My reason for pessimism about the future is connected to Becker's reason for being optimistic! I fear population growth. The combination of increased longevity as a result of medical advances and healthier life styles, reduced infant mortality, and a continued high demand for large families in much of the world seems likely to overcome the "demographic transition," that is, the well-documented negative effect on birth rates of increases in average income to middle-class levels. World population, currently somewhat more than 6 billion, may well rise to 10 billion by 2050. If average output rises as well, the total amount of economic activity several decades from now may be a significant multiple of the present level. That higher level portends a big increase in carbon dioxide emissions even if fossil-fuel prices rise sharply, and an ominous reduction in biodiversity (with potentially very harmful effects on agriculture) as a result of more land being cleared for human habitation. It may well be possible to offset these effects by investments in various ameliorative technologies, but investments that merely offset the bad effects of population growth do not increase net well-being.
Supporters of population growth point out correctly that given a more or less fixed percentage of geniuses, the greater the aggregate population the more geniuses there are, and geniuses can confer benefits on society as a whole that greatly exceed what they take out of society in their own consumption. A related point is that the larger the market for a good, the lower its price is likely to be because the fixed costs of producing it are spread over a larger output. But this effect may be offset by the higher prices of scarce inputs as demand increases. More important, if there is a fixed percentage of geniuses, there may also be a fixed percentage of evil geniuses, including potential terrorists. In the age of weapons of mass destruction--which are becoming ever cheaper, more accessible, and (in the case of bioweaponry) more lethal--the harm that a terrorist can do may outweigh the good that a benign genius can do.
I am also concerned about negative externalities that result from an increased percentage of elderly people in a nation's population. Judging by Medicare, the elderly are already able to use their voting power to extract vast subsidies for their medical care that would be more productive in other uses. This misallocation is likely to grow as the elderly become a larger and larger fraction of the voting population.
Even if net well-being is likely to decrease rather than increase in the years ahead, it can be argued that the effect on total well-being will be offset by population growth. Suppose average utility for 6 billion people is 2, and for 10 billion is 1.5; then total utility is greater in the second stage (15 billion versus 12 billion). But very few people think that total well-being is a proper maximand, as such a view would lead to grotesque results; if population grew enough, total utility might increase even if average utility fell to Third World levels.