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It is precisely the point that in reality, the system under consideration is finite. Consequently, you cannot find "economic substitutes" forever, as they are finite and limited themselves. One central restriction here is the limit to pollution, which you cannot help by polluting with different stuff. So long as the economy depends on physical objects, these restrictions apply. And they aren't "in the distance" either, but right around the corner. |
That's entirely the point, the economy is quickly dematerializing. As the smartphone example shows, we can provide the same service (and in fact, a far superior one) using a tiny fraction of physical resources. Electronic mail and newspapers, online marketplaces, real time video-communication are in every way better, cheaper and environmentally friendlier than their traditional counterparts.
So we can generate far more economic output (defined as transactions people are willing to make, for example software licenses, apps etc) using the same physical input.