But everything thus far shows us that perpetual growth is possible. Technology is a wonderful thing - each year we're able to do more with less.
That's not to say that a lot of what goes on in the market isn't pure, unadulterated bullshit, but real, honest-to-goodness "growth" won't stop until technology does.
This is a textbook example of the "cornucopian" view on economics. The implicit assumption here is that there are no limits to technological improvements, or that those limits are extremely far in our future. I think that this assumption is flat out wrong and dangerous. It is these sorts of ideas which have lead large parts of the global economy to eerily resemble Ponzi Schemes.
I wrote the following post in reply:
There are limits to exponential growth. (And make no mistake, growth expressed as a fixed percentage per year is exponential). Technology can push the limits closer to what the laws of physics allow, but technology cannot change the laws of physics.
Let's look at some numbers to drive the point home. Our global energy consumption in 2008 was estimated to be 474 exajoules.
The total energy received by the earth from the sun during a year is about 5 million exajoules, a fraction of which reaches the surface. 5 million is much more than 474. But at a seemingly modest 2% per year growth rate (as it was between 1980 and 2006), our energy consumption will match those 5 million exajoules in less than 500 years!
Think about that: if energy consumption growth continues at the current pace, then in 500 years we'll either be using ALL solar energy received by the earth (leaving none for the biosphere), or we'll have figured out some magic technology to produce 5 million exajoules of energy per year. Assuming the magic technology, where are we going to get rid of all that extra heat? It would effectively be like having a second sun on earth, cooking us in place.
Granted, you did say "do more with less". So lets say energy consumption will stay constant in the future, and instead we'll derive 2% more "value" from the same energy each year. Now you run into a new problem. No matter how you define "value", you run into physical limits. If you define value as "amount of mass lifted out of the earth's gravity field", then the hard efficiency limit is a minimum of 60 megajoules per kg. If you define value as "amount of computation", then again there are limits given by the laws of physics.
Exponential growth is counterintuitive. No matter how far you push the limits (e.g. by colonizing the entire galaxy or inventing game-changing technology), exponential growth will hit its limits much faster than you think. We're talking about growth with a fixed doubling period here.
Finally, I'd argue that we are already experiencing the end of exponential growth today. After decades of growth, in 2004 global oil production reached a plateau [theoildrum.com]. It's not a coincidence that we experienced a major financial crash and recession soon after that. The era of "perpetual growth" is over. The next era will be that of the "zero-sum game" at best.
On a related note, after writing the above post I stumbled on this excellent series of videos of a lecture by Dr. Albert A. Bartlett where he shows with some very simple calculations and examples that "steady growth" is in fact always unsustainable. We have to find a way to get our civilization to work with 0% growth. The alternative is total collapse, probably within decades.