Exponential Growth Versus Linear Growth

Actual and Projected Medicare Costs from 1967-1994

Most people, including highly educated people, believe that systems grow linearly (like the green line above). Unfortunately, this is not true. Almost all actual systems grow exponentially (like the red line above). Systems that grow linearly are devoid of feedback loops.

As an example, take a look at the figure above. The green line is the official projection of the future costs of the Medicare program from 1967-1994, while the red line shows the actual costs. Although the early (red) line (1967-1974) looks linear, it is not.

Exponentially growing systems have two important characteristics. The first is insidiousness. That is, their growth "sneaks-up" on you. The second is power. Exponential growth is extremely powerful.

To illustrate the second characteristic, consider the following thought experiment. If you were to fold a standard piece of printer paper in half, over and over, forty-two times, how thick would it be? Note that the thickness of the paper would be growing exponentially b/c it doubles after each fold.

Here's the answer:

Around 300,000 miles thick! Enough thickness to get you to the moon!