With rising concern for environmental and natural resource problems over the past decade, considerable effort has been devoted to methodologies for environmental impact assessment and integrated development planning. While some superficially new approaches have appeared (e.g., simulation, cross impacts analysis) for handling larger problems with more interrelated factors, the tendency has been to cling very tenaciously to a basic paradigm or world view concerning the dilution of impacts over space and time and between major subsystems (e.g., ecological, economic). Most often this world view is either not recognized at all, or is buried in technical jargon so as to appear unimportant. One is often reminded of the children's story about why ostriches bury their heads in the sand. The intent of this paper is to critically examine the "dilution of impacts" paradigm. I first attempt to define it more clearly by reference to an alternative viewpoint. Then some examples are presented to suggest that it is becoming an increasingly dangerous and incorrect way to look at the world. I next examine some general mechanisms in modern society that make the paradigm invalid; these mechanisms suggest new directions to look in planning and impact assessment studies.