GDP is a poor metric on a number of axes. GDP is an estimate of all costs, not of the benefits to society. The whole premise of GDP was originally to capture production capacity in a time of war....
Exemplary
GDP is a poor metric on a number of axes.
GDP is an estimate of all costs, not of the benefits to society. The whole premise of GDP was originally to capture production capacity in a time of war. GDP is also a poor estimator of costs when it comes to external costs, since they are omitted. Prevention of problems by spending a little money up front to offset future cost is not easily accounted for, yet preventing problems are all major indicators of a countries success - how much is spent on setting up smart infrastructure rather than simply repairing it when it breaks, for example, or how much is spent on preventative health versus reactive.
Basic needs are also not dealt with well by GDP. Water is not a good which should be traded off for a luxury good and buying more expensive luxury water bottles might increase your GDP but provide nothing of tangible value. Freedom is another concept by which luxury goods might be sold but counterintuitive when measuring progress of society. Paying for services to secure your freedom from surveillance would also increase your GDP but represent what most would consider a negative societal outcome.
GDP does a shit job at measuring happiness, and there's tons of examples pointing this out. Europe has a history with this dating back decades ago.
As mentioned by many other individuals, GDP does nothing to account for income distribution, another critical indicator of life satisfaction.
GDP only measures formal economies and not the informal ones. Did you help a neighbor out recently? Unless you sent them an invoice and recorded it on your taxes, GDP can't account for this. Have you ever lived in a helpful house or neighborhood? I can't speak for you but a cohesive society where people are helping each other out is way more important to me than how much GDP I generate.
GDP fails to account for environmental change. If you pollute the air a bunch, it's not reflected in GDP until you spend a bunch of money fixing air pollution. Your GDP might look great while you're deforesting the Amazon to meet supply/demand in other countries, but how will it look when there's no forest left?
There's a lot of reasons why comparing countries on a single metric is less than ideal, but GDP has been under flak for ages for simply being a poor metric by which to base nearly anything on. It was never designed to measure the economy and it does a poor job at doing that except through a hyper-capitalistic lens, one worthy of harsh criticism.
There's a great joke about two economists walking down the street and they spot a pile of dogshit, one pays the other $50 to eat some, he does, he gives the $50 back to the other guy to do the...
There's a great joke about two economists walking down the street and they spot a pile of dogshit, one pays the other $50 to eat some, he does, he gives the $50 back to the other guy to do the same, he does.
They then congratulate each other for increasing the country's GDP by $100.
To put it in the American context: you work 70 hours a week, eat like shit to save time and money, waste money on a car you wouldn't need if you could live in the city you work, get type 2...
To put it in the American context: you work 70 hours a week, eat like shit to save time and money, waste money on a car you wouldn't need if you could live in the city you work, get type 2 diabetes, spend exorbitant amounts on insurance and insulin, go to the doctor more frequently and pursue more costly treatments when you're older since you didn't have the time or money for preventative care, doctor went into 300k in debt to pay for 8 years of post-secondary education and spends exorbitant amounts on malpractice insurance because of highly litigious patients trying to recoup costs for medical care and passes the costs onto the patient. These things are all great for GDP.
I couldn't help but add a little extra snark: The USA has almost never not been at war. Of course the GDP is of immense importance to the USA and basic needs mean little.
The whole premise of GDP was originally to capture production capacity in a time of war.
I couldn't help but add a little extra snark: The USA has almost never not been at war. Of course the GDP is of immense importance to the USA and basic needs mean little.
The "Indian Wars" really did a number on our wartime percentage. That covered 1/3 (~81 years, per US Congress) of our entire history as a country. Very shameful. That being said, unless your...
The "Indian Wars" really did a number on our wartime percentage. That covered 1/3 (~81 years, per US Congress) of our entire history as a country. Very shameful.
That being said, unless your interpretation of "at war" is including conflicts that were not officially war and things with 'war' in the title, then I think the "almost never" is a bit hyperbolic. Now, even officially declared wars cover more than half of our existence, so your sentiment is understandable and a sad testament to the country.
I read a lot about how the US is doing poorly, even from my own wife, but I think this shows a growing economic reality in Europe. In 2008 Europe's GDP or 14.2 trillion, and as of 2023 it's now 15...
I read a lot about how the US is doing poorly, even from my own wife, but I think this shows a growing economic reality in Europe.
In 2008 Europe's GDP or 14.2 trillion, and as of 2023 it's now 15 trillion. The US was at 14.8 trillion and is now over 26.9 trillion. Europeans are about to face a reality where they are going to be poorer which they haven't faced in generations. I can already hear furious typing about life expectancy, social safety nets, and other memes to which I say considering the EU population is 448m vs the US's 332m Europoor may not be a meme anymore.
Not sure what the EU should consider doing, and what mechanisms it has to deal with it's issues.
Or to put it another way, FAANG, Microsoft, nvidia have accounts matching that of many countries. How much has that really done for the average american?
Or to put it another way, FAANG, Microsoft, nvidia have accounts matching that of many countries.
How much has that really done for the average american?
Yep. We should look beyond the GDP to measure a country's success. Sure, it can help us determine which country can bring the most industrial might to bear in a contest, but that shouldn't be what...
Yep. We should look beyond the GDP to measure a country's success. Sure, it can help us determine which country can bring the most industrial might to bear in a contest, but that shouldn't be what we strive to maximize. We should look at maximizing happiness or life expectancy or social mobility.
Shouldn't companies that provide the entire planet with software and hardware that enables many aspects of our modern lives be more valuable than many nations that don't really contribute nearly...
Shouldn't companies that provide the entire planet with software and hardware that enables many aspects of our modern lives be more valuable than many nations that don't really contribute nearly that much?
Probably, but the thing is that the credit goes the the USA, as in the entire country that is comprised of fairly divergent lifestyles, cultures and socio-economic and demographic classes, but...
Probably, but the thing is that the credit goes the the USA, as in the entire country that is comprised of fairly divergent lifestyles, cultures and socio-economic and demographic classes, but adding these corporations' GDPs to the US figure does nothing to distinguish that. And besides, in our globalized world where the global south is vastly more populous and so a bigger source of the internet's total traffic and all the raw materials that comprise all of the products that these companies designed and coded, Silicon valley or whichever other wealthy country the company is hosted in gets nearly all the actual financial gain.
Mining rocks just isn't worth as much as building graphics cards. The value add of the second step shouldn't be considered in the country that doesn't do that step.
Mining rocks just isn't worth as much as building graphics cards. The value add of the second step shouldn't be considered in the country that doesn't do that step.
Without mining rocks, the graphics cards don't exist. If it takes 100 people to mine rocks full time to have 100 people make graphics cards full time, this labor is equivalent in value.
Without mining rocks, the graphics cards don't exist.
If it takes 100 people to mine rocks full time to have 100 people make graphics cards full time, this labor is equivalent in value.
Ignoring that this is just flat out false, this is still a very poor analogy considering that the amount of raw resources video cards use is also miniscule.
Ignoring that this is just flat out false, this is still a very poor analogy considering that the amount of raw resources video cards use is also miniscule.
How is it blantantly false? Yes I am aware it's not an accurate ratio, it is an arbitrary example. You just have what I consider flawed assumptions about the value of miners. The miner is not less...
How is it blantantly false? Yes I am aware it's not an accurate ratio, it is an arbitrary example. You just have what I consider flawed assumptions about the value of miners. The miner is not less valuable to society than the graphics card manufacturers. If anything, graphics cards are an incredible luxury while mining is what enables virtually every technological advancement since smelting was invented. That puts graphic card manufacturing much lower on the totem pole in my mind.
If you'd prefer a simpler example, if you have 10 people mining ore to keep 1 blacksmith providing tools for the miners and the 9 farmers whom keep all 20 fed, those people are all doing equivalent labor. None more valuable than the others. Because if any one of them stops doing their share the system collapses.
That's not to say all work is exactly equal. But if it is a job that needs done, like water sanitization, mining, or home construction, those jobs are no less important than the doctor, the engineer, or the farmer.
Value is largely a function of how much does your work contribute to the people around you? The person making a graphics card? Their individual contribution is relatively massive. The next...
Value is largely a function of how much does your work contribute to the people around you?
The person making a graphics card? Their individual contribution is relatively massive. The next graphics design makes a difference of like hundreds of households worth of electricity usage, allows better simulations of things all across the world, and generally makes massive changes.
Someone who is working in a mine? That's still important, but nowhere near as productive or impactful.
Generally the more your work multiplies the force of others, the more valuable your work is and the more difficult it is as well.
if you have 10 people mining ore to keep 1 blacksmith providing tools for the miners and the 9 farmers whom keep all 20 fed, those people are all doing equivalent labor
Imagine get from the perspective of, "How fuck are we if that guy quits".
One of those miners goes away? Everything's going to be fine. That one blacksmith goes away? Say hello to a cascading failure as people aren't able to get their work done without tools and all of a sudden your productive capacity is cut in half.
You generally want to pay the guy doing more important work more, so that they continue to do that job and others are incentivized to try to do it as well.
Double the numbers, two smiths. One dies, another takes up an apprentiship. Just because a job requires more education does not intrinsically make it more valuable. It means a longer lead time to...
Double the numbers, two smiths. One dies, another takes up an apprentiship. Just because a job requires more education does not intrinsically make it more valuable. It means a longer lead time to productivity, sure. But that's why we should pay people to get educations to do their jobs. In fact, many good employers do just that.
If anything, it is the education itself that has special societal value, not the worker, for that reason. You could lose all your graphics card designers tomorrow and so long as the educational materials and documentation still exists, the industry will move forward.
Same thing applies. It's far more effort and intense to get someone to learn to be a blacksmith and it is to get someone to learn to be a miner, and overall the blacksmith continues to contribute...
Double the numbers, two smiths.
Same thing applies. It's far more effort and intense to get someone to learn to be a blacksmith and it is to get someone to learn to be a miner, and overall the blacksmith continues to contribute more to the economy as an individual than any other miners and deserves to get paid in regards for that.
Conversely, the town could function for multiple years without a blacksmith or miners, but without any farmers would be dead within a year. Just because the smith's skills are less widely known do...
Conversely, the town could function for multiple years without a blacksmith or miners, but without any farmers would be dead within a year.
Just because the smith's skills are less widely known do not make them more valuable. Speaking from experience, Smithing is not particularly difficult to learn. You just need patience and practice. If you can swing a hammer and not stand in fire you can learn to smith. If anything, the only reason there aren't more smiths is because they only need one.
Suppose a farmer invents a machine that can do the work of 9 farmers for the labor of only 1 farmer, obviating the need for most of the smith's other tools. But now we need 9 smiths and 1 farmer instead of the reverse to keep up with maintenance. Is the farmer now providing that disproportionately more value by operating the machine? And now that the smithing work is well known, it is worth less? And was it actually a good decision to use this machine instead of just having 9 farmers and 1 smith?
No, because the machine exists and is maintained and improved by the blacksmiths. Yes. Because now those farmers can be blacksmiths.
Suppose a farmer invents a machine that can do the work of 9 farmers for the labor of only 1 farmer, obviating the need for most of the smith's other tools. But now we need 9 smiths and 1 farmer instead of the reverse to keep up with maintenance. Is the farmer now providing that disproportionately more value by operating the machine?
No, because the machine exists and is maintained and improved by the blacksmiths.
And was it actually a good decision to use this machine instead of just having 9 farmers and 1 smith?
Yes. Because now those farmers can be blacksmiths.
If you want to build a graphics card you need multiple engineers with years of experience, very intensive education, and a highly capital rich ecosystem of tools and people and stability to do it....
If you want to build a graphics card you need multiple engineers with years of experience, very intensive education, and a highly capital rich ecosystem of tools and people and stability to do it.
The sort of environment you need to invent a graphics card is very difficult to come by and only exists in a very select few places, one of those being silicon valley.
If you want rocks, all you need is to find someone willing to hit them with a pick.
In short, if it weren't for the third world the first world economy wouldn't halt, it would just reshuffle, focus more capital on mining resources, and keep on chugging along.
I'd argue we should do exactly that. It would greatly increase our value as individuals in the first world and lead to a surge in investments in labor productivity.
Are you being obtuse? This is ignoring the process of ore extraction, smelting, purification, metallurgy and probably many other crafts and sciences I'm unaware of. I see what you're doing, you...
Are you being obtuse? This is ignoring the process of ore extraction, smelting, purification, metallurgy and probably many other crafts and sciences I'm unaware of.
I see what you're doing, you are attempting to devalue what you see as unskilled labor, but let me assure you, the science of turning your "rocks" into something usable in the industries you clearly overvalue requires skills on par with the people making the graphics cards.
Are you referring to the stuff that they were doing in the middle ages? Yes those steps exist and they add value, but none of them are nearly as advanced or complicated as the high value add stuff...
This is ignoring the process of ore extraction, smelting, purification, metallurgy
Are you referring to the stuff that they were doing in the middle ages?
Yes those steps exist and they add value, but none of them are nearly as advanced or complicated as the high value add stuff they're doing like building graphics cards, doing research and development, and so on.
High-end metallurgy that requires lots of precision and modern technology? It's largely done in the first world.
So you are being obtuse. Or commenting in bad faith. You say this as though these fields haven't progressed in the 600 years since the middle ages. This is a lie. The countries which are mining...
So you are being obtuse. Or commenting in bad faith.
Are you referring to the stuff that they were doing in the middle ages?
You say this as though these fields haven't progressed in the 600 years since the middle ages.
Yes those steps exist and they add value, but none of them are nearly as advanced or complicated as the high value add stuff they're doing like building graphics cards, doing research and development, and so on.
High-end metallurgy that requires lots of precision and modern technology? It's largely done in the first world.
This is a lie. The countries which are mining minerals like lithium, gold, aluminum, and others are refining them in their own countries and exporting them in their processed form, ready to be used. It makes no sense to export unrefined ore.
You must understand that mining and refining has many stages. There's a leap between like 80 percent pure and 99.99 percent. A lot of the former will come out of the third world where the latter...
The countries which are mining minerals like lithium, gold, aluminum, and others are refining them in their own countries
You must understand that mining and refining has many stages.
There's a leap between like 80 percent pure and 99.99 percent. A lot of the former will come out of the third world where the latter will be orders of magnitude more expensive and come out of the first world.
And there is something called a value ladder. Of course they do value add stuff in the third world. They just do less of it and the value add generally isn't as much.
So what is your purpose in pointing all this out? It sounds like you're trying to justify some kind of hierarchy, or imperialism, or hegemony. Do people in the countries which do the mining and...
So what is your purpose in pointing all this out? It sounds like you're trying to justify some kind of hierarchy, or imperialism, or hegemony.
Do people in the countries which do the mining and and refining not deserve good lives? I think we all deserve to have a good life, to not live near polluted waters, to have access to housing, food, and health care. Are you saying these people haven't 'earned' these things in your eyes?
Without first world demand for those services, and the advanced things they get in return, their lives would be worse. And we generally improve the human condition by making people not mine for a...
Do people in the countries which do the mining and and refining not deserve good lives?
Without first world demand for those services, and the advanced things they get in return, their lives would be worse.
And we generally improve the human condition by making people not mine for a living. Paying excess amounts for work that isn't worthwhile is how you end up stagnating.
The correct answer here is to let the development cycle play out until there is no more third world and the only way to mine resources is to invest large amounts of capital into it so one worker is all you need to get the output of hundreds. Then we all win because nobody is wasting their lives banging rocks for a living.
The alternative is simply to cut off the trade lines so the first world is forced to invest heavily in their own mining productivity instead, which would be amazing for individuals living in the first world and terrible for the capital owners and third world inhabitants.
(Everyone wins long term with global trade and development, the first world people just hurt for a while until it settles out)
The development cycle you refer to is just a cycle of exploitation. Extortionate loans from hegemonic entities like the IMF and world bank that demand client states implement austerity upon their...
The correct answer here is to let the development cycle play out until there is no more third world and the only way to mine resources is to invest large amounts of capital into it so one worker is all you need to get the output of hundreds. Then we all win because nobody is wasting their lives banging rocks for a living.
The development cycle you refer to is just a cycle of exploitation. Extortionate loans from hegemonic entities like the IMF and world bank that demand client states implement austerity upon their citizens and just make their living and working conditions more fraught. The benefit of these loans often goes to the ruling classes, and exploitative capitalists who are taking advantage of the situation. Bolivia is a good example of a country who kicked out these exploitative entities and now they are finally starting to improve their conditions. Thomas Sankara realized this in Burkina Faso in the 1980's and was pushing for self reliance and self determination on the African continent. He ultimately paid for this stance with his life. He was killed because the powers that be were deathly afraid that this worldview would catch on, and they would lose their stranglehold on the existing world order.
The development cycle happens regardless of whatever the IMF or world bank does - even if the wild conspiracy crap of the IMF secretly trying to harm countries is true. All the removal of the...
The development cycle happens regardless of whatever the IMF or world bank does - even if the wild conspiracy crap of the IMF secretly trying to harm countries is true.
All the removal of the world bank would result in is countries returning to that cycle in a healthier and faster way.
The largest producers of ultra high purity polysilicon operate in Xinjiang, China using raw silicon ore mined from Xinjiang and turning it into 99.9999% pure polysilicon. Much of this is enabled...
The largest producers of ultra high purity polysilicon operate in Xinjiang, China using raw silicon ore mined from Xinjiang and turning it into 99.9999% pure polysilicon. Much of this is enabled by slave labor, but this is still an explicit and vast point against your argument.
Do you have any statistics that back up your claim that the ultra high purity refinement occurs primarily in developed countries?
Ah and there's the fundemental root of our disagreement. I hold that capital itself has no real value. People have value. Everything else is just stuff. If your favorite shovel breaks, you get a...
a highly capital rich ecosystem of tools and people and stabil
Ah and there's the fundemental root of our disagreement.
I hold that capital itself has no real value. People have value. Everything else is just stuff.
If your favorite shovel breaks, you get a new shovel without much thought. Your best friend dies, you mourn their life, possibly for the rest of your own.
Capital is of immense value and you would far more mourn its loss than you would your friend when you notice that you can't eat anymore because the farmers tractor stopped working and all of your...
Capital is of immense value and you would far more mourn its loss than you would your friend when you notice that you can't eat anymore because the farmers tractor stopped working and all of your friends die of famine.
I find it worrying that you’ve opted not to refute what I’ve said, as it carries an implication that my concerns about your views were correct. Capital is only ever valuable insofar as it enables...
I find it worrying that you’ve opted not to refute what I’ve said, as it carries an implication that my concerns about your views were correct.
Capital is only ever valuable insofar as it enables the betterment and preservation of human life, no further. Choosing it above people is putting the cart before the horse, and more directly, is incredibly callous. People matter; tools and property don’t.
If a tractor is necessary to keep a farm running, but must be destroyed lest it run someone over, I would destroy it without hesitation. New tractors can be made, but you can’t replace a person.
You literally can though. It just takes a lot of time and resources. The only reason we can have this feeling that "new tractors can be made" is because we live in a time of phenomenal material...
New tractors can be made, but you can’t replace a person.
You literally can though. It just takes a lot of time and resources.
The only reason we can have this feeling that "new tractors can be made" is because we live in a time of phenomenal material abundance where we can take for granted that valuable things can be somewhat easily replaced. But that all depends on an extremely intricate web of social, political, and physical infrastructure that can consistently produce and deliver these things where and to whom they're needed at costs they can afford.
If you can't replace the tractor easily, and this means your produce rots in the field due to inability to harvest it all effectively, you've hurt a great deal more people than the accident would have. All of our social and political systems for the past several thousand years have been trying to optimize the "producing stuff" part of the equation so we can afford ourselves the luxury of valuing individual lives more highly.
Corollary: This is what people mean when they say that "human lives are worth less in the developing world". That's not a normative statement, but a positive one; that's just the way it is. Over...
Our entire social and political systems for the past several thousand years have been trying to optimize the "producing stuff" part of the equation so we can afford ourselves the luxury of valuing individual lives more highly.
Corollary: This is what people mean when they say that "human lives are worth less in the developing world". That's not a normative statement, but a positive one; that's just the way it is. Over here, in the tradeoff of property vs life, you destroy the property, because most property is just luxuries, or can be reclaimed by spending less on luxuries. In a poorer country, that property is directly or indirectly involved in feeding people. Safety is expensive to implement, so it isn't implemented until it's economically feasible. Once everyone's immediate needs are met, you can think about assigning resources to safety. Until then, it doesn't make economic sense to do so. "Economic" here being the problem of making do with scarce resources, completely removed from capitalism. If your favorite economic philosophy was in that same situation, any decision maker, be it a worker's council, the community, capitalists, would still have to make the same unenviable decisions.
Again just to be safe: That human lives are worth less in developing countries is a disgrace. Needless to say, I'd rather that not be the case. Normative, positive, you get the idea.
I did refute what you said. Yeah. And the value of capital on human suffering and quality of life often far exceeds the contribution of many people. And when you apply that at scale, you kill...
I did refute what you said.
Capital is only ever valuable insofar as it enables the betterment and preservation of human life, no further.
Yeah. And the value of capital on human suffering and quality of life often far exceeds the contribution of many people.
If a tractor is necessary to keep a farm running, but must be destroyed lest it run someone over, I would destroy it without hesitation
And when you apply that at scale, you kill millions.
No, I stated that I was worried you valued capital over human life. You have said nothing to the contrary, and so I'm left believing this fear was founded. Which is incredibly saddening. Bold...
I did refute what you said.
No, I stated that I was worried you valued capital over human life. You have said nothing to the contrary, and so I'm left believing this fear was founded. Which is incredibly saddening.
And when you apply that at scale, you kill millions.
Bold assumption. There are a great many ways to feed people, especially in the modern world, and many are not taken advantage of. Capital is strongly overvalued, and we would do well to remember just how many different solutions there are to problems that do not require us to preserve property to the detriment of people.
Just to be clear, the "property" we were talking about here was tractors and combines and trucks and fertilizers and all the infrastructure that makes those work. It's hard to imagine how we're...
Just to be clear, the "property" we were talking about here was tractors and combines and trucks and fertilizers and all the infrastructure that makes those work. It's hard to imagine how we're supposed to feed people at scale without those things.
If we're talking about the scale at which all those operate in aggregate, then yes, all agricultural infrastructure combined does outweigh a human life. But that's a rather skewed comparison,...
If we're talking about the scale at which all those operate in aggregate, then yes, all agricultural infrastructure combined does outweigh a human life. But that's a rather skewed comparison, isn't it?
When I'm talking about property vs. people here, I'm not talking about huge swathes of industry vs. one person. I'm talking about a tractor vs. a person, and in that scenario, a person is always more valuable.
In a world where tractors are comparatively cheap sure. In a world where tractors are irreplaceably expensive the math works out much harder. Like I said, we’ve built a colossal amount of...
In a world where tractors are comparatively cheap sure. In a world where tractors are irreplaceably expensive the math works out much harder.
Like I said, we’ve built a colossal amount of infrastructure to buy ourselves the privilege of being able to treat extremely valuable productive assets as if they were disposable. The calculation you are making here is only possible because a lot of people over history have made a lot of hard choices to make that math possible.
There are communities in the developing world where people literally do not make that choice because the productive assets (such as machinery or livestock) are more critical for the survival of the community than any individual member of it.
Most famines are not caused by food shortages, they are caused by issues in distribution of food (i.e. problems caused by capitalism). I would suggest reading Amartya Sen's work on this...
Most famines are not caused by food shortages, they are caused by issues in distribution of food (i.e. problems caused by capitalism). I would suggest reading Amartya Sen's work on this (Britannica have a nice summary).
Modern famines, yes, because we have the capital and decades of industrial farming experience that has built itself into a world wide food network that creates a incredibly durable supply. That...
Modern famines, yes, because we have the capital and decades of industrial farming experience that has built itself into a world wide food network that creates a incredibly durable supply.
9/10 of the worst famines in modern history happened under autocratic "communist" regimes in China and Russia. It's simply disingenuous to blame capitalism....
9/10 of the worst famines in modern history happened under autocratic "communist" regimes in China and Russia. It's simply disingenuous to blame capitalism.
IMO, These famines that occurred specifically under Stalin and Mao can be attributed specifically to them as authoritarian/totalitarian leaders who were either just plainly incompetent (Mao) or...
IMO, These famines that occurred specifically under Stalin and Mao can be attributed specifically to them as authoritarian/totalitarian leaders who were either just plainly incompetent (Mao) or fine with destroying/genociding the Kulaks and generally pushing a really forceful transition of the Russian economy from an agrarian to an industrial one. Socialist ideology as a whole isn't anywhere near as horrific as Stalin/Mao.
Edit: Your thread specifically shows about one famine cause by Stalin, one by Mao, One by one of North Korea's dictators, one caused by Pol Pot (one of the most insane regimes in human history) and 5-6 famines caused because of war (all the other Chinese famines the Bengal Famine). All this shows me is that the 20th century Eastern Bloc had bad people in it, but Autocracy isn't all of socialism.
I absolutely support strong social systems. I just wanted to respond to the claim that capitalism is responsible for famines because that doesn't square with the historical record. I totally agree...
I absolutely support strong social systems. I just wanted to respond to the claim that capitalism is responsible for famines because that doesn't square with the historical record.
I totally agree with you that autocracy is dangerous and has a sordid history.
But the stuff is the result of people doing work in the past, and it's considered valuable because it's still useful. A shovel isn't equivalent in scale to a life, but some things could take a...
But the stuff is the result of people doing work in the past, and it's considered valuable because it's still useful. A shovel isn't equivalent in scale to a life, but some things could take a lifetime of effort to replace. If it took a team of 80 machinists a year to create a piece of industrial equipment, that's a whole human lifespan that went into that machine. Replacing it would be possible, but that "stuff" is a physical representation of all that effort, in addition to a tool that has economic value.
I agree, the value of the stuff is proportional to the labor used to create it. It isn't to suggest we should be wasteful of said stuff. But if said machine breaks, it's still relatively trivial...
I agree, the value of the stuff is proportional to the labor used to create it. It isn't to suggest we should be wasteful of said stuff.
But if said machine breaks, it's still relatively trivial to replace it, if the knowledge is not lost and labor is available. The important thing is the operation of the machine itself does not contribute value to the downstream things that it produces. Because those 29,200 labor hours to build the machine get subdivided among every widget the machine produces. The value of the machine tends toward 0 over time. But the value of the people operating and maintaining the machine will remain relatively constant.
It's part of why us non-capitalists feel all this stuff for production shouldn't be owned by any given person, it should be collectively owned by society.
This is the core of LTV. I'd say its incomplete, namely adding some dimensions to account for ecological impact. Right now regular markets fail to capture ecological impact properly as well...otherwise disposable plastic beverage containers wouldn't be a thing.
They aren't. Like, just as a matter of fact they aren't. Generally as GDP goes up so does the wealth of the average person in the country. They aren't. As a matter of fact they aren't. In Europe...
You do recognise that GDP and wage growth are hugely decoupled?
They aren't. Like, just as a matter of fact they aren't. Generally as GDP goes up so does the wealth of the average person in the country.
US citizens and European citizens are both getting poorer
They aren't. As a matter of fact they aren't. In Europe maybe, but American wages have on average been meeting or beating inflation for a while, and the last 5 years or so those wage increases have picked up in a major way.
this constant desire for growth inside a finite system is causing the entire world to undergo a massive climate catastrophe
Our use of fossil fuels is doing that, and the only way to stop global warming is to kill our use of fossil fuels. That doesn't happen without invitation and growth.
And a finite system? Sure. But the earth is a big place and the things we can do with it can and should continue to increase rapidly for decades yet. We are still very very primitive beings and there is a long climb even from where we are today.
And you're using a misleading statistic. Wages as a percentage of GDP does not disprove anything about the fact that GDP growth is associated to increases in wages overall. And minor things...
wages as a factor of GDP has been decreasing
And you're using a misleading statistic. Wages as a percentage of GDP does not disprove anything about the fact that GDP growth is associated to increases in wages overall.
Those fossil fuels aren't magically just being used. They're being used to product things that you, your family, friends and everyone else has been told they need in order to look good
And minor things like....
Food (70 percent of the nitrogen in your body was made using a energy intense process).
Electricity (air conditioning, vacuums and washing machines, cooking food, etc).
Life saving medicine.
Communications and transport.
The Earth has finite resources
And that doesn't matter. We could stop using extra resources tomorrow and we should still see growth continue because we still have an absolute shit ton of things to discover and do. If GDP growth ever shows that's not a sign we are healthy drawing down resource usage. It's a sign of social and industrial stagnation.
Yes it does, and I would be quite curious to understand why you think it doesn't. At the end of the day, the economy must be grounded in physical goods: Food, Water, Shelter, Medicine. On a finite...
And that doesn't matter.
Yes it does, and I would be quite curious to understand why you think it doesn't.
At the end of the day, the economy must be grounded in physical goods: Food, Water, Shelter, Medicine. On a finite planet, with perpetual growth, eventually those things run out.
That's not really accurate. Services are a huge chunk of the economy and are bounded largely by the innate skills and human capital endowments of the people supplying them. In other words, suppose...
At the end of the day, the economy must be grounded in physical goods: Food, Water, Shelter, Medicine. On a finite planet, with perpetual growth, eventually those things run out.
That's not really accurate. Services are a huge chunk of the economy and are bounded largely by the innate skills and human capital endowments of the people supplying them.
In other words, suppose you gave me and Wong Kar Wai equivalent budgets and equipment and the same crew and actors. I can say with confidence that whatever movie he makes with those endowments is likely going to be orders of magnitude more valuable than anything I would do with the same amount of labor and physical inputs. He just has more skill and is valued by the public more highly. In fact, because he is more skilled he can probably produce more work with fewer resource inputs (like getting scenes shot faster so he uses less film and spends less time lighting a set) than I could.
What I was saying by that is: No matter how much of our economic activity transitions to purely non-physical goods like software and data, everyone still needs to eat. This post elaborates more....
What I was saying by that is: No matter how much of our economic activity transitions to purely non-physical goods like software and data, everyone still needs to eat.
This post elaborates more. Particularly of interest for this point is the section labelled "The Unphysical Economy".
And the value of feeding them becomes a smaller and smaller share of the total value being created by society's work. But the economy continues to grow, because people are constantly figuring out...
No matter how much of our economic activity transitions to purely non-physical goods like software and data, everyone still needs to eat.
And the value of feeding them becomes a smaller and smaller share of the total value being created by society's work. But the economy continues to grow, because people are constantly figuring out new forms of value to create.
Consequently, the price of food, energy, and manufacturing would drop to negligible levels relative to the fluffy stuff. And is this realistic—that a vital resource at its physical limit gets arbitrarily cheap? Bizarre.
This scenario has many problems. For instance, if food production shrinks to 1% of our economy, while staying at a comparable absolute scale as it is today (we must eat, after all), then food is effectively very cheap relative to the paychecks that let us enjoy the fruits of the broader economy. This would mean that farmers’ wages would sink far lower than they are today relative to other members of society, so they could not enjoy the innovations and improvements the rest of us can pay for. Subsidies, donations, or any other mechanism to compensate farmers more handsomely would simply undercut the “other” economy, preventing it from swelling to arbitrary size—and thus limiting growth.
The post is just bad because it starts from a bad premise. And the fact that you're unwilling to critically re-examine this premise that economic value is tied to physical goods (whatever that...
The post is just bad because it starts from a bad premise. And the fact that you're unwilling to critically re-examine this premise that economic value is tied to physical goods (whatever that means) is only going to frustrate you.
For one thing, we are nowhere near the "physical limits" of "food production." We use land and water extremely inefficiently when it comes to nutrient and calorie density per unit of land. And despite that we produce enough food to feed a planet of 11 billion people (which is more than we have), we just distribute it very poorly.
It's also not really necessary for it to become "negligibly cheap." It can even become more expensive as people transition to more expensive types of food that require greater expertise to grow (e.g. fancy $200 melons). The point is that the value of the food is independent of any physical aspect of the food. Value is a subjective and unquantifiable thing that we are only vaguely able to measure by proxy. Any attempt to reify these metrics as if they were real will end in folly, and attempts to manage the economy according to reified metrics will be a massive folly.
This would mean that farmers’ wages would sink far lower than they are today relative to other members of society, so they could not enjoy the innovations and improvements the rest of us can pay for.
Or automation and technology improvements can allow farmers to do more with fewer people and make up the lower wages per bushel of whatever in volume. Or we can redistribute the gains to everyone else to the agriculture sector through subsidies to keep them in a dignified standard of living (which is functionally what the developed world has been doing for most of the 20th century).
This Malthusian argument has been empirically invalidated again and again, almost on a decade by decade basis. The predicted apocalypse never comes because people's actual baseline survival needs are actually quite basic and not that difficult to achieve with modern industrial capacity.
I'm not re-examining the premise, because I find it a solid one. The physical limits in question are that of energy expenditure, not really of land or physical resources. This energy expenditure...
economic value is tied to physical goods (whatever that means)
I'm not re-examining the premise, because I find it a solid one. The physical limits in question are that of energy expenditure, not really of land or physical resources. This energy expenditure itself is going to be hampered by thermodynamic energy growth limits within 400 years, which is the main premise these other ideas are elaborating on. And if we don't hamper that growth ourselves, the oceans boiling away will do it for us. The author even discusses how the timelines in question shift drastically if we shift from exponential growth to linear growth. But since that itself is such a massive departure from our current economic situation, that discussing transitioning to linear growth is almost as radical as suggesting the end of all economic growth. Again, I'm not really doing the full post justice with my regurgitation here.
All economic activity requires energy expenditure. Some more than others, but generally production of physical goods requires much more than indirect activity like services. Running a tractor for 2 days will use a lot more energy than any real estate transaction.
What that means is: In a world with an energy budget (to avoid boiling said oceans), there will always need a percentage of that energy budget expended to produce physical goods to live. The post details more about the "de-coupled" economic activity like services, where the economic activity is less directly tied to energy. But because everyone needs some goods that can't be decoupled from energy use, they serve as a tether...directly or indirectly.
So say 5% of the energy budget going to providing the physical goods for everyone's needs, and 95% to everything else. Total GDP will be relatively fixed for that 5% (being more directly tied to energy expenditure), but the other 95% can grow faster, as its not tightly coupled to energy use. At this point, arbitrary examples will be easier for me to think about. Farming and real estate are good examples.
Say an apple costs $1, farmer grows 100,000 apples a year, has a $100,000 income from selling them (this is in the 5% category). Real estate agent makes $100,000 from exchanging real estate, can buy all apples they want.
Fast forward 10 years. Apple still costs $1 as that energy budget is still relatively fixed. Farmer still makes $100,000. But Real estate agent now makes $200,000, given that the energy expenditure for real estate transactions is negligible. Apples now cost roughly half as much to the real estate agent, but the farmer isn't pulling in more income.
So there are kind of two scenarios that can play out:
Price of apple goes up to $2, and we just get inflation. It's not really growth in the sense of more apples being produced, it's just manipulation of numbers. To grow more apples, you need to expend more energy, taking away from the energy budget of the 95%.
The price of food continues to fall in relation to the growth of the non-producing economy like real estate exchange.
You bring up subsidies, which the author of the post does as well. The subsidies are themselves a limiting factor of growth, are they not? They lop the top off the growth, and give it to the bottom, essentially just creating that first bullet point of inflation without real growth. They are that "tether" which prevents the services economy from having unlimited growth relative to the goods economy.
For one thing, we are nowhere near the "physical limits" of "food production." We use land and water extremely inefficiently when it comes to nutrient and calorie density per unit of land.
As a sidebar, this is debatable as many yields are stagnating or decreasing. Many of the techniques we've used to get these high yields are proving unsustainable. Ranging from over-reliance on pesticides or artificial fertilizers, to draining groundwater faster than it can be replenished. Don't get me wrong, there's plenty of room for improvement in many ways (reducing beef consumption would be a good start), but it's not really the heart of what I was discussing.
That's not a limit though, because people don't directly value energy input. Energy is an input to produce what they value. But the valuation changes dynamically. Hence the Wong Kar Wai example....
The physical limits in question are that of energy expenditure, not really of land or physical resources.
That's not a limit though, because people don't directly value energy input. Energy is an input to produce what they value. But the valuation changes dynamically. Hence the Wong Kar Wai example. The exact same energy expenditure produces different outcomes depending on when and how it's applied.
Fast forward 10 years. Apple still costs $1 as that energy budget is still relatively fixed.
No it's not! Technology changes. How much people value apples changes. Even the definition of what constitutes a "standard" apple can change. None of these things are fixed. People don't even value the apple qua being an apple. They value the satiation and social signaling conferred by consuming the apple.
The subsidies are themselves a limiting factor of growth, are they not?
Nah this is Chicagoan nonsense. It depends on how it's structured. If people value having a nice, bucolic countryside then they're essentially paying for the privilege of maintaining this agricultural sector for aesthetic or moral reasons. That's perfectly fine and valid. And such subsidies can support a more dynamic agricultural sector with a greater variety of food stuffs than the market would produce naturally, then you're producing more growth by maintaining or cultivating productive capacity that would atrophy otherwise.
As a sidebar, this is debatable as many yields are stagnating or decreasing. Many of the techniques we've used to get these high yields are proving unsustainable. Ranging from over-reliance on pesticides or artificial fertilizers, to draining groundwater faster than it can be replenished.
So is the human population in most places, so this problem can largely solve itself.
I think that's the crux of the problem. Our entire economic system ignores the externalities of thermodynamics. Because the planet doesn't care how pretty or delicious an apple is, right? Or if...
because people don't directly value energy input
I think that's the crux of the problem. Our entire economic system ignores the externalities of thermodynamics. Because the planet doesn't care how pretty or delicious an apple is, right? Or if we're growing cherries instead of apples because trends changed? It cares that the tractor combusted several thousand joules of energy that need radiated into space at some point. We could just as easily use bag of flour, sugar, or rice as a substitute. This is talking on a macro scale for feeding the planet given a finite amount of energy, not the whims of fads and fashions for determining prices of goods.
This is also probably why so many are so loathe to admit that CO2 emissions are a problem: Because it forces recognition of a physical externality that otherwise is intangible and abstract.
So is the human population in most places, so this problem can largely solve itself.
You're right...but when problems solve themselves it's often a very messy outcome.
Nah the economic system evolved as a response to determine what to produce, how much, and for whom given all of those constraints. If energy is scarce, it becomes more valuable and, consequently,...
Our entire economic system ignores the externalities of thermodynamics.
Nah the economic system evolved as a response to determine what to produce, how much, and for whom given all of those constraints. If energy is scarce, it becomes more valuable and, consequently, gets allocated to use cases that are more highly valued. If it's scarce enough that we need to prioritize adequate calories over delicious calories, then people shift to valuing calorie density more highly.
I can't overstate that productive capacity to feed people is really not a big deal. We have plenty of technology and resources to be able to do that. It's all the other stuff people care about that can become scarce, but people's actual physical needs aren't that difficult with modern technology.
The reason not directly valuing energy expenditure is good, actually, is because you can keep people just as happy or make them even more happy without needing to use more energy. In fact, since people's values systems change dynamically, you can even have them value efficient uses of energy more highly than inefficient ones under the right cultural conditions.
You're right...but when problems solve themselves it's often a very messy outcome.
In this case it's just people having fewer kids because a combination of financial instruments and changing economic conditions means they can save for retirement without needing progeny to take care of them. It's quite pleasant all around.
I'll agree to disagree on that stuff, as I think we're on very different wavelengths there. But WRT to kids... From Pew, the top three reasons people cite for not having kids in the USA, other...
I'll agree to disagree on that stuff, as I think we're on very different wavelengths there.
But WRT to kids... From Pew, the top three reasons people cite for not having kids in the USA, other than the wishy-washy "just don't want to" answer:
Age
Medical conditions
Financial instability
Age in particular has other implications like "I'd like to but I'm too old now." Which from my own anecdotal evidence, is itself a byproduct of financial instability. Used to be people could start having kids in their 20s while feeling secure in the world. You can have a lot more kids if you start in your 20s than if you start in your 30s.
While those definitely fall under changing economic conditions, I'd hardly call those pleasant.
The US is an outlier on this stuff. Most of the reductions in population growth happen in the developing world and it's almost entirely due to women having better access to healthcare and family...
While those definitely fall under changing economic conditions, I'd hardly call those pleasant.
The US is an outlier on this stuff. Most of the reductions in population growth happen in the developing world and it's almost entirely due to women having better access to healthcare and family planning resources and people moving off the farm and not needing extra hands to help with work.
Although he’s mostly stopped posting, I’m a fan of the “do the math” blog because it talks about physical limits and how these will eventually effect the economy. He makes mathematical,...
Although he’s mostly stopped posting, I’m a fan of the “do the math” blog because it talks about physical limits and how these will eventually effect the economy. He makes mathematical, theoretical, physics-based arguments about the long run. On the other side are economists’ mathematical arguments about the long run that are even more theoretical since they have no physical basis.
From this zoomed-out perspective, even drastic changes like most people in the world switching to vegetarianism would be only a one-time deal. After you do that, how do you get the next efficiency improvement? Can we assume there will always be more efficiency improvements?
Conservation and input substitution are important and many worries about running out of specific industry inputs are overblown. But the idea that the economy can grow indefinitely based on arbitrary changes in what people value doesn’t make a whole lot of sense to me. It presumes we will stop valuing the physical world altogether, but that’s a durable human value.
Physical limits often have little to do with everyday concerns. Some of us don’t have to worry much about paying for food. Buying fancy foods and eating in restaurants are pretty far away from any physical limits. There’s clearly plenty of inefficiency and we could live a lot cheaper if we had to. If everyone did this, the economy would change drastically, as we saw during the pandemic.
So we will likely run into other limits first that have more to do with what people value and what changes they’re willing to make. It’s unlikely that everyone will become a vegetarian, or that eating meat will be a special occasion like it once was, historically. That’s not a physical limit and it’s rather uncertain as limits go, since many people could to change their diets if they really wanted, but food preferences are still a gigantic cultural force with important implications.
I don’t know what will happen with food prices, but a common-sense assumption is that the physical world matters a lot, that food is hardly ever “too cheap to meter,” that abundance is only a local, temporary thing for some people and some foods, like when fruits and vegetables are in season. The war in Ukraine and its effects on on energy and grain markets are important worldwide, and it would be very strange if food or energy prices no longer mattered.
I’m a fan of scenario thinking, and I think pessimistic scenarios should be taken seriously, particularly in this case since he’s put a lot of work into it. That doesn’t mean the zoomed-out perspective is best or I’m sure who’s right.
Believe it or not, a surprisingly large number of economists initially started their education in applied math and physics. So the idea that economists simply don't care about the physical...
He makes mathematical, theoretical, physics-based arguments about the long run. On the other side are economists’ mathematical arguments about the long run that are even more theoretical since they have no physical basis.
Believe it or not, a surprisingly large number of economists initially started their education in applied math and physics. So the idea that economists simply don't care about the physical material realities of production are simply false. It's just that through the process of studying how decisions are made regarding what to produce and how to allocate resources, a lot else goes into it besides just the physical inputs. The theory that physical inputs are the fundamental source of value was a the pre-eminent economic theory for much of the 18th century. But it has since been supplanted as economists have learned more through empirical observations of human behavior. It was supplanted not once, but TWICE! (Or even more depending on how you want to count it.) First by the labor theory of value and then again by the marginal revolution.
Generally speaking, if you're not an expert in a specific field and attempting to apply knowledge and methods from different fields is leading you to draw highly heterodox conclusions, the most likely answer is not that everyone who is in expert in that field is an idiot. It's that they probably looked into it and whatever you're thinking doesn't really work for a bunch of empirical or theoretical reasons you hadn't thought about. (Economists also fall victim to this problem when they start to opine on fields like sociology, history, anthropology, and political science FWIW.)
The fundamental thing that you and vord aren't getting is that humans are social animals and value is a socially/culturally determined thing. The economy is a system for allocating resources and provisioning goods and services for humans based on their subjective assessments of their wants and needs. It is not a mathematical optimization problem because the core things we are trying to measure are fundamentally unquantifiable. The mathematical models are proxies based on simplifying assumptions we have to make about how the messy world works so that we can make reliable predictions and understand the impacts of policies. What the models are not is reality. The fundamental reality is far too complex for mortal brains to fathom.
But the idea that the economy can grow indefinitely based on arbitrary changes in what people value doesn’t make a whole lot of sense to me. It presumes we will stop valuing the physical world altogether, but that’s a durable human value.
Well for one, that seems like a massive leap in logic unless you're looking at super-long time-scales, at which point, we start to ask questions about what it really means to be human at all. I don't view such extrapolations as being particularly interesting for anything other than science fiction or philosophy thought experiments.
Secondly, it doesn't really. All it means is that there is no clear, linear relationship between physical inputs and the level of utility people derive from them. When you say that food is never really "too cheap to matter" you're not wrong, but what constitutes an acceptable standard for "food" doesn't stay constant as the production processes make it cheaper.
If everyone was willing to eat an extremely bland diet of unseasoned lean protein, grain mush, and vitamin supplements every day then food can be too cheap to matter right now. It's just that nobody wants to live like that. We'd consider such a life to be so miserable that we'd think it cruel to impose it on prisoners and the indigent, who have no other options. Instead we have opted to allocate the same water, land, labor, etc. to producing a much wider variety of nicer foods in smaller quantities. People's needs shift based on the cultural expectations of what constitutes a dignified standard of living. The reason the price never seems to come down to being too cheap to matter is because people are willing to pay a specific amount on food, and when they make more money they evidently opt for eating better or rarer or wider varieties of food instead of just banking the money so they can swim around in it like Scrooge McDuck. The energy inputs towards "food" as a category aren't necessarily radically different, but the value output is completely different.
I do agree many things you've written in this post. However, I'm attempting to make space for alternative views. I think on Tildes we've gotten in the habit of debunking or dismissing views that...
I do agree many things you've written in this post. However, I'm attempting to make space for alternative views. I think on Tildes we've gotten in the habit of debunking or dismissing views that don't need to be dismissed? This topic is disheartening: a bunch of people piling on the idea that GDP measurements have flaws (which they surely do), as if they weren't also useful.
What the models are not is reality.
Yes, I'd like to emphasize that whenever we think about the future, we are imagining things. The scenarios aren't real, yet. There's room for competing scenarios, particularly when it's the far future. When you're doing normal, everyday stuff, there are things you can rule out. (The thing you lost is not in the place you just looked.) This is much harder for the hazy future. Most options are open. The things to be ruled out are mostly logical absurdities. (This doesn't mean people can't say things that seem to imply logical absurdities.)
I don't think Tom Murphy's views need to be dismissed. His description of economists' views are a bit of a caricature, surely annoying to more thoughtful economists, but this isn't a straw-man since many people seem to think that economic growth can continue without limit. (He apparently had a conversation with an economist that went similarly, though it's perhaps exaggerated a bit for effect.)
In turn, you're misrepresenting both my and (presumably) Tom Murphy's views. I doubt he believes that every economist is an idiot. I don't think either of us believe that value comes solely or mostly from physical inputs. Yes, a long time ago, there were economic theories that made claims about physical inputs that we no longer believe. I agree that value is largely culturally and socially determined, and that it's not a linear relationship.
But, as we've learned from the pandemic and Ukraine, value isn't independent of physical inputs either. Energy is broadly useful for a wide variety of purposes. So is land. We still go to war over them.
I don't think that's making a radical claim? The radical claim would be that the value of these things could shrink to nothing. Maybe few people really believe it, particularly if you put it like that. But the math of exponential economic growth implies it, which is a reason to be wary of it.
(Caveat: just because a simple economic theory is wrong doesn't mean it isn't useful, or couldn't be fixed up. The labor theory of value is wrong, but labor is still an important cost.)
Yea, that's a little bit frustrating. I think some people have a conception of 'growth' as something capitalism has inflicted on us when in reality growth is just the manifestation of people's...
This topic is disheartening: a bunch of people piling on the idea that GDP measurements have flaws (which they surely do), as if they weren't also useful.
Yea, that's a little bit frustrating.
I think some people have a conception of 'growth' as something capitalism has inflicted on us when in reality growth is just the manifestation of people's needs, wants, and desires. GDP isn't a perfect metric, but if a perfect metric existed people would be using it.
The reason I dropped that link is that it did a far better job breaking it down than I will. That, and your 3 sentences were hardly sufficient reasoning to justify the handwaving away of finite...
The reason I dropped that link is that it did a far better job breaking it down than I will. That, and your 3 sentences were hardly sufficient reasoning to justify the handwaving away of finite limits. But in essence:
Energy growth must cease at some point, in all forms. If we continue with energy growth that we've seen since about 1600 (about 2-4% per year), the oceans boil away within 400 years. Not because of emissions, but because of Earth's inability to radiate excess heat into space. If magic fusion was invented today and we stopped emitting a single extra gram of CO2, we'd still boil alive from the growth because all the energy we generate on earth has to radiate out into space after we expend it.
Because the economy must be tethered to physical goods like food, that means GDP as we know it must cease growing at some point, in the relatively near future.
As the article noted, there is room for quality improvement within that energy budget, that the widgets made 10 years later may be better....but essentially the same number of widgets must remain in service.
The point of saying that growth is bound by physical limits is that industrial stagnation is inevitable. It would be better for us to figure out a way to do that gracefully before the oceans start boiling or things collapse unexpectedly.
Saying "there's still more to do" does not really address why growth is limited by finite resources. It just says we haven't yet hit that point. And its a point that would be far better if we never get close to it.
You think this is an unchanging fact of life? There are many steps we can take to offset local heating due to our energy consumption. From putting up white sheets of "sky cooling panels" to...
Not because of emissions, but because of Earth's inability to radiate excess heat into space
You think this is an unchanging fact of life? There are many steps we can take to offset local heating due to our energy consumption. From putting up white sheets of "sky cooling panels" to putting massive solar shades that block sunlight or finding ways to shunt heat out into the upper atmosphere.
These are all absurdities, but so will be humanity when we get to the point that this sort of heating is an issue.
Because the economy must be tethered to physical goods like food, that means GDP as we know it must cease growing at some point, in the relatively near future.
Radio. Television. Ever more complicated phones and other devices that do ever more things for people. AI. Virtual reality. Genetic engineering.
GDP is not tied to physical goods and has never been. We could create literally no food or other durables from today onwards and still return to GDP growth simply by continuing to produce ever more complicated ways to improve and deepen your life.
If you insist this train will end soon... Do did the people in the 1900s who thought soon there would be nothing left for people to desire. They were wrong. You are wrong.
that the widgets made 10 years later may be better....but essentially the same number of widgets must remain in service.
Absolutely not. The amount of things you can get for a static resource input can easily grow. They can get both better in terms of their value to people and they can get better in terms of the intensity of the resources they need.
industrial stagnation is inevitable
You're right in the abstract but not in the practical. Maybe in a few hundred years you'll have a point, but for our purposes as creatures of the 2020s this simply isn't true and we have a looooong way to go yet. Accepting your premise would be like a middle schooler stopping their schooling because "well, I'll eventually learn everything"
You single out Earth's limit of radiating heat into space: Yes, this is a physical limit, a natural law of the universe. A function of the surface area of the Earth. No amount of human invention...
You single out Earth's limit of radiating heat into space: Yes, this is a physical limit, a natural law of the universe. A function of the surface area of the Earth. No amount of human invention can get around this. We might be able to delay hitting that limit through various means of invention, but we can't change the limit itself short of making the planet larger.
I am aware of just how much energy it is. This post addresses most of your points more directly. An excerpt discussing theoretical limits of solar power (emphasis mine):
Only 70% of the incident sunlight enters the Earth’s energy budget—the rest immediately bounces off of clouds and atmosphere and land without being absorbed. Also, being land creatures, we might consider confining our solar panels to land, occupying 28% of the total globe. Finally, we note that solar photovoltaics and solar thermal plants tend to operate around 15% efficiency. Let’s assume 20% for this calculation. The net effect is about 7,000 TW, about 600 times our current use. Lots of headroom, yes?
When would we run into this limit at a 2.3% growth rate? Recall that we expand by a factor of ten every hundred years, so in 200 years, we operate at 100 times the current level, and we reach 7,000 TW in 275 years. 275 years may seem long on a single human timescale, but it really is not that long for a civilization. And think about the world we have just created: every square meter of land is covered in photovoltaic panels! Where do we grow food?
Now let’s start relaxing constraints. Surely in 275 years we will be smart enough to exceed 20% efficiency for such an important global resource. Let’s laugh in the face of thermodynamic limits and talk of 100% efficiency (yes, we have started the fantasy portion of this journey). This buys us a factor of five, or 70 years. But who needs the oceans? Let’s plaster them with 100% efficient solar panels as well. Another 55 years. In 400 years, we hit the solar wall at the Earth’s surface. This is significant, because biomass, wind, and hydroelectric generation derive from the sun’s radiation, and fossil fuels represent the Earth’s battery charged by solar energy over millions of years. Only nuclear, geothermal, and tidal processes do not come from sunlight—the latter two of which are inconsequential for this analysis, at a few terawatts apiece.
Skipping ahead a bit...
Let me restate that important point. No matter what the technology, a sustained 2.3% energy growth rate would require us to produce as much energy as the entire sun within 1400 years. A word of warning: that power plant is going to run a little warm. Thermodynamics require that if we generated sun-comparable power on Earth, the surface of the Earth—being smaller than that of the sun—would have to be hotter than the surface of the sun!
He highlights well how 275 years is not that long of a timescale for civilization. In fact, we've known about the global warming effects of fossil fuels for almost 53 years. 53 years is 19% of 275 years. How much progress have we made on mitigating that problem so far? Not nearly enough to avoid disaster. And "Hitting upon thermodynamic limits of the planet Earth" is an even scarier premise than "Rising temperature of Earth."
The article continues on.... We have well-documented history of what happened 2,500 years ago. 2,500 years from now, at our current growth rates, we'll be consuming more energy than our entire galaxy of stars can create.
When I say "the same number of widgets must remain in service," it is because the energy budget is fixed. You can't plug in a new fridge without unplugging the old one because there's a full-blown energy ration. Exceeding the ration means boiling the planet.
Global warming is literally an example of the radiation of the earth changing. I gave you like three examples of things we can do today to change how much heat is going into space. This is just...
, this is a physical limit, a natural law of the universe. A function of the surface area of the Earth. No amount of human invention can get around this.
Global warming is literally an example of the radiation of the earth changing. I gave you like three examples of things we can do today to change how much heat is going into space.
This is just literally, objectively, false.
Also, being land creatures, we might consider confining our solar panels to land, occupying 28% of the total globe. Finally, we note that solar photovoltaics and solar thermal plants tend to operate around 15% efficiency. Let’s assume 20% for this calculation.
A whole load of assumptions here.
Energy consumption will increase at a steady rate (in fact, look at American energy consumption as a graph. It's actually down over the last decade. We're coming out of a very very wasteful period of development. If our consumption tends keep up we will have an energy free economy in a few hundred years!).
We won't find increasingly novel and unique ways to gather and manage energy. Land cost of solar would quicky skyrocket and we would find other energy sources pretty quickly. We have lots of options.
Nuclear.
Fossil fuels with carbon capture.
Fusion.
Solar - In Space!.
Wind.
Geothermal.
Who knows, we might figure out how to annihilate matter in controlled quantities and get nuclear energy without either fusion or fusion. Simply a controlled animation of any material we can stick into a special box
In fact, we've known about the global warming effects of fossil fuels for almost 53 years
And we are starting to cut our reliance more and more with every passing year. I think it's hard to understate just how magical fossil fuels are for human development and just how hard it is to replace them.
And "Hitting upon thermodynamic limits of the planet Earth" is an even scarier premise than "Rising temperature of Earth."
It's literally the same thing, except in the latter humanity will be orders of magnitude more capable and have experience solving the problem.
I'm sorry, but most of your post ignored his followup paragraph where he loosened those restrictions into fantasy where the entire planet is coated in 100% efficient solar panels and it extended...
I'm sorry, but most of your post ignored his followup paragraph where he loosened those restrictions into fantasy where the entire planet is coated in 100% efficient solar panels and it extended the timeline to 400 years instead of 275. He addresses every one of those other options. But I'm not really gonna debate the rest of this, but this particular point I need to hammer home: Yes, the theoretical maximum amount of energy the earth can radiate into space is a relatively fixed number. Black-body radiation calculations can provide a good approximation for solar bodies, for the purposes of this discussion.
Your three ideas do not address this.
Two of them are akin to artificial clouds: reflecting some of heat from the earth before it raises the atmospheric temperature. That does not adjust the theoretical maximum radiation limit, it just slows how fast we get there, by a little.
The third is a throwaway sci-fi level "find a way to shunt heat into the upper atmosphere," Which still is subject to said theoretical limits, its just doing it in the air and not on the ground.
Imagine a regular computer floating in space, powered by nothing but solar panels. How does this computer cool itself? Case fans do nothing, because there's no air. The only way the heat from the CPU heat-sink leaves the heat sink is by passively radiating out into the vacuum. A larger heatsink will radiate faster than a smaller one. The whole planet does this, atmosphere included. For now, we're well under that limit. But the math shows that unless we curb our economic growth to be linear instead of exponential, we're talking about the oceans boiling within a millennium. That's not a very long time in the grand scheme of things.
Except I literally didn't and my points addressed this directly by covering the fact there will be many alternatives to covering the planet with solar? It's possible to use air conditioners to...
most of your post ignored his followup paragraph where he loosened those restrictions into fantasy where the entire planet is coated in 100% efficient solar panels
Except I literally didn't and my points addressed this directly by covering the fact there will be many alternatives to covering the planet with solar?
Yes, the theoretical maximum amount of energy the earth can radiate into space is a relatively fixed number. Black-body radiation calculations
It's possible to use air conditioners to move 2x energy using 1x energy today. We do not need to rely on a fixed static state black body radiation to cool the earth in a universe where humanity is using enough power that it's causing global warming.
Literally all you have to do is either move that energy into space or concentrate it enough that it radiates quickly into space.
As for sci Fi shit - that's exactly what this future universe with anthropogenic heat problems is. It will be literal centuries from now.
The post is an interesting thought experiment, but it's also flawed. 400 years is a long time. Increases in solar efficiency and increases in renewable energy in general will also move the needle...
The post is an interesting thought experiment, but it's also flawed. 400 years is a long time. Increases in solar efficiency and increases in renewable energy in general will also move the needle much further back.
In the long term, moving people into space is a viable option, especially if we develop fusion reactors. And if that fails growth will naturally slow as we approach any sort of capacity -- energy prices will not remain static. Also I'm not sure what the anti-growth proposal is supposed to be here, draconian limits on reproduction and utility per person until the sun burns out?
Also, it's interesting to have a look at the results of 'doing the math'; the author's post about peak oil in 2011 is somewhat amusing just 12 years later.
Oh my God I didn't even realize this was the Peak Oil guy until you mentioned it. And yeah 400 years is a long enough time scale that I don't think we can really extrapolate contemporary social or...
Also, it's interesting to have a look at the results of 'doing the math'; the author's post about peak oil in 2011 is somewhat amusing just 12 years later.
Oh my God I didn't even realize this was the Peak Oil guy until you mentioned it.
And yeah 400 years is a long enough time scale that I don't think we can really extrapolate contemporary social or economic systems out that far. 400 years ago North America was still peopled by powerful Native American empires. The Jamestown settlement would have been, like, 20 years old.
Even independent of technological changes to how much energy we can produce, we can't even know what sorts of cultural changes we will undergo that impact our relationship to energy or work or owning stuff. What religious and social beliefs will people even have? Who knows!?
To be fair, he did have some good caveats in there including the principle reason for Peak Oil disappearing from the public lexicon: But it's a good illustration of how extrapolations based on...
Oh my God I didn't even realize this was the Peak Oil guy until you mentioned it.
To be fair, he did have some good caveats in there including the principle reason for Peak Oil disappearing from the public lexicon:
This graphic, adapted from Brandt & Farrell, shows the estimated resources of all hydrocarbons, together with their production cost. Proven reserves are the dark bands to the left of each block, and increasingly uncertain potential resources stretch off to the right for each component. The graphic conveys that in order of increasing cost, enhanced oil recovery, tar sands and heavy oil, gas-to-liquids, coal-to-liquids, and oil shale add substantial stocks at production costs that are only 2–10 times that of conventional oil. Those who are primarily interested in climate change are not too happy with the implications, but this situation could alleviate concerns over oil decline.
I should point out that the production costs of the various hydrocarbons in the plot above are based on 2007 energy prices. Using the escalated energy prices brought on by a conventional oil decline pushes everything higher on the scale. So don’t take either axis of the graph literally.
I will admit that personally, this is the strongest evidence I have seen for why I should not worry about peak oil...
But it's a good illustration of how extrapolations based on current assumptions are really hard to get right, even over relatively short time frames.
Even at the time I remember the technologies on the horizon to mitigate reliance on oil were known and it was largely a question of the engineering to bring costs down. The issue was they were...
But it's a good illustration of how extrapolations based on current assumptions are really hard to get right, even over relatively short time frames.
Even at the time I remember the technologies on the horizon to mitigate reliance on oil were known and it was largely a question of the engineering to bring costs down.
The issue was they were forecasting economic collapse rather than just price adjustments to account for oil becoming more dear. But there was so much scope (and still is) to simply use less oil without much cost to quality of life once the initial difficulties of changing lifestyles are done. We're basically doing that now, through urbanization and walkability, we're just going slow. But instead of saying "We're gonna have a recession/depression" or "We're in for lean times" the narrative was "CIVILIZATION WILL BE OVER!"
Yea, it was a very dramatic reaction to something that seemed obvious, even at the time. If you really want a chuckle read the author's victory lap at the start of the post over selling an...
Yea, it was a very dramatic reaction to something that seemed obvious, even at the time.
If you really want a chuckle read the author's victory lap at the start of the post over selling an 'overvalued' San Diego home in 2005. Hopefully he re-bought in the early 2010s.
A few select issues: Investment is half of wages as a fraction of GDP in the United States. A life worth living is generally one where you're wealthier, not one where you cope about being in...
A few select issues:
Investment is half of wages as a fraction of GDP in the United States.
A life worth living is generally one where you're wealthier, not one where you cope about being in poverty by saying it's family that really matters. Where do people largely spend their money?
Housing.
Transportation.
Food.
Retirement.
Health care.
You might make a marginal impact by this "fight against capitalism", but you'll likely just lead to more people being impoverished, and less innovation overall.
And that's on a tangent, because it's not just the topic of capitalism, it's a topic of growth as a whole. People are seriously assuming that we can be shrinking as a society and still innovating...
This whole innovation thing makes me laugh, as if capitalism is how innovation happens
And that's on a tangent, because it's not just the topic of capitalism, it's a topic of growth as a whole. People are seriously assuming that we can be shrinking as a society and still innovating it anywhere near the place we are today, which just isn't true. If you're innovating you're also growing.
If you kill growth you'll have innovation happening maybe at universities, but none of it's actually going to be implemented because there's nowhere to implement it because growth has died out.
Healthcare doesn't seem like it's working in the US at all anymore
And this is also a total tangent from the point. We still need fossil fuels for the manufacture and transport of basically every advanced medication that exists today, and the systems that support our modern healthcare system.
If you changed to centralized health care, the money would still be spent, it would just be spent by the government and you would be able to complain even more about how wages aren't going to GDP.
I mean yeah, those things still matter and more so when people are getting poorer. Social safety nets are there precisely for that reason... To catch people when it's not going as well. It's a...
I mean yeah, those things still matter and more so when people are getting poorer. Social safety nets are there precisely for that reason... To catch people when it's not going as well.
It's a problem for sure, but there's a war on our doorstep for gods sake. It's migrant crisis after migrant crisis (where in some cases the US isn't entirely blameless either), one of the larger players just up and left, and the millions of Ukrainian refugees and energy crisis just put an already strained post-covid economy into another downward spiral. If anything, the fact that the economy is not having a large downturn, means it appears to be incredibly robust instead.
It just needs to either stay stable or move up, but I'm not so sure about that yet.
I think the article has merit, the EU is seeing people getting poorer for the first time in a while, but the article entirely ignores that a couple billion of GDP just vanished with the UK leaving. It's no wonder it didn't grow, it quite simply shrank very rapidly with that change.
I'm not saying the EU doesn't need a swift kick in the balls to change things up a bit and put things in next gear and while I don't have the answers either there's no denying the union is in a tough spot. I do dare say that it's in a better position than the article posits.
Ultimately though it ends up being a trade union first, and it's been clear from the outset that multiple nations like this aren't a true union and won't be for while. You will see every one of them go for their own interests before the union. Contrary to the US where every state feels proud to be American, most people still feel proud to be insert nationality first and European second.
I would just like to point out that the EU is not like the US. The EU is not a federal authority in the same way Washington DC is. The EU is still a jumble of actual, individual and sovereign...
Not sure what the EU should consider doing, and what mechanisms it has to deal with it's issues.
I would just like to point out that the EU is not like the US. The EU is not a federal authority in the same way Washington DC is. The EU is still a jumble of actual, individual and sovereign countries who have decided to play as a team, for now. I know it makes it easier to compare the two if you put them on a equal standing but I don't think that gives a accurate picture of the situation.
And I'm not writing this to say "this is fine we are doing fine." We have problems and we need to deal with them, but GDP numbers are not a worry for me.
If this effect was so drastic and evident, surely it would be visible already. But it's not. Europeans haven't gotten a notable reduction in level of living compared to Americans.
If this effect was so drastic and evident, surely it would be visible already. But it's not. Europeans haven't gotten a notable reduction in level of living compared to Americans.
I mean I guess the visibility would highly depend on your personal experience and exposure to different people? Anecdotally, I know a number of people in Germany who are really struggling these...
I mean I guess the visibility would highly depend on your personal experience and exposure to different people? Anecdotally, I know a number of people in Germany who are really struggling these days compared to the Americans I know. Or do you mean visible in some other way?
And yet, many of us "expats" (i.e. emigrants) have little reason to return to the USA. The quality of life here is just so much better. Sure, we recognize that our salaries would be a lot bigger,...
And yet, many of us "expats" (i.e. emigrants) have little reason to return to the USA. The quality of life here is just so much better. Sure, we recognize that our salaries would be a lot bigger, our flats, or rather detached single-family homes, would be more spacious, and taxes much lower... but at what cost?
Taxes not even really lower. I recall seeing some studies that show that most US citizens are actually taxed higher in aggregate than the EU. Especially once you start factoring in the value you...
Taxes not even really lower. I recall seeing some studies that show that most US citizens are actually taxed higher in aggregate than the EU. Especially once you start factoring in the value you are (not) receiving for those taxes.
Exactly! Taxes feel terrible if you think you don’t benefit from them. When you know what they do for you, it still hurts, but much less! In most of Europe, taxes bring you good roads, proper...
… once you start factoring in the value you are (not) receiving for those taxes.
Exactly! Taxes feel terrible if you think you don’t benefit from them. When you know what they do for you, it still hurts, but much less!
In most of Europe, taxes bring you good roads, proper healthcare, public transport, and much more.
GDP is a poor metric on a number of axes.
GDP is an estimate of all costs, not of the benefits to society. The whole premise of GDP was originally to capture production capacity in a time of war. GDP is also a poor estimator of costs when it comes to external costs, since they are omitted. Prevention of problems by spending a little money up front to offset future cost is not easily accounted for, yet preventing problems are all major indicators of a countries success - how much is spent on setting up smart infrastructure rather than simply repairing it when it breaks, for example, or how much is spent on preventative health versus reactive.
Basic needs are also not dealt with well by GDP. Water is not a good which should be traded off for a luxury good and buying more expensive luxury water bottles might increase your GDP but provide nothing of tangible value. Freedom is another concept by which luxury goods might be sold but counterintuitive when measuring progress of society. Paying for services to secure your freedom from surveillance would also increase your GDP but represent what most would consider a negative societal outcome.
GDP does a shit job at measuring happiness, and there's tons of examples pointing this out. Europe has a history with this dating back decades ago.
As mentioned by many other individuals, GDP does nothing to account for income distribution, another critical indicator of life satisfaction.
GDP only measures formal economies and not the informal ones. Did you help a neighbor out recently? Unless you sent them an invoice and recorded it on your taxes, GDP can't account for this. Have you ever lived in a helpful house or neighborhood? I can't speak for you but a cohesive society where people are helping each other out is way more important to me than how much GDP I generate.
GDP fails to account for environmental change. If you pollute the air a bunch, it's not reflected in GDP until you spend a bunch of money fixing air pollution. Your GDP might look great while you're deforesting the Amazon to meet supply/demand in other countries, but how will it look when there's no forest left?
There's a lot of reasons why comparing countries on a single metric is less than ideal, but GDP has been under flak for ages for simply being a poor metric by which to base nearly anything on. It was never designed to measure the economy and it does a poor job at doing that except through a hyper-capitalistic lens, one worthy of harsh criticism.
There's a great joke about two economists walking down the street and they spot a pile of dogshit, one pays the other $50 to eat some, he does, he gives the $50 back to the other guy to do the same, he does.
They then congratulate each other for increasing the country's GDP by $100.
To put it in the American context: you work 70 hours a week, eat like shit to save time and money, waste money on a car you wouldn't need if you could live in the city you work, get type 2 diabetes, spend exorbitant amounts on insurance and insulin, go to the doctor more frequently and pursue more costly treatments when you're older since you didn't have the time or money for preventative care, doctor went into 300k in debt to pay for 8 years of post-secondary education and spends exorbitant amounts on malpractice insurance because of highly litigious patients trying to recoup costs for medical care and passes the costs onto the patient. These things are all great for GDP.
I couldn't help but add a little extra snark: The USA has almost never not been at war. Of course the GDP is of immense importance to the USA and basic needs mean little.
The "Indian Wars" really did a number on our wartime percentage. That covered 1/3 (~81 years, per US Congress) of our entire history as a country. Very shameful.
That being said, unless your interpretation of "at war" is including conflicts that were not officially war and things with 'war' in the title, then I think the "almost never" is a bit hyperbolic. Now, even officially declared wars cover more than half of our existence, so your sentiment is understandable and a sad testament to the country.
I read a lot about how the US is doing poorly, even from my own wife, but I think this shows a growing economic reality in Europe.
In 2008 Europe's GDP or 14.2 trillion, and as of 2023 it's now 15 trillion. The US was at 14.8 trillion and is now over 26.9 trillion. Europeans are about to face a reality where they are going to be poorer which they haven't faced in generations. I can already hear furious typing about life expectancy, social safety nets, and other memes to which I say considering the EU population is 448m vs the US's 332m Europoor may not be a meme anymore.
Not sure what the EU should consider doing, and what mechanisms it has to deal with it's issues.
Or to put it another way, FAANG, Microsoft, nvidia have accounts matching that of many countries.
How much has that really done for the average american?
Yep. We should look beyond the GDP to measure a country's success. Sure, it can help us determine which country can bring the most industrial might to bear in a contest, but that shouldn't be what we strive to maximize. We should look at maximizing happiness or life expectancy or social mobility.
Shouldn't companies that provide the entire planet with software and hardware that enables many aspects of our modern lives be more valuable than many nations that don't really contribute nearly that much?
Probably, but the thing is that the credit goes the the USA, as in the entire country that is comprised of fairly divergent lifestyles, cultures and socio-economic and demographic classes, but adding these corporations' GDPs to the US figure does nothing to distinguish that. And besides, in our globalized world where the global south is vastly more populous and so a bigger source of the internet's total traffic and all the raw materials that comprise all of the products that these companies designed and coded, Silicon valley or whichever other wealthy country the company is hosted in gets nearly all the actual financial gain.
Mining rocks just isn't worth as much as building graphics cards. The value add of the second step shouldn't be considered in the country that doesn't do that step.
Without mining rocks, the graphics cards don't exist.
If it takes 100 people to mine rocks full time to have 100 people make graphics cards full time, this labor is equivalent in value.
Ignoring that this is just flat out false, this is still a very poor analogy considering that the amount of raw resources video cards use is also miniscule.
How is it blantantly false? Yes I am aware it's not an accurate ratio, it is an arbitrary example. You just have what I consider flawed assumptions about the value of miners. The miner is not less valuable to society than the graphics card manufacturers. If anything, graphics cards are an incredible luxury while mining is what enables virtually every technological advancement since smelting was invented. That puts graphic card manufacturing much lower on the totem pole in my mind.
If you'd prefer a simpler example, if you have 10 people mining ore to keep 1 blacksmith providing tools for the miners and the 9 farmers whom keep all 20 fed, those people are all doing equivalent labor. None more valuable than the others. Because if any one of them stops doing their share the system collapses.
That's not to say all work is exactly equal. But if it is a job that needs done, like water sanitization, mining, or home construction, those jobs are no less important than the doctor, the engineer, or the farmer.
Value is largely a function of how much does your work contribute to the people around you?
The person making a graphics card? Their individual contribution is relatively massive. The next graphics design makes a difference of like hundreds of households worth of electricity usage, allows better simulations of things all across the world, and generally makes massive changes.
Someone who is working in a mine? That's still important, but nowhere near as productive or impactful.
Generally the more your work multiplies the force of others, the more valuable your work is and the more difficult it is as well.
Imagine get from the perspective of, "How fuck are we if that guy quits".
One of those miners goes away? Everything's going to be fine. That one blacksmith goes away? Say hello to a cascading failure as people aren't able to get their work done without tools and all of a sudden your productive capacity is cut in half.
You generally want to pay the guy doing more important work more, so that they continue to do that job and others are incentivized to try to do it as well.
Double the numbers, two smiths. One dies, another takes up an apprentiship. Just because a job requires more education does not intrinsically make it more valuable. It means a longer lead time to productivity, sure. But that's why we should pay people to get educations to do their jobs. In fact, many good employers do just that.
If anything, it is the education itself that has special societal value, not the worker, for that reason. You could lose all your graphics card designers tomorrow and so long as the educational materials and documentation still exists, the industry will move forward.
Same thing applies. It's far more effort and intense to get someone to learn to be a blacksmith and it is to get someone to learn to be a miner, and overall the blacksmith continues to contribute more to the economy as an individual than any other miners and deserves to get paid in regards for that.
Conversely, the town could function for multiple years without a blacksmith or miners, but without any farmers would be dead within a year.
Just because the smith's skills are less widely known do not make them more valuable. Speaking from experience, Smithing is not particularly difficult to learn. You just need patience and practice. If you can swing a hammer and not stand in fire you can learn to smith. If anything, the only reason there aren't more smiths is because they only need one.
Suppose a farmer invents a machine that can do the work of 9 farmers for the labor of only 1 farmer, obviating the need for most of the smith's other tools. But now we need 9 smiths and 1 farmer instead of the reverse to keep up with maintenance. Is the farmer now providing that disproportionately more value by operating the machine? And now that the smithing work is well known, it is worth less? And was it actually a good decision to use this machine instead of just having 9 farmers and 1 smith?
No, because the machine exists and is maintained and improved by the blacksmiths.
Yes. Because now those farmers can be blacksmiths.
What does this mean, can you elaborate?
If you want to build a graphics card you need multiple engineers with years of experience, very intensive education, and a highly capital rich ecosystem of tools and people and stability to do it.
The sort of environment you need to invent a graphics card is very difficult to come by and only exists in a very select few places, one of those being silicon valley.
If you want rocks, all you need is to find someone willing to hit them with a pick.
In short, if it weren't for the third world the first world economy wouldn't halt, it would just reshuffle, focus more capital on mining resources, and keep on chugging along.
I'd argue we should do exactly that. It would greatly increase our value as individuals in the first world and lead to a surge in investments in labor productivity.
Are you being obtuse? This is ignoring the process of ore extraction, smelting, purification, metallurgy and probably many other crafts and sciences I'm unaware of.
I see what you're doing, you are attempting to devalue what you see as unskilled labor, but let me assure you, the science of turning your "rocks" into something usable in the industries you clearly overvalue requires skills on par with the people making the graphics cards.
Are you referring to the stuff that they were doing in the middle ages?
Yes those steps exist and they add value, but none of them are nearly as advanced or complicated as the high value add stuff they're doing like building graphics cards, doing research and development, and so on.
High-end metallurgy that requires lots of precision and modern technology? It's largely done in the first world.
So you are being obtuse. Or commenting in bad faith.
You say this as though these fields haven't progressed in the 600 years since the middle ages.
This is a lie. The countries which are mining minerals like lithium, gold, aluminum, and others are refining them in their own countries and exporting them in their processed form, ready to be used. It makes no sense to export unrefined ore.
You must understand that mining and refining has many stages.
There's a leap between like 80 percent pure and 99.99 percent. A lot of the former will come out of the third world where the latter will be orders of magnitude more expensive and come out of the first world.
And there is something called a value ladder. Of course they do value add stuff in the third world. They just do less of it and the value add generally isn't as much.
So what is your purpose in pointing all this out? It sounds like you're trying to justify some kind of hierarchy, or imperialism, or hegemony.
Do people in the countries which do the mining and and refining not deserve good lives? I think we all deserve to have a good life, to not live near polluted waters, to have access to housing, food, and health care. Are you saying these people haven't 'earned' these things in your eyes?
Without first world demand for those services, and the advanced things they get in return, their lives would be worse.
And we generally improve the human condition by making people not mine for a living. Paying excess amounts for work that isn't worthwhile is how you end up stagnating.
The correct answer here is to let the development cycle play out until there is no more third world and the only way to mine resources is to invest large amounts of capital into it so one worker is all you need to get the output of hundreds. Then we all win because nobody is wasting their lives banging rocks for a living.
The alternative is simply to cut off the trade lines so the first world is forced to invest heavily in their own mining productivity instead, which would be amazing for individuals living in the first world and terrible for the capital owners and third world inhabitants.
(Everyone wins long term with global trade and development, the first world people just hurt for a while until it settles out)
The development cycle you refer to is just a cycle of exploitation. Extortionate loans from hegemonic entities like the IMF and world bank that demand client states implement austerity upon their citizens and just make their living and working conditions more fraught. The benefit of these loans often goes to the ruling classes, and exploitative capitalists who are taking advantage of the situation. Bolivia is a good example of a country who kicked out these exploitative entities and now they are finally starting to improve their conditions. Thomas Sankara realized this in Burkina Faso in the 1980's and was pushing for self reliance and self determination on the African continent. He ultimately paid for this stance with his life. He was killed because the powers that be were deathly afraid that this worldview would catch on, and they would lose their stranglehold on the existing world order.
The development cycle happens regardless of whatever the IMF or world bank does - even if the wild conspiracy crap of the IMF secretly trying to harm countries is true.
All the removal of the world bank would result in is countries returning to that cycle in a healthier and faster way.
Be as snarky as you want. It's no secret how the IMF exploits emerging economies. Everything they do is overt and its effects are able to be observed.
The largest producers of ultra high purity polysilicon operate in Xinjiang, China using raw silicon ore mined from Xinjiang and turning it into 99.9999% pure polysilicon. Much of this is enabled by slave labor, but this is still an explicit and vast point against your argument.
Do you have any statistics that back up your claim that the ultra high purity refinement occurs primarily in developed countries?
Even the metallurgists in the developing world who supervise the mining operations are, generally, getting paid pretty well.
Ah and there's the fundemental root of our disagreement.
I hold that capital itself has no real value. People have value. Everything else is just stuff.
If your favorite shovel breaks, you get a new shovel without much thought. Your best friend dies, you mourn their life, possibly for the rest of your own.
Capital is of immense value and you would far more mourn its loss than you would your friend when you notice that you can't eat anymore because the farmers tractor stopped working and all of your friends die of famine.
Sounds like you’re valuing capital over human life. I won’t mince words here when I say that if that’s the case, it’s a very, very nasty take.
The point of capital is to enhance and better human life. If you forget its value you'll annihilate both.
I find it worrying that you’ve opted not to refute what I’ve said, as it carries an implication that my concerns about your views were correct.
Capital is only ever valuable insofar as it enables the betterment and preservation of human life, no further. Choosing it above people is putting the cart before the horse, and more directly, is incredibly callous. People matter; tools and property don’t.
If a tractor is necessary to keep a farm running, but must be destroyed lest it run someone over, I would destroy it without hesitation. New tractors can be made, but you can’t replace a person.
You literally can though. It just takes a lot of time and resources.
The only reason we can have this feeling that "new tractors can be made" is because we live in a time of phenomenal material abundance where we can take for granted that valuable things can be somewhat easily replaced. But that all depends on an extremely intricate web of social, political, and physical infrastructure that can consistently produce and deliver these things where and to whom they're needed at costs they can afford.
If you can't replace the tractor easily, and this means your produce rots in the field due to inability to harvest it all effectively, you've hurt a great deal more people than the accident would have. All of our social and political systems for the past several thousand years have been trying to optimize the "producing stuff" part of the equation so we can afford ourselves the luxury of valuing individual lives more highly.
Corollary: This is what people mean when they say that "human lives are worth less in the developing world". That's not a normative statement, but a positive one; that's just the way it is. Over here, in the tradeoff of property vs life, you destroy the property, because most property is just luxuries, or can be reclaimed by spending less on luxuries. In a poorer country, that property is directly or indirectly involved in feeding people. Safety is expensive to implement, so it isn't implemented until it's economically feasible. Once everyone's immediate needs are met, you can think about assigning resources to safety. Until then, it doesn't make economic sense to do so. "Economic" here being the problem of making do with scarce resources, completely removed from capitalism. If your favorite economic philosophy was in that same situation, any decision maker, be it a worker's council, the community, capitalists, would still have to make the same unenviable decisions.
Again just to be safe: That human lives are worth less in developing countries is a disgrace. Needless to say, I'd rather that not be the case. Normative, positive, you get the idea.
I did refute what you said.
Yeah. And the value of capital on human suffering and quality of life often far exceeds the contribution of many people.
And when you apply that at scale, you kill millions.
No, I stated that I was worried you valued capital over human life. You have said nothing to the contrary, and so I'm left believing this fear was founded. Which is incredibly saddening.
Bold assumption. There are a great many ways to feed people, especially in the modern world, and many are not taken advantage of. Capital is strongly overvalued, and we would do well to remember just how many different solutions there are to problems that do not require us to preserve property to the detriment of people.
Just to be clear, the "property" we were talking about here was tractors and combines and trucks and fertilizers and all the infrastructure that makes those work. It's hard to imagine how we're supposed to feed people at scale without those things.
If we're talking about the scale at which all those operate in aggregate, then yes, all agricultural infrastructure combined does outweigh a human life. But that's a rather skewed comparison, isn't it?
When I'm talking about property vs. people here, I'm not talking about huge swathes of industry vs. one person. I'm talking about a tractor vs. a person, and in that scenario, a person is always more valuable.
In a world where tractors are comparatively cheap sure. In a world where tractors are irreplaceably expensive the math works out much harder.
Like I said, we’ve built a colossal amount of infrastructure to buy ourselves the privilege of being able to treat extremely valuable productive assets as if they were disposable. The calculation you are making here is only possible because a lot of people over history have made a lot of hard choices to make that math possible.
There are communities in the developing world where people literally do not make that choice because the productive assets (such as machinery or livestock) are more critical for the survival of the community than any individual member of it.
Most famines are not caused by food shortages, they are caused by issues in distribution of food (i.e. problems caused by capitalism). I would suggest reading Amartya Sen's work on this (Britannica have a nice summary).
Modern famines, yes, because we have the capital and decades of industrial farming experience that has built itself into a world wide food network that creates a incredibly durable supply.
That would simply not exist without capital.
9/10 of the worst famines in modern history happened under autocratic "communist" regimes in China and Russia. It's simply disingenuous to blame capitalism.
https://skeptics.stackexchange.com/questions/43434/is-collectivism-the-cause-of-the-10-worst-famines-of-the-20th-century
IMO, These famines that occurred specifically under Stalin and Mao can be attributed specifically to them as authoritarian/totalitarian leaders who were either just plainly incompetent (Mao) or fine with destroying/genociding the Kulaks and generally pushing a really forceful transition of the Russian economy from an agrarian to an industrial one. Socialist ideology as a whole isn't anywhere near as horrific as Stalin/Mao.
Edit: Your thread specifically shows about one famine cause by Stalin, one by Mao, One by one of North Korea's dictators, one caused by Pol Pot (one of the most insane regimes in human history) and 5-6 famines caused because of war (all the other Chinese famines the Bengal Famine). All this shows me is that the 20th century Eastern Bloc had bad people in it, but Autocracy isn't all of socialism.
I absolutely support strong social systems. I just wanted to respond to the claim that capitalism is responsible for famines because that doesn't square with the historical record.
I totally agree with you that autocracy is dangerous and has a sordid history.
But the stuff is the result of people doing work in the past, and it's considered valuable because it's still useful. A shovel isn't equivalent in scale to a life, but some things could take a lifetime of effort to replace. If it took a team of 80 machinists a year to create a piece of industrial equipment, that's a whole human lifespan that went into that machine. Replacing it would be possible, but that "stuff" is a physical representation of all that effort, in addition to a tool that has economic value.
I agree, the value of the stuff is proportional to the labor used to create it. It isn't to suggest we should be wasteful of said stuff.
But if said machine breaks, it's still relatively trivial to replace it, if the knowledge is not lost and labor is available. The important thing is the operation of the machine itself does not contribute value to the downstream things that it produces. Because those 29,200 labor hours to build the machine get subdivided among every widget the machine produces. The value of the machine tends toward 0 over time. But the value of the people operating and maintaining the machine will remain relatively constant.
It's part of why us non-capitalists feel all this stuff for production shouldn't be owned by any given person, it should be collectively owned by society.
This is the core of LTV. I'd say its incomplete, namely adding some dimensions to account for ecological impact. Right now regular markets fail to capture ecological impact properly as well...otherwise disposable plastic beverage containers wouldn't be a thing.
They aren't. Like, just as a matter of fact they aren't. Generally as GDP goes up so does the wealth of the average person in the country.
They aren't. As a matter of fact they aren't. In Europe maybe, but American wages have on average been meeting or beating inflation for a while, and the last 5 years or so those wage increases have picked up in a major way.
Our use of fossil fuels is doing that, and the only way to stop global warming is to kill our use of fossil fuels. That doesn't happen without invitation and growth.
And a finite system? Sure. But the earth is a big place and the things we can do with it can and should continue to increase rapidly for decades yet. We are still very very primitive beings and there is a long climb even from where we are today.
And you're using a misleading statistic. Wages as a percentage of GDP does not disprove anything about the fact that GDP growth is associated to increases in wages overall.
And minor things like....
Food (70 percent of the nitrogen in your body was made using a energy intense process).
Electricity (air conditioning, vacuums and washing machines, cooking food, etc).
Life saving medicine.
Communications and transport.
And that doesn't matter. We could stop using extra resources tomorrow and we should still see growth continue because we still have an absolute shit ton of things to discover and do. If GDP growth ever shows that's not a sign we are healthy drawing down resource usage. It's a sign of social and industrial stagnation.
Yes it does, and I would be quite curious to understand why you think it doesn't.
At the end of the day, the economy must be grounded in physical goods: Food, Water, Shelter, Medicine. On a finite planet, with perpetual growth, eventually those things run out.
That's not really accurate. Services are a huge chunk of the economy and are bounded largely by the innate skills and human capital endowments of the people supplying them.
In other words, suppose you gave me and Wong Kar Wai equivalent budgets and equipment and the same crew and actors. I can say with confidence that whatever movie he makes with those endowments is likely going to be orders of magnitude more valuable than anything I would do with the same amount of labor and physical inputs. He just has more skill and is valued by the public more highly. In fact, because he is more skilled he can probably produce more work with fewer resource inputs (like getting scenes shot faster so he uses less film and spends less time lighting a set) than I could.
What I was saying by that is: No matter how much of our economic activity transitions to purely non-physical goods like software and data, everyone still needs to eat.
This post elaborates more. Particularly of interest for this point is the section labelled "The Unphysical Economy".
And the value of feeding them becomes a smaller and smaller share of the total value being created by society's work. But the economy continues to grow, because people are constantly figuring out new forms of value to create.
From the linked post:
The post is just bad because it starts from a bad premise. And the fact that you're unwilling to critically re-examine this premise that economic value is tied to physical goods (whatever that means) is only going to frustrate you.
For one thing, we are nowhere near the "physical limits" of "food production." We use land and water extremely inefficiently when it comes to nutrient and calorie density per unit of land. And despite that we produce enough food to feed a planet of 11 billion people (which is more than we have), we just distribute it very poorly.
It's also not really necessary for it to become "negligibly cheap." It can even become more expensive as people transition to more expensive types of food that require greater expertise to grow (e.g. fancy $200 melons). The point is that the value of the food is independent of any physical aspect of the food. Value is a subjective and unquantifiable thing that we are only vaguely able to measure by proxy. Any attempt to reify these metrics as if they were real will end in folly, and attempts to manage the economy according to reified metrics will be a massive folly.
Or automation and technology improvements can allow farmers to do more with fewer people and make up the lower wages per bushel of whatever in volume. Or we can redistribute the gains to everyone else to the agriculture sector through subsidies to keep them in a dignified standard of living (which is functionally what the developed world has been doing for most of the 20th century).
This Malthusian argument has been empirically invalidated again and again, almost on a decade by decade basis. The predicted apocalypse never comes because people's actual baseline survival needs are actually quite basic and not that difficult to achieve with modern industrial capacity.
I'm not re-examining the premise, because I find it a solid one. The physical limits in question are that of energy expenditure, not really of land or physical resources. This energy expenditure itself is going to be hampered by thermodynamic energy growth limits within 400 years, which is the main premise these other ideas are elaborating on. And if we don't hamper that growth ourselves, the oceans boiling away will do it for us. The author even discusses how the timelines in question shift drastically if we shift from exponential growth to linear growth. But since that itself is such a massive departure from our current economic situation, that discussing transitioning to linear growth is almost as radical as suggesting the end of all economic growth. Again, I'm not really doing the full post justice with my regurgitation here.
All economic activity requires energy expenditure. Some more than others, but generally production of physical goods requires much more than indirect activity like services. Running a tractor for 2 days will use a lot more energy than any real estate transaction.
What that means is: In a world with an energy budget (to avoid boiling said oceans), there will always need a percentage of that energy budget expended to produce physical goods to live. The post details more about the "de-coupled" economic activity like services, where the economic activity is less directly tied to energy. But because everyone needs some goods that can't be decoupled from energy use, they serve as a tether...directly or indirectly.
So say 5% of the energy budget going to providing the physical goods for everyone's needs, and 95% to everything else. Total GDP will be relatively fixed for that 5% (being more directly tied to energy expenditure), but the other 95% can grow faster, as its not tightly coupled to energy use. At this point, arbitrary examples will be easier for me to think about. Farming and real estate are good examples.
Say an apple costs $1, farmer grows 100,000 apples a year, has a $100,000 income from selling them (this is in the 5% category). Real estate agent makes $100,000 from exchanging real estate, can buy all apples they want.
Fast forward 10 years. Apple still costs $1 as that energy budget is still relatively fixed. Farmer still makes $100,000. But Real estate agent now makes $200,000, given that the energy expenditure for real estate transactions is negligible. Apples now cost roughly half as much to the real estate agent, but the farmer isn't pulling in more income.
So there are kind of two scenarios that can play out:
You bring up subsidies, which the author of the post does as well. The subsidies are themselves a limiting factor of growth, are they not? They lop the top off the growth, and give it to the bottom, essentially just creating that first bullet point of inflation without real growth. They are that "tether" which prevents the services economy from having unlimited growth relative to the goods economy.
As a sidebar, this is debatable as many yields are stagnating or decreasing. Many of the techniques we've used to get these high yields are proving unsustainable. Ranging from over-reliance on pesticides or artificial fertilizers, to draining groundwater faster than it can be replenished. Don't get me wrong, there's plenty of room for improvement in many ways (reducing beef consumption would be a good start), but it's not really the heart of what I was discussing.
That's not a limit though, because people don't directly value energy input. Energy is an input to produce what they value. But the valuation changes dynamically. Hence the Wong Kar Wai example. The exact same energy expenditure produces different outcomes depending on when and how it's applied.
No it's not! Technology changes. How much people value apples changes. Even the definition of what constitutes a "standard" apple can change. None of these things are fixed. People don't even value the apple qua being an apple. They value the satiation and social signaling conferred by consuming the apple.
Nah this is Chicagoan nonsense. It depends on how it's structured. If people value having a nice, bucolic countryside then they're essentially paying for the privilege of maintaining this agricultural sector for aesthetic or moral reasons. That's perfectly fine and valid. And such subsidies can support a more dynamic agricultural sector with a greater variety of food stuffs than the market would produce naturally, then you're producing more growth by maintaining or cultivating productive capacity that would atrophy otherwise.
So is the human population in most places, so this problem can largely solve itself.
I think that's the crux of the problem. Our entire economic system ignores the externalities of thermodynamics. Because the planet doesn't care how pretty or delicious an apple is, right? Or if we're growing cherries instead of apples because trends changed? It cares that the tractor combusted several thousand joules of energy that need radiated into space at some point. We could just as easily use bag of flour, sugar, or rice as a substitute. This is talking on a macro scale for feeding the planet given a finite amount of energy, not the whims of fads and fashions for determining prices of goods.
This is also probably why so many are so loathe to admit that CO2 emissions are a problem: Because it forces recognition of a physical externality that otherwise is intangible and abstract.
You're right...but when problems solve themselves it's often a very messy outcome.
Nah the economic system evolved as a response to determine what to produce, how much, and for whom given all of those constraints. If energy is scarce, it becomes more valuable and, consequently, gets allocated to use cases that are more highly valued. If it's scarce enough that we need to prioritize adequate calories over delicious calories, then people shift to valuing calorie density more highly.
I can't overstate that productive capacity to feed people is really not a big deal. We have plenty of technology and resources to be able to do that. It's all the other stuff people care about that can become scarce, but people's actual physical needs aren't that difficult with modern technology.
The reason not directly valuing energy expenditure is good, actually, is because you can keep people just as happy or make them even more happy without needing to use more energy. In fact, since people's values systems change dynamically, you can even have them value efficient uses of energy more highly than inefficient ones under the right cultural conditions.
In this case it's just people having fewer kids because a combination of financial instruments and changing economic conditions means they can save for retirement without needing progeny to take care of them. It's quite pleasant all around.
I'll agree to disagree on that stuff, as I think we're on very different wavelengths there.
But WRT to kids... From Pew, the top three reasons people cite for not having kids in the USA, other than the wishy-washy "just don't want to" answer:
Age in particular has other implications like "I'd like to but I'm too old now." Which from my own anecdotal evidence, is itself a byproduct of financial instability. Used to be people could start having kids in their 20s while feeling secure in the world. You can have a lot more kids if you start in your 20s than if you start in your 30s.
While those definitely fall under changing economic conditions, I'd hardly call those pleasant.
The US is an outlier on this stuff. Most of the reductions in population growth happen in the developing world and it's almost entirely due to women having better access to healthcare and family planning resources and people moving off the farm and not needing extra hands to help with work.
Yea wealthiest nation in the world and all that.
Although he’s mostly stopped posting, I’m a fan of the “do the math” blog because it talks about physical limits and how these will eventually effect the economy. He makes mathematical, theoretical, physics-based arguments about the long run. On the other side are economists’ mathematical arguments about the long run that are even more theoretical since they have no physical basis.
From this zoomed-out perspective, even drastic changes like most people in the world switching to vegetarianism would be only a one-time deal. After you do that, how do you get the next efficiency improvement? Can we assume there will always be more efficiency improvements?
Conservation and input substitution are important and many worries about running out of specific industry inputs are overblown. But the idea that the economy can grow indefinitely based on arbitrary changes in what people value doesn’t make a whole lot of sense to me. It presumes we will stop valuing the physical world altogether, but that’s a durable human value.
Physical limits often have little to do with everyday concerns. Some of us don’t have to worry much about paying for food. Buying fancy foods and eating in restaurants are pretty far away from any physical limits. There’s clearly plenty of inefficiency and we could live a lot cheaper if we had to. If everyone did this, the economy would change drastically, as we saw during the pandemic.
So we will likely run into other limits first that have more to do with what people value and what changes they’re willing to make. It’s unlikely that everyone will become a vegetarian, or that eating meat will be a special occasion like it once was, historically. That’s not a physical limit and it’s rather uncertain as limits go, since many people could to change their diets if they really wanted, but food preferences are still a gigantic cultural force with important implications.
I don’t know what will happen with food prices, but a common-sense assumption is that the physical world matters a lot, that food is hardly ever “too cheap to meter,” that abundance is only a local, temporary thing for some people and some foods, like when fruits and vegetables are in season. The war in Ukraine and its effects on on energy and grain markets are important worldwide, and it would be very strange if food or energy prices no longer mattered.
I’m a fan of scenario thinking, and I think pessimistic scenarios should be taken seriously, particularly in this case since he’s put a lot of work into it. That doesn’t mean the zoomed-out perspective is best or I’m sure who’s right.
Believe it or not, a surprisingly large number of economists initially started their education in applied math and physics. So the idea that economists simply don't care about the physical material realities of production are simply false. It's just that through the process of studying how decisions are made regarding what to produce and how to allocate resources, a lot else goes into it besides just the physical inputs. The theory that physical inputs are the fundamental source of value was a the pre-eminent economic theory for much of the 18th century. But it has since been supplanted as economists have learned more through empirical observations of human behavior. It was supplanted not once, but TWICE! (Or even more depending on how you want to count it.) First by the labor theory of value and then again by the marginal revolution.
Generally speaking, if you're not an expert in a specific field and attempting to apply knowledge and methods from different fields is leading you to draw highly heterodox conclusions, the most likely answer is not that everyone who is in expert in that field is an idiot. It's that they probably looked into it and whatever you're thinking doesn't really work for a bunch of empirical or theoretical reasons you hadn't thought about. (Economists also fall victim to this problem when they start to opine on fields like sociology, history, anthropology, and political science FWIW.)
The fundamental thing that you and vord aren't getting is that humans are social animals and value is a socially/culturally determined thing. The economy is a system for allocating resources and provisioning goods and services for humans based on their subjective assessments of their wants and needs. It is not a mathematical optimization problem because the core things we are trying to measure are fundamentally unquantifiable. The mathematical models are proxies based on simplifying assumptions we have to make about how the messy world works so that we can make reliable predictions and understand the impacts of policies. What the models are not is reality. The fundamental reality is far too complex for mortal brains to fathom.
Well for one, that seems like a massive leap in logic unless you're looking at super-long time-scales, at which point, we start to ask questions about what it really means to be human at all. I don't view such extrapolations as being particularly interesting for anything other than science fiction or philosophy thought experiments.
Secondly, it doesn't really. All it means is that there is no clear, linear relationship between physical inputs and the level of utility people derive from them. When you say that food is never really "too cheap to matter" you're not wrong, but what constitutes an acceptable standard for "food" doesn't stay constant as the production processes make it cheaper.
If everyone was willing to eat an extremely bland diet of unseasoned lean protein, grain mush, and vitamin supplements every day then food can be too cheap to matter right now. It's just that nobody wants to live like that. We'd consider such a life to be so miserable that we'd think it cruel to impose it on prisoners and the indigent, who have no other options. Instead we have opted to allocate the same water, land, labor, etc. to producing a much wider variety of nicer foods in smaller quantities. People's needs shift based on the cultural expectations of what constitutes a dignified standard of living. The reason the price never seems to come down to being too cheap to matter is because people are willing to pay a specific amount on food, and when they make more money they evidently opt for eating better or rarer or wider varieties of food instead of just banking the money so they can swim around in it like Scrooge McDuck. The energy inputs towards "food" as a category aren't necessarily radically different, but the value output is completely different.
I do agree many things you've written in this post. However, I'm attempting to make space for alternative views. I think on Tildes we've gotten in the habit of debunking or dismissing views that don't need to be dismissed? This topic is disheartening: a bunch of people piling on the idea that GDP measurements have flaws (which they surely do), as if they weren't also useful.
Yes, I'd like to emphasize that whenever we think about the future, we are imagining things. The scenarios aren't real, yet. There's room for competing scenarios, particularly when it's the far future. When you're doing normal, everyday stuff, there are things you can rule out. (The thing you lost is not in the place you just looked.) This is much harder for the hazy future. Most options are open. The things to be ruled out are mostly logical absurdities. (This doesn't mean people can't say things that seem to imply logical absurdities.)
I don't think Tom Murphy's views need to be dismissed. His description of economists' views are a bit of a caricature, surely annoying to more thoughtful economists, but this isn't a straw-man since many people seem to think that economic growth can continue without limit. (He apparently had a conversation with an economist that went similarly, though it's perhaps exaggerated a bit for effect.)
In turn, you're misrepresenting both my and (presumably) Tom Murphy's views. I doubt he believes that every economist is an idiot. I don't think either of us believe that value comes solely or mostly from physical inputs. Yes, a long time ago, there were economic theories that made claims about physical inputs that we no longer believe. I agree that value is largely culturally and socially determined, and that it's not a linear relationship.
But, as we've learned from the pandemic and Ukraine, value isn't independent of physical inputs either. Energy is broadly useful for a wide variety of purposes. So is land. We still go to war over them.
I don't think that's making a radical claim? The radical claim would be that the value of these things could shrink to nothing. Maybe few people really believe it, particularly if you put it like that. But the math of exponential economic growth implies it, which is a reason to be wary of it.
(Caveat: just because a simple economic theory is wrong doesn't mean it isn't useful, or couldn't be fixed up. The labor theory of value is wrong, but labor is still an important cost.)
Yea, that's a little bit frustrating.
I think some people have a conception of 'growth' as something capitalism has inflicted on us when in reality growth is just the manifestation of people's needs, wants, and desires. GDP isn't a perfect metric, but if a perfect metric existed people would be using it.
Then you should read the next two to three sentences that I wrote after that one.
The reason I dropped that link is that it did a far better job breaking it down than I will. That, and your 3 sentences were hardly sufficient reasoning to justify the handwaving away of finite limits. But in essence:
Energy growth must cease at some point, in all forms. If we continue with energy growth that we've seen since about 1600 (about 2-4% per year), the oceans boil away within 400 years. Not because of emissions, but because of Earth's inability to radiate excess heat into space. If magic fusion was invented today and we stopped emitting a single extra gram of CO2, we'd still boil alive from the growth because all the energy we generate on earth has to radiate out into space after we expend it.
Because the economy must be tethered to physical goods like food, that means GDP as we know it must cease growing at some point, in the relatively near future.
As the article noted, there is room for quality improvement within that energy budget, that the widgets made 10 years later may be better....but essentially the same number of widgets must remain in service.
The point of saying that growth is bound by physical limits is that industrial stagnation is inevitable. It would be better for us to figure out a way to do that gracefully before the oceans start boiling or things collapse unexpectedly.
Saying "there's still more to do" does not really address why growth is limited by finite resources. It just says we haven't yet hit that point. And its a point that would be far better if we never get close to it.
You think this is an unchanging fact of life? There are many steps we can take to offset local heating due to our energy consumption. From putting up white sheets of "sky cooling panels" to putting massive solar shades that block sunlight or finding ways to shunt heat out into the upper atmosphere.
These are all absurdities, but so will be humanity when we get to the point that this sort of heating is an issue.
Radio. Television. Ever more complicated phones and other devices that do ever more things for people. AI. Virtual reality. Genetic engineering.
GDP is not tied to physical goods and has never been. We could create literally no food or other durables from today onwards and still return to GDP growth simply by continuing to produce ever more complicated ways to improve and deepen your life.
If you insist this train will end soon... Do did the people in the 1900s who thought soon there would be nothing left for people to desire. They were wrong. You are wrong.
Absolutely not. The amount of things you can get for a static resource input can easily grow. They can get both better in terms of their value to people and they can get better in terms of the intensity of the resources they need.
You're right in the abstract but not in the practical. Maybe in a few hundred years you'll have a point, but for our purposes as creatures of the 2020s this simply isn't true and we have a looooong way to go yet. Accepting your premise would be like a middle schooler stopping their schooling because "well, I'll eventually learn everything"
You single out Earth's limit of radiating heat into space: Yes, this is a physical limit, a natural law of the universe. A function of the surface area of the Earth. No amount of human invention can get around this. We might be able to delay hitting that limit through various means of invention, but we can't change the limit itself short of making the planet larger.
I am aware of just how much energy it is. This post addresses most of your points more directly. An excerpt discussing theoretical limits of solar power (emphasis mine):
Skipping ahead a bit...
He highlights well how 275 years is not that long of a timescale for civilization. In fact, we've known about the global warming effects of fossil fuels for almost 53 years. 53 years is 19% of 275 years. How much progress have we made on mitigating that problem so far? Not nearly enough to avoid disaster. And "Hitting upon thermodynamic limits of the planet Earth" is an even scarier premise than "Rising temperature of Earth."
The article continues on.... We have well-documented history of what happened 2,500 years ago. 2,500 years from now, at our current growth rates, we'll be consuming more energy than our entire galaxy of stars can create.
When I say "the same number of widgets must remain in service," it is because the energy budget is fixed. You can't plug in a new fridge without unplugging the old one because there's a full-blown energy ration. Exceeding the ration means boiling the planet.
Global warming is literally an example of the radiation of the earth changing. I gave you like three examples of things we can do today to change how much heat is going into space.
This is just literally, objectively, false.
A whole load of assumptions here.
Energy consumption will increase at a steady rate (in fact, look at American energy consumption as a graph. It's actually down over the last decade. We're coming out of a very very wasteful period of development. If our consumption tends keep up we will have an energy free economy in a few hundred years!).
We won't find increasingly novel and unique ways to gather and manage energy. Land cost of solar would quicky skyrocket and we would find other energy sources pretty quickly. We have lots of options.
Nuclear.
Fossil fuels with carbon capture.
Fusion.
Solar - In Space!.
Wind.
Geothermal.
Who knows, we might figure out how to annihilate matter in controlled quantities and get nuclear energy without either fusion or fusion. Simply a controlled animation of any material we can stick into a special box
And we are starting to cut our reliance more and more with every passing year. I think it's hard to understate just how magical fossil fuels are for human development and just how hard it is to replace them.
It's literally the same thing, except in the latter humanity will be orders of magnitude more capable and have experience solving the problem.
I'm sorry, but most of your post ignored his followup paragraph where he loosened those restrictions into fantasy where the entire planet is coated in 100% efficient solar panels and it extended the timeline to 400 years instead of 275. He addresses every one of those other options. But I'm not really gonna debate the rest of this, but this particular point I need to hammer home: Yes, the theoretical maximum amount of energy the earth can radiate into space is a relatively fixed number. Black-body radiation calculations can provide a good approximation for solar bodies, for the purposes of this discussion.
Your three ideas do not address this.
Two of them are akin to artificial clouds: reflecting some of heat from the earth before it raises the atmospheric temperature. That does not adjust the theoretical maximum radiation limit, it just slows how fast we get there, by a little.
The third is a throwaway sci-fi level "find a way to shunt heat into the upper atmosphere," Which still is subject to said theoretical limits, its just doing it in the air and not on the ground.
Imagine a regular computer floating in space, powered by nothing but solar panels. How does this computer cool itself? Case fans do nothing, because there's no air. The only way the heat from the CPU heat-sink leaves the heat sink is by passively radiating out into the vacuum. A larger heatsink will radiate faster than a smaller one. The whole planet does this, atmosphere included. For now, we're well under that limit. But the math shows that unless we curb our economic growth to be linear instead of exponential, we're talking about the oceans boiling within a millennium. That's not a very long time in the grand scheme of things.
Except I literally didn't and my points addressed this directly by covering the fact there will be many alternatives to covering the planet with solar?
It's possible to use air conditioners to move 2x energy using 1x energy today. We do not need to rely on a fixed static state black body radiation to cool the earth in a universe where humanity is using enough power that it's causing global warming.
Literally all you have to do is either move that energy into space or concentrate it enough that it radiates quickly into space.
As for sci Fi shit - that's exactly what this future universe with anthropogenic heat problems is. It will be literal centuries from now.
The post is an interesting thought experiment, but it's also flawed. 400 years is a long time. Increases in solar efficiency and increases in renewable energy in general will also move the needle much further back.
In the long term, moving people into space is a viable option, especially if we develop fusion reactors. And if that fails growth will naturally slow as we approach any sort of capacity -- energy prices will not remain static. Also I'm not sure what the anti-growth proposal is supposed to be here, draconian limits on reproduction and utility per person until the sun burns out?
Also, it's interesting to have a look at the results of 'doing the math'; the author's post about peak oil in 2011 is somewhat amusing just 12 years later.
Oh my God I didn't even realize this was the Peak Oil guy until you mentioned it.
And yeah 400 years is a long enough time scale that I don't think we can really extrapolate contemporary social or economic systems out that far. 400 years ago North America was still peopled by powerful Native American empires. The Jamestown settlement would have been, like, 20 years old.
Even independent of technological changes to how much energy we can produce, we can't even know what sorts of cultural changes we will undergo that impact our relationship to energy or work or owning stuff. What religious and social beliefs will people even have? Who knows!?
To be fair, he did have some good caveats in there including the principle reason for Peak Oil disappearing from the public lexicon:
But it's a good illustration of how extrapolations based on current assumptions are really hard to get right, even over relatively short time frames.
Even at the time I remember the technologies on the horizon to mitigate reliance on oil were known and it was largely a question of the engineering to bring costs down.
The issue was they were forecasting economic collapse rather than just price adjustments to account for oil becoming more dear. But there was so much scope (and still is) to simply use less oil without much cost to quality of life once the initial difficulties of changing lifestyles are done. We're basically doing that now, through urbanization and walkability, we're just going slow. But instead of saying "We're gonna have a recession/depression" or "We're in for lean times" the narrative was "CIVILIZATION WILL BE OVER!"
Yea, it was a very dramatic reaction to something that seemed obvious, even at the time.
If you really want a chuckle read the author's victory lap at the start of the post over selling an 'overvalued' San Diego home in 2005. Hopefully he re-bought in the early 2010s.
This doesn't really strike me like a comment that's going to elicit productive discussion.
Gentle reminder that it's OK to disengage.
Yeah, you're right. My bad.
Foul mood at the moment so thank you for that.
A few select issues:
Investment is half of wages as a fraction of GDP in the United States.
A life worth living is generally one where you're wealthier, not one where you cope about being in poverty by saying it's family that really matters. Where do people largely spend their money?
Housing.
Transportation.
Food.
Retirement.
Health care.
You might make a marginal impact by this "fight against capitalism", but you'll likely just lead to more people being impoverished, and less innovation overall.
And that's on a tangent, because it's not just the topic of capitalism, it's a topic of growth as a whole. People are seriously assuming that we can be shrinking as a society and still innovating it anywhere near the place we are today, which just isn't true. If you're innovating you're also growing.
If you kill growth you'll have innovation happening maybe at universities, but none of it's actually going to be implemented because there's nowhere to implement it because growth has died out.
And this is also a total tangent from the point. We still need fossil fuels for the manufacture and transport of basically every advanced medication that exists today, and the systems that support our modern healthcare system.
If you changed to centralized health care, the money would still be spent, it would just be spent by the government and you would be able to complain even more about how wages aren't going to GDP.
My first thought was what would the difference be if you removed the top 1% or the top 0.1% from the equation (in all countries being compared.)
I mean yeah, those things still matter and more so when people are getting poorer. Social safety nets are there precisely for that reason... To catch people when it's not going as well.
It's a problem for sure, but there's a war on our doorstep for gods sake. It's migrant crisis after migrant crisis (where in some cases the US isn't entirely blameless either), one of the larger players just up and left, and the millions of Ukrainian refugees and energy crisis just put an already strained post-covid economy into another downward spiral. If anything, the fact that the economy is not having a large downturn, means it appears to be incredibly robust instead.
It just needs to either stay stable or move up, but I'm not so sure about that yet.
I think the article has merit, the EU is seeing people getting poorer for the first time in a while, but the article entirely ignores that a couple billion of GDP just vanished with the UK leaving. It's no wonder it didn't grow, it quite simply shrank very rapidly with that change.
I'm not saying the EU doesn't need a swift kick in the balls to change things up a bit and put things in next gear and while I don't have the answers either there's no denying the union is in a tough spot. I do dare say that it's in a better position than the article posits.
Ultimately though it ends up being a trade union first, and it's been clear from the outset that multiple nations like this aren't a true union and won't be for while. You will see every one of them go for their own interests before the union. Contrary to the US where every state feels proud to be American, most people still feel proud to be insert nationality first and European second.
I would just like to point out that the EU is not like the US. The EU is not a federal authority in the same way Washington DC is. The EU is still a jumble of actual, individual and sovereign countries who have decided to play as a team, for now. I know it makes it easier to compare the two if you put them on a equal standing but I don't think that gives a accurate picture of the situation.
And I'm not writing this to say "this is fine we are doing fine." We have problems and we need to deal with them, but GDP numbers are not a worry for me.
If this effect was so drastic and evident, surely it would be visible already. But it's not. Europeans haven't gotten a notable reduction in level of living compared to Americans.
I mean I guess the visibility would highly depend on your personal experience and exposure to different people? Anecdotally, I know a number of people in Germany who are really struggling these days compared to the Americans I know. Or do you mean visible in some other way?
And yet, many of us "expats" (i.e. emigrants) have little reason to return to the USA. The quality of life here is just so much better. Sure, we recognize that our salaries would be a lot bigger, our flats, or rather detached single-family homes, would be more spacious, and taxes much lower... but at what cost?
Taxes not even really lower. I recall seeing some studies that show that most US citizens are actually taxed higher in aggregate than the EU. Especially once you start factoring in the value you are (not) receiving for those taxes.
Exactly! Taxes feel terrible if you think you don’t benefit from them. When you know what they do for you, it still hurts, but much less!
In most of Europe, taxes bring you good roads, proper healthcare, public transport, and much more.