Tom Murphy, who is a physics professor at UC San Diego, runs a blog called Do the Math. Just over 10 years ago, he had a popular blog post asking can economic growth can last?, which I discussed in one of my a blog posts. A couple of days ago, he published his main arguments in a Nature Physics comment titled Limits to Growth, the full text of which you can also access here.
He makes two main arguments. One relates to waste heat, and the other to physical resource limits. When we utilise energy on the Earth’s surface it eventually turns into waste heat that needs to be radiated into space. At the moment this is negligible. However, if energy usage grows at 2.3% per year, it will increase by an order of magnitude every century and this waste heat would become significant within a few centuries. His argument isn’t that this is likely to happen. It is simply an illustration of a real limit. Admittedly, as pointed out on Twitter, he also doesn’t really make clear that this only applies to non-renewable sources of energy, but there are also limits to how much renewable energy we could use.
His other argument relates to physical resources. There must be some limit to our use of physical resources. This doesn’t necessarily limit economic growth because not all economic activity relies on the usage of physical resources. You could imagine a scenario where we reach a stage where economic growth decouples from the use of physical resources. In other words, we reach the limit of physical resources, the usage of which is now fixed, but economic growth continues through activities that don’t utilise these resources.
The problem that Tom Murphy highlights is that this means that economic activity associated with these physical resources will become an ever decreasing fraction of total economic activity. However, these would be activities that are crucial to our survival, such as food and energy. He suggests that this would be ludicrous. For example, if they become effectively free, how do you stop someone from buying it all and raising the price?
What I would be very interested to hear are mainstream rebuttals to the above argument. It could be that mainstream economics just doesn’t consider century long timescales. If so, does that imply that Tom Murphy’s arguments have validity over these longer timescales? Another could be, as the paper suggests, that the finite physical resources will always be associated with a non-negligible fraction of total economic activity. Hence, they essentially act to limit how much overall economic growth is possible. Alternatively, maybe there are ways to have continued economic growth even if those sectors associated with physical resources become a vanishingly small part of the global economy.
Alternatively, if no mainstream economics are willing to discuss the arguments in Tom Murphy’s paper, maybe my commenters can let me know what they think 🙂
Economic activity could be just reselling the same physical object over and over again. For example you buy a painting, and after some time sell it. Each of these acts will add to the GDP. One could imagine engineering producing extremely robust articles which are used for a few years and then sold. This could keep the economy moving even with minimal production.
Yes, but can that give you growth?
As a useful ‘prebuttal’ to this line of thinking I would recommend ‘A Step Farther Out’ by Jerry Pournelle, written partly in response to various publications by the Club of Rome, including the famous book ‘The Limits To Growth.’
Pournelle’s main thesis is that there is only one real constraint–energy, and that if you can solve that, other supposed limits melt away. Obviously he was a big fan of nuclear energy. He makes a cogent case and addresses many, if not all of the concerns raised in The Limits to Growth and its many successors.
I had a lot of back and forth with Michael Tobis on this subject several years ago. I guess my POV would best be characterized by something I wrote to him, that yes, there are limits to our resources, but to speak of them now is like someone trying to dig a hole to China with a spoon and beginning to wonder what he’ll see at the end after five minutes of digging.
Matt Ridley wrote a lot about resource substitution in The Rational Optimist, a far better book than people think, as their critique is influenced by his view on climate change. We have found substitutes in the past for specific resources that started to become scarce–not much of a market anymore for whale oil or guano. There is little reason to think we cannot continue in that vein.
As hinted at above, more and more of our economy is listed as services rather than products. The percentage of the population involved agriculture and resource extraction has dropped from 80% to 2%, while the percentage of income spent on food and extracted resources has dropped dramatically as well. The net result has been an explosion of wealth worldwide.
But if we assume that we’re not going off planet, then either you run into the waste heat problem, or you run out of energy (i.e., there is a limit to how much solar energy could be captured). If the idea is to use nuclear, then waste heat becomes a big problem on a timescale of a few centuries. So, I don’t see how this resolves the issue at all.
Okay, but this doesn’t mean that there won’t be a point in the future (and not too distant) when these resource limits become relevant. So, it is simply that the mainstream position just ignores this?
Yes, but there are still resource limits. Again, assuming we're staying on the planet, we must eventually run out of resources if we assume resource use continues to grow, even if we can find alternatives to some that run out.
Sure, but the point in the article is that this eventually becomes a negligible fraction of economic activity if economic growth continues indefinitely. Is that feasible or would the problem highlighted in the paper come into effect (for example, someone could essentially buy it all and raise the prices)? If there is an argument against this, I would be keen to hear it.
Hi ATTP, and happy Saturday. So, I’m not sure I qualify as mainstream. In addition to Pournelle and Ridley, I could point you to Steven Pinker (Enlightenment Now), Hans Rosling (Factfulness) and, if you managed to overlook the 66 pages he wrote on climate change, Bjorn Lomborg’s The Skeptical Environmentalist.
If food were free, how could someone buy it all? I suppose they could buy the land it was grown on, but I rather think governments might step in and shake their fingers at a land grab for purposes of creating a monopoly.
We could, with existing technology, begin to bring resources from other parts of the solar system, including energy from the sun, water from several moons, iron and several ‘rare earths.’ We could do it today, one of the central theses of A Step Farther Out, written 40 years ago. So I guess I’m not assuming we’re stuck with one planet’s resources, even if I think that we’ve barely tapped the resources on this rock.
I think the rapid population growth of the past century or so has colored the thinking of many and the projections of those who think population will grow in a straight line trend. Population is very likely to peak this century. We are currently engaged in (yet another) energy transition away the fossil fuels that cause so much angst. We are growing more food on less land than is needed to feed the projected peak population of this world.
These are the facts–but citing them gets you labeled as a Cornucopian, which is admittedly nicer than denier. But once the label is affixed it relieves some of the need to actually look at the facts presented.
I don’t think it means exactly free, just such a low fraction of the global economy that someone could buy it all. Yes, governments could step in, but this is this what mainstream economists would suggest as the solution?
Sure, but that’s why I was stressing in my previous response that we were staying on the planet. We could resolve some of this by going inter-planetary, but is that what would be proposed? In other words, are Tom Murphy’s arguments valid in a scenario where we don’t go inter-planetary.
Yes, I agree that there isn’t necessarily a problem with feeding the world’s population and that it is likely to peak. However, this doesn’t really resolve the issue of how the global economy would work if there was continued economic growth, but limits to how much could be associated with physical resources.
Bill left a note:
> [Matt King Coal] briefly dismisses the pandemic threat, citing last year’s false alarm over the H1N1 virus.
A pity this had not turned into a Gates-Ridley bet.
I guess my short answer to your question is that the planet’s experience over the past century shows that we are transitioning to services rather than products at a rapid pace and that services in general consume far less resources than more traditional components of the economy. In developed countries, services comprised 67% of the U.S. economy in 2018. I don’t know is that’s a satisfactory or complete answer to your question, but that’s what I’ve got at the moment.
Yes, I get that, but it doesn’t really answer the question as to what happens if the economic activity that is not associated with resource use ends up being so large that the part associated with resource use becomes essentially negligible. We aren’t there yet, and may not be for some time, but presumably this would become an issue if we assume economic growth has no limits.
The decoupling of our economy might take a while:
As Gordon Summer suggests (1981), we live in a material world.
The thing that tends to strike me about Ridley-esque optimism is how it seems to ignore survivor bias. It may well be that under almost all scenarios there will be happy, wealthy, healthy, communities in the future. That, however, doesn’t mean that many won’t suffer in the process of getting there, or that there aren’t ways of getting there that are preferable than others (for some reasonable definition of preferable).
Hi again, ATTP
Your comment to willard overlooks the fact that the significant reduction in global income inequality has come from the poor getting wealthier, not the wealthier pulling away from the rest of us.
Yes, the rich are getting richer, which is galling to some, but the poor are getting less poor even quicker.
No, I don’t think it does overlook that. I’m simply pointing out that when we look back and highlight how much better things are today that they were, we tend to ignore that we are the ones that have survived the various challenges that have been faced.
Sorry about the double post. First one didn’t go up quickly.
ATTP, there’s no doubt about that. But there’s no avoiding it either. Dead people don’t comment much, although there’s a variety of jokes inherent in that…
You [WOULD be imagining ANY] scenario where we reach a stage where economic growth decouples from the use of physical resources.
The comment that is critique is ALSO laughably limited.
This framing and choice of subject could be imagined as more red flags to be seen regarding how motivated reasoning binds and blinds. How much might living a relatively privileged life growing up in South Africa effect neural pathways that thereby limit what imagined and trusted systemic thinking? How much could it be imagined that an academic career reinforced the wiring?
sNAILmALEnotHAIL …but pace’n myself
life is for learning so all my failures must mean that I’m wicked smart
So, to summarize my point of view:
1. Resources are not an immediate constraint to growth. We have millenia worth of many critical resources and available substitutes for most resources that may run short.
2. The period of exponential growth in resource utilization is rapidly coming to an end for two reasons. First, population will peak. Second, more of our economic activity is devoted to services.
3. As material consumption becomes less relevant, it has both freed and enriched us by allowing us to concentrate on value-add and more enriching activities.
4. Overall it is working–health, lifespan, wealth etc. are all moving in the right direction. It just isn’t universally available yet, which should be our main focus for the next few decades.
Yes, but it is possible to consider doing things to limit suffering. That the future could be better for those living than than it is today, doesn’t mean that the optimal pathway was followed.
1. How can you claim we have a millenia’s worth? Growth of 2.3% per year means an order of magnitude increase per century.
2. Yes, but that still doesn’t address the question of what happens if economic growth does decouple and activities associated with resource use become a vanishingly small part of economic activity.
3. This may be true, but the question is more whether or not this can continue indefinitely than disputing it having happened up till now.
4. Again, this may be true, but still doesn’t mean that more of the same is the optimal trajectory.
I’m it clear how to have a meaningful discussion (particularly on these time scales but also even on much shorter time scales) without considering distribution.
Not all economic growth is equal, and views on the essentialness associated with different levels of growth interacts with distribution.
X amount growth could be associated with a good quality of life by large numbers of people depending on how its distributed. In the other hand, X+(Y*1,000,000,0000) amount of growth could be associated with a good quality of life foie only a tiny fraction of the world’s population.
This is, imo, the missing ingredient in my observations of Roger Jr.’s activism related to GDP growth and climate change. My sense is that it’s very convenient for many libertarian types to argue moralistically about the essentialness of GDP growth while effectively ignoring the critical aspect of distribution (because to do so would require some reconciling with their views about the role of government, and am tendency towards free market fetishism).
Another guy who probably is scorned here, Tim Worstall, writes about how resource availability is calculated.
1. Readily available reserves are usually the headline figure that is reported. It does not include large quantities of resources that we know are there, but are a little more expensive to get to with current technology. This is common for all resources that are extracted commercially. I didn’t write there is a millenium worth of many valuable resources. I wrote millenia.
2. I thought I addressed this. It is happening now and it’s obviously a boon to mankind. Resource extraction is hard work, dangerous, life-shortening where it is not life-threatening. The sooner everyone ditches the plough and jack hammer and lets robots take over, the better.
3. Again, like Moore’s law or improvements in solar power, it doesn’t have to go on forever. If it goes on to about 2080 when population peaks, we will be okay.
4. Most of those trying to offer a different, ‘optimal’ trajectory have focused on taking things off the table, reducing our consumption of things we want to consume. The writers I have championed here would likely say that first, that won’t fly in a world where people can vote. Second, that it ignores the impact of innovation for the past 250 years. Third, that it is based on inaccurate calculations of existing resources and our proven ability to substitute.
I don’t think Tim Worstall has ever been scorned here, or even mentioned.
1. Yes, I realise there are large quantities of resources, but that doesn’t change that there must be a limit if we assume that we don’t go interplanetary. What do you mean by millenia?
2. Yes, it might be happening, but it hasn’t happened. Economic activity associated with resource use is not currently a vanishingly small part of economic activity.
3. Again, you’re making a claim without actually addressing the point.
4. Yes, not everyone who has suggested alternatives have suggested ones that would be optimal. That doesn’t mean that there isn’t an alternative that might be.
There probably isn’t much point in continuing this discussion. You’re not really addressing the points being made in the article. I’m not even trying to argue against what you’re suggesting, but what you’re highlighting isn’t really all that relevant and I’m not sure there’s much point in highlighting the main points again.
I think you’re probably right. Have a nice weekend.
That would be quite unfair to scorn Tim, a true gentleman in the British tradition:
Tom should look at some new maps before re-reading Pournelle’s old work.
Jerry , with whom I did some archaeological field workin Central America, often embraced anecdotal climate history at the expense of following the development of climate modeling— he was big on the MWP.
Though very much a science fiction writer, and as such a great fan of Freeman Dyson, whose eponymous Sphere he and Larry Niven transformed into a more materials efficient Ringworld, ( stay tuned for the TV production) he could be reasoned with on energy economics and geophysics.
But not for long- his fiction continued to traffic in ideas on the order of conquering AGW by burning more and smokier coal to boost the Earth’s albedo.
Willard’s caution regarding Timmy is in my experience well founded.
I would say that the scenario by TM is not possible in an economic sense. There are many good reasons why, in the aggregate, you can’t decouple economic growth PER CAPITA from resource use because economic growth is made up in growth of labour and resources, noting else. So for a short while you can create growth by simply working more, but quite soon you reached limits (which was the case in pre-fossil societies). Any further growth can ONLY be generated by use of natural resources. Things that don’t use any resources are free and don’t generate any growth at all. I realised this is hard for most people to comprehend because they mix up “growth” with well being or because they belive growth is created increase of asset values, but there is no growth in a GDP sense from increased asset prices. I explain this in much detail here: https://gardenearth.blogspot.com/2020/09/is-green-deal-card-shuffle-trick.html
I believe nordhaus projected global economic growth of 700% by 2100 under RCP 8.5 equivalent.
Perhaps some real numbers would help.
Global energy use grew by about 6% per year in the 1960s. The amount of annual increase has steadily grown smaller. At present, it’s increasing at about 2% per year. This is related in part to the rate of population growth, and in part to increased energy efficiency. As population growth slows and energy efficiency increases, the rate of increase in energy use will slow. So the assumption of a constant 2.3% growth is … well … unreasonable. It’s already less than that, and it has decreased by a factor of three in half a century.
Next, we currently use on the order of 160 PWh/year of primary energy. Most, although not all, of that will end up as heat. Assuming it’s all heat, this works out to be about 0.036 watts per square meter of global surface area. By comparison, as a 24/7 average, about 500 watts per square meter of radiation strike the surface.
Let us unreasonably assume, as your author has, that the rate of increase continues at its current rate. This is on the order of 2% per year. As discussed above, this is likely high for future years, but we’ll use it.
This would indicate that in about 250 years, the annual human-added energy will be about 1% of the naturally occurring energy, lost in the noise … be still, my beating heart.
At this point, I fear we’re running into what I might call the “Mark Twain problem”. Twain said:
My own rule of thumb is, any predictions for times that are more than fifty years in the future are nothing but scientific mathturbation … but hey, that’s just me.
But if you chose to dismiss any predictions for times beyond 50 years, then you can’t address the issues highlighted in the paper.
Willard, Willis is right to discount 50 year predictions because the species he holds responsible for the existential threat of sea level change seldom lives beyond 40:
By Willis Eschenbach from Honiara Tuesday, 10 November 2009 08:01 AM
In your article “Solomon Islands Makes Strong Statement on Climate Change” you repeat the incorrect claim that rapidly rising sea levels are threatening low-lying coral atolls.
First, there has been absolutely no increase in the rate of sea level rise. In fact, in the last few years it has slowed down…
The first and most important fact, discovered by none other than Charles Darwin, is that coral atolls essentially “float” on the surface of the sea… The problems in the low-lying atolls are not from rising sea levels.
They are from coral mining and reef destruction… and killing of the parrotfish that produce the sand required to keep the atolls afloat …
Disclaimer: The views and opinions expressed in this letter are those of Willis Eschenbach and do not necessarily reflect the official policy or position of Solomon Times Online.
A round of Climateball always provides a good reason to RTFR:
Click to access IPCC_AR6_WGII_SummaryForPolicymakers.pdf
Also cf. the examples of regional key risks to contemplate more good news from Team GRRRRROWTH!
“This would indicate that in about 250 years, the annual human-added energy will be about 1% of the naturally occurring energy, lost in the noise … be still, my beating heart.”
This seems to me to be making a similar error that skeptics make when they note that anthropogenic CO2 emissions are small compared to natural CO2 emissions. This is true, but anthropogenic emissions are large (about twice as large) as the difference between natural emissions and natural uptake, and in the opposite direction.
While the amount of waste heat is small compared to inbound energy, that doesn’t mean it wouldn’t generate a energy imbalance that could substantially raise planetary temperatures, and not at all “lost in the noise”. The forcing from CO2 is also small compared to the inbound solar flux, but it is causing warming.
1% of 500 Wm^-2 is 5 Wm^-2, which is more than the current forcing from GHGs. So much for “lost in the noise”.
This reminds me of when Willis, fairly early on in the pandemic, broke put his calculator and confidently predicted that no country would ever exceed 0.085% of their population dying from covid. He had that same smug air if superiority then, too.
You’d think that maybe after that experience of getting so far out over his analytical skis, Willis’d be a bit more humble going forward when chuckling to himself ’bout the prescience of his own “scientific mathturbation”…
Heh, just kidding. I think we all know the likelihood of that happening, without needing to take on any complicated computation.
Indeed, we don’t even need to develop some kind of taxonomy of over-confidence.
Willis, dismissively, “in about 250 years, the annual human-added energy will be about 1% of the naturally occurring energy” or approximately the same as the 2xCO2 forcing, which is a bit past the point where you start to get fairly impressive climate disruption, a point which is by now empirical rather than theoretical.
Exponential increase thereafter is unsupportable. That’s exactly the point.
A much more interesting question is whether a “dematerialized” economy is in any important sense really a growth economy. I’m reminded of the old communist era fable wherein the Russians developed a one million ruble dog, and successfully traded it to Poland for two half million ruble cats. A win-win!
> we don’t even need to develop some kind of taxonomy of over-confidence.
The appeal to incredulity is key to understanding the contrarian playbook, however, e.g.:
If you really want a name, the implicit argument it contains could be the Gambler’s fallacy.
@-“current global financial flows for adaptation, including from public and private finance sources, are insufficient for and constrain implementation of adaptation options especially in developing countries (high confidence).”
It is ‘the current global finacial flows’ that put a constraint on resources. If money is irrelevant, and/because energy is free, then you can make, extract or substitute almost anything.
I would hope that humans increase energy production by more than 2.6% per year, although obviously not by burning fossil fuels. By the time we get to the ‘waste’ heat reaching 5W/m2 I would expect the methods of dispensing the heat would have advanced as well and made it innocuous to our climate. Or at least geo-engineering solutions will have been developed to offset it.
Food would seem to be the main limit, although with genetic manipulation and free energy it should be possible to synthesise any amount of carbohydrate. roughage, and protein.
I would hope that economic revolution removes the restraint from population growth, so that it continues to grow, even if at a lesser rate than the 70s peak. 7 billion is a start, but 20-40 billion is a more realistic target.
Beyond that, off Earth development becomes advisable. Space elevators, and a orbital ring would be the next stage.
Ian M Banks ‘The Culture’ is the goal….
It is indeed a problem that one person can try to corner the market in low-priced but essential goods. But that is why monopoly regulation exists. The paper never gets beyond very basic economics, which assumes a working market, so discussing what happens if the market fails is incoherent.
This is the weakest part of the paper, but unfortunately the only bit which is really under dispute; the bulk of the paper is making fairly uncontroversial points about material growth.
I find it hard to even parse what economic argument is actually being made, though, in the next paragraph (starting ‘This result makes little sense in the context of supply and demand’); either this is just badly worded or plain wrong. If the equilibrium price of an essential material good saturates at a finite level, that doesn’t imply anything specific about growth in the non-material sector.
Are you suggesting we could find a way to get rid of the waste heat that didn’t involve radiating it to space?
Gotta say, guys, your response to me actually running the numbers is hilarious. I’ve just given you facts, and in response, you attack me for all kinds of unrelated things I’ve said in the past. Sea level. COVID. Coral atolls. WTF do those have to do with this discussion? They’re just a pathetic attempt to discredit me without dealing with the issues I’ve put forward.
Perhaps you haven’t noticed, but people only do that because they’re losing the debate … but hey, don’t let me interrupt your fun.
Next, ATTP, you say:
You sound like the folks who predicted in 1894 in the Times of London that ““In 50 years, every street in London will be buried under nine feet of manure” because of the horse manure from all the carriages and wagons … and then likely accused anyone who objected to the uncertainty of such long-range predictions of not being able to “address the issues highlighted in the paper”.
PS—The climate has been warming in fits and starts since the Little Ice Age, about 300 years. The first 200 years cannot be from CO2—it hadn’t increased enough.
Until you can show that the last 100 years of the current warming period is somehow different from the first 200 years, until you can explain why it started warming in 1700 instead of continuing to cool or simply stay cold, until you can tell us with certainty why it stopped warming and started cooling in the year 1000, your facile claims about your deep understanding of climate and of the purported huge effect of a very small change in forcing ring very hollow.
Maybe I misunderstood his argument was, but what I thought he was suggesting is that the economic activity associated with resource use will always be finite (i.e., it won’t become vanishingly small as the rest of the economy grows). If so, then it essentially provides what the paper refers to as an anchor. For example, if the economic activity associated with resource use will always be 1%, or bigger, of total economic activity, then the total economic activity will be limited to be 100 times that associated with resource use. I may have not explained that all that well.
Except I’m not making a prediction. I’m trying to understand if the points that someone else made make some sense. A suggestion that we shouldn’t really consider such timescales doesn’t really help to clarify anything.
Would be good if you were clear that you meant “show to my satisfaction” because then we’d at least realise that it isn’t possible to do what you’re requesting.
“Gotta say, guys, your response to me actually running the numbers is hilarious. I’ve just given you facts, and in response, you attack me for all kinds of unrelated things I’ve said in the past. ”
Err, no. I pointed out the error in your initial post on this thread and you have not addressed it.
ATTP: I thought he might be trying to get at something like that too. But this is not a carefully laid out economic argument; he appears to have shown (or just asserted) that the material sector of the economy will have a finite absolute value, not a finite relative value.
So I suspect the economists’ response would be “not even wrong” because the argument isn’t even clear enough to argue against.
Indeed, but I’m not sure why this makes a difference. Isn’t the point that if the non-material part of the economy can keep growing without bounds, then even if the material sector of the economy is finite in absolute terms, it could become infinitesimal in relative terms, which then potentially creates interesting possible problems.
Maybe, but it is the argument that I was quite keen to understand why it might be wrong. Alternatively, are there any potential issues with the material sector of the economy becoming a vanishing small part of overall economic activity and, if not, how would this work?
Isn’t non-material economy bounded by the material economy as materials are required to support the non-material economy (infrastructure, computing, food/clothing/shelter for workers, and the consumers)?
Note this is a question, not a statement, I am no expert on this but the idea of unlimited growth seems unrealistic to me, even for non-material goods/services (I don’t think it would be good for society anyway).
Dikranmarsupial, You are correct. The notion that there can be immaterial economic growth is nonsense. It is not the writing of million books that create growth, but the printing or the downloading of the e-book (and as the e-book is cheaper there is less value added = less growth).
“The value added in services is big and in most developed economies its share of the economic value added is two thirds or more. Services do, however, use more resources than most people believe. The travel industry is a very good examples where air travel, hotels and cruise ships all are much more resource demanding than many industries. Other services are actually a direct part of industrial production, mining, forestry or farming. In most industries big chunks of the work have been outsourced to service contractors. When a job is done within a manufacturing firm it is seen as part of manufacturing, but when the same job is bought in externally (i.e. outsourced) it is classified as services. Finally, a big portion of services is trade and distribution and their link to resource use is quite obvious as it is the huge flow of goods that necessitates all those services. After all, it is only because Walmart, Carrefour or Amazon sell a lot of stuff that they can employ a lot of people.
Personal services, such as household cleaning, hairdressing or massage, constitute a very small share of services. In relation to growth, personal services contributes very little to economic growth and it is quite easy to realize that there will be no growth in an economy made up of personal services.
One can therefore not claim that services in general are less resource demanding than manufacturing. There is also no relationship between a country’s material footprint and the share of services in the GDP. Services constitute 77 percent of the GDP of the USA and 66 percent of the GDP of Sweden, while the material footprint of the American economy per capita is considerably bigger. In China, services doubled their share in the economy from 1970 to 2013 while its resource use per capita increased nine times. ”
I explain this and other aspects relevant for this discussion further here: https://gardenearth.blogspot.com/2020/09/is-green-deal-card-shuffle-trick.html
“Are you suggesting we could find a way to get rid of the waste heat that didn’t involve radiating it to space?”
That would be a good trick, might require FM rather than AM.
Or radiate it to space from a surface around 5m2 positioned in the dark zone of each pole at around 50,0000m.
I am trying to envision a post-scarcity society with unlimited free energy, room temp superconductors, and A.I. well in advance of current human abilities.
I think there are all kinds of problems with what endless GDP growth implies, but mostly these are economics/philosophy questions about value and how to compare different time periods in a sensible way. i.e. to figure out ‘real prices’ by removing inflation, we have to think about a ‘basket of goods’.
The problem is that the goods in the basket can’t stay the same; you can’t buy a new 1970s car or house in 2020. So valuation is inherently rather subjective and the whole concept of ‘how much better off are we than in the 1970s’ is clearly not a cut-and-dried quantitative matter. More cynically, look at who decides whether “growth” has taken place and what their motives are.
“Value” is stuff that exists in our heads, and, like human stupidity, can happily be infinite.
Ben ““Value” is stuff that exists in our heads, and, like human stupidity, can happily be infinite.”
Oddly enough, the first thing that came to mind when “non-material economy” was mentioned was NFTs ;o)
“Oddly enough, the first thing that came to mind when “non-material economy” was mentioned was NFTs ;o)”
It is a good example of con-fusing price with value.
There is no limit to how often the bored a[e digital graphic can be copied, attempting to put a price on it is our current money/scarcity economy trying to incorporate digital data.
What value the bored ape graphic has is debatable… but the value of a musical performance is rather more obvious.
Which is why any attempt to propagate a digital copy is prone to sanctions.
Ah Willis – it’s a silly game you play.
You write a comment dripping with smug superiority, and then when people respond to your smug superiority claim that’s evidence that you’re right and your smug superiority is justified.
If that simple logic – that if people are responding to you being obnoxious means that you must be right – works for you, that’s only because you have a very low standard, I’d guess particularly when it comes to yourself.
That’s exactly what we saw with your massive boner about Covid population fatality. And it’s a pattern. You spend so much time smelling yourself and luxuriating in the aroma, that you forget the parts about uncertainty and humility.
Here, look at this little irrelevancy you left at the end of your last comment, as more bait:
You’re so focused on your sense of superiority that you write a comment as if you’re ‘splainin to people something so basic that they don’t know. How silly. You write a comment which is inherently insulting to other readers and which displays that very same sense of smug superiority just to make sure to feel justified in your smug sense of superiority..
[Playing the ref. – W]
Dear Inspirator! I am a frequent reader of your newsletter. Much appreciated. The most recent one was of particular interest. I wanted to write a comment but have failed to submit my comment. There is obviously something I have to do to be able to provide a comment. Please advise! Best Anders Wijkman
You should simply be able to comment.
Is that really a question mark after the title of “Limits to Growth”? Who on earth, after 50 years of open discussion and validation of the original punch-card LtG study thinks it is a debatable proposition? Would it interest anyone to know that there is a handy 2022 paperback “Limits and Beyond” that contains some extremely pertinent essays on the dimensions of the LtG “issue”? What kind of virus infects a brain that wants so desperately to protect the fossil fuel status quo that it ignores the basic reality that LtG showed the uncomprehending world?
I can’t remember the reference but I’m sure I read an analysis years ago that exponential growth had to end not far in the future due to the finite speed of light: the volume of space and thus the quantity of physical resources available to humanity cannot grow faster than t^3 which is slower than any e^gt eventually. The point being that even if you go beyond the finite limits of our home planet, exponential growth cannot be sustainable for long. Probably Sagan or Asimov or someone like that wrote about this.
Interesting. I’d never thought of that, but it does make sense (well, in the sense that there must be some limit to continued exponential growth).
“Sea level. COVID. Coral atolls. WTF do those have to do with this discussion?
They’re just a pathetic attempt to discredit me without dealing with the issues I’ve put forward.”
Willis, you need a new playbook- larrikins who persistently tout hogwash inevitably discredit themselves
I’ll just chime in again on my way to work–my argument is not that there are no limits, nor that exponential growth would surprise with its rapidity. My argument is a) that current resources are larger than some argue and b) that exponential growth is ending with the arrival of peak population.
Well, (a), doesn’t really seem to be responding to the point here since the suggestion here isn’t that current resources aren’t larger and (b) seems to be acknowledging that maybe there are limits and that there may well be a post-growth phase.
…which gets circular in a hurry, right? If resource consumption slows but is partially replaced by (pure) service growth, then we are debating values, not costs. There is definitely an adjustment involved in this transition. I would argue that the transition began more or less at the end of WWII.
Hi again here are my comments. I failed to insert in the comment box, but I trust you will be able to put my comments where they ought to be:
Thank you for bringing up the “limits perspective”. Tom Murphy´s paper is most interesting. However, his perspective is long term and does not really deal with the challenges we face in the near future. Whether we refer to climate change or ecosystem degradation and biodiversity loss the use of energy and materials are at the core. There is broad agreement that fossil fuels must be phased out. This is happening, albeit far too slow. When it comes to materials, however, there is limited understanding about the role that material use plays, both with regard to climate change and biodiversity loss. The International Resource Panel (IRP) has estimated that the extraction and processing of materials make up 50% of global carbon emissions – reference is made to steel, concrete, aluminum, plastics, textiles etc – and 90% of biodiversity loss (GRO 2019). Material use has been tripling since 1970 and is projected to double again before 2060. Such a development would be devastating for the climate and for biodiversity and the health of ecosystems.
Decoupling resource use from economic growth has been an objective ever since the Bruntland Commission Report in 1987. However, while relative decoupling has been happening in many areas through technology innovation, the gains made have been eaten up by rebound effects and growing economies. Absolute decoupling is nowhere to be seen. In fact, presently demand for materials is growing faster than economic growth globally. The slide below shows what is going on:
Against this background it is difficult to see how continued conventional economic growth – with its focus on production growth – could continue for much longer. Nor do I see how the prevailing growth economy could be transformed to a system where 50-75% of the growth would be decoupled from physical resources. Rather what has to happen – to avoid ecological collapse and/or accelerating climate change – is a reorientation of the economy from a focus on quantitative objectives – i e production growth – to qualitative indicators – i e wellbeing. Quality of life goes far beyond material consumption but for that to be reflected in daily life we have to rethink the way progress in society is measured. Growth in GDP has to be abandoned in favour of wellbeing indicators.
This also means we have to put a limit to the natrural resource use per capita. The material footprint per capita in high-income countries is around 25 tons per annum. In low-income countries the footprint is 2-3 tons. Ultimately a redistribution of resources has to happen between citizens of high- and low-income countries to enable billions of poor people to improve their living-standards without natural reource use transgressing the planetary boundaries.
Best Anders Wijkman, honorary president Club of Rome, member of the International Resource Panel (IRP)
Thanks for the comment. I agree that Tom Murphy’s paper doesn’t deal with the challenges we face in the near term. My understanding is that it’s mostly intended to highlight that there are real limits even if we weren’t facing these immediate issues.
Indeed, people often highlight improvements in energy intensity and carbon intensity but, as you suggest, the goal (in terms of dealing with climate change) is to get emissions to zero, not to simply reduce emissions per GDP, because the latter doesn’t immediately imply that emissions will go to zero. Similarly, with resource use.
Yes, I also find it difficult to see how the global economy can rapidly decouple from resource use so that a huge fraction of it is not associated with the exploitation of physical resources. In some sense, I hope I’m wrong, because I’m not convinced we’re going to transform the global economy any time soon.
Jerry’s frequent collaborator Larry Niven of course had the answer to all that waste heat. Just move your planet(s) into interstellar space and put a small nuclear- powder sun in orbit for light only.
Came in handy later when the Galactic Core exploded.
Of course we’re not quite at that technology level…
> Which gets circular
The economy, yes. The argument, no.
Mr. Wijkman, I think we’re all pleased that you have joined the discussion.
I hold opposing views on this issue. I think redistribution of resources is highly unlikely and that new resources will have to be brought to bear to improve living standards globally. I also think that adequate resources exist to accomplish this and that it can be done sustainably.
As I wrote above, with population set to peak in the medium term, the growth rate in consumption will fall dramatically. As incomes rise, people across the world will be able to shift away from environmentally unfriendly practices such as using firewood as an energy source, etc., etc.
Indeed I would argue that growth is the only way out of our planetary dilemma. It is only when the populations of India, Malaysia, Nigeria, et al achieve a better standard of living that they will be able to afford lifestyles less damaging to the planet.
As for us in the developed world, it is only growth that has permitted the success of companies like Tesla and solar power companies. It is only growth that allows popular support for environmental organizations. It is only growth that permitted the construction of 17 Metro lines in Shanghai.
Growth can be much smarter than it is today and I advocate that our energies be put towards making growth smarter, not making it go away.
Yes, I’m aware of Larry Niven’s book. We could resolve some of these issues if we moved some activities off-world, or something similar. I think the basic idea here is there are limits on a finite planet.
I’ll start at the end, because I think this is key.
Yes, but this involves actually having serious discussions about these issues and thinking about how this might happen, not asserting that it will. Also, that it could happen, doesn’t guarantee that it will. It does sometime seem that some people’s arguments involve saying “we could do X” as if it this implies “we will do X”.
I tend to agree with the first part of this. I also think redistribution is unlikely. I’m less convinced by the second part. It may be the case, but it’s not obvious that it is.
In some sense, yes, but this does seem to ignore the cumulative nature of some of these issues. I’ll focus on climate change, because I understand that best. To have a good chance of keeping warming below, for example, 2C requires limiting how much is emitted in total, not simply getting emissions to ~zero at some point in the future.
So, if growth always initially occurs through the use of fossil fuels and can then be followed by adoption of alternatives, then it seems virtually certain that cumulative emission will exceed those required to meet some of the stated targets. If anything, it’s hard to see how such a scenario wouldn’t lead to cumulative emissions far exceeding the levels required to meet these targets.
You may disagree, but there are enormous risks to such a scenario. Maybe we’ll get lucky and climate sensitivity will turn out to be low and warming will end up – in some sense – be manageable. On the other hand, maybe we’ll be unlucky and the resulting warming will be high (> 3C, for example). This will lead to a climate that humans have never experience before. Again, maybe the impacts will be manageable, but there’s no guarantee of this and it seems much more likely – in my view – that the impacts will be severe.
So, it seems to me that you’re making an argument about the benefits of growth while glossing over the potential impacts of particular scenarios. Since we’ve probably had these kind of discussions before, I’m not sure that the outcome of this one will be any different to those we’ve had before.
There is some truth to what you write. There are risks and you outlined them. However, I don’t think the risks are as dramatic as you apparently do. Again, based on IPCC reports on impacts, it does not seem that we are ‘betting the farm’ on the chance that sensitivity is lower than 3C. I think both warming and sea level rise are manageable even at higher sensitivities. It will be expensive to adapt and we will spend more on mitigation and there will be serious negative impacts on parts of the world that can least afford it.
So I am thoroughly on board with those championing both adaptation and mitigation. But I also have confidence in our ability to innovate and I believe that, far from being a ‘deus ex machina,’ that innovation has repeatedly proven that it deserves a seat at the table in these discussions.
Except, in a sense you are. There is only one farm in this case.
Also, it’s not only betting on climate sensitivity. How much warming there will be depends on climate sensitivity *and* on how much ends up getting emitted. Climate sensitivity doesn’t need to be >3C for the warming to be high and the impacts to be severe. This could also be the outcome if total emissions end up being high enough.
Also, the warming is essentially irreversible on human timescales. We’re irreverisbly changing the climate of the planet. I think this is a really bad idea even if we can’t stop doing so immediately. Maybe we should try to stop doing so as soon as we can. I realise that there are lots of factors to consider and that there are some who have benefitted far less from fossil fuel use than others and that reducing emissions in a way that is fair isn’t a trivial thing to decide. Maybe the solution is to seriously discuss how to do so rather than suggesting that we just largely carry on as we have, hoping that climate sensitivity turns out to be low enough that the accompanying growth will allow societies to deal with the resulting impacts.
I hope it doesn’t surprise you that I basically agree with you. Perhaps on another post we could begin such a discussion. Call it Limits to How We Grow.
As Roger Pielke Jr. would happily tell us, we are growing smarter in how we use energy. As airlines brag, new engines are far more efficient than those being built just 20 years ago.
How can we make those a baseline for further achievements rather than headline exceptions? My first and most pessimistic thought is that it will start with education and will take time that seems more precious every year.
I think you’re forgetting Roger’s Iron Law!
The melting temperature of iron is 1,538 C. That being the average temperature of blog posts discussing Roger…
Speaking of betting the farm:
Choosing a betting strategy under 3C would give us less than 50% odds to be right, according to what we know. Unless we can cut our loss on each bet, this is the surest way to lose. Even if you sometimes win big, you will get wiped out quite fast.
If your win ratio is above 50%, you will still lose in the long run (ruin is a certainty) but at least you got a fighting chance before that. The trick is to win more than you risk. That means you need to protect yourself against black swan events like on 1913-08-18 in Monte Carlo where the roulette ball fell on black 26 times in a row.
The best way not to protect yourself against a black swan is to live your betting life as if it would never happen and bet big each time. The safest bet is, as always, not to bet at all. More so that we are taking a collective bet with folks who have little experience in games of chance. The investment manager never gambles for long.
There are interesting potential issues about what happens when the economy is dependent on something ultimately limited by physics like energy, but we have already been subject to a very hard limit on land usage (also economically crucial) for hundreds of years and that doesn’t seem to have stopped “growth”. Actually land value has stayed pretty constant as a share of national wealth, so the absolute price of land has grown exponentially: economic value is not inherent to an object, but depends on what opportunities it affords.
Doesn’t rule out the sci-fi stuff about ultimate energy limits, but perhaps more informative about the next couple of centuries. “In the long term we are all dead”: in this case, just severely impacted by climate change well before ultimate energy constraints kick in.
“The melting temperature of iron is 1,538 C. That being the average temperature of blog posts discussing Roger…”
no, that is Roger’s irony law ;o)
Maybe this is me illustrating my economic naivety, but doesn’t this imply an effective limit? If something remains a constant share of wealth (national or global) and there is a limit to what that thing can provide, then even if the “value” of that thing is rising, if its share of the total remains roughly constant, then the total will always be fixed relative to that thing.
Of course, there may be some period where that “thing” can provide additional opportunities, but unless we think that there is no limit to what that “thing” can provide, doesn’t it eventually have to – in some sense – anchor the total? I may not have expressed this all that clearly.
Potential limits are everywhere:
We may not have the financial means to mine it all, so we should be OK to get it from Mars instead.
“Decoupling resource use from economic growth has been an objective ever since the Bruntland Commission Report in 1987.”
In invoking the Bruntland report, Anders throws a blazing overhand ClimateBall by neglecting mention of its editorial perspective.
Prefiguring todays New Green Deal, the Commission drew heavily on the views of Vice President Bruntland and several other Socialist International Presidium members.
If the growth rate in reserves these figures imply is correct:
Then the whole Australian continent will soon be made of pure lithium. Not sure how that affects the Mad Max timeline.
“The total global reserves are estimated at 14 million tons. This corresponds to 165 times the production volume in 2018…. We may not have the financial means to mine it all, so we should be OK to get it from Mars instead.”
We may not need to go so far. There are over 150 Billion tons of lithium in sea water.
Although at very low concentrations. But that just makes it a more difficult extraction process rather than having to fly out of two gravity wells. Financial means are a socially adjustable factor.
I gather the supply of Uranium for fission reactors will start running out in a century or so. I suspect at that point fusion reactors may still be 40 years away ;o)
“I suspect at that point fusion reactors may still be 40 years away ;o)”
They will be twenty years away by then. The time till fusion power is perfected is always half what it was 100 years ago…
But Uranium is not in danger of running out. Quite apart from fast breeder reactors, there is approximately 4 Billion tons in seawater.
Mining for metals is too dirty. Open your mobile phone instead, fire up your
gamingtrading app, and invest in rare metals ETFs. Watch them become ten, a hundred baggers. With that money you buy all the mobile phones in the world, and give one to each of us. If we all invest in ETFs the same way, GDPs all around the world accelerate.
The GRRRRROWTH cycle then becomes complete. Carnot would be proud.
“The time till fusion power is perfected is always half what it was 100 years ago…
So, what you are saying is that Fusion Power Real Soon Now has a half-life of about 100 years?
These are great questions to wrestle with and I am not posting to provide any special insight or to represent “mainstream economics” on this issue. That being said, I did notice the economist Noah Smith (who is very active on twitter—you may have encountered his content before) reposted this post (which is itself a repost) when Dr.Murphy published the paper. You might find it interesting: https://noahpinion.substack.com/p/murphys-law-or-follies-of-a-finite
Thanks, I did read that at the time but had forgotten.
It does seem to suggest that one issue is that when economics talk about continued economic growth they don’t actually mean forever, or even for a very long time, they just mean for some number of future decades. This is fine and actually makes sense. However, it still doesn’t change that there will still probably be some point in the future when growth reaches some limits (again, assuming we’re not going off planet). It may not be on a timescale typically considered by economists, but the constrains still probably exist. Also, if growth is exponential, then this timescale is not all that far into the future.
I also wasn’t all that convinced by the “someone could buy up all the air” argument, because we don’t currently have to do anything to utilise air. Energy, on the other hand, does require human developed infrastructure and is something we have to buy. It may well be that even if it did become arbitrarily cheap it wouldn’t create the kind of problems that Murphy suggests, but I don’t think “someone could buy up all the air” is an effective counter-argument.
I thought the end of Smith’s piece was interesting because it says “What he calls “development” (i.e. what economists call “growth”) will also probably halt. Why? Because we will eventually satisfy ourselves. …. So as soon as humans completely satisfy ourselves, economic growth will stop.” which sounds like he is suggesting that we will reach some kind of post-growth phase and makes me think that some of the issue here is that we’re just talking past each other.
Of course, he’s suggesting that this will happen because we’ve become satisfied, while others suggests it will happen because we’ve reach some kind of planetary limit. I kind of hope the economists are right, but I’m somewhat concerned that the latter will happen before the former.
> However, these would be activities that are crucial to our survival, such as food and energy. He suggests that this would be ludicrous. For example, if they become effectively free, how do you stop someone from buying it all and raising the price?
You say you’d be interested to hear from the mainstream, but predicatably enough you have no mainstream commentators. See-also On getting out more – as true today as it has always been.
On your specific point, consider salt. Once expensive, now dirt cheap. Evil Elon Musk – and many others – could afford to buy up all the salt producers. Is this ludicrous? No, of course not. If he did, other sources would come onstream (slightly regrettably for this analogy, you can’t buy all the oceans). But even if there were no other sources, you couldn’t buy all the salt, even if you could afford it at its present price. Because the act of trying to buy it all would push up the prices of the bits you didn’t yet own. That someone can get arguments like “Under such circumstances, one person could afford to buy them all and then raise prices.” into Nature Physics is as embarrassing for NP as the Sokal hoax was for Social Text.
I suspect that eventually you’ll end up comparing everyone else to WUWT. Thanks for clearing things up, though.
ATTP, I have no idea what “comparing everyone else to WUWT” means. I also have no clue what you think WMC has “cleared up”.
Our Stoatness cleared up that he’s a tosser, and that on can find Freedom Fighters anywhere, from the Californian beaches to the Canary Wharf.
Also, Noah might be forgetting something when he says:
There are lots of years between 20 years and 400 years. At least one economist is interested by these years:
To make a more a serious point, it may well be that the economic arguments in Murphy’s paper are so ill-posed that they’re not even worth addressing, or maybe can’t actually be addressed. There are certainly examples in physics/climate where it’s hard to address some claim because it doesn’t even really make sense. I can also see that people can simply get frustrated with trying to address things that are nonsensical.
However, I do think that even if there are claims in physics/climate that are ill-posed there have at least been attempts (numerous) to address the basic issues. Or, maybe more clearly, climate scientists have put a lot of effort into providing numerous resources that provide clear explanations of the basics.
It certainly seems as though the whole issue of growth versus degrowth, or whether or not there are limits, is a debate that mostly involves people largely dismissing those they disagree with. Maybe I’m wrong, of course, and there are numerous reliable – and accessible – resources. Maybe the tone of the whole discussion provides some kind of information, but I’m not quite sure what.
I wonder if anyone has looked at the sum biomass of the Earth and looked to see if it is more or less constant? i would think it may have declined somewhat as ‘natural’ habitats will hae more biomass than monocultures. I know Asimov made the calculation that if the biomass was constant, with a doubling rate of 47 years we’d replace the entire biomass of the Earth with people in about 600 years and replace the mass of the Universe with humans n a few thousand years (he was showing the power of exponential growth). Obviously this is not possible but it does set a limit to growth.
Still relevant after all these years.
“Arithmetic Population and Energy”
Dr. Albert A. Bartlett
Dept. of Physics
University of Colorado Boulder
“Mining for metals is too dirty. Open your mobile phone instead, fire up your gaming trading app, and invest in rare metals ETFs. Watch them become ten, a hundred baggers… If we all invest in ETFs the same way, GDPs all around the world accelerate.
The GRRRRROWTH cycle then becomes complete. Carnot would be proud.”
As Willis has done his darnedest to kite the price of Jesuit Bark derivatives, and Jo Nova’a hubby’s Global Kooling funds , might he reveal the price at which he went long palladium and rhodium, or shorted chloroquine and de-worming stocks?
This article by Francesco Gonella May have some relevance to this discussion.
Economics and Science in higher education: the need for a common language.
Click to access e3sconf_sf2013_02004.pdf
Thanks. I’ll probably have to read that again because it has some rather awkward phrasing, but I do wonder if part of the issue is people talking past each other, or some doing things that others regard as rather nonsensical. Maybe economics really only does consider time periods of a few decades, while physicists do feel more comfortable considering longer timescales.
It may well be that trying to make economic predictions over long timescale is just silly, but that doesn’t change what would happen if energy use did continue to grow exponentially. So, even if trying to make a prediction doesn’t make sense, it’s still not clear why one shouldn’t consider “what if” type of scenarios.
I was reading through the comments on Tom Murphy’s post about an economist meeting a physicist and thought this was a good comment. I was confused about this point, though,
If your constant daily supply meets your current needs and then you decide to rebuild your house, then surely you either need more energy, or to use much less of the energy for your other daily needs. So, it’s not clear that this really is illustrating how you can increase your utility (becoming better off) without increasing resource use.
“Or think about this example: you have a house that doesn’t depreciate…”
Isn’t this thought experiment a bit like saying “if you have a completely frictionless bearing you can make a perpetual motion machine”?
Doesn’t this require the energy to be supplied without cost? If that is the case it seems odd that the energy supplier will provide something that can be converted into something of value without charging for it?
I hope I am not being to WUWT there (unlike Willis I am capable of clicking on a link). I suspect part of the issue is an impedance mismatch between the transmitter and receiver that is too large for efficient transfer. Ideally both transmitter and receiver will be willing to adapt themselves for more efficient communications. However, that requires both parties to want to communicate. I suspect this blog is more receptive to mainstream economics that WUWT is to the science of the climate (they still cherry pick short term trends and argue that the rise in atmospheric CO2 is natural, the problems with both of which have been repeatedly explained to them). If you don’t understand something, that probably won’t change without discussion.
But how to feed everyone ATTP, once your planet is in interstellar space? OK one solution is to bring along some other planets and use them as agricultural worlds, with their nuclear-powered Suns emitting on photosynthesis-friendly wavelengths.
Or you could graze your way across the Galaxy (there’s that Core explosion to escape from, remember?). Just import a bit of Fred Pohl tech: a CHON Machine or Oort Cloud Processor.
That presumes every system has an Oort cloud or at least lots of comets and carbonaceous chondrites (presumably a smart machine would not have to pick up its water and organics from the same body, but would have some temporary storage). Perhaps there’s an astrophysicist I could ask 😉 .
You might also fish molecular clouds, like a baleen whale. Presumably the machine doesn’t care where the raw materials come from and you just need a different collection system. Some sort of ramscoop (back to Niven).
No much help in the short-to-medium term though 😦 .
To return obliquely on-topic, imaginary future technology enabling endless growth (no need for the imaginer to specify it, of course 😉 ). A Ringworld of course requires scrith, a synthetic material whose tensile strength is comparable to the strong nuclear force (although that may be overkill).
An alternative posited in the Odyssey One space-opera series is an orbiting series of flat panels, held together by guys, with artificial gravity to keep the air in and motors to keep things in place.
That’s where the bad guys (spoiler alert) kept their farm of semi-organic, semi-sentient von Neumann Machines when they weren’t out gobbling up the planets of their enemies. They hadn’t built them – just found them and reprogrammed them. Oddly enough neither side in that earlier forgotten war was around to tell the tale. That should have been a clue that this was a bad idea.
Not all technologies are benign, and some have unforeseen (but perhaps should-have-been-foreseeable) consequences. The farm bought the farm, of course.
ATTP: If people just always rebuild their houses every 50 years on average that doesn’t imply any ‘increase in energy use’. Sure, it uses energy, but the (nationally-averaged) rate doesn’t change with time. You just set aside part of your power allocation to rebuild your house occasionally.
Perhaps the issue is that it is the norm in the UK to essentially never rebuild houses, but in US/Aus ‘rebuild every 50 years’ is standard operating procedure. Replace ‘rebuild’ with ‘renovate’ if that helps.
(I think this comment is neatly addressing the question of how the same energy use can be used to enable ever-increasing ‘value’ as houses indeed seem to endlessly grow in value despite bricks not getting any harder to make)
Houses are a good example because so much of real estate value is about intangible stuff that has nothing to do with the physical object like ‘being near a good school’. The goodness of the school can increase with time for reasons that have nothing to do with energy use.
DM: I don’t think the lack of depreciation of the house is central to the argument, it just simplifies the accounting.
Indeed, that’s a fair point. However, if each rebuild costs (on average) uses the same amount of energy, does this increase utility (as the original commenter implied) or simply sustain it? If it’s more of an upgrade, than a renovation, it might, but if it’s mostly renovation, then it might not.
Ben thanks for the clarification, but I think the energy being free is more of an issue. I think it comes back to my previous point that the non-material economy requires a material economy to support it (both in production and for the consumers). So if the material economy is bounded, then so is the non-material economy.
The rest of the comment was more interesting, especially that GDP is only a proxy for the important definition of growth (happiness and well being). It seems to me to be a rather bad proxy as growing economic inequality means that overall happiness and well-being may not be increasing, just being concentrated.
As a UK academic [~20% real terms pay cut over the last 12 years], I was quite amused by this bit:
;o) Of course it is because I don’t own the IP I create.
Nathan, didn’t E.O. Wilson say that ants were the winners because their global biomass was higher than that of any other animal?
More generally, I should think it would depend on the type of bio.
More growth is not always better. δ13C evidence that high primary productivity delayed recovery from end-Permian mass extinction. I would imagine that a fetid soup of sulphate-reducing bacteria supports a larger biomass for a given energy input than a system including higher trophic levels like animals. And of course those dead zones in the Gulf aren’t actually dead. The bacteria are lovin’ it.
BTW history has a way of repeating itself. Rapid and sustained environmental responses to global warming: the Paleocene–Eocene Thermal Maximum in the eastern North Sea. The presence of sulphur bound isorenieratane, a diagenetic product of green sulphur bacteria, shows that even the photic zone was sulphidic and euxinic. During the PETM, “pea-souper” referred to the seawater, not just to fog. Of course I knew that already because I’ve seen a lot of Sele Shale core. Not only organic-rich and micro-layered (so no benthic burrowers or crawlers), but no pelagic fossils bigger than a dinoflagellate (they can both photosynthesise and predate, so I expect they were fine-dining on bacteria and loving it). I bet the North Sea biomass was larger in the Sele than in the preceding, oxic Lista, despite that looking much more productive to a multicellular observer due to the presence of burrowers, crawlers and swimmers.
Please, let’s not make it a hat-trick, OK?
Easy to feed people in interstellar space, Dave.
soylent.com. If they had a green product, I would feel compelled to try it!
Should have known…
That seems a bit circular Willard. How do you make it lossless? I was thinking I might speculate about the Second Law in my trophic-level post above (you can probably use it to prove that each trophic level has less usable energy than the one below, even if the total energy is constant).
But perhaps you could pull off the card trick with Maxwell’s Demon dealing the deck.
On a more semi-serious note, here could be one source of confusion. In the follow-up to the comment AT underlined, Roger rhetorically asks:
Here would be a reason:
Utility theory has one job: to order our decisions according to our preferences. If it cannot do that with (more or less) well-ordered values, it becomes useless. It would be sad if utility theory had no utility. As a side note, never misunderestimate an Aussie philosopher on utilitarian matters.
If you prefer a more tangible argument, try to play Monopoly with infinite money. At some point each property gets infinite value. We might try order infinities, but the jury is still out as to how we should proceed. I would not want to play the Bank.
These idealizations are usually set aside. Assuming infinity should be OK as long as we don’t mess with it. It is just a horizon. There is no point in asking what happens when we go beyond the horizon. The old economist can always reply: you are very clever, young physicist, very clever: it’s utility all the way down, and I can assign value to any four things however I please before breakfast.
To be able to assign value works subjectively since a long while, the objective account leading to a well-known paradox. For some reason the English entry does not mention that, but the French one does. (The English entry also does not mention Julien Clerc’s album *Utile*. Where is the world going?) Isn’t there still some kind of sleight of hand by switching from objective to subjective utility? Only if we presume that utility increases infinitely without ever slowing down. That would be one way to have one’s cake and eat it forever. For that reason economists invented the law of marginal utility. The rich socialite who buys a second 10K champagne bottle to empty in the hotel bathtub while he drinks down the first in front of the Instafans feels less need to buy a 67th. At some point wasting money becomes too uneconomical.
I don’t think it counters the point the physicist is trying to make, but at least this picture bypasses XKCD 793. After all, that profession has little else going for it than to elaborate that kind of abstract contraption. We should celebrate the fact that it could come up with a wordology that is more cryptic than contemporary philosophy.
want to share a quote from Laurie Anderson that seems on topic: if you think technology is going to solve your problems, you don’t understand your problems. Or technology.
Thanks for the reminder, Mike:
The bit about the Egyptians burning their mummies for their steam trains might also appease Dave’s preoccupation with circularity.
ATTP: I think that to the economist, the price (that someone was willing to pay) and the utility are the same number. So the fact that the prices of houses have increased by a huge factors (in real terms) is slam-dunk evidence that their utility has gone up (through renovation or otherwise).
Of course, this seems like nonsense in terms of the usual meaning of words like utility or value (and Willard is making points along this line). Houses 100 years ago kept rain off your head just the same as one built last year. Problem is, you want to play with concepts like GDP, it is the economists making the rules.
I think that the problem is that people take economics too seriously but not literally enough.
> people take economics too seriously but not literally enough.
Words of wisdom, Ben. Words of wisdom. This would be my takeway, along with this other one:
I’m sure this is infinitely better than Soylent Green! Sorry, Dikran.
Soya lethicin: don’t try to bake a Hostess Ding Dong without it .
Elsewhere in the world of cornucopian economics, some clever chemists claim to have paid homage to Julian Simon by extracting lithium from sea water at a cost competitive with mining or brining the stuff, but they should be careful what they wish for :
It seems to me that many comments here confuse increased utility or subjective value with “growth”. They are very different concepts with no determined relation. Computer today are x times better than 30 years ago, but the contribution to the economy (GDP) of one computer is much less.
Likewise “efficiency” is not creating growth as such, it is the opposite, if you make something with less resources (=more efficient) its contribution to the GDP is less not more.
There are other reasons for why efficiency, despite this, still will drive growth, which I explain in the link I posted above.
July 26, 2022 at 3:58 pm
“Utility theory has one job: to order our decisions according to our preferences.”
When Willard next visits the EU, he should drop in on the Quai d’Orsay to see if it still has a wall map dividing a former colony into three districts
“Tchad Utile, Tchad Inutile,” and “Tchad Futile.”
I’m certainly getting rather confused myself 🙂
I can see how the increase in value of houses is an illustration of increased utility. However, the scenario I was thinking of was the one in that comment where the idea is that we’ve reached some limit of how much energy can be utilised (assuming we don’t go off planet). The idea seemed to be that we could use some of that energy to rebuild houses so that their value went up. However, we’re still in a scenario where we can’t use more energy overall than the planetary limit. So, how do we continually increase the value of houses, for example, if there is now a limit to how much energy can be utilised overall. Maybe there’s an epoch where this may well work, but won’t there be some kind of limit where there’s only so much that can be done with the available energy?
I guess there could still be demand that drives the value up, but then we maybe get into the scenario that I think Joshua mentioned earlier about whether or not this kind of metric ends up being a good indicator of overall well-being.
The relationship between growth and value is made plain in the dialog between the physicist and the economist:
Since a growth rate represents a change in value of all the goods and services produced, how we estimate that value matters quite a bit. And one point I tried to make earlier is this one: no, there’s no objective definition of value that works. Because, paradoxes. To an economist, what you value is what you value, and that’s it.
Grrooowth… seems to be an economic concept tied into planned obsolescence.
Growth in the human population requires increasing amounts of food and an increase in housing.
both can be achieved in sustainable ways. Food can be grown on hydroponic substrates or poor land with increased production.
Housing cab built of wood for sustainability or bricks, stone or concrete for durability.
Many people in Europe live in houses over 100 years old which have only been renovated to improve the energy consumption by fitting insulation, double glazing and central heating. This is currently undergoing a further improvement with the installation of solar panels and heat engines fro more efficient heating. The increased use of digital information is further reducing the energy footprint of the occupants.
How much energy do we actually need to expend on the Earth for 10 Billion to live in comfort ?
If we require more energy than this why could we not acquire it from solar collectors in orbit and expend it in space, eventually surrounding the sun to collect its total output, or at least as much as required. This would not need to be a complete sphere, just orbiting constructions.
I get the strong impression that many of the limits to Ggrrooowth come from economic considerations. That it is not financially viable to do X or Y because there is no profit in it.
But money is a measure of the poverty of a society. In a post-scarcity world the price of anything becomes zero, you just need the time and desire to obtain it.
Eventually such things as HeeChee CHON machines and scrith ringworlds may become desirable, but we can go a long way with AM before such FM becomes needed.
Did you get the memo? Neom is place to be.
In the U.K. it seems that the utility of houses that is driving increases in their value is the increase in their value, i.e. they are an investment. It isn’t clear to me that this isn’t creating a bubble because there is no intrinsic increase in utility – houses are increasing in value even without value added by renovation. I wouldn’t have thought that is sustainable as rents will increase to a point where rental housing is no longer affordable, or the owners will not get enough rent for it to be profitable after the mortgage is paid. It isn’t clear to me that the financial value of housing is a good match for its intrinsic utility. I have both feet firmly on the housing ladder, so technically house price rise is good for me, but only if I ignore the needs of the society I live in.
caveat: May contained uninformed opinion – always grateful for informed opinions on my uninformed opinions.
Presumably, at some level the increase in house prices is influenced by demand. However, when you look at income distributions in the UK and at house prices, there does seem to be some kind of disconnect suggesting that house prices can’t continue to rise. Somehow, they seem to do so, though.
Willard, increased value doesn’t equal growth in any GDP sense. This is most apparent for asset values which do not affect the GDP at all. The only addition to the GDP from sales of houses, bonds or stocks is the fee from the middlemen. And the addition to the GDP when someone sells his flat is only if the new owner puts in a new kitchen etc. I have tried to explain this in several comments above, but apparently my skills are not sufficient to make this clear enough.
TTP, house prices are not affecting the GDP, only the production of new houses or refurbishing of old ones. And real estate agents fees.
I can see that being true until the value is realised, but presumably it often is. So, in some sense, increasing house values must have some relationship with increasing GDP. Yes, there can be situations where it’s a bubble that eventually collapses, but it still seems that the higher values will impact GDP even if it doesn’t persist.
ATTP “Presumably, at some level the increase in house prices is influenced by demand.” yes, however if the demand is driven by investment opportunities for the already wealthy, rather than somewhere to live, then value still increases, at least while the rental sector can carry on going. It may be that these increases in value will be subsidized by the tax payers through housing benefits? Landlords have a reasonable case for charging rates according the the costs of the mortgages they have taken on the buildings and we all need to live somewhere, so those who can’t afford rents must be given benefits so they can be housed (if they are in full time employment, it is more an indication they are not getting a fair wage for their labour – IMHO). I don’t know how this works but the prices do seem to rise and rise (I suspect interest rates are part of it?).
Gunnar it may not affect GDP, but it does affect actual economic utility (in the sense of happiness and well-being – discussed in one of the articles that has been linked to).
I find the way this debate are framed unhelpful: “clearly because energy is limited, economists are wrong about infinite growth”. I think it mostly just ends up with a bunch of physicists looking naiive about economics, and economists uninterested in engaging. Economists have had arguments for centuries with people who think something or another will stymie growth, and have empirically been on the winning side to date. So their response is just “oh no, not this again”, not “hmm, we never thought of that”.
I think TM could have responded more constructively to criticism over the last decade and should have been able to nail the basic economics theory. His use of economics terminology gives a strong impression that he isn’t up to speed. So if the two sides are talking past each other it is to a large extent his fault; his argument appeals to the self-importance of physicists, and certainly he is being rewarded by being published in prominent places.
Possibly his argument might be salvageable, but why is it interesting/helpful? This is not the problem we are currently facing, and it seems to have largely been embraced by catastrophists in the vein of the “Peak X” people. If the idea is for economics to pay more attention to physical limitations, then there seem to be more productive lines of dialogue, with actually-existing cross-field collaboration going on. i.e. IAMs are horrible in various ways, but at least there is discussion and not just dismissal.
“How do we improve human welfare despite hard material limitations?” is a better start to a discussion.
“I find the way this debate are framed unhelpful: “clearly because energy is limited, economists are wrong about infinite growth”. I think it mostly just ends up with a bunch of physicists looking naiive about economics, and economists uninterested in engaging.”
perhaps the problem is economists talking about infinite growth, when that cannot be what they actually mean. Hyperbole is a good way of creating an impedance mismatch when talking to scientists.
Economists have had arguments for centuries with people who think something or another will stymie growth, and have empirically been on the winning side to date.
The thing that seems to stymie growth on a fairly regular basis is financial institutions trying to maximise their growth and causing a financial crash. ;o)
It seems to me a reasonable argument that the non-material economy is supported by the material economy, so if the latter has limits, so does the former. I put that argument up-thread, and if someone explained to me why it isn’t valid, I appear to have missed it.
Indeed. I have been trying to avoid framing it quite that way, but maybe haven’t quite succeeded. I do recognise that there are issues, for example, that climate scientists have addressed time and time again and are just tired of continually doing so. It may be that this is a similar situation. I also realise that i’m certainly naive about economics.
This may be a fair point.
You’re probably right that there are more constructive ways to engage. I also realise that the scenario presented in TM’s paper is essentially an absurd scenario (we’re not going to increase energy use by a factor of 10 every century for the next few centuries). I think it’s intentionally absurd in order to make a point, but maybe it’s so absurd that economics think that the point is essentially irrelevant.
In a sense, physicists are quite comfortable with such thought experiments, but maybe they come across as nonsensical to others.
True, there is this tendency. I would argue that there is also a tendency for others to embrace arguments about their being no limits, or that we will somehow overcome all obstacles. So, this does seem to split down ideological lines. Probably difficult to avoid.
I agree. This would be a much better discussion.
“It seems to me a reasonable argument that the non-material economy is supported by the material economy, so if the latter has limits, so does the former. ”
Once upon a time if you wanted to see a film or hear a musical performance you had to travel to a venue, or buy a physical object that also required a special device to replay it.
Now, almost any film, drama, or documentary is available as a digital download. The same with a musical performance.
How are these limited by a material ‘economy’ once the internet and home computer is widespread ?
Just to illustrate the point about embracing convenient arguments, this article by Michael Liebreich about the Secret of Eternal Growth seemed to be quite popular amongst some groups. However, it literally said:
“Now, almost any film, drama, or documentary is available as a digital download. The same with a musical performance.
How are these limited by a material ‘economy’ once the internet and home computer is widespread ?”
The digital download needs something to play it on, these get replaced on a fairly regular basis (and designed with that intention). The internet is not maintenance/upgrade free either you need servers to serve the downloads/streaming. As I said some of the support for the non-material economy is to support the customer (this includes all of the customers needs that must be met before they can buy the content).
Making films requires a *lot* of infrastructure, just look at the length of the credit crawl at the end. The material economy needs to supply the material needs of all those people.
dikranmarsupial, the drain on resources you site are there to serve the first customer. Serving the second is considerably less taxing. Hence the success of Microsoft.
Another way of looking at this is to consider the human capacity for making use of energy and material resources. The universe is virtually limitless, but the resources become harder to access. Our track record of wise use of resources is not re-assuring, but to date a new resource to exploit has bailed us out. I’d be more optimistic, if we could find an example of a species that maintained unlimited long term growth.
Tom Fuller – “dikranmarsupial, the drain on resources you site are there to serve the first customer. Serving the second is considerably less taxing.”
But growth depends on all of your customers.
“Hence the success of Microsoft.”
This isn’t actually true. Microsoft would not have produced anything if it were just for one sale. Mass sales drive most of their product development.
I’m not really arguing that infinite economic growth is possible, just that the arguments against it are poor/have massive holes in them. Asserting that the immaterial economy must be bounded above by the material economy times some constant is not an argument, it is just asserting the thing under dispute.
i.e., please do dunk on the economists, but I don’t think this is a productive line of attack. Maybe concentrate on the ones who are saying stuff out of line with their peers.
Also, I’m more interested in the “medium-term”: societies like the UK (yes, even including imported goods) have substantially reduced primary energy consumption per capita over the last couple of decades. Maybe that is possible more broadly once less well-off nations reach a similar level of development? At least to allow human welfare to continue to improve for a couple of centuries. As long as we can avoid killing ourselves off by choking on our own waste, which seems to be a more pressing problem than the lack of resources to turn into waste.
“Asserting that the immaterial economy must be bounded above by the material economy times some constant is not an argument, it is just asserting the thing under dispute.”
For there to be a dispute, it would require that the non-material economy has no scaling relation whatsoever with the material economy. I can’t see how that can be true, since the non-material economy is built on material things (like people, including the customers) which have material requirements. If there is a dispute there, I’m yet to see a basis for it.
“Also, I’m more interested in the “medium-term”
me too, “infinite growith” seems a bit like asymptotics in statistics. Great for giving lectures, but of very limited practical utility (I only worry about them when I analyse an infinite dataset ;o)
I’d be more interested in theories of how to produce stable economic growth without boom-bust cycles than theories of how we can rely on growth indefinitely (there will come a point where it becomes irrelevant, c.f. Star Trek ;o) Personally, I think it is Gibbs phenomenon and what will inevitably happen if you go for overly rapid growth.
Gibbs phenomenon? But a square wave can be broken down into an infinite supply of valuable sine waves.
This is a fair point. On the other hand I haven’t heard, or haven’t understood, any counter arguments. I can’t quite tell if there are strong arguments against this, or even strong arguments indicating that even if there are constraints they won’t apply any time soon. I guess one of the concerns people have is that if this isn’t being considered in some robust way, how will we know? We won’t really know if it’s a constraint we might reach sometime soon, if it’s something that we might have to worry about but isn’t relevant now, or if it’s something that really doesn’t apply under any circumstances.
TTP, estate prices, and other assets are BY DEFINITION not in the GDP and thus also not changes in them. Basically they are only transfer of money between economic agents with no value addition in an economic sense. Inflation is also not influencing the GDP. https://www.economicsonline.co.uk/managing_the_economy/national_income.html/
Ben – in my earlier comments and the link provided I have given solid arguments for why an immaterial economy that is decoupled from the material economy doesn’t exist in a GDP sense and can’t exist as the GDP is made up of the use of labor (human energy) and resources.
Ben “Asserting that the immaterial economy must be bounded above by the material economy times some constant is not an argument, it is just asserting the thing under dispute. “
It is an argument though if you provide an explanation for why the immaterial economy is bounded by above due to a bound on the material economy, and such explanations were given.
Indeed Chubbs. Rare earths being a case in point. They’re not particularly rare, just rarely concentrated to a degree where they can be cheaply and economically mined and processed.
They’re a tad under a ppm in chondrites (and presumably in the Bulk Earth – at least that’s what we assume when we chondrite-normalise our geological samples). But concentrated in the crust, and shales typically have about 150 times the chondrite value. A quick glance at my PhD thesis tells me my top dog scores about 100 for the heavies and 300 for the lights. Call it 100ppm per element as a slightly high round number, or 1‰ for the bag. Oil shales are a good place to look – the minerals they like get concentrated in those. Might be a nice sideline if you’re retorting them. Of course what you really want are rocks rich in their actual ores like monazite, but high concentrations of that sort of thing are like hen’s teeth.
Annual world production is on the order of 250k tonnes, so if I wanted to supply 1% of the world market I’d need to process about 2.5 million tonnes or a million cubic metres of rock annually. That’s not much. Assume a 50m high face and a 500m wide working front (shales are abundant, no problem finding a place to do that). I’d only need to cut back 50m per year (allowing for some wastage and non-shale). Easy-peasy. Now I just have to extract the rare earths.
The hard part is making a profit, when the other guy has access to hen’s teeth, not just in terms of concentration but in extraction costs.
I feel like the burden is on the people making the assertion to prove it, rather than to claim it is obvious. This is really just non-economists (of whom I am one, obvs) stating their intuitions about economics. Economists would look pretty silly making assertions about accretion disk dynamics based on their intuitions. People think they understand money though, cause they deal with it every day.
The claim that there is some fixed limit to the ratio of immaterial GDP versus material GDP in all possible societies, infinitely far into the future, is really a very broad and sweeping statement about things that I don’t think people know much about. Talking about sci-fi stuff is apropos.
Generally, people are treating GDP as if it is a quite tangible physical quantity. But it is more of a somewhat woolly abstraction that is anchored in trading between people and thus about mental states and relationships. So it is more like the concept of love, rather than, say, a carrot.
It should tell you something that economics articles often read like pure maths. Abstract things can be infinite.
You said that growth had nothing to do with value. This is too strong. All else equal, if you buy a dessert that costs more than the Hostess you would have bought last year, the economy grows. I suspect the Economist used that example to bypass any discussion about what is really included in assessing GDP, whether real or nominal. Unless bought brand new, a house belongs to the secondary market. Same for art and equities as retail investors usually acquire these assets. Different for renovation, repurposing, and repairs. Better to hire an accountant to deal with that mess.
The goods we purchase as first and final buyers have value that exceeds the sum of its material components. This is what economists want to measure. That value is not intrinsic. I don’t believe it can be. However, the Physicist has a point: Nature bats last. There are constraints. We might be spirits, but we *do* live in a material world.
I can grant the Economist that the Physicist misinterprets growth. As far as I am concerned growth can grow forever. That does not change anything about the hard limits of our planet. The Economist needs to grant that point. But note the difference – the Physicist has been suckered by a definition, whilst the Economist has been brought back to reality.
If I had to bet between reality and a definition, I know where I would put my money. Even if it would be a Pyrrhic win. Bets are for honour, not wealth. My investment decision would be different.
The Economist’s win rings hollow. At best he escaped with a legal clause. Take hurricane damages. They grow economies by destroying stuff. The Economist might rejoice if there are more hurricanes in the future. The Physicist is well justified to consider that stance absurd.
I mock the cult of growth as GRRRRROWTH not because infinite growth is impossible, but because it is ridiculous. Growth is a good thing, but as with all good things with moderation. That also applies to moderation.
A fair point. Although one could argue that a decent null hypothesis would be that that there are resource limits and that these will provide constraints on what might reasonably described as economic growth.
But this does sort of feel like a key point. If economic growth becomes detached from things that are tangible, then I guess we could define some quantity that we might call GDP that does indeed continue to increase, but it then becomes difficult to connect this things that we might regard as real. So, yes, by some definition of some quantity that we might regard as a proxy for economy growth it can grow without limits, but it’s not obvious that everyone would agree that this proxy is measuring something that has any bearing on the reality that we actually experience.
I will acknowledge that I’m now well outside my comfort zone/expertise, so maybe the above doesn’t really make any sense.
Ben “I feel like the burden is on the people making the assertion to prove it, rather than to claim it is obvious. “
I started this with
I am not making an assertion. I asked a reasonable question and stated my intuition on this.
Now if you do have some evidence or argument that my intuition is incorrect, I would genuinely appreciate hearing it.
I also think that indeed the non-physical nature of GDP is key.
Willard’s observation that the Physicists are getting suckered by definitions seems on the mark. They’ll drag you into their ridiculous abstractions, then beat you with experience.
Real world, limited energy of course has a massive impact on what kinds of society are possible.
Freedom fighting economists are fond of talking about creative desctruction:
Under that light, 2022 was a fantastic year!
My modest proposal would be to extend that concept to extreme events. Sure, they downsize communities. But look at the efficiency and dynamism they create!
The future is bright.
DM: first of all, most of the items you mentioned can and are already provided with current levels of energy, without any need for increase.
But mostly, this looks to me like restating your ‘fixed maximum ratio’ intuition in different words. This isn’t something you can prove by discussing the current state of the economy.
I have no idea how you would even start supporting/disproving the idea that this ratio has a fixed maximum value in all possible future societies. i.e. this comes as close as practically possible to being an unfalsifiable statement.
“DM: first of all, most of the items you mentioned can and are already provided with current levels of energy, without any need for increase.”
does that imply that the argument is that the value added by a worker can be unlimited? I can’t see how that can be true either. Note energy was not the source of the limitation I mentioned.
” ‘fixed maximum ratio’ “
I have said precisely nothing about a fixed ratio. I did mention scaling, but that doesn’t imply a fixed ratio (e.g. x can scale quadratically with y).
To substantiate Ben’s point that economists can drag you into their ridiculous abstractions, then beat you with experience, let’s recall this delightful exchange between Paul Romer and Andy Andolfatto:
Andy then produces such model. That model has no bearing on reality, but it is not inconsistent. It only exists to refute Paul’s specific point.
It might be important to recall with Richard Thaler that economists are first and foremost failed mathematicians or physicists. So please thread lightly.
This seems to be an example where definitions can be important. Physics can have terms that may not have obvious meanings, or the meanings of which aren’t what you might expect. However, they’re typically well-defined so that it is possible to explain what the terms mean and their significance. Terminology is meant to help discussions, not make it more difficult.
Thaler’s Misbehavior Theorem may be stated as :
Environmental economics advances one Nobel Prize loser’s funeral at a time.
Got to love Andy:
If economists are failed mathematicians, mathematicians are failed philosophers. And philosophers failed at all the things. Yet they mastered the art of failing at philosophy.
Fail again. Fail better.
Maybe I should start this again 🙂 but I must admit that I’m still not entirely sure what the semi-formal counter to TM’s arguments actually is. There seem to be a number of options (which I’m paraphrasing, so any mis-interpretation is not intentional):
a) The whole argument is so nonsensical that there really isn’t any easy way to counter it.
b) There are no limits. We will always find ways around resource limits and even if some resource limits do apply this doesn’t mean that this will somehow constrain economic growth.
c) Economists don’t really consider such long timescales, so the whole argument is a bit of a strawman (what Noah Smith seemed to suggest).
d) There may be limits, but they don’t really apply because economic growth will essentially saturate whan people are satisfied (also from Noah Smith).
e) Some combination of the above.
f) Something else altogether.
It does seem that economics takes some pride in being heterodox, so it seems possible that there isn’t really a single counter and that some may broadly agree with TM’s arguments, while others might vociferously object.
DM: Sorry, indeed you didn’t say ratio. ‘functional dependence’ instead of ‘ratio’ doesn’t change the argument, though.
ATTP: I think a-e roughly covers most of the options. There are a couple of other possibilities which are variants on GDP-is-ridiculous-in-this-context like: “actually, because practical definitions of real GDP are path-dependent and rather pathological, it could grow even in societies that are completely cyclic in time”. Or “GDP is only relevant in societies very like our own and it is a bit of a stretch to even apply is to pre-formal-trade societies; in the infinitely far-future all bets are off and it is probably not a sensible concept”.
As Noah notes, TM also basically concedes the whole argument (in his blog post but not the Nature comment) by noting that growth as defined by economists can continue to increase forever.
The argument may be “wrong” but it might still be “good” in the sense that people learn something from discussing it (adding to GDP, obviously).
Ben “Sorry, indeed you didn’t say ratio. ‘functional dependence’ instead of ‘ratio’ doesn’t change the argument, though”
We seem to be at an impasse. You seem to be claiming that I can’t prove that my intuition is correct (if I could prove that, I wouldn’t be posing it as a question), but you seem unwilling to provide any argument that my intuition is incorrect.
BTW requiring “proof” seems to me like climate skeptics requesting experimental proof of the greenhouse effect (which is impossible without a test tube tall enough to have a lapse rate). I’d be more than happy with reasoned argument rather than proof, and I have provided it for my intuition.
DM: OK, I don’t think arguing that an assertion is not just unfalsifiable, but not really accessible to evidence at all, is inherently unreasonable, but I agree this isn’t going anywhere.
Ben, not even science requires falsifiability (not everybody is a fundamentalist Popperian), it also isn’t necessarily about evidence. Sometimes reasoning is the best we can do. If the opposing view doesn’t have evidence or reasoning, then there isn’t much going for it.
I am asking questions to try to understand the issue, not defend a position. I am not making assertions, I am not asking for falsification, just reasoning why something may not be true.
I suspect that you can make models of the economy where infinite growth is possible if you make assumptions that are not going to be true in practice (e.g. that markets work), the real question (at least for me) is whether it can be achieved in practice (and also in terms of things that really matter rather than just GDP which I gather is just a proxy). All models are wrong, but some are useful. Are these models where infinite growth is possible useful?
“Rare earths being a case in point. They’re not particularly rare, just rarely concentrated to a degree where they can be cheaply and economically mined and processed.”
Cheaply and economically compared to what ?
Presumably from substrates where they are less concentrated and that are more recalcitrant to extraction processes.
But that puts extraction in the province of finance. The COST of everything in monetary terms becomes the measure.
On this basis there is no incentive to cease the use of fossil fuels. They will always represent the best concentrated source of energy with the least cost of extraction per unit of power. Wind and solar may come close for intermittent electricity generation, but with no low cost means of large scale storage this is only ever going to be an occasional substitute.
The reason to abandon fossil fuels is because the CO2 released causes disruption to the climate on which human agriculture and civilisation depend.
But on financial terms if the cost of adaption is less than the cost of mitigation/abandonment, then continued use is logical. Such an assessment is dependent on future projections, which will always favour the staus quo when made by those with financial power that is based on that staus quo.
Now imagine a society where the ‘cost’ of everything is zero. Anything can be extracted from any substrate ignoring the comparative cost. The basis for this would of course be that the cost of energy is zero. There is as much as you need or want at any time without any cost in monetary terms. This would also make food and housing zero cost. So avoiding the need to work to earn ‘money’ to pay for your existence. Can you envisage how this would change the approach to resource extraction ? It would be possible to extract a desired material from a poor source that would not disrupt the environment, instead of destroying a nature reserve or fragile ecosystem. It is probably impossible without advanced A.I., room temp super-conductors, and some other power source. But those are options that reside within the realms of AM, rather than FM.
Spaghetti hoops at Tescos cost 85p, as does Alphabettispaghetti, despite the additional development costs and being clearly superior with regard to presentation (I doubt the manufacturing costs are lower). So after the initial novelty, was there was no long term accumulation of value or quality of life improvement? And Spaghettisaurus, the ne pas ultra of canned spaghetti, isn’t even on sale anymore! ;o)
[caveat: this was not intended as a completely serious counter example!]
Izen, “cheaply and economically” is just The World As It Is”.
You can of course add regulation, or make what absent taxes and regulations would be the cheapest no longer the cheapest. Consider smoky coal and the Clean Air Act
In the case of rare earths the cleanest is probably a placer deposit. You tend to get things pre-sorted by size and density (hydraulic equivalent) and can then use meshes or dense liquids to separate them. And need minimum energy and generate minimum waste for the spoil heap. If you’re in hundred ppm territory you’re into blasting the tops off mountains, possibly using some very nasty separation methods, and have millions of tonnes of contaminated waste to dispose of. It’s also much more expensive and less economical. But maybe the placer deposit is in China and the mountain in Nevada, and you worry about depending on China for a strategic material. Or maybe you think or know it’s being worked by forced Uighur labour and have moral qualms.
It should be (d). Since this is what I was suggesting earlier with the idea of infinity as a horizon, I might be biased. I do not think Noah is right about (c), as intergenerational justice is a thing, even for economists. Some estate plans have been going on for centuries. Alfred Nobel is a new kid on that block.
The debate would make more sense with proper quantification. Exponentials that grow forever are not projectible. Economists usually acknowledge that fact in a footnote somewhere. They have yet to modulate the growth swings like climate scientists do with sensitivity. When you start by abstracting away almost everything about the economic agents you are supposed to help, your modelling capacity is rather bleak.
All this reminds me of the bros who kept bragging about tech stocks on Reddit. So called Growth stocks sure had a good run (a historic one, in fact) until last autumn. That run came at the expense of a speculative sucker in full FOMO mode. Ponzi schemes are everywhere. Economists ought to take it on the chin and meditate on the resource part when they try to solve allocation problems.
An interesting example dikran. How do economists equate products with no intrinsic value other than a religious one? Kosher or halal food for example. As it’s not mainstream in the UK it presumably has an intrinsically higher manufacturing and retail cost. Does a kilo contribute more to GDP than a kilo of Tesco’s finest? Suppose I buy it because I like my veal pale without the angst of calves in cages? I suppose they’d say squeamishness abut calf cages falls into the same category as religious observance.
Actually AFAIK the Church Of The Flying Spaghetti Monster
has no restrictions of that sort. All pasta is equal. Ramen to that!
The puzzle has been solved a few years ago, Dave:
Free range eggs are still eggs. Biological veggies are still veggies. Impossible burgers are still burgers.
“All pasta is equal.”
indeed, ordinary spaghetti in tomato sauce, which must be by far the easiest to make is also 85p ;o)
Depends where or when, Dikran:
This is a kind of infinite regression that economists care about!
Willard, indeed, when buying online it is a good idea to shop around, even if it is at the same shop.
I think that sort of algorithm explains why e.g. rare books at Amazon are often only available at prices nobody would ever buy them.
The value-price thing is interesting, made me think of Salt Bae, where I suspect a fair bit of the value for the customers comes from the price being exorbitant.
I think the foods thing may not be the best of examples for the economists as I suspect a lot of it is chasing changing consumer tastes, in which case it is only “better” at one point in time. It could well be that people 400 years ago would find our “tastiest” foods revolting. I can sort of see what the economist is getting at, but it isn’t easy to think of a really clear example.
Physics seems easy compared to many subjects!
As long as we agree that there is no real intrinsic value anywhere, Dikran, my job is done. You can argue that mainstream economics is an utilitarian pipe dream. I would not mind. Many economists do not seem to realize that there is some madness behind their method. It is only fair that we remind them of it.
One last thing I forgot to mention: innovation tends to be deflationary. Imagine all the things you would have to buy to replace your smartphone. It certainly does not replace the old Leica, but as you and Dave underline some fetichism is involved.
Which means that GDP might undersell the true prosperity we humans of the Anthropocene are enjoying. I am listening to Moby Dick this summer (on my deck, arrr!) and back in the days getting dense energy was quite an adventure. Some other times GDP might oversell what we truly value. Being able to enjoy light at sundown is a great gift, more than what it costs. Speaking of which, I would be remiss not to plug:
And in all seriousness, no, not all pasta is made equal.
“indeed, ordinary spaghetti in tomato sauce, which must be by far the easiest to make is also 85p ;o)”
“And in all seriousness, no, not all pasta is made equal.”
Quite, Asda smart brand is 19p.
“As long as we agree that there is no real intrinsic value anywhere,” yes, I *think* so.
“Imagine all the things you would have to buy to replace your smartphone”
difficult for me, I wouldn’t have one if I were paid to have it (I value off-line time too much)
“And in all seriousness, no, not all pasta is made equal” spaghettisaurus again!
Somebody once observed that the field of economics is not what people on the onetime peakista blog The Oil Drum say it is.
Seeing the OP immediately reminded me of Noah Smith*’s rejoinder, but also the replies under Murphy’s old post from people with some training in econ who saw little of what they learned in the arguments of Murphy’s Simplicio. One suggested that the doctrine of Infinite Growth started not with economics, but with Julian Simon. I would suggest that the notion that infinite growth is an axiom of economics be treated with the respect and attention due his other ideas.
*He has gone on to miss the lesson of this exchange and opine professionally beyond his expertise.
GDP is pretty weird, but also these arguments are based on knowing the properties of advanced societies infinitely far into the future. I would argue that is less well known than, say, how Earth’s climate works: asymptotic science fiction.
Indeed, I agree. I’m certainly not advocating that we try to do economic modelling far into the future. However, given that physical systems have some structural constancy we can ask (for example) “what would happen if we energy use on the surface grew exponentially”. Maybe this shouldn’t then be linked to economic growth, but it is still possible to address these kind of questions, which may have relevance to economic issues.
As growth is a consideration in discounting, and hence rational policy, I’d be more interested in the plausible growth over the course of the next century or so, as that is the timescale on which most of the losses from climate change will be incurred. The issue I have with “infinite growth” is it seems associated with the idea of growth *always* being able to get us out of any trouble we make today (as there are no limits to it) – so we don’t need to mitigate, just leave others to adapt. But like statistics, I suspect it is much easier to make asymptotic statements that don’t really apply to practical situations than it is to put bounds on the practical situations themselves. Statisticians often seem comforted by asymptotic properties, which seem to me (coming from an engineering background) to be “nice” but not terribly reassuring.
I don’t think it is a given that economic growth will not be stifled (if temporarily) by a limit on the material economy over the next century. We already have one with computing power. We haven’t been making substantially faster computers for a while, just computers with more cores/processors/GPUs. That means we can still speed up some kinds of computation, but not all. Some tasks have an inherently sequential component that can’t be sped up via parallelism (Amdahl’s Law). I suspect that part of the modern interest in AI as a growth area is that it can be readily parallelized – but what about tasks that can’t.
Meaningful error bars on centennial scale economic projections sounds rather more difficult than meaningful error bars on centennial scale climate projections.
The Social Cost of Carbon might be a better metric for what Tim is looking for. Economists cannot cry XKCD 793 as the SCC is their own invention. If we transpose his point over there, the question becomes: how do we estimate the SCC as we are nearing the “heat sink capacity” of the Earth. This would make economic sense for the computation would look like estimating the risk of ruin. There is no coming back from ruin, and actuaries have models for it, eg:
So perhaps physicists ought to team up with mathematicians and work with the insurance industry instead of competing with a community that is overly belligerent and that nobody really listens to.
If the fling spagetti monster exists, why has it not lobbied for the advancement of K-12 mathematical educationwith school lunch programs featuring calculus and symbol font pasta & alphabet soup
A new version of the U.S. Energy Policy Simulator has just been released:
Here’s the ‘MacKay carbon calculator’ for designing UK energy futures, named after a practitioner of a more useful form of limitarianism:
Even if the non-physical economy grows a lot I don’t see how the physical economy can shrink much. Abundance of energy can make a lot of things possible that otherwise are not – I suppose that can include making the use of otherwise uneconomic mineral resources including recycling of wastes more cost effective. I suppose that could make it easier to switch to materials for widespread use that are better – designed (Cradle to Cradle style) – for recycling, but then again it could encourage disregard for ease of recycling in Jevons style.
It still takes physical infrastructure and it seems to me the more energy intensive an industrial process gets the more technically demanding and that makes for diminishing returns and limits. Fusion seems like an example of where extreme processes that are technically demanding imposes significant barriers and if it is that hard to do at all, doing it reliably and cheaply may remain elusive. Space resources and colonisation seem to face a similar problem.
Taken to the sci-fi extreme the waste heat in a world with ongoing population growth and energy abundance based on fission or fusion would become ever more significant – whilst enhanced greenhouse would, we hope, becomes insignificant. We still need to be near to zero emissions for it to be adding more heat than current enhanced greenhouse and it could be that renewables (that don’t add waste heat) do most, especially should significant improvements to energy storage emerge.
It would be heartening to think people will have a healthier relationship with goods and services, that living well, (with small families) is valued over extravagant physical prosperity, are much less wasteful and require less energy. And perhaps low cost virtual experiences can be a resource efficient alternative. But expecting people en-masse to become wise may be a tad optimistic.
Is it time to talk about Piketty’s discussion of economic growth (in his “Capital in the 21st Century” book)? although not the central concern of the book, I think he basically says that these are unusual times and it is not ‘normal’ for growth of this magnitude, for the bulk of human history there was essentially no growth.
So is it fair it is not ‘normal’ for this sort of growth to think it will carry in in perpetuity flies in the face of evidence.
the idea of infinite growth on a finite planet seems preposterous to me, but it does appear to be an interesting parlor game for folks trained in certain disciplines. Mostly theoretical disciplines. Not that many biologists or that type taking part afaict. Read this article in Guardian this am.
https://www.theguardian.com/environment/2022/jul/30/total-climate-meltdown-inevitable-heatwaves-global-catastrophe?CMP=GTUS_email Seems to be pessimistic about AGW:
“I know a lot of people working in climate science who say one thing in public but a very different thing in private. In confidence, they are all much more scared about the future we face, but they won’t admit that in public. I call this climate appeasement and I believe it only makes things worse. The world needs to know how bad things are going to get before we can hope to start to tackle the crisis.”
Did I just hear the overton window start to slide to closed position?
+1 for reading Piketty’s discussion of economic growth, if you can stick through it: there must be a digested version somewhere…
Instead of talking about infinite growth, which few if any are actually advocating, how about we discuss ‘good growth until the end of the century,’ when population, consumption and emissions stabilize?
We could, but that’s not really the topic of this post. However, it would be good to see some evidence for your claim that “population, consumption and emissions” will stabilise at the end of the century. Also, stabilising emissions doesn’t stop climate change. That would require (net) zero emissions.
I’m puzzled that the mounting escalation of catastrophic events doesn’t make a dent on the starry-eyed optimists who think we can wait to act (as we have already done for nearly 50 years). As megayachts turn into gigayachts and multiply (as do young billionaires), and convenience dictates that people have to take a plane from their office to their vacation spot on Long Island (because traffic is a nuisance, you see), and there is such a thing as a market for $3 million watches, I don’t see us surviving a few decades, let alone to 2100. Here’s another example of the king of thinking that prevails everywhere marketing is in charge:
The retreat into theory is nice and cool, but right now in the UK and US we have a takeover by people who don’t care about anything but exploiting lies and ignorance to stay in charge and keep the giveaways to those who don’t need ’em coming, while finding victims to blame.
Kate Raworth is an economist worth listening to. That’s probably why she’s not mentioned much any more.
Oops, wrong tweet. But that’s not entirely irrelevant either. Sorry about that.
One more and I’ll stop. Please do look at the short where Coca Cola says sales will suffer if they stop polluting with single use bottles. This is a short on private flights, which are growing, not diminishing. Can we really afford untrammeled growth, particularly when it clusters at the top?
Susan, yes air travel is high emissions and use of private jets is extravagantly wasteful but I see the way wealthy people invest their money and run their businesses as much more significant than their personal indulgences, like using private jets. If they manage their businesses and investments to support the transition to zero emissions I can forgive a lot of personal wastefulness.
Of course the reality is very few of the very wealthy are doing that, with those who support strong climate action (and open to accusations of hypocrisy just for being wealthy) being a small minority. Where the wealthy show any preference it is more often for systemic avoidance climate responsibility and accountability for their investments – funding climate obstructionist politicians, not “green” ones. It may not be hypocrisy but it is just as bad or worse.
The solution to aircraft emissions is going to be low emissions aircraft and/or the requirement to pay for negative emissions. Unfortunately using what passes for negative emissions – carbon offsets – look a lot more like evading emissions reductions than supporting them; I’ve never been a fan of offsets. I suppose some of the celebrity “activists” do use them and I suppose it counts for some good intentions. I don’t see banning such activities as something that will be effective, any more than banning the accumulation of wealth; we are constrained to incremental societal change. Revolutions rarely deliver the desired results – it seems more likely to deliver worse results; regimes that gain power by force rarely allow themselves to be overruled by any independent rule of law.
Susan, perhaps if you also pointed out that Coca Cola now costs more than most beers, you might get more people to examine their business model.
Too much growth of energy production is going to result in an excess of waste heat? Do I have this right? Isn’t one of the possible uses of energy to direct the flow of heat? Isn’t that what air conditioners do? Of course they don’t divert heat away from the Earth, but could there possibly be ways to use a lot of energy to do so? I’d like to suggest orbiting space shades that could rotate on and off. Problem solved with the possible added benefit of having some control over weather — much better than Russell Seitz’s shiny bubbles.
At some point that energy ends up as waste heat. If we’re considering a scenario where we don’t go off planet, then the most efficient way to get rid of that waste heat is to radiate it to space, which requires an increase in surface temperature. Hence, there is a limit to how much non-solar/wind energy that can be utilised (there’s also, obviously, a limit to how much wind/solar can be utilised).
Apologies for the delay in responding to your reply to my comment:
Yes, the article does have awkward phrasing. I did have a reference to a similar but much better written (or better translated?) article by Gonella but my bookmark no longer worked.
I thought there were two significant points in the article;
An attempt to set out a common basis for considering energy in economics and physics;
A course on the following to be part of any science, economics and social science study at undergraduate level
First and second laws of Thermodynamics
Principles of System Theory
Introduction to Complex Systems
Self-organization and Emergent Properties
Phase changes and criticality
Entropy and emergy
Speaking as one whose science education was somewhat reductionist in thinking, I would say that a case could be made for some of those topics to be introduced at school level.
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