10 ms·

Why Economic Growth Will Fall

104 points by kosmos1337 10y ago

crimsonalucard 10y ago
This. Finally. People on HN think that startups, technology and economic growth have unlimited potential. This is pure stupidity at its finest. Observations of the natural world show a general trend: that everything, from physical resources to energy has limits. It is a mistake to believe that this general observation does not apply to technology and the human imagination. While we can comprehend what a limit in oil production is... we simply cannot comprehend exactly where or what a limit to the human imagination or technology is... This leads to a false illusion that there is no limit... The reality is: An inability to comprehend something does not lend any evidence to the idea that human potential is unlimited. Like science, true understanding comes from observations of the natural world and as all things observed in the natural world... it is far more likely for humanity to eventually reach a limit in technology. Whether that limit is among us is debateable. Computing has shown dramatic improvements in the past decade but outside of having an app for everything in my phone, nothing has really changed in the past two decades.
- adrianN 10y ago
  > Computing has shown dramatic improvements in the past decade but outside of having an app for everything in my phone, nothing has really changed in the past two decades. If you exclude making the Internet accessible to hundreds of millions of people, critical improvements in AI and robotics, and all the other stuff about which computer scientists write thousands of papers each year, then yes, nothing much has changed.
  - crimsonalucard 10y ago
    I did exclude those things. I said, nothing has really changed OUTSIDE of computing. Actually you could make an argument for biology. Much has changed in the realm of genetics though so far it has had little impact on our daily lives.
- piaste 10y ago
  This is some of the shallowest, most misleading insight I've ever read. "Human achievement will probably reach a limit at some point" is effectively an empty statement. Even if you could take its truth for granted, it is completely useless information. There is zero actionable difference between a limit that doesn't exist, and a limit that is unknowable and unguessable. Your behaviour should stay exactly the same either way - i.e. try to achieve as much as you can - until that limit becomes known or guessable in some way. (This argument is basically a very slight variation on Russell's teapot.)
  - elcapitan 10y ago
    The simple logical flaw in GP's argumentation is that it summarizes rather abstract phenomena (human inventions, potential of startups) to compare it against concrete, limited phenomena (oil production). To make that jump, that assumption would have to be proven.
    - crimsonalucard 10y ago
      It is only seemingly a flaw. Concrete phenomena and abstract phenomena are in fact the same thing. For abstract phenomena to even exist they must be concrete and thus limited by the concreteness of the physical world.
  - feral 10y ago
    I think the strongly worded logic in your post is questionable. > There is zero actionable difference between a limit that doesn't exist, and a limit that is unknowable and unguessable. Thought experiment: Situation 1: I rely on a single food source, which I know is unlimited. Situation 2: I rely on a single food source, which I'm not sure is unlimited, but I can't guess when it'll run out. > Your behaviour should stay exactly the same either way, until that limit becomes known or guessable in some way Really? Because if I was in situation 2, I would be preparing a contingency. Trying to find another food source. By the time the limit of my current source became knowable, it might be too late and I would starve. The right time to prepare is from a position of strength. That's an actionable difference - do you think this is a valid counterexample to your logic? Or is something not appropriate?
- deleted 10y ago
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- gilleain 10y ago
  The comparison you make with the natural world is interesting. If you consider natural systems to be innovators in the space of making new organisms then what have we seen? First, there were eras of explosive growth into new areas - for example, the first organisms to be able to live on land had a huge new area to grow on. Although the Cambrian 'explosion' may not be as rapid as once thought, the diversity of body plans when multicellularity was invented shows what can happen in moving into a new area. So the current technological era might be a lot like modern biology - there's never going to be a repeat of the discovery of how to use oxygen, but species will live and die as before. Except of course for humans. Confusingly here, the metaphor catches up with reality - humans as organisms have become humans as technological innovators, which has the potential for unlimited changes to biology. We could wipe out nearly all life, we could make endless new variants of existing or imagined organisms. Finally, there's intelligence which got us here. If we succeed in making a truly artificial intelligence, then that could explore the limits of what intelligence can do. Perhaps there are even limits to that - certainly there are physical constraints - but we're not at that limit quite yet.
- evgen 10y ago
  This sort of dystopian hand-wringing seems to have a certain cachet aomong some crowds, but seems to mostly stem from profound ignorance and a failure of the same imagination you find so limited. What makes humans different than all of the other parts of the natural world is that same imagination and technology that you seem to fundementally misunderstand. We can change our environment, and more importantly we can change the scope of the environment: if the resources of a small area are insufficient we can bring in more, if the resources of an entire planet are insufficient to meet our imagination we can dream bigger and actually execute on those dreams. Imagination itself is only limited by our technological progress and there are few limits beyond physics itself to stop us there. Two centuries ago our dreams were merely to fly like birds or travel swifter than horses, now we can dream of travel among the stars. Imagine what we will dream of in a century from now.
  - crimsonalucard 10y ago
    >Imagination itself is only limited by our technological progress and there are few limits beyond physics itself to stop us there. What is the difference between the natural world and physics? I would argue that there is no difference. I use the language "natural world" as a synonym for "the nature of existence" and "physics." I would assume that in your vernacular, the meaning is the same. Thus your own statement above validates My argument. You state physics limits technology and technology limits the imagination. Thus in turn imagination is limited by physics. This is exactly my argument.
- frgewut 10y ago
  Of course there are limits (e.g. mass of human population will never exceed Earth's mass etc). But what these limits are? For example we can double the size of human economy by colonizing Mars. This sounds very achievable to me.
  - deleted 10y ago
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  - crimsonalucard 10y ago
    Limits are never reached, they are only approached asymptotically. Thus most people will never observe a limit in human innovation in their lifetimes, instead they will only observe an eternal slow down as innovation spends forever converging with the limit. This makes it impossible to prove (or disprove) that there is a limit to technology. One can only make an educated guess. Have we reached the limits of human colonization? Are we approaching a limit? Mars may be possible, but it is an order of magnitude harder than colonizing the Americas. Colonizing the west happened only a couple years after Columbus discovered the new world. Mars was discovered 3 centuries ago... are we at a limit? How long will it take to colonize the nearest star?
- placebo 10y ago
  While it's definitely true that many a time certain crowds tend to have lost touch with reality regarding the potential of a specific activity (as illustrated in repeated economic bubbles), to say that economic growth is limited suggests that economy is in principle a zero sum game. I don't believe that to be the case. Any attempt to predict the absolute limits of economic potential is an attempt to limit the potential of creativity (and I'd say of reality itself). We are nowhere near understanding that potential and I assume we never will. Whether we will be able to continue to tap into that potential instead of self destructing is another question.
  - crimsonalucard 10y ago
    All observations point to limits and thus suggest that reality and therefore the economy is a zero sum game. You talk as if limiting reality doesn't make any sense when scientific observation describes a reality that is in fact limited. Conservation of energy, conservation of mass, the speed of light, these are limits built into the fabric of existence.
    - placebo 10y ago
      I think it's a bit premature to conclude we have uncovered what the fabric of existence is made of. History has repeatedly shown we have no idea how much we don't know (just until recently we thought we understood more or less what the universe is made of and we now realise we understand less than 5% of it) and the reality keeps delivering surprises. But just for the sake of the argument, let's suppose we do know how everything works. There's enough matter and energy out there to supply endless economic growth if creative minds continue to come up with ideas on how to leverage it. Besides that, from a quick research, I see many economists with a much deeper understanding in economy then myself are convinced that economy isn't a zero sum game. This doesn't necessarily make it true, but I'd study their claims before dismissing it.
      - crimsonalucard 10y ago
        >I see many economists with a much deeper understanding in economy then myself are convinced that economy isn't a zero sum game. These are idealized models. To simplify calculations. The sun will burn out in a billion years so one can assume in a model that it will never burn out. The fact of the matter is, the economy runs on resources. Resources are limited. Thus the economy is limited.
- eru 10y ago
  Oh, there are some very simple adjustments we could make right now (without even any new technology) to get a great amount of real growth. Just open some pretty standard economics textbooks: On the demand side: target nominal GDP to all but eliminate recessions. (Or at least target the long term growth of the price level instead of letting bygones be bygones.) On the supply side: completely shift the tax burden from labour and capital onto land. Remove barriers to free trade. Review and simplify economic regulations---start with silly zoning laws perhaps. Lower barriers to entry in most industries. Invest in public infrastructure and education. Cut stupid spending, and the most distorting taxes. (Land taxes can probably even yield enough to pay for a lavish social welfare system. They will definitely recoup all sane investment in public infrastructure. Without distorting the economy even one bit.) Of course the problem is that all these reforms are politically infeasible. There might be a technological limit to real growth, of course, but we are far from it.
  - gutnor 10y ago
    > start with silly zoning laws perhaps Why not keep them and invest in remote working instead of packing even more people in major cities. You probably work most of your time with remote people anyway and tech is definitively there. Also it is a lot easier to organise plenty of small towns (think hospital, school, road infrastructure, ...) rather than a megacity where you can have literally thousands of people per block.
    - eru 10y ago
      Let the people who want to be packed live in major cities. Than we have more space left over for people who prefer sparser living. Singapore and Hong Kong seems pretty well organised. Even other big cities like New York seem to work reasonably well on an organisational level. Hospitals, schools, road infrastructure are more efficient with shorter distances and diversified over more people's demand.
- PetoU 10y ago
  to add, I would say, the limits of human imagination are cognitive limits posed by the physical limits of our brains. Let's say cognitive biases, you can't completely unbias yourself. You could argue, that with coming technology, we can modify the biological basis (those limits), but just go more meta. We will have limits about how to modify those limits.
- fsloth 10y ago
  "nothing has really changed in the past two decades" If we discuss consumer products, then I would be willing to agree up to a point. Except, for example, we are finally getting electric cars that drive by themselves. This not just an improvement in computing. Geneticists just got crispr which means there will be an explosion in gene altered organisms. I'm not sure what kind of big changes you are crawing - these do not reflect the state of the art in sciences but rather what products are manufactured and marketed for consumers. Two decades are actually a really short time for any sort of significant development in any field - although improvements tend to come in bursts.
- jsmith0295 10y ago
  Except that the technology itself can be used to create technology. That's the whole point. If we were talking about raw human creativity, we already surpassed that capability a long time ago. And it seems likely that we can get the technology to a place where it can improve itself with little enough human effort that growth can be kept up for longer than any of our life times.
  - crimsonalucard 10y ago
    Having technology recursively create technology does not lead to unlimited potential. Such infinite structures lead to stack overflow and do not exist in the natural world without limits.
    - jsmith0295 10y ago
      But how many people actually think the potential is unlimited? Clearly there is a limit, but its likely far enough away from our current position that it doesn't particularly matter.
- snowwrestler 10y ago
  > Computing has shown dramatic improvements in the past decade but outside of having an app for everything in my phone, nothing has really changed in the past two decades. I suspect this says more about your ignorance of other industries, than anything else. Modern pharmaceutical research or medical imaging would be impossible without powerful computing. CRISPR is impossible without powerful computing. Self-driving cars are impossible without powerful computing. Heck, GE has an entire series of ads about the impact of computing on their industrial technologies like turbines, locomotives, etc., which mocks the "technology is just apps" mindset. https://www.youtube.com/watch?v=OvfU1NpCJQQ https://www.youtube.com/watch?v=OvfU1NpCJQQ
gggggg11111 10y ago
Considering we live in an infinite universe I do not see why economic growth can not continue even accelerate. Especially seeing that sometime this century we will get cheap space travel (getting there) and AI (getting there) and transition from fossil fuels to renewables and fusion (getting there) Tho' yes seeing how some of our best and brightest are working on how to serve more ads and how to get people spend their free time locked in their walled garden...
- eru 10y ago
  How do you know the size of the universe we live in? (To be pedantic, even in an infinite universe the size of the human-sphere couldn't grow faster than a ball expanding at the speed of light.)
  - gggggg11111 10y ago
    Because that is the prevalent scientific opinion We are on a course for a confluence of some major technologies this century which could result in another great leap forward. Anyways i forgot why i dont bother to reply much on this site, got down voted for my above comment yet no indication as to why (is it my comment about working on advertising? its ok that's what I work in too myself have to pay bills somehow, but would rather do something more interesting).
    - eru 10y ago
      The observable universe is very much finite. (And if speed of light is a barrier, than the observable universe is about the biggest thing we can ever influence.) Sure, there will be lots of nice technology coming over the next century. No doubts about that.
      - gggggg11111 10y ago
        Lets assume we develop technology to travel at near light speeds and go mad colonising the universe, what exactly contains us to the observable universe, move 4 light years in another direction and your observable horizon shifts
marcoperaza 10y ago
There are many breakthroughs waiting to be made in medicine, energy production, geoengineering, space exploration, transportation, etc. Automation and AI will increase productivity and leisure time, which will allow the market for entertainment, travel, and luxury to grow much larger than today, and be accessible to many more people. But if we succumb to this pessimism, it will be a self-fulfilling prophecy.
- Gatsky 10y ago
  I agree. But lately, I have been more aware of the fact that ecological catastrophe could make all this potential irrelevant.
- collyw 10y ago
  "Automation and AI will increase productivity and leisure time". We got told this in the 70's (the automation part at least), yet seem to be working more and more hours now.
  - cheriot 10y ago
    Well, we can produce what was considered enough back then without working so much. People just keep want more, more, more.
    - collyw 10y ago
      Most people under 40 can't afford a house in many western countries. Compared to 20 years ago, most people could (at least in the two countries I am familiar with - the UK or Spain). The very rich seem to be doing OK though.
      - cheriot 10y ago
        The more, more, more does seem to wind up with fewer people. I'm skeptical of the unaffordable housing arguments, though. People only talk about a handful of cities. At least in the US, there's plenty of cheap places to live. They just aren't trendy.
minikites 10y ago
This article reminds me of http://www.motherjones.com/politics/2010/05/peter-victor-deficit-growth http://www.motherjones.com/politics/2010/05/peter-victor-def... >It took a couple of decades, but unemployment eventually fell to 4 percent, most people's standards of living actually rose, and greenhouse gas emissions decreased to well below Kyoto levels. The economy reached a "steady state." And if the model is accurate, then something like it, say some ecologically minded economists, may be the only way for humanity to survive in the long term.
dzdt 10y ago
Sounds like an interesting book. From the linked review, the main thesis that many improvements from 1870-1970 are one-time-only events seems sound. I also agree with the assessment that 'singularity' theories are hokum. (That may be more controversial here on HN!) It does sound like he might underestimate the effects of the coming AI/robot revolution. Over the next 75 years, any job definable by its output may be taken over by a robot. What is left are service and creative occupations where the human presence and artistry is valued. But this will entail a huge economic upheaval. The other giant quality-of-life advancement that might be out there is slowing or eliminating the effects of aging. That would also come with giant problems of inequality (if it is narrowly available) or population pressure (if it is widely available). But it would surely be another huge advancement for its beneficiaries.
skywhopper 10y ago
I agree that it's impossible for the rates of economic growth and lifestyle improvements we saw since the late 1800s to continue indefinitely, but the key to growth is investment. And from the late-1800s till the mid-1900s, there were huge government investments made in building new and innovative infrastructure in the US--railroads, the phone network, state universities and K-12 public education, electricity generation and distribution, highways, airports. Those investments in common infrastructure allowed private investment to piggyback and provide the enormous success the US economy has had in the time detailed. But today, we've forgotten the formula. Education funding is falling, basic maintenance isn't being performed on much of the infrastructure, and we aren't investing enough in the new things that can provide growth for the next hundred years. High-speed and light rail could help address the limits of airport and highway capacity, and provide better mobility in and between cities. Investing in clean electricity generation, a national power network, and improved battery technology could revolutionize how our homes and cars get their power. Very-low cost higher education was a thing in mid-20th-century America--it was possible to attend your in-state university for a few thousand bucks in today's dollars. What happened? As long as we pretend these things are too expensive to invest in, then we're sure to enter a long slow decline.
- marcoperaza 10y ago
  >Very-low cost higher education was a thing in mid-20th-century America--it was possible to attend your in-state university for a few thousand bucks in today's dollars. What happened? As long as we pretend these things are too expensive to invest in, then we're sure to enter a long slow decline. I don't think your point about education makes sense. You want more investment, but then bemoan the fact that it costs more, as if that signifies low investment. People are investing in their education at record levels! Maybe you think student loans are a problem for other reasons, but they certainly aren't stopping people from going to college. Again, they're going in record numbers and spending record money to do so.
  - internaut 10y ago
    > People are investing in their education at record levels! They are investing in formal qualifications. Certificates. As Thiel points out, a university degree has transmogrified from "investment" to "insurance" to "tournament". The reality is that the previous generation knows jack shit about the environment facing the current generation. Their 'common sense' can be thrown out nearly entirely with few exceptions. In today's environment most of them wouldn't stand a chance.
nabla9 10y ago
To keep discussion grounded. We should think this trough economic growth models. What model we use is not that important. You can use simple neoclassical Solow-Swan model as starting point and add more factors as you go. You can play with the model in Wolfram Alpha http://demonstrations.wolfram.com/DynamicsInTheSolowSwanGrowthModel/ http://demonstrations.wolfram.com/DynamicsInTheSolowSwanGrow... Techno-optimists often argue naively that technological progress or increase in human capital works like magic without understanding how they dynamically interact with more basic factors of production like capital, output and labor.
cheriot 10y ago
Bill Gates' review of this book takes a techo-optimist view of it. https://www.gatesnotes.com/Books/The-Rise-and-Fall-of-American-Growth https://www.gatesnotes.com/Books/The-Rise-and-Fall-of-Americ... "Most reviews have focused on the “fall” indicated in the title: the last hundred pages or so, in which Gordon predicts that the future won’t live up to the past in terms of economic growth. I strongly disagree with him on that point, as I discuss below. But I did find his historical analysis, which makes up the bulk of the book, utterly fascinating"
- jamesrom 10y ago
  Excellent read. Thanks. Something I've always tried to understand is the value of these digital things. How much would it cost, in 1970, to have a library of all the worlds music? Today it's 10 bucks a month. How much value do we put on information? What is the value of the bits of information that make up the Wikipedia page "Smallpox vaccine"? How about in 1960? Can you even put a dollar value on it?
  - AJ007 10y ago
    The answer is these things have an immense amount of value. To even say the value of technology an average person accesses today is double that of 1970 is wrong, it is a lot more than that. Much or even most of that value is underutilized. I think a combination of the following lead to a completely perverted understanding of money: - politicalization of economics - the reflexive nature of markets - the tendency of both academics and professionals to seek the assignment of natural laws to market behavior - time lags in the market making it take years or even decades to discover something was worth a lot less than the amount invested Fundamentally money is just meant to be a way to account for limited resources between trading parties. If the trading parties are doing something destructive, money doesn't know that. I've also used the analogy before that the trying to measure things in prices as money supply changes is also like trying to use a yard stick which changes in size frequently. Simple if you have some metrics from the central bank, but actually not so simple because of all the complex moving missing pieces (including what other currencies are doing.) The real global fear factor right now is that a great deal of institutions and individuals have a strong interest in inflation rather than deflation. These are groups whose future is based on prices for things largely going one direction, up. If you earn a living by spending borrowed money -- or being paid by earned interest -- you need this. A lot of people thrive in situations where someone can hand them a blueprint of what to do along with a bunch of money. They follow it, copy, and get the output. That is largely what current growth numbers measure. The reality is, of course, everything can't grow forever. That isn't a bad thing. What I think is the greatest concern right now, the greatest danger, is not 1% global growth or even -1%. Instead, it is how nation states decide to react to slow growth. Quite a few are trying to finance their way out. Others may attempt to do disruptive things such as wars. I think we are more than a decade in to these reactions, by the way. If fossil fuels are as dangerous as we think, a global slow down or contraction may end up saving us. Right now the countries which are growing are still copy and pasting their way to a pretty non-sustainable future. There is another situation where real growth is negative but available money supply is increasing and prices are going up. That is very painful to be in, but a real future possible outcome.
tim333 10y ago
>At the point where computers have achieved superintelligence, we have reached the Singularity >...Gordon has no sympathy for these futuristic views. Kind of dumb really. Like discussing growth at the start of the industrial revolution and having no sympathy for the idea of an industrial revolution.
havetocharge 10y ago
I think it would be helpful to quantify the measure of world warfare. I think it would correspond to economic growth. Nuclear weapons and public opinion on war act as a huge deterrent to large scale mobilizations, so we've reached peak war, and with it, peak economy.
Meegul 10y ago
Freakonomics made a good podcast with the author of this book regarding this topic [1]. I can't say I agree with it, but it's an interesting listen nonetheless. [1]: http://freakonomics.com/podcast/american-growth/ http://freakonomics.com/podcast/american-growth/
tonyedgecombe 10y ago
Up to 1700 the British went through a period of 400 years with virtually no growth per capita: http://www.lse.ac.uk/economicHistory/seminars/ModernAndComparative/papers2011-12/Papers/Broadberry.pdf http://www.lse.ac.uk/economicHistory/seminars/ModernAndCompa... One thing that did boost growth in that period was the black death.
georgeecollins 10y ago
Thomas Piketty is so important about this because he shows how exceptional America was in that it had plentiful capital in terms of land, so that labor was unusually valuable vs capital when compared to Europe. It shapes American's thinking in a positive way, but we need to acknowledge things have changed. Formerly, almost anyone who was willing to work hard and take a risk could build a homestead. Now the conditions for opportunity are available but more restricted.
- splintercell 10y ago
  > Now the conditions for opportunity are available but more restricted. < Restricted, yet it beats rest of the world hands down in terms of opportunities. When the rest of the world looks at America, they just see a nation which got lucky with land and capital. But the fact is, America had people before it was discovered by the Europeans, and there was no great civilization here unlike almost everywhere else in the world, which leads you to believe that maybe it isn't really all about the geography. America is a plentiful place where individuals who wanted to achieve something (the 'American way of thinking') they arrived here. This still holds true, and will continue to hold true as long as this American way of thinking remains around.
  - badsock 10y ago
    That belief is widespread in America, but is unsupported by data. If you look at how hard it is for an American to rise out of the conditions they were born in, they're worse off than if they'd been born in (for example) France, Germany, Canada, or Denmark: https://en.wikipedia.org/wiki/File:Intergenerational_mobility_graph-1.jpg https://en.wikipedia.org/wiki/File:Intergenerational_mobilit... From: https://en.wikipedia.org/wiki/Economic_mobility https://en.wikipedia.org/wiki/Economic_mobility (see the "Worldwide" section).
    - georgeecollins 10y ago
      Piketty's work was a history of the previous century. You are pointing out current statistics, which make his point that things have changed.
cheriot 10y ago
Maybe growth has slowed, not because of an inherent limit of technology, but because we just don't have problems as big as our great-grandparents. The biggest enemy we have left is ourselves. We crave attention more, overeat, and look forward to a retirement where our minds waste away. There are some exciting advances we need to extend the modern world to all of humanity without destroying the planet. But for those of us already living with the best humanity has to offer, our biggest limitation is ourselves. I keep trying to come up with a reason for how recent advances are improving our lives without increasing GDP. Does anyone have a compelling one? Things like wikipedia are valuable and don't contribute to GDP. But then shouldn't people be happier than 20 years ago?
- petra 10y ago
  >> But then shouldn't people be happier than 20 years ago? A few years ago there was a survey among the amish, and it appears that they are as happy as modern day billionaires. On the other hand, another survey have shown a decrease of 20% ! in empathy among college students, between 2000-2010. And it have probably became worse since than. And empathy is core to so many critical things. But when you don't aim society at nothing meaningful, just more money, what do you expect to get ?
- alanwatts 10y ago
  >I keep trying to come up with a reason for how recent advances are improving our lives without increasing GDP. Does anyone have a compelling one? GDP/GNP is not a measurement of happiness or standard of living. >Gross National Product counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl. It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities. It counts Whitman's rifle and Speck's knife, and the television programs which glorify violence in order to sell toys to our children. Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile. And it can tell us everything about America except why we are proud that we are Americans. -RFK, Speech at the University of Kansas at Lawrence (18 March 1968)
damptowel 10y ago
Mandatory post :) Exponential Economist Meets Finite Physicist http://physics.ucsd.edu/do-the-math/2012/04/economist-meets-physicist/ http://physics.ucsd.edu/do-the-math/2012/04/economist-meets-...
throw2016 10y ago
Growth and progress are dehumanised meaningless terms when divorced from quality of life of all citizens on earth. You can have massive unsustainable growth that only filters to the top percentages and destroys the environment. This is quasi feudalism. Currently we seem to have an economic system whose sole purpose seems to make a few wealthy. Any technological, social and political progress is a side effect to sustain the primary purpose of wealth for a few, and should any of the side effects come in the way of the primary purpose it will be quashed, which seems a tad uncivilised. These billions are just a social number more than anything else, and do not do anything meaningful, apart from affording power, privilege to sustain an inherently exploitative cycle with serious environmental consequences. Capitalism by its very nature can only reward the top percentages, the moment demand rises with scarce resources prices rise too, leaving a small exclusive group with disproportionate wealth and power always in control. The market cannot decide anything without heavy constraints, and will take us quickly to a gridlock. In a non functioning traffic intersection, humans will always act not in enlightened self interest or common interest but short term immediate self interest which is neither good for them, everyone else or their environment, evidenced in the ensuing gridlock that will leave everyone including themselves stranded. Yet we set up a system that rewards this uncivilised base individual behavior to get ahead at all costs nevermind anything else. If low cost drives choices it only means the market will rush to exploitation and plunder without constraining rules. If someone is plundering the environment or using slaves an informed choice can only happen if the consumers know about it, cares about it and by the time this happens irreversible damage to the environment or social structure may already be done. Power could ensure information is not available, propaganda or lack of choice for alternatives. Capitalism cannot deliver an egalitarian enlightened sustainable society and is not designed to, only promise to while the small elite control the cycle. Currently the elite will always support the system out of self interest nevermind the consequences for everyone else or the environment while others seek a way to break into the club or an alternative way. This is inherently unstable and will lead to periodic purges or paranoia and control of the population. Like the old quote goes there is enough for everyone's need but not for their greed.
mark_l_watson 10y ago
Our economy depends on growth, and I think this will cause lots of problems. I saw a quote by a US congressman blaming young people today for our financial problems because many of them are unwilling to put themselves into debt for homes, cars, etc. An outrageous statement, blaming people for doing what they believe to be in their own self interest. If the value of production mostly stayed with the people and local businesses then I can imagine our society thriving with minimal growth. In my opinion, the requirement for growth to keep the financial sector going is like a cancer. Wall Street, central banks, etc. grow in power and consume more of the productive segments of society like a cancer.
- tome 10y ago
  Why and how does our economy depend on growth? I've head this claimed a lot but never understood it.
  - allendoerfer 10y ago
    You buy a stock, create a company, build a house, because you expect it to increase in value and be a worthwhile investment. If growth stops it will be increasingly hard to do this, because all stocks that are still increasing in value will be bought up, until they cannot anymore. So you keep your money. Deflation. System collapse.
    - tome 10y ago
      OK, that's a rough argument that needs fleshing out. Has the rigorous argument actually been made and is widely accepted by economists or is this just a meme that's accepted and repeated without much basis?
      - riskneural 10y ago
        Adam Smith makes the argument well in A Wealth of Nations. Essentially, the only reason to invest is that you expect to earn something above on top of the risk. Then add that up over everybody in the system. They cannot all get something extra, unless there is growth. That growth is spread over everybody as return on investment. So, if there is no growth, then investment stops earning that extra, so there no point in investment, so nobody hires anybody or builds new machines. Importantly, it's growth in total value, not growth in number of things. Hence, it's okay that growth is infinite without gobbling up the universe - we can always be better. Stuff can always be sexier.
wazoox 10y ago
By definition, growth is unsustainable in the long term. GDP growth is totally, completely correlated to energy consumption. In the future, energy availability will at best plateau, or more probably decline. GDP growth then will be a blip in a long trend of stability, and steep decline is ahead to fall back to a sustainable level (i.e. entirely from renewable resources, as it was for the past millions of years). Data speaks for itself, see many article from a physicist here: http://physics.ucsd.edu/do-the-math/2015/03/bbc-questions-indefinite-growth/ http://physics.ucsd.edu/do-the-math/2015/03/bbc-questions-in... See immense resources from a specialized engineer here: http://manicore.com/anglais/documentation_a/greenhouse/kaya_equation.html http://manicore.com/anglais/documentation_a/greenhouse/kaya_...
haywirez 10y ago
Degrowth[0] is an interesting related perspective/solution to check out. [0] https://en.wikipedia.org/wiki/Degrowth https://en.wikipedia.org/wiki/Degrowth
known 10y ago
First things first http://www.businessinsider.com/inequality-is-worse-than-you-think-2013-3 http://www.businessinsider.com/inequality-is-worse-than-you-... AND this http://www.businessinsider.com/social-mobility-is-a-myth-in-the-us-2013-3 http://www.businessinsider.com/social-mobility-is-a-myth-in-...
edoceo 10y ago
Growth at scale, to bubble up to the oligarchs maybe fails. Sustainable Growth for the local business, small market business keeps going. Small business employs more people than the "big guys" and is a real core economic driver.
bubbleRefuge 10y ago
Modern money is created by keystrokes[1]. We(the US) are no longer on the gold standard(a good thing). In order to have conditions for economic growth(say GDP growth) to occur aggregate income must increase. There are only two possible drivers: Government goes into debt or the private sector goes into debt where debt = spending more than ones income. If government policy makers were to use fiscal policy based economic models that paid closer attention to aggregate debt and aggregate income balances we could have much smoother business cycle and avoid deep recessions where the private sector wants to deleverage. The only thing to fear is inflation and we have never truly sniffed demand pull inflation in the US ever. The 80's was supply shock petroleum based inflation. The Federal government needs to put its foot on the accelerator and not the brakes but the politicians don't know where the accelerator is. [1] http://neweconomicperspectives.org/2012/03/where-did-the-federal-reserve-get-all-that-money.html http://neweconomicperspectives.org/2012/03/where-did-the-fed...

104 points by kosmos1337 10y ago

This. Finally. People on HN think that startups, technology and economic growth have unlimited potential. This is pure stupidity at its finest. Observations of the natural world show a general trend: that everything, from physical resources to energy has limits. It is a mistake to believe that this general observation does not apply to technology and the human imagination. While we can comprehend what a limit in oil production is... we simply cannot comprehend exactly where or what a limit to the human imagination or technology is... This leads to a false illusion that there is no limit... The reality is: An inability to comprehend something does not lend any evidence to the idea that human potential is unlimited. Like science, true understanding comes from observations of the natural world and as all things observed in the natural world... it is far more likely for humanity to eventually reach a limit in technology. Whether that limit is among us is debateable. Computing has shown dramatic improvements in the past decade but outside of having an app for everything in my phone, nothing has really changed in the past two decades.

adrianN 10y ago
> Computing has shown dramatic improvements in the past decade but outside of having an app for everything in my phone, nothing has really changed in the past two decades. If you exclude making the Internet accessible to hundreds of millions of people, critical improvements in AI and robotics, and all the other stuff about which computer scientists write thousands of papers each year, then yes, nothing much has changed.
- crimsonalucard 10y ago
  I did exclude those things. I said, nothing has really changed OUTSIDE of computing. Actually you could make an argument for biology. Much has changed in the realm of genetics though so far it has had little impact on our daily lives.
piaste 10y ago
This is some of the shallowest, most misleading insight I've ever read. "Human achievement will probably reach a limit at some point" is effectively an empty statement. Even if you could take its truth for granted, it is completely useless information. There is zero actionable difference between a limit that doesn't exist, and a limit that is unknowable and unguessable. Your behaviour should stay exactly the same either way - i.e. try to achieve as much as you can - until that limit becomes known or guessable in some way. (This argument is basically a very slight variation on Russell's teapot.)
- elcapitan 10y ago
  The simple logical flaw in GP's argumentation is that it summarizes rather abstract phenomena (human inventions, potential of startups) to compare it against concrete, limited phenomena (oil production). To make that jump, that assumption would have to be proven.
  - crimsonalucard 10y ago
    It is only seemingly a flaw. Concrete phenomena and abstract phenomena are in fact the same thing. For abstract phenomena to even exist they must be concrete and thus limited by the concreteness of the physical world.
- feral 10y ago
  I think the strongly worded logic in your post is questionable. > There is zero actionable difference between a limit that doesn't exist, and a limit that is unknowable and unguessable. Thought experiment: Situation 1: I rely on a single food source, which I know is unlimited. Situation 2: I rely on a single food source, which I'm not sure is unlimited, but I can't guess when it'll run out. > Your behaviour should stay exactly the same either way, until that limit becomes known or guessable in some way Really? Because if I was in situation 2, I would be preparing a contingency. Trying to find another food source. By the time the limit of my current source became knowable, it might be too late and I would starve. The right time to prepare is from a position of strength. That's an actionable difference - do you think this is a valid counterexample to your logic? Or is something not appropriate?
deleted 10y ago
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gilleain 10y ago
The comparison you make with the natural world is interesting. If you consider natural systems to be innovators in the space of making new organisms then what have we seen? First, there were eras of explosive growth into new areas - for example, the first organisms to be able to live on land had a huge new area to grow on. Although the Cambrian 'explosion' may not be as rapid as once thought, the diversity of body plans when multicellularity was invented shows what can happen in moving into a new area. So the current technological era might be a lot like modern biology - there's never going to be a repeat of the discovery of how to use oxygen, but species will live and die as before. Except of course for humans. Confusingly here, the metaphor catches up with reality - humans as organisms have become humans as technological innovators, which has the potential for unlimited changes to biology. We could wipe out nearly all life, we could make endless new variants of existing or imagined organisms. Finally, there's intelligence which got us here. If we succeed in making a truly artificial intelligence, then that could explore the limits of what intelligence can do. Perhaps there are even limits to that - certainly there are physical constraints - but we're not at that limit quite yet.
evgen 10y ago
This sort of dystopian hand-wringing seems to have a certain cachet aomong some crowds, but seems to mostly stem from profound ignorance and a failure of the same imagination you find so limited. What makes humans different than all of the other parts of the natural world is that same imagination and technology that you seem to fundementally misunderstand. We can change our environment, and more importantly we can change the scope of the environment: if the resources of a small area are insufficient we can bring in more, if the resources of an entire planet are insufficient to meet our imagination we can dream bigger and actually execute on those dreams. Imagination itself is only limited by our technological progress and there are few limits beyond physics itself to stop us there. Two centuries ago our dreams were merely to fly like birds or travel swifter than horses, now we can dream of travel among the stars. Imagine what we will dream of in a century from now.
- crimsonalucard 10y ago
  >Imagination itself is only limited by our technological progress and there are few limits beyond physics itself to stop us there. What is the difference between the natural world and physics? I would argue that there is no difference. I use the language "natural world" as a synonym for "the nature of existence" and "physics." I would assume that in your vernacular, the meaning is the same. Thus your own statement above validates My argument. You state physics limits technology and technology limits the imagination. Thus in turn imagination is limited by physics. This is exactly my argument.
frgewut 10y ago
Of course there are limits (e.g. mass of human population will never exceed Earth's mass etc). But what these limits are? For example we can double the size of human economy by colonizing Mars. This sounds very achievable to me.
- deleted 10y ago
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- crimsonalucard 10y ago
  Limits are never reached, they are only approached asymptotically. Thus most people will never observe a limit in human innovation in their lifetimes, instead they will only observe an eternal slow down as innovation spends forever converging with the limit. This makes it impossible to prove (or disprove) that there is a limit to technology. One can only make an educated guess. Have we reached the limits of human colonization? Are we approaching a limit? Mars may be possible, but it is an order of magnitude harder than colonizing the Americas. Colonizing the west happened only a couple years after Columbus discovered the new world. Mars was discovered 3 centuries ago... are we at a limit? How long will it take to colonize the nearest star?
placebo 10y ago
While it's definitely true that many a time certain crowds tend to have lost touch with reality regarding the potential of a specific activity (as illustrated in repeated economic bubbles), to say that economic growth is limited suggests that economy is in principle a zero sum game. I don't believe that to be the case. Any attempt to predict the absolute limits of economic potential is an attempt to limit the potential of creativity (and I'd say of reality itself). We are nowhere near understanding that potential and I assume we never will. Whether we will be able to continue to tap into that potential instead of self destructing is another question.
- crimsonalucard 10y ago
  All observations point to limits and thus suggest that reality and therefore the economy is a zero sum game. You talk as if limiting reality doesn't make any sense when scientific observation describes a reality that is in fact limited. Conservation of energy, conservation of mass, the speed of light, these are limits built into the fabric of existence.
  - placebo 10y ago
    I think it's a bit premature to conclude we have uncovered what the fabric of existence is made of. History has repeatedly shown we have no idea how much we don't know (just until recently we thought we understood more or less what the universe is made of and we now realise we understand less than 5% of it) and the reality keeps delivering surprises. But just for the sake of the argument, let's suppose we do know how everything works. There's enough matter and energy out there to supply endless economic growth if creative minds continue to come up with ideas on how to leverage it. Besides that, from a quick research, I see many economists with a much deeper understanding in economy then myself are convinced that economy isn't a zero sum game. This doesn't necessarily make it true, but I'd study their claims before dismissing it.
    - crimsonalucard 10y ago
      >I see many economists with a much deeper understanding in economy then myself are convinced that economy isn't a zero sum game. These are idealized models. To simplify calculations. The sun will burn out in a billion years so one can assume in a model that it will never burn out. The fact of the matter is, the economy runs on resources. Resources are limited. Thus the economy is limited.
eru 10y ago
Oh, there are some very simple adjustments we could make right now (without even any new technology) to get a great amount of real growth. Just open some pretty standard economics textbooks: On the demand side: target nominal GDP to all but eliminate recessions. (Or at least target the long term growth of the price level instead of letting bygones be bygones.) On the supply side: completely shift the tax burden from labour and capital onto land. Remove barriers to free trade. Review and simplify economic regulations---start with silly zoning laws perhaps. Lower barriers to entry in most industries. Invest in public infrastructure and education. Cut stupid spending, and the most distorting taxes. (Land taxes can probably even yield enough to pay for a lavish social welfare system. They will definitely recoup all sane investment in public infrastructure. Without distorting the economy even one bit.) Of course the problem is that all these reforms are politically infeasible. There might be a technological limit to real growth, of course, but we are far from it.
- gutnor 10y ago
  > start with silly zoning laws perhaps Why not keep them and invest in remote working instead of packing even more people in major cities. You probably work most of your time with remote people anyway and tech is definitively there. Also it is a lot easier to organise plenty of small towns (think hospital, school, road infrastructure, ...) rather than a megacity where you can have literally thousands of people per block.
  - eru 10y ago
    Let the people who want to be packed live in major cities. Than we have more space left over for people who prefer sparser living. Singapore and Hong Kong seems pretty well organised. Even other big cities like New York seem to work reasonably well on an organisational level. Hospitals, schools, road infrastructure are more efficient with shorter distances and diversified over more people's demand.
PetoU 10y ago
to add, I would say, the limits of human imagination are cognitive limits posed by the physical limits of our brains. Let's say cognitive biases, you can't completely unbias yourself. You could argue, that with coming technology, we can modify the biological basis (those limits), but just go more meta. We will have limits about how to modify those limits.
fsloth 10y ago
"nothing has really changed in the past two decades" If we discuss consumer products, then I would be willing to agree up to a point. Except, for example, we are finally getting electric cars that drive by themselves. This not just an improvement in computing. Geneticists just got crispr which means there will be an explosion in gene altered organisms. I'm not sure what kind of big changes you are crawing - these do not reflect the state of the art in sciences but rather what products are manufactured and marketed for consumers. Two decades are actually a really short time for any sort of significant development in any field - although improvements tend to come in bursts.
jsmith0295 10y ago
Except that the technology itself can be used to create technology. That's the whole point. If we were talking about raw human creativity, we already surpassed that capability a long time ago. And it seems likely that we can get the technology to a place where it can improve itself with little enough human effort that growth can be kept up for longer than any of our life times.
- crimsonalucard 10y ago
  Having technology recursively create technology does not lead to unlimited potential. Such infinite structures lead to stack overflow and do not exist in the natural world without limits.
  - jsmith0295 10y ago
    But how many people actually think the potential is unlimited? Clearly there is a limit, but its likely far enough away from our current position that it doesn't particularly matter.
snowwrestler 10y ago
> Computing has shown dramatic improvements in the past decade but outside of having an app for everything in my phone, nothing has really changed in the past two decades. I suspect this says more about your ignorance of other industries, than anything else. Modern pharmaceutical research or medical imaging would be impossible without powerful computing. CRISPR is impossible without powerful computing. Self-driving cars are impossible without powerful computing. Heck, GE has an entire series of ads about the impact of computing on their industrial technologies like turbines, locomotives, etc., which mocks the "technology is just apps" mindset. https://www.youtube.com/watch?v=OvfU1NpCJQQ https://www.youtube.com/watch?v=OvfU1NpCJQQ

gggggg11111 10y ago

Considering we live in an infinite universe I do not see why economic growth can not continue even accelerate. Especially seeing that sometime this century we will get cheap space travel (getting there) and AI (getting there) and transition from fossil fuels to renewables and fusion (getting there) Tho' yes seeing how some of our best and brightest are working on how to serve more ads and how to get people spend their free time locked in their walled garden...

eru 10y ago
How do you know the size of the universe we live in? (To be pedantic, even in an infinite universe the size of the human-sphere couldn't grow faster than a ball expanding at the speed of light.)
- gggggg11111 10y ago
  Because that is the prevalent scientific opinion We are on a course for a confluence of some major technologies this century which could result in another great leap forward. Anyways i forgot why i dont bother to reply much on this site, got down voted for my above comment yet no indication as to why (is it my comment about working on advertising? its ok that's what I work in too myself have to pay bills somehow, but would rather do something more interesting).
  - eru 10y ago
    The observable universe is very much finite. (And if speed of light is a barrier, than the observable universe is about the biggest thing we can ever influence.) Sure, there will be lots of nice technology coming over the next century. No doubts about that.
    - gggggg11111 10y ago
      Lets assume we develop technology to travel at near light speeds and go mad colonising the universe, what exactly contains us to the observable universe, move 4 light years in another direction and your observable horizon shifts

marcoperaza 10y ago

There are many breakthroughs waiting to be made in medicine, energy production, geoengineering, space exploration, transportation, etc. Automation and AI will increase productivity and leisure time, which will allow the market for entertainment, travel, and luxury to grow much larger than today, and be accessible to many more people. But if we succumb to this pessimism, it will be a self-fulfilling prophecy.

Gatsky 10y ago
I agree. But lately, I have been more aware of the fact that ecological catastrophe could make all this potential irrelevant.
collyw 10y ago
"Automation and AI will increase productivity and leisure time". We got told this in the 70's (the automation part at least), yet seem to be working more and more hours now.
- cheriot 10y ago
  Well, we can produce what was considered enough back then without working so much. People just keep want more, more, more.
  - collyw 10y ago
    Most people under 40 can't afford a house in many western countries. Compared to 20 years ago, most people could (at least in the two countries I am familiar with - the UK or Spain). The very rich seem to be doing OK though.
    - cheriot 10y ago
      The more, more, more does seem to wind up with fewer people. I'm skeptical of the unaffordable housing arguments, though. People only talk about a handful of cities. At least in the US, there's plenty of cheap places to live. They just aren't trendy.

minikites 10y ago

This article reminds me of http://www.motherjones.com/politics/2010/05/peter-victor-deficit-growth http://www.motherjones.com/politics/2010/05/peter-victor-def... >It took a couple of decades, but unemployment eventually fell to 4 percent, most people's standards of living actually rose, and greenhouse gas emissions decreased to well below Kyoto levels. The economy reached a "steady state." And if the model is accurate, then something like it, say some ecologically minded economists, may be the only way for humanity to survive in the long term.

dzdt 10y ago

Sounds like an interesting book. From the linked review, the main thesis that many improvements from 1870-1970 are one-time-only events seems sound. I also agree with the assessment that 'singularity' theories are hokum. (That may be more controversial here on HN!) It does sound like he might underestimate the effects of the coming AI/robot revolution. Over the next 75 years, any job definable by its output may be taken over by a robot. What is left are service and creative occupations where the human presence and artistry is valued. But this will entail a huge economic upheaval. The other giant quality-of-life advancement that might be out there is slowing or eliminating the effects of aging. That would also come with giant problems of inequality (if it is narrowly available) or population pressure (if it is widely available). But it would surely be another huge advancement for its beneficiaries.

skywhopper 10y ago

I agree that it's impossible for the rates of economic growth and lifestyle improvements we saw since the late 1800s to continue indefinitely, but the key to growth is investment. And from the late-1800s till the mid-1900s, there were huge government investments made in building new and innovative infrastructure in the US--railroads, the phone network, state universities and K-12 public education, electricity generation and distribution, highways, airports. Those investments in common infrastructure allowed private investment to piggyback and provide the enormous success the US economy has had in the time detailed. But today, we've forgotten the formula. Education funding is falling, basic maintenance isn't being performed on much of the infrastructure, and we aren't investing enough in the new things that can provide growth for the next hundred years. High-speed and light rail could help address the limits of airport and highway capacity, and provide better mobility in and between cities. Investing in clean electricity generation, a national power network, and improved battery technology could revolutionize how our homes and cars get their power. Very-low cost higher education was a thing in mid-20th-century America--it was possible to attend your in-state university for a few thousand bucks in today's dollars. What happened? As long as we pretend these things are too expensive to invest in, then we're sure to enter a long slow decline.

marcoperaza 10y ago
>Very-low cost higher education was a thing in mid-20th-century America--it was possible to attend your in-state university for a few thousand bucks in today's dollars. What happened? As long as we pretend these things are too expensive to invest in, then we're sure to enter a long slow decline. I don't think your point about education makes sense. You want more investment, but then bemoan the fact that it costs more, as if that signifies low investment. People are investing in their education at record levels! Maybe you think student loans are a problem for other reasons, but they certainly aren't stopping people from going to college. Again, they're going in record numbers and spending record money to do so.
- internaut 10y ago
  > People are investing in their education at record levels! They are investing in formal qualifications. Certificates. As Thiel points out, a university degree has transmogrified from "investment" to "insurance" to "tournament". The reality is that the previous generation knows jack shit about the environment facing the current generation. Their 'common sense' can be thrown out nearly entirely with few exceptions. In today's environment most of them wouldn't stand a chance.

nabla9 10y ago

To keep discussion grounded. We should think this trough economic growth models. What model we use is not that important. You can use simple neoclassical Solow-Swan model as starting point and add more factors as you go. You can play with the model in Wolfram Alpha http://demonstrations.wolfram.com/DynamicsInTheSolowSwanGrowthModel/ http://demonstrations.wolfram.com/DynamicsInTheSolowSwanGrow... Techno-optimists often argue naively that technological progress or increase in human capital works like magic without understanding how they dynamically interact with more basic factors of production like capital, output and labor.

cheriot 10y ago

Bill Gates' review of this book takes a techo-optimist view of it. https://www.gatesnotes.com/Books/The-Rise-and-Fall-of-American-Growth https://www.gatesnotes.com/Books/The-Rise-and-Fall-of-Americ... "Most reviews have focused on the “fall” indicated in the title: the last hundred pages or so, in which Gordon predicts that the future won’t live up to the past in terms of economic growth. I strongly disagree with him on that point, as I discuss below. But I did find his historical analysis, which makes up the bulk of the book, utterly fascinating"

jamesrom 10y ago
Excellent read. Thanks. Something I've always tried to understand is the value of these digital things. How much would it cost, in 1970, to have a library of all the worlds music? Today it's 10 bucks a month. How much value do we put on information? What is the value of the bits of information that make up the Wikipedia page "Smallpox vaccine"? How about in 1960? Can you even put a dollar value on it?
- AJ007 10y ago
  The answer is these things have an immense amount of value. To even say the value of technology an average person accesses today is double that of 1970 is wrong, it is a lot more than that. Much or even most of that value is underutilized. I think a combination of the following lead to a completely perverted understanding of money: - politicalization of economics - the reflexive nature of markets - the tendency of both academics and professionals to seek the assignment of natural laws to market behavior - time lags in the market making it take years or even decades to discover something was worth a lot less than the amount invested Fundamentally money is just meant to be a way to account for limited resources between trading parties. If the trading parties are doing something destructive, money doesn't know that. I've also used the analogy before that the trying to measure things in prices as money supply changes is also like trying to use a yard stick which changes in size frequently. Simple if you have some metrics from the central bank, but actually not so simple because of all the complex moving missing pieces (including what other currencies are doing.) The real global fear factor right now is that a great deal of institutions and individuals have a strong interest in inflation rather than deflation. These are groups whose future is based on prices for things largely going one direction, up. If you earn a living by spending borrowed money -- or being paid by earned interest -- you need this. A lot of people thrive in situations where someone can hand them a blueprint of what to do along with a bunch of money. They follow it, copy, and get the output. That is largely what current growth numbers measure. The reality is, of course, everything can't grow forever. That isn't a bad thing. What I think is the greatest concern right now, the greatest danger, is not 1% global growth or even -1%. Instead, it is how nation states decide to react to slow growth. Quite a few are trying to finance their way out. Others may attempt to do disruptive things such as wars. I think we are more than a decade in to these reactions, by the way. If fossil fuels are as dangerous as we think, a global slow down or contraction may end up saving us. Right now the countries which are growing are still copy and pasting their way to a pretty non-sustainable future. There is another situation where real growth is negative but available money supply is increasing and prices are going up. That is very painful to be in, but a real future possible outcome.

tim333 10y ago

>At the point where computers have achieved superintelligence, we have reached the Singularity >...Gordon has no sympathy for these futuristic views. Kind of dumb really. Like discussing growth at the start of the industrial revolution and having no sympathy for the idea of an industrial revolution.

havetocharge 10y ago

I think it would be helpful to quantify the measure of world warfare. I think it would correspond to economic growth. Nuclear weapons and public opinion on war act as a huge deterrent to large scale mobilizations, so we've reached peak war, and with it, peak economy.

Meegul 10y ago

Freakonomics made a good podcast with the author of this book regarding this topic [1]. I can't say I agree with it, but it's an interesting listen nonetheless. [1]: http://freakonomics.com/podcast/american-growth/ http://freakonomics.com/podcast/american-growth/

tonyedgecombe 10y ago

Up to 1700 the British went through a period of 400 years with virtually no growth per capita: http://www.lse.ac.uk/economicHistory/seminars/ModernAndComparative/papers2011-12/Papers/Broadberry.pdf http://www.lse.ac.uk/economicHistory/seminars/ModernAndCompa... One thing that did boost growth in that period was the black death.

georgeecollins 10y ago

Thomas Piketty is so important about this because he shows how exceptional America was in that it had plentiful capital in terms of land, so that labor was unusually valuable vs capital when compared to Europe. It shapes American's thinking in a positive way, but we need to acknowledge things have changed. Formerly, almost anyone who was willing to work hard and take a risk could build a homestead. Now the conditions for opportunity are available but more restricted.

splintercell 10y ago
> Now the conditions for opportunity are available but more restricted. < Restricted, yet it beats rest of the world hands down in terms of opportunities. When the rest of the world looks at America, they just see a nation which got lucky with land and capital. But the fact is, America had people before it was discovered by the Europeans, and there was no great civilization here unlike almost everywhere else in the world, which leads you to believe that maybe it isn't really all about the geography. America is a plentiful place where individuals who wanted to achieve something (the 'American way of thinking') they arrived here. This still holds true, and will continue to hold true as long as this American way of thinking remains around.
- badsock 10y ago
  That belief is widespread in America, but is unsupported by data. If you look at how hard it is for an American to rise out of the conditions they were born in, they're worse off than if they'd been born in (for example) France, Germany, Canada, or Denmark: https://en.wikipedia.org/wiki/File:Intergenerational_mobility_graph-1.jpg https://en.wikipedia.org/wiki/File:Intergenerational_mobilit... From: https://en.wikipedia.org/wiki/Economic_mobility https://en.wikipedia.org/wiki/Economic_mobility (see the "Worldwide" section).
  - georgeecollins 10y ago
    Piketty's work was a history of the previous century. You are pointing out current statistics, which make his point that things have changed.

cheriot 10y ago

Maybe growth has slowed, not because of an inherent limit of technology, but because we just don't have problems as big as our great-grandparents. The biggest enemy we have left is ourselves. We crave attention more, overeat, and look forward to a retirement where our minds waste away. There are some exciting advances we need to extend the modern world to all of humanity without destroying the planet. But for those of us already living with the best humanity has to offer, our biggest limitation is ourselves. I keep trying to come up with a reason for how recent advances are improving our lives without increasing GDP. Does anyone have a compelling one? Things like wikipedia are valuable and don't contribute to GDP. But then shouldn't people be happier than 20 years ago?

petra 10y ago
>> But then shouldn't people be happier than 20 years ago? A few years ago there was a survey among the amish, and it appears that they are as happy as modern day billionaires. On the other hand, another survey have shown a decrease of 20% ! in empathy among college students, between 2000-2010. And it have probably became worse since than. And empathy is core to so many critical things. But when you don't aim society at nothing meaningful, just more money, what do you expect to get ?
alanwatts 10y ago
>I keep trying to come up with a reason for how recent advances are improving our lives without increasing GDP. Does anyone have a compelling one? GDP/GNP is not a measurement of happiness or standard of living. >Gross National Product counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl. It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities. It counts Whitman's rifle and Speck's knife, and the television programs which glorify violence in order to sell toys to our children. Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile. And it can tell us everything about America except why we are proud that we are Americans. -RFK, Speech at the University of Kansas at Lawrence (18 March 1968)

damptowel 10y ago

Mandatory post :) Exponential Economist Meets Finite Physicist http://physics.ucsd.edu/do-the-math/2012/04/economist-meets-physicist/ http://physics.ucsd.edu/do-the-math/2012/04/economist-meets-...

throw2016 10y ago

Growth and progress are dehumanised meaningless terms when divorced from quality of life of all citizens on earth. You can have massive unsustainable growth that only filters to the top percentages and destroys the environment. This is quasi feudalism. Currently we seem to have an economic system whose sole purpose seems to make a few wealthy. Any technological, social and political progress is a side effect to sustain the primary purpose of wealth for a few, and should any of the side effects come in the way of the primary purpose it will be quashed, which seems a tad uncivilised. These billions are just a social number more than anything else, and do not do anything meaningful, apart from affording power, privilege to sustain an inherently exploitative cycle with serious environmental consequences. Capitalism by its very nature can only reward the top percentages, the moment demand rises with scarce resources prices rise too, leaving a small exclusive group with disproportionate wealth and power always in control. The market cannot decide anything without heavy constraints, and will take us quickly to a gridlock. In a non functioning traffic intersection, humans will always act not in enlightened self interest or common interest but short term immediate self interest which is neither good for them, everyone else or their environment, evidenced in the ensuing gridlock that will leave everyone including themselves stranded. Yet we set up a system that rewards this uncivilised base individual behavior to get ahead at all costs nevermind anything else. If low cost drives choices it only means the market will rush to exploitation and plunder without constraining rules. If someone is plundering the environment or using slaves an informed choice can only happen if the consumers know about it, cares about it and by the time this happens irreversible damage to the environment or social structure may already be done. Power could ensure information is not available, propaganda or lack of choice for alternatives. Capitalism cannot deliver an egalitarian enlightened sustainable society and is not designed to, only promise to while the small elite control the cycle. Currently the elite will always support the system out of self interest nevermind the consequences for everyone else or the environment while others seek a way to break into the club or an alternative way. This is inherently unstable and will lead to periodic purges or paranoia and control of the population. Like the old quote goes there is enough for everyone's need but not for their greed.

mark_l_watson 10y ago

Our economy depends on growth, and I think this will cause lots of problems. I saw a quote by a US congressman blaming young people today for our financial problems because many of them are unwilling to put themselves into debt for homes, cars, etc. An outrageous statement, blaming people for doing what they believe to be in their own self interest. If the value of production mostly stayed with the people and local businesses then I can imagine our society thriving with minimal growth. In my opinion, the requirement for growth to keep the financial sector going is like a cancer. Wall Street, central banks, etc. grow in power and consume more of the productive segments of society like a cancer.

tome 10y ago
Why and how does our economy depend on growth? I've head this claimed a lot but never understood it.
- allendoerfer 10y ago
  You buy a stock, create a company, build a house, because you expect it to increase in value and be a worthwhile investment. If growth stops it will be increasingly hard to do this, because all stocks that are still increasing in value will be bought up, until they cannot anymore. So you keep your money. Deflation. System collapse.
  - tome 10y ago
    OK, that's a rough argument that needs fleshing out. Has the rigorous argument actually been made and is widely accepted by economists or is this just a meme that's accepted and repeated without much basis?
    - riskneural 10y ago
      Adam Smith makes the argument well in A Wealth of Nations. Essentially, the only reason to invest is that you expect to earn something above on top of the risk. Then add that up over everybody in the system. They cannot all get something extra, unless there is growth. That growth is spread over everybody as return on investment. So, if there is no growth, then investment stops earning that extra, so there no point in investment, so nobody hires anybody or builds new machines. Importantly, it's growth in total value, not growth in number of things. Hence, it's okay that growth is infinite without gobbling up the universe - we can always be better. Stuff can always be sexier.

wazoox 10y ago

By definition, growth is unsustainable in the long term. GDP growth is totally, completely correlated to energy consumption. In the future, energy availability will at best plateau, or more probably decline. GDP growth then will be a blip in a long trend of stability, and steep decline is ahead to fall back to a sustainable level (i.e. entirely from renewable resources, as it was for the past millions of years). Data speaks for itself, see many article from a physicist here: http://physics.ucsd.edu/do-the-math/2015/03/bbc-questions-indefinite-growth/ http://physics.ucsd.edu/do-the-math/2015/03/bbc-questions-in... See immense resources from a specialized engineer here: http://manicore.com/anglais/documentation_a/greenhouse/kaya_equation.html http://manicore.com/anglais/documentation_a/greenhouse/kaya_...

haywirez 10y ago

Degrowth[0] is an interesting related perspective/solution to check out. [0] https://en.wikipedia.org/wiki/Degrowth https://en.wikipedia.org/wiki/Degrowth

known 10y ago

First things first http://www.businessinsider.com/inequality-is-worse-than-you-think-2013-3 http://www.businessinsider.com/inequality-is-worse-than-you-... AND this http://www.businessinsider.com/social-mobility-is-a-myth-in-the-us-2013-3 http://www.businessinsider.com/social-mobility-is-a-myth-in-...

edoceo 10y ago

Growth at scale, to bubble up to the oligarchs maybe fails. Sustainable Growth for the local business, small market business keeps going. Small business employs more people than the "big guys" and is a real core economic driver.

bubbleRefuge 10y ago

Modern money is created by keystrokes[1]. We(the US) are no longer on the gold standard(a good thing). In order to have conditions for economic growth(say GDP growth) to occur aggregate income must increase. There are only two possible drivers: Government goes into debt or the private sector goes into debt where debt = spending more than ones income. If government policy makers were to use fiscal policy based economic models that paid closer attention to aggregate debt and aggregate income balances we could have much smoother business cycle and avoid deep recessions where the private sector wants to deleverage. The only thing to fear is inflation and we have never truly sniffed demand pull inflation in the US ever. The 80's was supply shock petroleum based inflation. The Federal government needs to put its foot on the accelerator and not the brakes but the politicians don't know where the accelerator is. [1] http://neweconomicperspectives.org/2012/03/where-did-the-federal-reserve-get-all-that-money.html http://neweconomicperspectives.org/2012/03/where-did-the-fed...