Americans Are Using Less Steel, Paper, Fertilizer, and Energy
reason.com
reason.com
There are two other trends that worry me more. One is visible in the freezer section at the grocery store; a "half-gallon" of ice cream is no longer actually a half-gallon. Many other food items have shrunk. The article's example of lighter buildings is what I view as the same category, something blogger Yves Smith terms 'crapification.' We've now had at least two generations of spreadsheet-wielding MBA's optimizing corporate costs to reduce what is spent on materials and labor. Evidence of their success is showing up across the economy, and politics, and society at large.
The other trend is money supply; One of the chief problems leading to the 2008 financial crisis was that much more credit had been extended than could ever be paid back by those to whom it was loaned. The 'solution' was to have central banks 'pay back' the loans that never should've been made. That put a lot of credit in to the economy, which shows up as economic growth. I'd like to see an analysis of 'economic growth' where the contributions of resources and credit are accounted for separately.
It's on us though. They're lying to us to get our money, our labor, our consent. We let them.
Why?
The varying of quantities in the same sized container is not the problem and is certainly not illogical. The problem is when we allow marketing departments to lie/cheat/fool the product onto a different portion of the demand curve instead of letting the $/amount naturally flow back when price decreases or when it makes sense to switch to cheaper containers.
Why put up with deceptive packaging?
[1] Yes I know that most of that product came arrived in even more packaging, but doing what I can for now.
People know this about me. They know it almost instantly. I sense it in them.
I sense the same about other people. They have that power over me.
However, I make an effort not to. Or, when I do, I work especially hard to steer them in the direction of their goals or somewhere that will benefit them. Even if it's at my own expense sometimes and that can be sad or disappointing.
And so, through that, I have come to resent people who don't think that way. Who think, "People won't look at the number of ounces in the can, they'll just see it's the same size and think they're getting the same amount."
It's a lie. Deception. It's wrong.
But yet, we allow it in society.
It's destroying us. It's all around us. Fake news. The US President. Marketing. Stack Overflow.
So, why put up with it? It's not that you even know you're putting up with it. Some of us do. Most don't. Scammers proliferate.
It's more like, How do we protect the innocent people? Why as a species, do we allow some of us to prey on others?
It doesn't seem good to me.
That's why I despise the advertising industry so much. They're all playing win-lose games with society, and the collateral damage slowly eats at the base of what keeps our societies together.
I said, "I want to create synergistic relationships with other people."
I despise advertising too, but I realized I have to advertise so people know about my products. There are people who want them. Advertising helps them find my products that solve their problems.
And then I realized the advertising platforms like adwords and such were also deceptive. So I stopped advertising.
It doesn't help me though or the people who I could help if they knew.
When everyone around you shouts through a megaphone, you need a megaphone too just so that the person next to you can hear you. If someone took all megaphones from everyone at the same time, people would have the ability to finally have a conversation.
Advertising currently is this. It's oversaturating our attention. Of course, for a market to function, you need a way for people to know what's available to buy. If done honestly, it's totally fine, and I don't have anything against it. My beef is with the existing industry, with all the things I've mentioned here[0]. I want someone to take their megaphones away, so that we could talk to each other like human beings.
--
[0] - http://jacek.zlydach.pl/blog/2019-07-31-ads-as-cancer.html
I've come to understand that to varying degrees a lot of public policy works this way.
This is how "hacking" the public policymaking fucks up society. And then people are surprised antivaxxers are a thing. They are a thing because we're all being constantly manipulated, and some people just don't have the capacity or patience to separate the truth from bullshit.
https://blog.codinghorror.com/introducing-stackoverflow-com/
> Stackoverflow is sort of like the anti-experts-exchange (minus the nausea-inducing sleaze and quasi-legal search engine gaming) meets wikipedia meets programming reddit. It is by programmers, for programmers, with the ultimate intent of collectively increasing the sum total of good programming knowledge in the world.
The key part is "minus the nausea-inducing sleaze" except that their behavior of late is exactly nausea-inducing sleaze.
https://www.wired.com/2012/07/stackoverflow-jeff-atwood/
>Atwood was bothered that the community doing all the work wasn't getting paid...
Yet, the contributors to the stacks don't get paid either. Now the creators and VC are trying to sell the stacks and make money -- exactly what he said his competitor was doing and shouldn't be.
> He and Spolsky decided to create an ad-supported free alternative, and released all answers under a Creative Commons license, so that the users could use the content elsewhere if Stack Overflow ever shut down or started charging for subscriptions.
Now they've decided to retroactively change content users created for them to their benefit.
https://meta.stackexchange.com/questions/333089/stack-exchan...
> we will continue forward under version 4.0 of the CC BY-SA license. This change encompasses all Subscriber Content as described in our ToS including data dumps as well as any content previously made available by Stack Exchange under the terms of version 3.0 of the CC BY-SA license.
There used to be an even more drastic law proscribing certain sizes and disallowing all others. Flour would only be available in 500g and 1kg bags, for example. They got rid of it, possibly because they got sick of people making fun of EU regulations (that's what happened with the famous banana ratings)
Grocery stores in the US do this, but it's not something you necessarily see in food service shops.
It's as often design to mislead and prevent comparison as it is to inform you that "store brand is definitely cheaper than name brand".
Since none of it is mandated, they do only what benefits their bottom line or they are publicly pressured to.
€/item, €/100g, €/1kg are all common
Maybe some German law?? Or just common practice in Germany?
Edit: I think I confused your response with parent. I understand price/kg is a thing although I didn't knew it was mandated by law. What I don't understand is being forced to use some odd unit like price per 500g.
A unit is how the product is customarily sold (singly) in the member state.
So for items typically sold as 500g in Germany, all items of that type in Germany would be labelled with 500g as the unit size for comparison. That same product may typically be sold in the UK as 1kg, so in the UK they would use 1kg.
The only time I remember having difficulty comparing was different formats of toilet paper when our usual brand was out of stock... #rolls × #sheets / pack price was a bit to much for me to do in my head. Yeah, I'm not really complaining.
They do an absolute shit job of it, because there are no standards or regulations. Most times I see this, similar items next to each other on the shelf are using different "standard" units making comparison impossible (e.g. price per ounce vs. price per piece). I've even seen two sizes of the same brand/product use different "standard" units on the grocery store price label.
America is way behind Europe on this. 99% of the time I go to Safeway, I have to bring out my calculator because the reference volume/weight is different from the other items on the same shelf.
What is a bit irritating is having to recalculate when items are discounted.
You’d think it would be in their interest to display the per-unit price comparison, to emphasise where a bigger package is better value.
I know of several products that the Mid Size packaging has the best Per Unit value.
And several where they are the EXACT same price per unit, so they want to push you to the bigger one hoping you will waste most of it.
The UK used to require bread to be 400g or multiples (so a regular sized loaf of bread is 800g) but it eventually got rid of that rule. Obviously years ago (this rule was hundreds of years old) it will have been some amount in an obsolete unit rather than grams, but once metrication happened the bakers picked 400g as the replacement size. I'm told it got rid of this law a few years back, but certainly last time I bought a loaf of bread it was still 800 grams.
[0] https://www.idealo.de/preisvergleich/OffersOfProduct/354801_...
I knew of the Bread Act that set it 1lb/2lb, and the Middle Ages origins that worked "backwards" - when the price of the loaf was fixed and the weight of the loaf was varied as the price of wheat changed.
Doesn't quite gel with modern manufacturing, though!
Although packaging could be thinner, a lot of packaging is to protect from external impact/environment, and remains just as thick, but the surface area to volume ratio has increased.
If I need 3L, it’s annoying to buy 4x 750 instead of 3x 1L like I could in the past.
But the opposite can be true too: a 12 pack of soap may be 12 boxes inside a box...
Kitchen paper towels and toilet paper can still give you a pretty good math exercise to figure out what's more affordable.
This was flamboyantly repeated and amplified by the current UK Prime Minister who was then 'journalist' Boris Johnson.
There is quite literally an archive in the European Comission containing, clarifications regarding lies and misrepresentation of facts (the large majority of which created by UK newspapers).
https://twitter.com/SteveStuWill/status/1181708302943539200?...
We're doomed.
> The alternative is to reduce quality, which usually results in a death spiral.
Or increase cost.
Similar to your point, executives don't like seeing the number on their costs go up. Isn't it possible that quality could take a hit in how the executive chooses to reduce costs?
Similar to your point, executives don't like seeing the number on their costs go up.
Yes, but they do go up, so they try to exploit quirk of human psychology to reduce the impact of rising costs on consumers.
Isn't it possible that quality could take a hit in how the executive chooses to reduce costs?
It sure is possible, and no doubt happens with lots of products across the board. Usually, it is wrong move, and the company eventually succumbs to competitors.
A half-gallon seems like an absolutely obscene volume of ice-cream. That's over two litres! Why would anyone possibly need ice-cream measured by the gallon? Isn't it good that sizes are reducing from that much?
(Although I have eaten one in one go when I was a young man.)
a) when you split it over four people it's only ~two evenings worth of desert.
b) don't tell me what to do with my body.
[1] https://www.target.com/p/breyers-original-ice-cream-natural-...
https://www.waitrose.com/ecom/shop/browse/groceries/frozen/i...
Kinda like how you don't drink a twelve pack in one night?
When I was a kid, we'd buy whole gallons of ice cream, and that would last us at least a week!
MBA's have optimized everything... which is great! We don't need to spend incredible amounts on labor. We don't need to buy incredibly large homes. Make work more efficient... its the only way to compete with low cost emerging economic markets. Specialization and efficiencies are the only way to remain competitive.
From my perspective, the only real structural damage has been done by the success of concentrated moneyed interests in regulatory capture. We need to tax these efficient corporations and individuals fairly, and use those tax dollars to invest in universal healthcare, environmental protection and education.
But we won’t. Most societies that become too successful suffer a similar fate. They become too polarized, and destroy the very foundations of what them great.
I do hope the US is different. Most of humanity has lived under authoritarian rule. For a brief period of time it seemed like a democracy could be the most powerful country in the world. But that’s fast unraveling...
I wonder if the reason wages are stagnating is that the "efficiency" is a result of skimming off the top, and removing much of the value added by removing people from the process. Maybe appliances failing as soon as the warranty expires introduces market externalities that someone will dearly pay for some day...
Or maybe we are paying for it today! Have you ever heard of the [broken window fallacy](https://en.m.wikipedia.org/wiki/Parable_of_the_broken_window)? Basically, someone may claim that breaking windows increases spending on window repairs, which is a net benefit to the economy. This, of course, ignores what could have been bought had the window not been broken to begin with.
By damaging the rest of society in ways that they're not directly accounted for, they find new ways to profit. Many have stayed competitive by costing the human race more that they provide in the long term in many cases.
Making products as low quality as possible is simply destroying your brand. It’s not actually optimizing for efficiency or anything but how effectively you can trade brand loyalty for some quick cash.
Sure, it’s easier to try and cheat your customers than actually improve efficiency and our compete your competitors. But, that’s a long term losing strategy.
There is scientific evidence for this, yes.
> scientific evidence for product shrinkage
No. The term "product shrinkage" itself is undefined, or poorly defined. You're saying the digitization of services has rendered unnecessary a lot of material needs. Counterpoint: it has enabled commercial transactions on an unbelievable scale, enabling smaller industries to reach wider audiences.
Just because you mix in a fact with an anecdote doesn't make the whole argument better :)
He had found substantial evidence not only that Americans were consuming fewer resources per capita but also that they were consuming less in total of some of the most important building blocks of an economy: things such as steel, copper, fertilizer, timber, and paper. Total annual U.S. consumption of all of these had been increasing rapidly prior to 1970. But since then, consumption had reached a peak and then declined.
The rolodex and the ice cream were just examples to ground the idea. I'm sure there's more to the story than spreadsheet-wielding MBAs, but I think it's reasonable to claim (and evidence can be provided for): 1) Spreadsheets have been used for two generations (VisiCalc, 1979) 2) MBAs are trained to optimize things like capital and labor costs, including the price and quantity of materials used in the products and services they manage.
Or on other hand we are enjoying more from life with less resources. Not only it helps more companies to be more profitable thus keeping more people employed, it also does a great service to the planet and the future as we continue to reduce our footprint.
I agree with your point about the loan paybacks which of course is off topic.
Fractional reserve banking (FRB) as is taught in most econ textbooks and courses is a myth. There's a very nice paper by the bank of england debunking this (Money creation in the modern economy). The idea behind QE and bailing out the banks was to create lending and liquidity in the market largely via the FRB mechanism however that failed to materialise for reasons the bank of england paper goes into but basically banks don’t lend out their reserves as the theory expects but it’s the process of lending that creates deposits not the other way around. The money given to banks didn't result in increased lending but instead went into financial markets buying up assets. There was some wealth effect going on so people with some assets got richer and then spent more but overall it was a really trickled down effect.
This statement is precisely what I meant by 'put a lot of credit in to the economy, which shows up as economic growth.' The trick is that QE took the bad mortgage loans (which are created as you say, loan first, not deposit first) off of the banks hands, and put real Fed-created money in the place of the loans (around 1.5-2T of QE went to mortgage-backed-securities.) That converted the bad loans into good credit, then used in the way you describe.
This is a common phenomenon in the UK, and there’s a name for it: Shrinkflation.
It’s a way to raise prices by stealth by not actually changing the price, but by shrinking the product instead.
Earlier you could afford only one pair of shoes for your entire life. Lots of physical things could be inherited because they were valuable and they were really expensive.
You would not let your kids inherit your shoes now. The same with buildings. Kids will probably want to have their "own dream house" not stick with their parents dreams. Those kids probably will also have to move to other state or other city because jobs their parents did will no longer be there, and they will have to find their own place to get a job. Son of a carpenter is not going to be a carpenter. You want buildings easily replaceable. Buildings should last not more than 100 years and be easy to recycle.
That said, all stuff that would be replaceable, should also be easy to repair
Jesse Asubel has been looking at "dematerialization" for a long time[1] but it has only been relatively recently, now with a couple of decades of additional data to look at, that it is getting the attention I think it deserves.
One of the consistently annoying things, for me, in science reporting is the extrapolation of a given set of ratios out to some point where the result is very click-baity. The systems guy in me has experience that all exponential trends are s-curves, and so I feel that one must at least acknowledge that fact in your reporting. I understand it, it means that the predicted outcome might not happen at all, but it is important to the story.
So economists do the same thing, they take some ratio of numbers that seem to be tracking the 'size' of the economy and then run that trend out 50, 100, 500 years. It really doesn't matter, but what is important, and this article and other papers on de-materialization have demonstrated, is that neither the economic growth rate, or the relationship between that growth rate and some other factor, are ever really constant. Thus any point that depends on them being constant for more than a decade or so, is really stretching it.
Its nice to see this reality (of how extrapolating is bad because things change) demonstrated in a clear and convincing way.
[1] "Materialization and Dematerialization: Measures and Trends" -- https://www.jstor.org/stable/20027375?seq=1#page_scan_tab_co...
...but when they do that same thing on earth temperature everyone loses his mind
"Don't be silly! Just because there is water dripping from the ceiling doesn't mean there is a leak in the roof. Things just get wet sometimes. I'm sure there's a wonderful explanation besides the roof leaking. No sense in hiring someone to come look at the roof either. That would be a waste of resources."
Also worth remembering is that climate change isn't really about climate. It's about our society. Earth doesn't care about temperature, and life on Earth will happily survive whatever we can possibly throw at it this century. All that matters is that climate change puts pressure on societies around the world, and with enough pressure our entire civilization will collapse, and you and me and everyone else we know will die a horrible death.
--
[0] - There are also environmental feedback loops ready to take over the growth of average temperature that have gained attention recently.
If 4 degrees Celsius of global cooling (relative to the current climate) can cause large parts of the US to be covered by 3,000 feet of ice, then it's not unreasonable to think that 4 degrees Celsius of global warming could have an equally destructive effect on agriculture and society.
Food pressure, as arable land is lost to the sea and temperatures[0], plus collapsing ecosystems as insects and plants with high vulnerability to temperatures die off. Food prices increase, risk of food shortage increases too, and so does social unrest.
As some land is lost, other land becomes available, "defrosted" by the changing climate. With reduced agricultural capability and migratory pressures, nations will want to compete for both that new land and resources available on it. This could lead to war.
I could elaborate, but let me instead tell you to look at the problem in reverse: think of how little it takes to cause "mass horrible deaths". Most people live in cities now, and most cities are fed "just-in-time", which means there's 3-5 days worth of food in them. Imagine what happens if you break that supply chain for more than a week. Imagine this happening to multiple cities in a country simultaneously.
--
[0] - You can't e.g. think that a +4°C Poland can just switch from wheat to bananas. Bananas may like the new summers, but won't survive the winters.
https://www.scientificamerican.com/article/for-crop-harvests...
Perhaps rich countries can mitigate the likely increase in food prices, but it could destabilise large regions of the globe.
Very few academic economists do 30+ year extrapolations, let alone 50, 100, 500. The vast majority of long-term growth macro-economic literature are attempts to explain/model the large observed differences in outcomes in GDP/capita between different countries, and hopefully distill some useful policy advise from that. Forecasting beyond even 5 years or so is a very niche activity in academic economics. (Source: PhD economics and former model builder for pension fund and souvereign wealth funds)
A possible counter-acting force is Jevon's paradox (a generalized economic form of Wirth's Law) but the linked empirical result suggests ephemeralization is the stronger force. Although, it is likely true we can do much more to counteract Jevon's Paradox like phenomena.
In my experience, the Jevons Paradox seems to be more widely brandished than understood in internet debates about energy and resources [3]. If Alice claims e.g. that American electricity production is getting more efficient, Bob may "refute" her point by citing the Jevons Paradox without mustering evidence that the Jevons Paradox applies to recent trends in American electricity consumption.
[1] https://en.wikipedia.org/wiki/Jevons_paradox
[2] https://en.wikipedia.org/wiki/Rebound_effect_(conservation)
[3] Your comment did not misuse the Jevons Paradox. You noted that ephemeralization seems to be winning.
The world is changing but at the moment that electricity largely comes from burning fuel. And if it makes sense to mine fuel when the payoff is X, then if still makes sense when the payoff is X + something (as it is when efficiency improves).
It is a very safe assumption that Jevons's paradox applies to electricity consumption, there is no need to show it. Take a look at US coal production [0]. There is no evidence there that energy use from coal will decrease with improved technology. That is 150 years of technological innovation and we're basically seeing a linear uptrend in use. If domestic use levels off there will be exporting. That production is not going to go down without an uneconomic political intervention or literally running out.
Now I'll agree that Jevons's paradox does not apply to everything [1]. But energy in general and electricity in particular it is painfully obvious that there are more potential uses than there are efficiencies in the world. Give me cheap enough electricity and I can do anything; its use will not be suppressed by reducing need for it in specific cases.
[0] https://en.wikipedia.org/wiki/Coal_mining_in_the_United_Stat...
[1] Also my name isn't Bob.
https://en.wikipedia.org/wiki/Coal_mining_in_the_United_Stat...
American coal production peaked in 2008 at 1.172 billion short tons. Domestic use peaked in 2006 at 1.150 billion short tons. As of 2018 those numbers are down to 0.755 and 0.678 billion tons short tons respectively.
The EIA's latest Short Term Energy Outlook predicts that total US coal production for 2019 will be 0.679 billion short tons and for 2020 will be 0.603 billion short tons, 48% below the peak.
If you look at the "components of annual change" graphic in the EIA report, you can see that coking coal (used for making steel) is up slightly from 2017-2020. It's coal consumption for electric power that is in persistent decline.
https://www.eia.gov/outlooks/steo/report/coal.php
Coal supplies about 25% of American electricity in 2019 and is expected to decline to 22% in 2020:
https://www.eia.gov/outlooks/steo/report/electricity.php
Percentage-wise, coal reached its all time high in the mid-1990s, at over 50% of American electricity generation:
https://www.mjbradley.com/sites/default/files/MJBAcoalretire...
The Jevons Paradox observes the introduction of more efficient technology in an existing system but finds a "paradoxical" uptick in input consumption. The introduction of more efficient coal burning machinery in England was followed by higher coal consumption. That surprised Jevons.
The broadening of energy use (e.g. India developing like England did) certainly also increases demand for energy inputs, but it's a different case than the Jevons Paradox.
1) Political action.
2) Alternative energy sources getting more competitive. Particularly natural gas, renewables and US shale oil.
You're arguing that use-of-energy efficiency can cause a decline in coal production. That is wrong; if you use energy more efficiently I'll mine more coal - I've met the people who make that sort of decision. Coal is declining for other reasons - mainly that alternative sources are getting cheaper (which is not using energy more efficiently).
Take a look at US coal production [0]. There is no evidence there that energy use from coal will decrease with improved technology.
There is ample evidence that improved technology is driving declines in American coal use/production. The combined cycle gas turbine made it possible to extract more electricity from a megajoule (thermal) of natural gas than a megajoule of coal. Hydraulic fracturing made natural gas cheap in the US. Improved technologies and economies of scale made wind and solar electricity more efficient and cheaper. These are all electricity production technologies. They are what what I had in mind with my up-thread Alice and Bob example. US electricity production is getting more efficient (more electricity per ton of material inputs consumed); Bob believes that any efficiency increase must be more-than-offset by increased electricity consumption, and exclaims "Jevons Paradox!" before even reviewing the numbers.
A friend of mine visited a financial planner inquiring about saving for his children's university education.
The planner took the last the last 20 years of education inflation and extrapolated it out 15 years, and recommended my friend put away 2.5k per month today per child today to cover it.
My friend didn't hire the planner, on the reason that we will probably be post-revolution (which would cause this curve to become an S) before we get to the point where you need to save 30k per kid per year over 15 years to pay for university.
What does this mean for the stock market? And debt? Or really, what does an economy look like when it's done growing, but stable?
Population growth, yes, but technology? Why can't technology continue to improve in terms of efficiency and environmental impact as well as productivity?
Edit: see https://news.ycombinator.com/item?id=21207011 which coincidentally happened to be in new articles when I checked...
Presumably higher quality content
https://en.wikipedia.org/wiki/Great_Acceleration
Turns out people use the efficiency of technology to just consume more. Your internet goods and services might increase consumption somewhere else. Some of it is even explicit. Google Ads is a digital service that explicitly is designed to increase consumption. In fact, all the great technology companies (Microsoft, Google, Apple) are designed around the idea that people will consume more. The tech industry, in aggregate, has been designed around getting people to consume more. Even Tesla, a green play, is designed around more consumption. Tesla could have been a company where you paid them, and they took your car and converted it to be an electric car by stripping the engine and adding batteries. This kind of play could have reduced real consumption. But that's not what Tesla is about.
> I can create digital goods and services which people buy
Your digital goods and services require physical machines to run on. These machines are made of physical materials, including some rare earth minerals that are costly to extract. These machines require energy to run, which also requires material inputs.
> I can even give massages all day, and this also doesn't destroy the environment
Human beings like yourself require material inputs to live – food, shelter, energy, to name only a few. Just by being alive on a biosphere, you are impacting the environment in some way. The size of that impact depends on your individual lifestyle.
There is simply no such thing as "immaterial" economic production.
Parent post was talking about marginal cost of production. E.g. where once we'd buy servers to run services on, we now share servers rented "by the cycle" from providers who amortize the cost over many users. Idle servers can be running at-the-moment economically valuable code for others. It's even possible that some economically valuable computation I might cause to be performed could consume an immeasurably small amount of power compared to the server sitting idle.
Your formulation reminds me of the "labour theory of value" (https://en.wikipedia.org/wiki/Labor_theory_of_value).
but to your question, you'd just "measure" price as the prevailing price that you see in the marketplace, and labor is measured as the aggregate cost of all labor inputs, including parts and raw materials and amortized capital costs. in a well-functioning market, you'd expect prices to trend with the labor value. the industry profit percentage would then be an reasonable expression of the riskiness of the market/industry (in drug discovery, it might be 50% but in grocery, it might be 5%).
so for example, if apple sells iphones for $1000 but it costs them $400 in labor to make and sell, their labor-price markup would be 250%. in a functioning competitive market, you'd expect a competitor like samsung to pursue those profits and, as a result, eventually drive prices down.
There must be a level of economic production that falls below the level of emission that can be absorbed without contributing to climate change. Furthermore in <1billion years everything on earth dies anyway (due to an expanding, ageing, sun) - so it is sustainable to use <1billionth of non-renewable resources.
You're right, there absolutely is such a level. The important point is that to stay at or below that level, you have to give up on the idea of perpetual, infinite growth. The inputs and outputs must remain constant.
My point was that there's no such thing as "immaterial" growth, so we can't escape this limitation by making a bunch of apps forever.
That means that taking and fighting becomes more rewarding than building.
It is either growth or war, no way around it.
They didn't argue that it didn't and that fact doesn't prevent perpetual growth. You can do more with less.
There is the immaterial economy which which might theorize can perpetually grow.
There is also the material economy which is rooted in real physics - ie, materials, energy (it will always take some energy to heat up water and prepare food, for instance). Can we rule out that buying metal and building material become completely free? Or that the cost of energy will be reduced to zero? If there is limited supply, there must be some cost and if that cost is too low, someone will buy it up, corner the market, and start charging the correct price.
If so, the material economy cannot grow forever (outside inflation, which is not real economic growth).
If the material economy cannot perpetually grow, but other parts can, then eventually that part of the economy will completely eclipse the non-material economy. As the part that perpetually grows goes to infinitely, the relative value of the part of the economy rooted in physical limits will be worth relatively nothing.
Which contradicts the earlier point part of the economy can perpetually grow when some parts do not, unless the parts which cannot perpetually grow simply become free.
This is wrong in two ways. 1) Cellphones don't just last 2 years; lots of people have older models. Sure, a bunch of people get rid of theirs after 2 years, but then they go to the secondhand market, where people like me buy them for a small fraction of their original price and keep them for another year or two before reselling them. Frequently, older phones eventually find their way to developing nations where people can't afford the latest iPhone. Your argument sounds like someone whining about people leasing a car for "only" 3 years; what do you think happens to cars after the original owner trades it in?
As for "little economic value", that's just plain ridiculous. Smartphones have enabled all kinds of things that just weren't possible or easy before: managing your bank account remotely, sending money to people (e.g. Venmo), GPS navigation, communicating without playing telephone tag, etc. And they do it with much less energy than any PC uses.
Increasingly less so. On one side, you have cheap subscription plans that bundle usable (not too decent) phones, on the other hand, phone life is shortened by a combination of planned obsolescence, software bloat, and lack of security updates. Short sales cycles is what manufacturers plan for and actively work towards.
> Frequently, older phones eventually find their way to developing nations where people can't afford the latest iPhone.
I might be wrong, but I'm not convinced. Shipping costs money, phones are cheap, and both battery and flash memory have pretty short lifetimes now. A good chunk of phones are barely operational after 2-3 years.
RE benefits of smartphones, it's all true, but you can't run economic growth on it forever. Smartphone transformation happened. It's mostly done. Itself it won't fuel further growth. Production of hardware and software might, but that is not free in terms of energy/resources.
Report: "Strategy Analytics: Average U.S. Smartphone Upgrade Cycle Now 33 Months"
https://www.fool.com/investing/2019/08/23/strategy-analytics...
Smartphone upgrade cycles have been steadily lengthening for years, which has important implications for smartphone vendors and wireless carriers alike. Slowing unit sales have led companies like Apple (NASDAQ:AAPL) to pivot toward subscription services in an effort to better monetize all of the devices that are already out there. ...
The slowing replacement cycle makes sense to me, for basically the same reasons that I don't upgrade my PCs nearly as fast as I did in the 1990s. The improvements aren't as dramatic from model to model or year to year. I'll keep using my current phone as long as it works, which looks to easily be 4+ years.
If phone manufacturers are deliberately trying to drive shorter replacement cycles, it's not working, at least not in the American market.
The report looks interesting, and switching to service model seems like a plausible explanation.
OP said nothing about growing the population. His statement can be true even as world population growth is slowing.
Like many things, there may be no purely immaterial, but there is much (and increasing) practically immaterial.
There are limits to efficiency due to fundamental laws of physics. We're already hitting some, we might be far from others, but a) we may not hit all of them fast enough to met the demand of exponential growth, and b) after we hit them, we can't improve those machines/processes further.
To quote a wise man, "The immaterial has become ... immaterial"
I swear, one day I'll find out why the software crowd, of all people, is completely incapable of understanding the difference between "material" and "real".
There is a strong correlation between the environmental cost and economic growth. It might weaken but it will never be decoupled, as long as people do have 'material' needs.
He said "Some people say growth can't happen forever, and all growth comes at environmental cost". Pointing out that "Every economic output requires material inputs" doesn't mean that there are limits to growth or that you can't have growth without environmental cost.
As an example, if you have a resource that you consistently get more efficient at operating, you can consistently use it to provide more and more value to the world (economic growth).
To use his example: if you take a human who would be using material inputs like food, and instead of them engaging in activity that did not provide value to society, they spent their time giving people massages, you have not increased the amount of physical resources being consumed (since the person was otherwise using the same amount of resources, just not doing anything of value).
You can also create growth by moving money in circles increasingly fast. Question is, how far we can push bullshit jobs before people get fed up with it? I'm not convinced that "forever" is the answer.
If a doctor spends his time saving lives or spends his time watching television, the impact on the world's material resources isn't that different, but the amount of value to society is much greater if he is saving lives.
As an aside, when talking about economic growth we're looking at economic, not social value, and it so happens that saving lives is one of the less valuable things. You can determine it by looking at the paychecks of doctors or ER personnel.
They would be doing that if they were not giving massages.
[1] https://en.wikipedia.org/wiki/List_of_countries_by_steel_pro...
[2] https://www.eia.gov/beta/international/data/browser/#/?vs=IN...
Said in other ways, China and the US may not like each other, but they will never go to war with each other as long as they trade with each other.
Additionally, the manufacturing output of the US economy has continued to grow in the 'post-peak' period.
I have to agree with you. The article is fatally flawed unless it can address these issues you mention. I'm surprised the readers here didn't catch it but I suppose they were busy discussing how quantities are priced at the supermarket.
Technology like Hydroponics also reduces consumption while increasing output.
Computer aided design helps with construction.
It's all there.
This is part of why R. Buckminster Fuller thought there was more than enough to go around.
One thing I'm curious about though - how come energy use stopped being correlated with economic growth? That's new.
If you can spray a field with glyphosate, you don't need to till at the start of the season. Tilling has huge externalities, both the carbon emitted from the powerful plow used, and also the runoff from the disturbed soil. That runoff, which can cause all sorts of contamination, algal blooms, etc., is also leeching needed nutrients from the soil.
If you avoid tilling, you ultimately need to use less fertilizer.
There's just so much shit to subscribe to anymore.
Edit: I forgot, digital-only video games and movie rentals too.
Now ordinarily, I'd assume it's a trivial thing that obviously must have been corrected for. But recently I read that apparently, US's disappearing manufacturing was hidden in statistics for a long time, because some people miscounted semiconductor industry as if it was manufacturing appliances. So I guess mistakes like that happen.
The US, as many other developed countries, has been shifting out of manufacturing economies to service economies for a while now.
Case in point: Nothing at Disney stipulates a correlation between their "economic output" and their energy consumption.
Meanwhile, a steel/aluminum plant in China will have a pretty direct correlation between economic output and energy input.
Not convinced. Whether movie creation or Disneyland, it all seems O(n) to energy use, except the constant factor is much smaller than for a steel plant, so we don't notice the correlation yet. Computers need electricity, man-hours ultimately have an energy cost, you need space and energy to entertain all the Disneyland visitors, etc.
I think I've found the answer to my question in other comments, though. The article focuses on US economy, but given the scale of imports, it doesn't really make sense to treat US economy in isolation. Just like I suspect the "dematerialization" is an artifact of not counting inputs to outsourced manufacturing of imported goods, I now suspect the decorrelation of energy use and economic growth is just an artifact of not counting the energy embodied in imported goods.
The absence of obvious correlation doesn't remove the need. Just like there would be no advanced economy without a working agricultural infrastructure to provide food to everyone...
Driving food around in a gig economy is just another logistics jobs, driving refined metals around between different refining processes is also just another logistics job, but one with more "energy-intensive cargo".
All that tech, the cars, the infrastructure, they need those base materials you can't just "service into existence" as you can do with IP and copyrights.
Sure, all that tech needs electricity to run, but the really big emission and energy footprint they create during their creation, not during their use.
Yeah, but this is a good thing. The labor class is a very strong supporter of the political party that pushes policies which increase the income gap, and votes strongly against anyone who tries to change this or go back to the policies you're talking about. So they're getting exactly what they're voting for.
It's not that hard to spin things in a way that people unknowingly vote for the opposite of what they actually want or need.
If people are intentionally voting for the opposite of what they actually need, why is this a problem? Who's the arbiter of what the voters "need" anyway? The voters are responsible for determining what they need, and voting for it; if they can't do that, then they're getting what they deserve, right?
Basically, this comes down to an argument of democracy vs. authoritarianism. Should the voters get what they want or vote for, even if it's seemingly not in their best interest? Or should some other party decide what the citizens need and force it on them?
It’s possible you were thinking of the white working class, but if that’s what you meant, then you should have said so.
There are similar indicators for Germany as well, and their wage picture is pretty different.
Check out [1] and scroll down to Table A-7 (it's an Excel file). It's the real earnings data (in 2018 dollars), by gender, from 1960 to 2018 (though it's kind of spotty before 1967). What sticks out to me:
* For men (looking at Total Workers), real earnings are currently around 10% higher than they were in the 70s (moving from low-$40K's to recently just past mid-$40K's, with some peaks and valleys along the way). Doesn't sound like much, but...
* For women, earnings have roughly doubled in that timespan
* The number of men in the workforce has increased by almost 50%
* The number of women in the workforce has increased by almost 100%
From a certain perspective, it's kind of amazing that real earnings haven't gone down significantly.
[1] https://www.census.gov/library/publications/2019/demo/p60-26... (Census report that came out last month)
That isn't wage growth. And yet, I am better off for being able to do that - not better off in terms of dollars, but better off in terms of being able to more easily do the things that I want to do.
A lot of people are upgrading phones or laptops every few years too.
The tech is great, but it isn't always free.
We might actually see a reduction in GDP in that case, especially if coupled with ever increasing production efficiency for energy consuming processes.
In that case, we might have to re-evaluate how we define "success" to be less weighted for GDP, or include the reduction in fossil fuel externalities in the definition.
Could be be best race-to-the-bottom ever.
[1] https://www.vox.com/future-perfect/2019/6/8/18656710/new-zea... (Forget GDP — New Zealand is prioritizing gross national well-being)
[2] https://docs.google.com/spreadsheets/d/1tZq47h6jg7NX4ddhTS_H... (Watsi.org Transparency Log)
I'm no economist but the fact that we're using less of the most fundamental resources available despite a growing population doesn't seem like improving efficiency in aggregate, it just seems like decreasing activity masked by the inflated aggregated metrics about the 'economy'. A lot of money moves around nowadays and relatively little of it is actually put toward something "real", instead being diverted to quant firms' operational costs and their employees' bank accounts.
Could this be related to growing income and wealth inequality? Poor people buy less stuff, and presumably rich people get rich by not buying more stuff commensurate with their incomes. Even the falling fertilizer consumption might be explained if poorer people are shifting to more processed junk food.
The article notes 1970 as the critical turning point, which is the same year Piketty identifies in his book Capital as the inequality turning point in the U.S. and Europe
Not many people out here buying new cars, or washers and dryers, or even homes right now. And then in the other world I live in, tech, people not only do all that, but they also fly to Greek Islands for vacations. It's really kind of bi-polar right now. At least around here it is.
> Poor people buy less stuff, and presumably rich people get rich by not buying more stuff commensurate with their incomes
One implication of the above statement would be that everyone is now buying less and yet somehow the economy is growing? Those two ideas aren't strictly necessarily opposed to one another but it certainly doesn't seem like a good place to start. The economy could only be growing through investment if this were the case.
> Even the falling fertilizer consumption might be explained if poorer people are shifting to more processed junk food.
Is there any junk food that isn't composed of organic matter primarily? Most "junk" food in the US that I can think of is corn based which would of course still require fertilizer...
That said, I have some questions if there’s an economics know-something around here, because there might be an alternative explanation than just a rise in inequality. For one thing, to maintain the standard of equality/inequality that exists today, I would think even the richest would need something to dump their money into. Right now that seems to be the United States economy, mostly, and a few fairly solid foreign markets, Japan, the EU, Hong Kong, Britain, and for the less risk averse, there’s also the PRC and various developing economies. Mostly the US is where you get your safest ROI.
So a massive growth in investment, would seem to also suggest a massive growth in the financial services market. Not to mention the massive amounts of money sloshing around throughout the Bay Area. At the end of the day, you still need bankers handling all the transactions.
And that’s just it, the United States today, near as I can tell and certainly this is what I was taught and the dogma of today, is a services-based economy. Banking, health care, government, etc, not to mention the usual suspects among tech: Google, Facebook, Amazon, Apple, Uber, Lyft, Doordash, Microsoft, Netflix, etc.
Now between them, there’s a lot of products getting designed, and built, and shipped, and sold. Computers, phones, and I’m sure even the cars drivers use for fares and deliveries are consuming a fair amount more resources than your average car. In providing their services, they are charging a premium, and in return you get convenience. If you use AWS or Azure, you’re still using something tangible and real, you just don’t own the infrastructure. But the people that do are benefitting from economies of scale large enough that there are ultimately fewer servers and data center than there otherwise would be if all of their customers bought their own. So in a real sense, it really does seem like more value is being created with less resources that way.
So now that whoever is reading this knows where I’m coming from, here is my question to economics know-somethings (fair warning, my jargon might even be off or used incorrectly): does our economic shift away from agriculture and manufacturing towards a service and information-centric economy have a possible causal effect on our ability to grow the economy with seemingly fewer resources? If so, is there one part of the services sector which seemingly has an outsized influence in decreasing our resource use while growing the economy, be it financial or tech or something else?
Seriously, thanks in advance.
Other factors:
Things last longer. (when there isn't planned obsolesce) We have learned to make things higher quality, so even when we make something the energy cost to replace it latter is deferred a little.
The miles people drive isn't increasing. Something as somehow got people to drive more and more each year. Services is probably a factor in that: why drive to X when you can stay home... (walking - or even driving someplace closer count as staying home)
It is really hard to know which factors are important though.
See e.g. https://home.agrian.com/what-we-do/ for a company that manages this process.
Farmers are very aware of the benefits of technology (why else would you spend half a million $ on a combine?) and will take it up if they see a benefit.
OP seems to be talking about some kind of automated drone weeding (or just phrased what he meant poorly).
There was just a paper released about a widely used pesticide that did not appear to actually increase yields.
If the question is, how does crop tonnage go up without water and fertilizer use, maybe the answer really is a computer helped people plan better and be less wasteful.
Or all the least efficient farmers were bankrupted out of the market.
"At TeeJet Technologies our single focus is on application technology. Our company and our products have been part of agricultural applications since the first crop protection products came onto the market in the 1940's. Our control systems date back to some of the earliest in-field uses of electronics in agriculture. This experience in the fields of spraying, fertilizing, and seeding means nobody is better suited to provide quality products and technical solutions for your business."
Farmers haven't just been adding a bit more fertilizer and water every year, and it has been going on long before computers.
Many factors go into it: soil management with tilling practices and fertilizers, pest and weed management, improvements in irrigation and drainage, better harvesters which leave less on the ground, but very much most importantly, plant genetics.
Nice to believe and it is certainly what growers should be doing, but the evidence clearly indicates that they really aren't.
Nitrate levels in the Mississippi are directly correlated to nitrogen use in agriculture and in the upper Mississippi River and Missouri River, flow-normalized nitrate concentration and flux have increased steadily during 1980–2000 and is most measuring sites accelerated since 2000.[0]
At the two most downstream sites on the Mississippi River, increasing trends in flow-normalized nitrate concentration are a relatively new development and at least partly reflect increases occurring in the Missouri River and the upper Mississippi River.
Many believe this increase in nitrate concentration is directly responsible for the Gulf of Mexico dead zone – an area of low to no oxygen that can kill fish and other marine life – which for 2019 NOAA scientists are forecasting to be approximately 7,829 square miles or roughly the size of the land mass of Massachusetts.[1]
I don't see how Ausubel's conclusion on decreased fertilizer use squares with the measured reality on the ground (or the water) in this case.
[0]: https://pubs.usgs.gov/sir/2013/5169/pdf/sir20135169.pdf
[1]: https://www.noaa.gov/media-release/noaa-forecasts-very-large...
The fluctuation year to year may be due better growing seasons so farmers use more, but potentially so do golf courses and lawns. The usage of the others may definitely be drivers as well but agricultural use is correlated
When my father was in a university geology department in an Agriculturally intensive midwestern state in the 80's, he worked on a few projects with farmers related to water use. One thing he looked into (unrelated to the main research project) was the cost/benefit of ferilizer use. The gist of it was that he came up a curve representing the marginal value added of fertilizer, which started high, and eventually went negative. Past a certain point, less fertilizer was absorbed into the soil and more went directly to runoff/there was more than the plants could use, something like that, and thereafter the added cost outweighed the further crop gains. Most of the farmers in the area were going beyond that point to some extent, and could increase their profit by decreasing fertilizer use to some extent. He said the farmers he talked to were skeptical, but one tried it out on one of their fields that year, found it to be an improvement, and a number of farmers in the area reduced their fertilizer to some extent using the curve as a guidance. The fertilizer sellers would probably just have said that more fertilizers would lead lead to more productivity, which was true, but not presented the cost/benefit.
I don't know too much about farming/crop science, but could see there having been improvements in things like this as well as GMO's & selective breeding. At one point Iowa State University was one of the leading statistics department in the US, which I believe was in large part due to the applicibility of statistics to farming.
"Or all the least efficient farmers were bankrupted out of the market."
One of the trends in the Midwest over the last few decades has been the transition from a larger number of smaller farms to a smaller number of very large farms. Perhaps this is greater efficiency/mechanization/scale.
Check out 5:22 in the video here:
https://www.cbsnews.com/news/land-olakes-ceo-beth-ford-and-t...
Glyphosate, with GMO crops or without, means you don't need to till your land. It's enabled a huge fraction of productive acreage to become no-till or low-till, which preserves soil nutrients, aids soil water absorption, reduces agricultural runoff, improves cover-cropping, and more.
There are a variety of farming practices that contribute to the efficiency of agriculture, but no-till is absolutely central. The late 90s through early oughts saw big increases in no-till acreage, up to ~20% of all land by 2002, precisely when fertilizer inputs started to decline. It sits between 40-50% now.
TFA: >> The growth in plastic consumption has slowed down greatly, to less than 2 percent per year between 2009 and 2015. This is almost 14 percent slower than GDP growth over the same period. So while America is not yet post-peak in its use of plastic, it's quickly closing in on this milestone.
It will be interesting to see what our other material trends do once we do hit peak plastic, if we shift to using more paper and aluminum as people push back against plastics for their various drawbacks.
This article is misleading horse shit.
[0]. https://www.cnbc.com/2019/07/29/buybacks-companies-increasin...
The Do The Math blog by Caltech-trained UCSD astrophysicist Tom Murphy is the best resource in this area.
In particular the posts
- Galactic Scale Energy https://dothemath.ucsd.edu/2011/07/galactic-scale-energy
- Can Economic Growth Last? https://dothemath.ucsd.edu/2011/07/can-economic-growth-last
- The dinner conversation with an economist on this topic https://dothemath.ucsd.edu/2012/04/economist-meets-physicist
His energy analysis concluded that at 2.3% growth rate and current technology, we would need to use the entire energy supply falling upon the earth's surface within 275 years. Improving technology might be able to stretch that to 400 years. Within 1400 years, we would need to use the entire energy of our solar system.
But we have a number of more pressing demographic constraints. As countries develop, fertility falls; fertility rates are currently below replacement in the entire developed world [1] with all regions other than Africa falling below replacement rate by 2050. Within 80 years, population is likely to start falling, with some studies predicting this within 30 years. Worse, there's a worldwide demographic bulge of 18-30 year old males that's hitting just about now; such demographics have been associated with a higher likelihood of war in the past.
There's plenty of other problems that these bring: if you don't get killed in war and manage to find a mate, you're not likely to see your social security or 401(k) worth all that much, nor will you find health care unless your rich or lucky or both. But they'll happen way before we reach physical limits on growth. Our threat model should be stupid politicians doing stupid things at the behest of frustrated populations, not the laws of physics.
[1] http://worldpopulationreview.com/countries/total-fertility-r...
On one hand, we want all those extra humans to generate "economic growth" to keep our perpetual growth train going.
On the other hand, the environmental consequences of that seem already unbearable for our biome right now.
It's like we want to have our cake and eat it too, it just won't work. If we want to "save the planet" then we need to let go of this insane idea of perpetual economic growth we supposedly only can solve by throwing more human bodies at it.
Economists and others who think growth is necessary to distribute goods don't know what they're talking about or have ulterior motives.
I don't think it can. My thought went to suspecting we simply don't "directly" consume raw materials only because this story doesn't pass the common sense 'sniff' test. If I look around me at my lifestyle or my friends/family/coworker's lifestyles, consumerism seems to have increased and not decreased. Think of the rise of ubiquitous handheld electronic devices, fast fashion (Forever 21, H&M, and so on), online shopping, and so on.
Also analyzed are building materials and agricultural inputs. Buildings can't be off-shored, and if anything, we're a net exporter of agricultural products. So the analysis holds.
A perfect cure for age related death is worth so much, it probably has undefined value. A TV show as a bitstream is worth nothing (bits ephemerally have no value), can be infinitely copied, and yet IPR law defines its value as a function of the lock on the disney vault.
The mainstream view is that "all costs are opportunity costs", which is to say, the best alternative use of some input. This is probably best further expanded to the notion that an opportunity cost is based on the consumer value received from the use stream defined by the alternative use, which is a bit abstract, but generally tractable.
An alternative, with antecedants to Adam Smith, is that costs are based on the factor inputs to production. The mainstream views these as labour and capital (or increasingly, simply capital), but a more comprehensive view would be for a number of inputs: material, energy, knowledge, capital (itself reserved production from earlier periods), labour, organisational services, and sinks. An early version of this appears in Leo Tolsty's What is to be Done? (1886).
Service and information are distinct from material production (goods, construction, capital) in several regards, but are not fully immune to physical considerations. In particular:
- Services require labour, capital, and energy inputs.
- Services are, in the words of one of the early economists (Smith or Mill as I recall) "immediately extinguished". That is, in the most fundamental sense, services are non-capitalist in that one cannot reserve production of services as capital. (The results of services may be.)
- Information has numerous characteristics which make its pricing virtually completely incompatible with market-based systems as information is a pure public good, in the econonomic sense: nonrivalrous and nonexcludable.
The upshot is that service-and-information economies neither spare us from physical resources, nor are amenable to the management and explanatory concepts that have guided most of the past 200 or so years of economic development.
Also, nit, the question is raised but not begged:
As we get better and better at producing the necessities, we'll desire more luxuries, some of which are experiences.
Glad to see it confirmed in the numbers.
See:
The true raw material footprint of nations
https://web.archive.org/web/20130906063246/http://newsroom.u...
The material footprint of nations http://www.pnas.org/content/early/2013/08/28/1220362110
As of 2010, total global per capita energy consumption was rising:
http://i.imgur.com/5hO5Hep.png
Most of the above, plus further discussion:
Economic decoupling? The recent relationship between energy and growth
https://old.reddit.com/r/dredmorbius/comments/1vlksg/economi...
https://a16z.com/2019/10/03/the-environment-capitalism-techn...
Increasing profits necessitates reducing one's demand for supply. Using less steel, paper, fertilizer, and energy to achieve same/better results while tautologically using less resources is indeed good all around (mostly).
Paper is most likely digitization which again just transfers the energy use into computing every time the document is viewed and is almost certainly a net negative in relation to energy consumption.
Fertilizer I don't know but a half ass guess would be GMO's. As they are able to target traits that allow them to use less fertilizer and pesticides to produce the same amount of crop yield.
Or maybe we just haven't accounted for inflation and the rampant advent of landlords and landlord-like start ups which consumes greater and greater slices of the consumer's money.
Anyone with half a brain knows that something is fucky.
On the other hand, well-meaning socialist interventions are driving additional environmental impacts, as people buy “reusable” bags or higher-CO₂-impact paper bags instead of changing their behavior the proper way.