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Exponential Economist Meets Finite Physicist (2012)

dothemath.ucsd.edu

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Re: Exponential Economist Meets Finite Physicist (2012)

#61

Post by sbov »

lutorm wrote: post #42
age_bronze wrote: post #30

There's an underlying assumption that economical growth has anything to do with physical limits. Economical growth is a lie we tell ourselves so that innovation has its incentives, while everything else that's there because it must be there (because it will always have a demand), such as energy (but also food, real estate, etc.) just piggybacks with a similar 'fake growth' that really arises only from the fact these…

Yeah, as far as I understand, there's nothing preventing you and me just trading the same money back and forth at ever increasing speed, creating economic "growth" without physical limits.

Taxes.

Re: Exponential Economist Meets Finite Physicist (2012)

#62

Post by jeremysalwen »

I read through the comments expecting the typical HN takedown of the whole bogus idea that energy must become cheaper as a fraction of the economy in order for it to keep growing. But surprisingly, nobody more economically literate than me has done so, so I guess it falls on me.

We already have experience with an economic input which is required for practically all production becoming less important to the economy as efficiency increases, it's called labor. And as efficiency of labor usage increases, the price of labor goes up, not down, see Baumol's Cost Disease. So no, the fact that the price of energy will go up with gdp does not mean the growth is "illusory", and the fact that an "extremely prestigious" econ professor did not point this out is a bit fishy.

Re: Exponential Economist Meets Finite Physicist (2012)

#63

Post by hn_throwaway_99 »

philipkglass wrote: post #19

I generally liked the Do The Math posts but I thought this was one of the weakest. Physicist: "Right, if you plot the U.S. energy consumption in all forms from 1650 until now, you see a phenomenally faithful exponential at about 3% per year over that whole span." It's not phenomenally faithful. There's an inflection point visible even in his large graph going back all the way to 1650. US primary energy consumption in…

Thank you thank you thank you. Honestly, this whole article had the veneer to me of "Ahh, poor silly economist..." I'm not sure if there is a great word for it, but I call it the "humble-brag equivalent of obnoxiously condescending"

Re: Exponential Economist Meets Finite Physicist (2012)

#64

Post by jbay808 »

jeremysalwen wrote: post #62

I read through the comments expecting the typical HN takedown of the whole bogus idea that energy must become cheaper as a fraction of the economy in order for it to keep growing. But surprisingly, nobody more economically literate than me has done so, so I guess it falls on me. We already have experience with an economic input which is required for practically all production becoming less important to the economy as…

I'm not sure this is quite a takedown of the author's point. In fact, I'm surprised at how many people on HN seem to be misunderstanding this.

The author is saying that physics puts a fairly solid cap on the amount of power we can produce on earth. That's the basic point.

What does a finite energy-consuming, exponentially growing economy look like?

If we accept that all economic transactions consume some energy, and the economy is growing (so the number or the value of economic transactions is increasing), then once we've hit our physical constraint on power generation, how does growth continue? Only if the energy required per unit of transaction-value continually decreases. So the price of energy must continue to drop, measured by the relative to the value it provides.

The author then points out that this is a contradiction because the price of energy would have to rise, and therefore that the problem is in the assumption of continuing exponential growth.

Re: Exponential Economist Meets Finite Physicist (2012)

#65

Post by jbay808 »

mr_toad wrote: post #35
jbay808 wrote: post #13

Earlier quoted context omitted.

This is why, as all economists agree, measurements of economic growth are completely arbitrary and the economy hasn't changed in any meaningful way that can be called "growth" since the middle ages. ... Oh, wait, or maybe growth actually can be expressed as a quantifiable concept? In this case, the author chooses energy as an objective measurement, because all economic transactions must consume energy in order to occ…

> the author chooses energy And is thereby begging the question. Economists value goods using prices.

And economists measure inflation by the prices of goods...

Re: Exponential Economist Meets Finite Physicist (2012)

#67

Post by jbay808 »

Mirioron wrote: post #54
jbay808 wrote: post #9

Earlier quoted context omitted.

"I do think there is still room for many more doublings in efficiency for computers" I don't think our finite physicist is arguing that exponential growth can't happen temporarily, just that eventually we hit the boundaries of our petri dish. It's a challenge to economic models that sometimes deny in principle that the petri dish even has boundaries.

If the universe is infinite then that does imply that eventually the petri dish will be too.

It doesn't, actually. The universe is getting bigger but the available negentropy, practically speaking, is not. A big, heat-death universe is not a useful resource to anyone.

Re: Exponential Economist Meets Finite Physicist (2012)

#68

Post by jbay808 »

dosy wrote: post #55
scythe wrote: post #14

Tom Murphy's website occasionally comes up in futurist circles. His general point that unbounded exponential growth is impossible is obviously correct, but I find his condescending attitude tiresome and he often exaggerates the apparent validity of his pessimism through questionable arguments. For example, he first insists that the conversation about energy consumption be confined to Earth and ignore space exploratio…

It does seem like physicist enjoys spreading the pessimism of that position in a condescending way, which makes me think the allegedly "faithful" write up of the dinner conversation, was in fact compensating for one where the physicist felt they had been beaten, and was so annoyed by that they have re-written the conversation in this more favorable way where it appears they win the argument. Besides, I think that pes…

What if X is free for everyone in unlimited quantity? And the only constraint... is that no one uses too much?

Sounds like a pricing mechanism had better appear. Fish are free for anyone to catch, as long as nobody catches the last two...

I feel like the rest of your post was trolling, though, so I'm not sure you were serious about this part.

Re: Exponential Economist Meets Finite Physicist (2012)

#69

Post by bshipp »

hn_throwaway_99 wrote: post #63
philipkglass wrote: post #19

I generally liked the Do The Math posts but I thought this was one of the weakest. Physicist: "Right, if you plot the U.S. energy consumption in all forms from 1650 until now, you see a phenomenally faithful exponential at about 3% per year over that whole span." It's not phenomenally faithful. There's an inflection point visible even in his large graph going back all the way to 1650. US primary energy consumption in…

Thank you thank you thank you. Honestly, this whole article had the veneer to me of "Ahh, poor silly economist..." I'm not sure if there is a great word for it, but I call it the "humble-brag equivalent of obnoxiously condescending"

I think part of the problem is that it's easy to draw a trend-line across a batch of data you actually know about, like oil reserves or food supplies, but incredibly difficult to make educated estimates about how we will resolve constraint problems in the future.

Naturally, the most rigorous analyses are going to be heavily weighted toward historical data, but will carefully ignore predicting future breakthroughs and paradigm shifts. Any analysis that tries to highlight humanity's adaptive ability would be laughably ignored, or at least minimized as being overly speculative.

So here we sit, with our broken pessimistic models, because they're the only ones the data supports.

Re: Exponential Economist Meets Finite Physicist (2012)

#70

Post by bshipp »

ThrustVectoring wrote: post #49
age_bronze wrote: post #30

There's an underlying assumption that economical growth has anything to do with physical limits. Economical growth is a lie we tell ourselves so that innovation has its incentives, while everything else that's there because it must be there (because it will always have a demand), such as energy (but also food, real estate, etc.) just piggybacks with a similar 'fake growth' that really arises only from the fact these…

The less cynical interpretation is that "real goods and services" captures the value people derive from them , rather than some objective measure like "energy consumption". There's no innate reason why we can't figure out more and more valuable ways to do things pretty much indefinitely.

Indeed. Take a look at cars, for example. My little 2.0L engine makes more power than a 1970's V8 behemoth could have dreamt of, while simultaneously getting fantastic fuel mileage with minimal pollutants (in comparison).

It's by no means perfect, but by any objective measure it's providing me with more value at a lower energy cost. Energy cost to operate, energy cost to build, energy cost to maintain. And that trend is most certainly not going to reverse any time soon.

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