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Exponential Economist Meets Finite Physicist (2012)

dothemath.ucsd.edu

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Re: Exponential Economist Meets Finite Physicist (2012)

#111

Post by paraschopra »

ThrustVectoring wrote: post #84
paraschopra wrote: post #74

Earlier quoted context omitted.

It depends what you call and measure as value. If it’s production or goods, there’s obviously an upper limit. Even if in distant future, we begin assembling atoms into making novel rare elements, all that process consumes energy and possibly would produce waste. Production is not free. In the exponential limit, we will hit some constraint. If we are talking about services, we should realise that even they cost energy…

Yes, in current and recent economic regimes, the primary way of providing more value is simply by doing more of the similar valuable work. Instead of manual production of a shirt, a factory worker makes orders of magnitude more. Increasingly though, modern economies are shifting away from this sort of work. Instead of the energy-constrained primary and secondary sectors, more things are being done on the knowledge an…

Yes, it is true that providing a service or an information consumes less energy than materials.

The real issue though is not about absolute amount of energy. The author is talking about exponential growth - the one where every year economy must grow as a percentage of existing base. At any base, even with a majority service based economy, exponential growth will hit a bottle neck.

For example, take this (from https://www.energuide.be/en/questions-answers/do-i-emit-co2-...)

>In 2018, Information and Communication Technologies (ICT) account for 6 to 10% of global electricity consumption, or 4% of our greenhouse gas emissions. And this figure increases by 5 to 7% each year!

This year-on-year growth is unsustainable, no matter how small the base. At 7% growth, the greenhouse emissions will double every 10 years. We're really bad at wrapping our heads around exponential growth.

The argument that we will find more energy efficient ways to do a certain activity misses the point because for a growing economy, even that efficiency gains will get outstripped by scale. And there's Jevon's paradox too whereby efficiency actually increases resource consumption. So as Internet bandwidth expands, it's not like per-capita Internet usage remained the same. We simply increased our hunger to consume the available bandwidth.

Re: Exponential Economist Meets Finite Physicist (2012)

#112

Post by PaulAJ »

The basic fallacy here is the proposition that all economic activity involves physical work, and hence energy == economic activity. However this is not the case. My economic activity consists of staring at a screen and pressing buttons. It is therefore perfectly possible that energy consumption can level off while economic growth continues.

One can imagine a similar conversation between a geographer and an economist (if one existed) in 1700 in which the geographer made the same argument about land use; at the time economic growth was very much about bringing land under cultivation or other use, and hence (the geographer would argue) economic growth would be limited by the finite amount of land. Same fallacy.

Re: Exponential Economist Meets Finite Physicist (2012)

#113

Post by ben_w »

seiferteric wrote: post #5

Only complaint is the discussion about super computers consuming vast amounts of power. I do think there is still room for many more doublings in efficiency for computers, it will likely require a switch to a completely new technology though. Also a bit more wild speculation... He does not account for the idea of space based manufacturing (he just mentions living in space). It's at least conceivable we could one day…

Sure, but at some point between 1400 and 2500 years, your (exponential) growth exceeds your (cubic) light cone volume.

Re: Exponential Economist Meets Finite Physicist (2012)

#114

Post by paraschopra »

Kalium wrote: post #82
paraschopra wrote: post #74

Earlier quoted context omitted.

It depends what you call and measure as value. If it’s production or goods, there’s obviously an upper limit. Even if in distant future, we begin assembling atoms into making novel rare elements, all that process consumes energy and possibly would produce waste. Production is not free. In the exponential limit, we will hit some constraint. If we are talking about services, we should realise that even they cost energy…

> If it’s production or goods, there’s obviously an upper limit. Is there? I have a difficult time imagining any meaningful inherent upper limit to the value of creative works. Perhaps you intend a narrower point?

Creative works are ultimately embedded in physical world. If our exploitable physical world is limited, there is indeed an upper limit to the value of creative works.

Just like we're facing the prospect of peak oil, is it really hard to imagine that we could face the prospect of physical limitations imposing themselves upon creation and distribution of creative works?

Re: Exponential Economist Meets Finite Physicist (2012)

#115

Post by paraschopra »

cinquemb wrote: post #79
paraschopra wrote: post #74

Earlier quoted context omitted.

It depends what you call and measure as value. If it’s production or goods, there’s obviously an upper limit. Even if in distant future, we begin assembling atoms into making novel rare elements, all that process consumes energy and possibly would produce waste. Production is not free. In the exponential limit, we will hit some constraint. If we are talking about services, we should realise that even they cost energy…

> Fundamental argument is then about energy. Can we keep harnessing it infinitely? No. Even if we make energy efficient processes, Jevon’s paradox suggests we will simply start using more energy. The thing about infinity is that while it is a limit, it can always be approached based on ones understanding. And I would not state that our knowledge and application of energy collection/generation (and even energy itself)…

>naturally markets and systems will correct.

Markets and systems obviously correct, but the key question is at what cost and to whom. Imagine for a moment that we find ourselves in a situation where energy is limited. Markets will correct themselves by making it expensive, but who'll suffer the most is the poor (while markets might have been reacting to overconsumption by the rich).

Saying markets will correct themselves is like saying things sort out themselves. They do, but usually who takes a hit isn't fair and ethical (as was evident by 2008 crisis).

Re: Exponential Economist Meets Finite Physicist (2012)

#116

Post by paraschopra »

PaulAJ wrote: post #112

The basic fallacy here is the proposition that all economic activity involves physical work, and hence energy == economic activity. However this is not the case. My economic activity consists of staring at a screen and pressing buttons. It is therefore perfectly possible that energy consumption can level off while economic growth continues. One can imagine a similar conversation between a geographer and an economist…

I think you're missing the basic point. Yes, pressing buttons and staring at a screen takes less energy but the value corresponding to that is expected to grow indefinitely, is that even possible?

What humans value is built upon energy and resources (even clicking on buttons), and if that base is limited, where does future value creation come from?

Re: Exponential Economist Meets Finite Physicist (2012)

#117

Post by paraschopra »

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…

> For any product you can imagine consuming, there are "obesity"-type limits to how much more of that same product you can consume before the marginal utility goes negative. For any service you might use, similar limits apply since there are only 24 hours in a day.

Not if products are finanicalized (like equity, debt or land ownership). There's no obesity-type limit to net worth of an individual and that money allows the person to have unprecedented power to exploit actual physical resources and energy. Some, like Bezos for his Blue Origin project, decide to do so.

> We ended up with a world where widespread obesity is a problem and predicted gigadeaths from starvation did not actually happen.

This is looking at a very specific metric of human well-being. The limits of nature assert themselves in various ways. The loss of biodiversity and climate change is directly attributable to economic growth. https://www.theguardian.com/commentisfree/2019/apr/25/capita...

Re: Exponential Economist Meets Finite Physicist (2012)

#118

Post by dosy »

kgwgk wrote: post #105
dosy wrote: post #100

Earlier quoted context omitted.

I had to parse that part a few times to get it myself, when I saw you didn't get it too I could relate. Then I had to think a few times about what you gave in response! It seems this part of the topic is quite involved. I think I get some of it now. If you drop the assumption that grow takes energy, then no extra demand on energy from growth, then no price increase on energy, then no inflation, and so it's just growt…

> I still have a hard time imagining a growth that doesn't use more energy (except the one defined in that article as "development", which seems to be a more sophisticated/involved use of existing resources, rather than extracting/creating more new (primary) resources.) Can’t you imagine efficiency gains leading to an increase in output (GDP) for constant inputs (resources)? That’s growth. (Note that the article talk…

Right, I think the article was saying development is GDP stagnation but increasing quality nonetheless, does that about match your understanding of it?

I still can't really imagine the other scenario because when I see efficiency gains I think they will lead to growth and more energy usage. Examples like "increasing CPU power should have led to faster software, but instead it lead to slower languages and larger software". Same for memory and bandwidth. Our websites keep expanding to fill the next generation of network capacity.

So the gains from efficiency are quickly consumed by increasing growth and energy use. Maybe you could help me imagine some that are not like that? I'd like that.

It's easier for me to imagine the examples like in the article (more fancy dessert, same ingredients) that are there classed as development, distinct from growth. But growth as defined there, with static energy, I can't imagine right now.

Re: Exponential Economist Meets Finite Physicist (2012)

#119

Post by paraschopra »

jbay808 wrote: post #64
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…

One of the points that the author misses this post (but addresses in other places) actually the cost of dealing with waste and entropy.

Even if energy becomes incredibly cheap, there's a certain cost to dealing with waste that for now we haven't baked into economic models (because we could simply throw it away). If energy usage, no matter how cheap, keeps on growing, waste will also keep on growing.

Re: Exponential Economist Meets Finite Physicist (2012)

#120

Post by paraschopra »

Chathamization wrote: post #45
fspeech wrote: post #31

Earlier quoted context omitted.

“Advances in efficiency or energy production aren't going to be stopped at some point because people are worried about someone buying up all the energy.“ That wasn’t really his point. His point was that even if energy itself is cheap there’s a floor to how it is valued relative to the total economy for such a vital commodity. If you don’t like the buying it up argument you can also think along the line of delivery co…

> His point was that even if energy itself is cheap there’s a floor to how it is valued relative to the total economy for such a vital commodity. I don't think that's true though. There are vital commodities that have been effectively free in some societies (water and salt, for example). Even energy - wind energy is free and some societies used it extensively, and biomass for burning was abundant in some places. We c…

Water is cheap/free because it's a physiological requirement for living, and not because it's abundant or is not a bottleneck.

Price is not universal indicator of value, neither being cheap implies that you can't run out of it. Many Indian cities are quickly running out of fresh ground water. The worst thing a city could do is let market determine the price so rich could use it more. Rationing at a less price is the way municipalities are going, which is more ethical way of doing things.

The same could happen for energy or other resources, while they still being cheap.

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