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Why Economic Growth Will Fall

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Re: Why Economic Growth Will Fall

#151

Post by bwanab »

skywhopper wrote: post #24

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 generat…

All the things you mention are true and important, but they're all second derivative. The first derivative to growth between 1870 and 1970 was cheap energy - primarily oil. What happened in the 70s? The oil embargos and drastic increases in prices. Since the 1970s whenever growth gets started, oil prices rise given the new demand which triggers recession which lowers demand and on and on.

Growth can continue when we develop new energy sources that are relatively inelastic to demand.

Re: Why Economic Growth Will Fall

#152

Post by hx87 »

Retric wrote: post #149
paganel wrote: post #141

Earlier quoted context omitted.

> Solar powered AC works just fine without a power distribution network and even tends to track production and demand It's pretty hard close to impossible to scale that to large and dense communities. I know for sure that my Eastern-European city (population: ~1.8 million) has enough problems as it is when in the summer heat people turn the AC on at the same time. And we're a pretty ok country in terms of power distr…

People are actually doing this right now due to terrible power distribution networks. If you work out power needs, you can do AC with rooftop solar up to ~5 story buildings. Building past that point need real infrastructure. But, getting water and sewage is much harder to get working in a city that size than power. A larger issue is solar has a relatively large upfront cost which is prohibitive in poor areas and ripe…

You can also put panels on walls as long as they have adequate solar exposure.

Re: Why Economic Growth Will Fall

#153

Post by Retric »

hx87 wrote: post #152
Retric wrote: post #149

Earlier quoted context omitted.

People are actually doing this right now due to terrible power distribution networks. If you work out power needs, you can do AC with rooftop solar up to ~5 story buildings. Building past that point need real infrastructure. But, getting water and sewage is much harder to get working in a city that size than power. A larger issue is solar has a relatively large upfront cost which is prohibitive in poor areas and ripe…

You can also put panels on walls as long as they have adequate solar exposure.

Near the equator you’re going to get minimal power that way, but further north or south you can get a fair amount of power on one side of a building assuming you’re not shaded by other tall structures. Street level in Manhattan for example gets less sunlight than you might think. You also run into a tradeoff with windows.

Re: Why Economic Growth Will Fall

#154

Post by snowwrestler »

jamesrom wrote: post #86
cheriot wrote: post #37

Bill Gates' review of this book takes a techo-optimist view of it. 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 anal…

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?

There is an industry that directly prices information, but it's not music or Wikipedia. In fact it's not very popular. It's the finance industry. Financial instruments are made of information, and their value changes directly in response to new information.

Also, can I just point out that a library of all the world's music is definitely not available for $10 a month? For $10 a month you get access mostly to the western popular music whose labels have done deals with that particular streaming service. Big difference, usually.

Re: Why Economic Growth Will Fall

#155

Post by snowwrestler »

georgeecollins wrote: post #56

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…

With respect to Piketty, the industries in which the U.S. is a world leader today include finance, entertainment, software, pharmaceuticals, and industrial equipment. None of these depend on the availability of land or other physical capital.

Re: Why Economic Growth Will Fall

#156

Post by snowwrestler »

crimsonalucard wrote: post #2

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…

> 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

Re: Why Economic Growth Will Fall

#157

Post by alanwatts »

cheriot wrote: post #77
alanwatts wrote: post #73

Earlier quoted context omitted.

>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 c…

Right, I'm trying to think of things that are increasing happiness and are not affecting GDP (which the book's author uses to justify the "fall").

Computing and renewable energy methods are becoming exponentially more powerful and less expensive to produce, a process called ephemeralization.

Re: Why Economic Growth Will Fall

#158

Post by Kalium »

tome wrote: post #136
allendoerfer wrote: post #135

Earlier quoted context omitted.

You don't have to, it will be worth more next month. It would be stupid to invest into your retirement fund if cash is increasing in value faster, so you take the cash. It makes total sense individually, but when everybody does it, the system will collapse.

Yes, I can see why a deflationary shock can cause behaviour that is individually rational but destroys the economy in the long term. I do not see why there cannot be a steady state with no growth. Presumably if this is widely accepted by economists there must be a standard textbook reference that you can give me?

As I understand it, such a thing is hypothetically possible. However, as long as populations grow and people want change in their lives, it is not desirable.

Re: Why Economic Growth Will Fall

#159

Post by allendoerfer »

Kalium wrote: post #158
tome wrote: post #136

Earlier quoted context omitted.

Yes, I can see why a deflationary shock can cause behaviour that is individually rational but destroys the economy in the long term. I do not see why there cannot be a steady state with no growth. Presumably if this is widely accepted by economists there must be a standard textbook reference that you can give me?

As I understand it, such a thing is hypothetically possible. However, as long as populations grow and people want change in their lives, it is not desirable.

Then there would be growth. What we were debating was that we need growth, otherwise eventually the described things would happen.

That growth by population growth is not sustainable should be obvious, somebody in here made a good argument why this is true even if we populate the universe.

Re: Why Economic Growth Will Fall

#160

Post by davidivadavid »

bluetomcat wrote: post #39
skywhopper wrote: post #24

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 generat…

This, and the wasteful misallocation of resources to bloated and unproductive industries like finance, insurance, advertising and entertainment.

How are these industries unproductive?
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