Why Economic Growth Will Fall • Hacker News Board

Re: Why Economic Growth Will Fall

#171

Post by crimsonalucard » Tue, Aug 02, 2016, 3:50 AM UTC

frgewut wrote: post #10

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…

Of course there are limits (e.g. mass of human population will never exceed Earth's mass etc). But what these limits are? For example we can double the size of human economy by colonizing Mars. This sounds very achievable to me.

Limits are never reached, they are only approached asymptotically. Thus most people will never observe a limit in human innovation in their lifetimes, instead they will only observe an eternal slow down as innovation spends forever converging with the limit. This makes it impossible to prove (or disprove) that there is a limit to technology. One can only make an educated guess.

Have we reached the limits of human colonization? Are we approaching a limit? Mars may be possible, but it is an order of magnitude harder than colonizing the Americas. Colonizing the west happened only a couple years after Columbus discovered the new world. Mars was discovered 3 centuries ago... are we at a limit? How long will it take to colonize the nearest star?

Re: Why Economic Growth Will Fall

#172

Post by crimsonalucard » Tue, Aug 02, 2016, 3:53 AM UTC

placebo wrote: post #165

crimsonalucard wrote: post #137

Earlier quoted context omitted.

All observations point to limits and thus suggest that reality and therefore the economy is a zero sum game. You talk as if limiting reality doesn't make any sense when scientific observation describes a reality that is in fact limited. Conservation of energy, conservation of mass, the speed of light, these are limits built into the fabric of existence.

I think it's a bit premature to conclude we have uncovered what the fabric of existence is made of. History has repeatedly shown we have no idea how much we don't know (just until recently we thought we understood more or less what the universe is made of and we now realise we understand less than 5% of it) and the reality keeps delivering surprises. But just for the sake of the argument, let's suppose we do know how…

>I see many economists with a much deeper understanding in economy then myself are convinced that economy isn't a zero sum game.

These are idealized models. To simplify calculations. The sun will burn out in a billion years so one can assume in a model that it will never burn out.

The fact of the matter is, the economy runs on resources. Resources are limited. Thus the economy is limited.

Re: Why Economic Growth Will Fall

#173

Post by wildmusings » Tue, Aug 02, 2016, 5:43 AM UTC

wildmusings wrote: post #164

internaut wrote: post #85

Earlier quoted context omitted.

> People are investing in their education at record levels! They are investing in formal qualifications . Certificates. As Thiel points out, a university degree has transmogrified from "investment" to "insurance" to "tournament". The reality is that the previous generation knows jack shit about the environment facing the current generation. Their 'common sense' can be thrown out nearly entirely with few exceptions. I…

I agree actually, but state funding of higher education, as the GP is suggesting, would probably only further cement the current broken system.

Edit: Not "would probably". It already is serving to entrench the current system.

Re: Why Economic Growth Will Fall

#174

Post by allendoerfer » Tue, Aug 02, 2016, 8:46 AM UTC

vivekd wrote: post #169

allendoerfer wrote: post #148

Earlier quoted context omitted.

But who would want to own a company producing food, when owning cash would be a better investment?

There has got to be some ways in which this basic economic assumption is wrong. Like with cars, I can buy a car and when I sell the car it will be worth much less. But I will buy that car anyways because I need a car. Or for a business perspective, I buy a dairy cow as an investment, when I sell the cow it will be worth much less than what I bought it for, but I don't mind because the cow has provided a steady stream…

Owning a new car seems like a good investment. You get a bit more car than when buying a used car plus you get a bit more status. When prices of cars drop and better means of transportation arrive you would just keep your cash and use an Uber for example.

With the cow I think the problem is that many people would buy a cow to fulfil the basic need so margins would be extremely thin. People would soon stop buying cows again.

I think this would be generally the case in such a situation: Everything would be a commodity and margins would approach zero. You need only very few people to produce commodities. The majority of the population would be unemployed.

This is not a bad outlook per se, my argument is just that our current system needs growth. We would have to gradually adjust the system once we realize that there is now way to create growth any more.

Re: Why Economic Growth Will Fall

#175

Post by danmaz74 » Tue, Aug 02, 2016, 9:42 AM UTC

tome wrote: post #105

mark_l_watson wrote: post #68

Our economy depends on growth, and I think this will cause lots of problems. I saw a quote by a US congressman blaming young people today for our financial problems because many of them are unwilling to put themselves into debt for homes, cars, etc. An outrageous statement, blaming people for doing what they believe to be in their own self interest. If the value of production mostly stayed with the people and local b…

Why and how does our economy depend on growth? I've head this claimed a lot but never understood it.

My understanding is that our economic structure and model is based on the expectation of growth fueled by continuous innovation, growing efficiency, growing workers productivity; the pie grows, and the slices become bigger for everybody.

If (when?) that stops, we'll have to change our model. We already have big problems with the pies not getting bigger for a big part of the population.

Re: Why Economic Growth Will Fall

#176

Post by nabla9 » Tue, Aug 02, 2016, 11:27 AM UTC

mac01021 wrote: post #54

nabla9 wrote: post #29

Earlier quoted context omitted.

Economic growth of 1% per year is exponential growth. Light of speeds puts limit to the economic growth and it's less than exponential. Maximum sustainable economic growth in infinite static flat universe is f(t)/dt where f(t) = 4/3×π×t^3.

You assume economic growth is at most proportional to the rate at which we occupy previously unoccupied space. That may be true, but it is not obvious to me.

My assumption is that all economic growth has some component that is based on matter and energy. Even if it's just firing of a neuron inside consumers head.

If that assumption holds, growth is limited by matter and energy. Assuming that you consume all matter and energy and leave behind maximum entropy (thermal radiation) the growth is limited by the area of an expanding sphere.