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What is energy, actually? (2011)

jancovici.com

181–190 of 286 posts

Re: What is energy, actually? (2011)

#181
post #145
post #83

Earlier quoted context omitted.

> Inflation is already almost zero in much of the West. pet theory: Inflation is way way more than zero almost everywhere (prices of services and rents reflect this), but high inflation is masked by increased supply chain efficiencies, cheapening (in some cases worsening) of products and other factors, which keep prices of physical products relatively stable.

There's a real discussion to be had here, but we have to be careful not to move the labels too much. The economics term for differential inflation in various goods is "Baumol cost disease": https://www.vox.com/new-money/2017/5/4/15547364/baumol-cost-... Tremendous graph there. Basically, services that have to be provided by western labour in the west have got much more expensive, while goods that can be imported have…

I don't think it's about imports / foreign production, but about the requirement of labour of high income workers generally. Domestic agriculture and manufacturing have experienced less inflation than medicine and education because they have reduced their dependence on labour with greater mechanisation and efficiency.

I think there's also an effect that people are increasingly able to tolerate working very low economic value jobs, because productivity increases in basic necessities of survival, like food and transportation, make this possible. These people are then priced out of healthcare, education, and quality housing. The decreased consumption of expensive labour-based services then decreases their weighting in measures of inflation, allowing them to further inflate, yet overall inflation stay low.

Re: What is energy, actually? (2011)

#182
post #135
post #52

Earlier quoted context omitted.

Inflation is already almost zero in much of the West. People demand growth because they want to get richer, regardless of the prevailing conditions. I would also like to point out that if there were to be no growth and no inflation (edit: and a static population level!), then the only way to add a dollar to your pile is to permanently make someone else a dollar poorer. That seems likely to accelerate the lethality of…

> I would also like to point out that if there were to be no growth and no inflation (edit: and a static population level!), then the only way to add a dollar to your pile is to permanently make someone else a dollar poorer. Is this really true? Aren't you mixing up production growth with production? Imagine I live alone on my small farm in the middle of nowhere. I produce 20 bags of wheat every year. I eat 19 and sa…

I think more accurate assumption would be that any increase of productivity on your farm (say going from producting 20 to 25 bags per year) would need to be met with a corresponding decrease of productivity somewhere else in the economy - it's the only way to maintain zero growth.

Re: What is energy, actually? (2011)

#183
post #9

Somewhat tangentially related: I wrote this in a private note to a friend last year. I don't believe this 100%, but the idea is worth exploring in my opinion: 1. Corporations desperately pursue continuous growth, even when they're already profitable, and do so at the expense of the environment, employee welfare and sometimes, the rule of law. 2. Corporations pursue growth because investors demand it. 3. Investors dem…

I would like to bring another concept to this discussion, which is the cost of externalities.

https://en.m.wikipedia.org/wiki/Externality

How much corporate growth is directly the result of taking from the environment? Could a regulating body apply the true cost of corporate growth back to the corporations so it were no longer profitable to take from the environment for the sake of your bottom line?

Re: What is energy, actually? (2011)

#184
post #147

Earlier quoted context omitted.

> As soon as there's a fiduciary duty to maximise ROI ... Your premise is wrong. As the U.S. Supreme Court recently stated, "modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not do so." ( BURWELL v. HOBBY LOBBY STORES, INC. )

And yet these corporations behave as if it is the law.

Its just amoral people justifying amoral actions in order to satisfy an unquenchable desire for wealth.

Re: What is energy, actually? (2011)

#185

That's easy to say from the First World, where they already traded our (global) environment for (local) gains. But what are the people in poor countries supposed to do? Just stay poor forever?

We traded our local environment too.

I mean South America is 35% Old Growth Forest vs. less than 3% in Europe.[1]

In Europe, pretty much only the Białowieża Forest remains. We destroyed everything else over the millennia.

[1] https://en.wikipedia.org/wiki/Old-growth_forest#Locations_of...

Re: What is energy, actually? (2011)

#186
post #145

Earlier quoted context omitted.

There's a real discussion to be had here, but we have to be careful not to move the labels too much. The economics term for differential inflation in various goods is "Baumol cost disease": https://www.vox.com/new-money/2017/5/4/15547364/baumol-cost-... Tremendous graph there. Basically, services that have to be provided by western labour in the west have got much more expensive, while goods that can be imported have…

> Basically, services that have to be provided by western labour in the west have got much more expensive, while goods that can be imported have got much cheaper. This is broadly true though the bit about the West and imports is unnecessary. Manufactured goods have gotten cheaper whether imported or not in real terms, and services get more expensive in relative terms as a consequence. Some of this is probably a resul…

> This is broadly true though the bit about the West and imports is unnecessary. Manufactured goods have gotten cheaper whether imported or not in real terms

This must be interpreted in the context of a large fraction of manufacturing moving off shore in the last 75 years. Manufacturing which remained has become significantly less labor intensive (because that which didn’t has moved to lower labor cost locations).

Re: What is energy, actually? (2011)

#187
post #112

Earlier quoted context omitted.

Question is whether you deserve salary gains to cover financial inflation, or if price cuts did to technology advancements are good enough.

Rent, Food, Gas, Utilities are the biggest drivers for personal cost of living increases, these do not have price cuts due to technology. All 4 of the big household expenses are increasing at a rate of 7-20% depending on where you live

Where is this actually true? I split my time between the Bay Area and rural Oregon and in neither of those locals has any of those 4 items gone up by 7% in the last year.

Re: What is energy, actually? (2011)

#188
post #160

Earlier quoted context omitted.

They have a tiny carbon footprint because they are overwhelmingly poor compared to the West (granted, the US have a particularly large footprint). So either we tell them that, sorry, but they have to stay dirt poor and also to stay away from their rain forests even if they starve, or the aim is to eradicate poverty on the planet, but in that latter case their resources footprint (this is more general than carbon alon…

Only a (smallish) portion of the western carbon footprint is directly correlated with having a decent life. Yes, the entire world cannot buy larger cars than what we need them for, we cannot fly around the world on vacations, we cannot throw away half the food we produce, we cannot buy clothes to use them once, and so on. Such needless things, often more related to consumption culture than living standards, is respon…

I would dispute your claim that our resources (again, it's not just about carbon) footprint is not directly correlated to basic standard of living.

But the key issue with your reply is that this is not 'us' doing this versus 'them' doing that.

We must reduce CO2 emissions and we must stop population growth. Both 'we' mean humankind as a whole.

Re: What is energy, actually? (2011)

#189
post #167

Earlier quoted context omitted.

Where are food prices going up? I can't say I've noticed it where I live.

Then you are not accurately tracking your food costs by unit of measure. Nor tracking pricing at restaurants. I have seen a combination of both Shrink and Price increases. The cost of eating lunch at my favorite restaurants has steadily increased, and the Average price per unit for normal groceries has increased on a weekly basis. Even if your bill remains the same, that 32oz Ketchup is now probably 28oz Looking at s…

I track my spending to the penny and this simply isn't the case in the Bay Area.

Re: What is energy, actually? (2011)

#190
In a market economy there is a lot of deliberate inefficiency. Commercial economies are driven, primarily, by transaction quantity, which is most typically exchanging end goods/services for money. Exchange quantity goes up as wages go up and unemployment goes down. Therefore it is in the interest of companies and government that people are employed, as many as possible, even if each person does very little to substantiate the wages earned. This line of thinking falls apart when an economy enters a correction.

Likewise, people will require less energy when wages shrink or disappear all together. Energy consumption is one of many indirect parts of the market economy. When people have less money they will travel less and shop less, which decreases the need for fuel and manufacturing.

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Reducing energy consumption is a very bad deliberate goal though. Energy efficiency is a natural goal from the collision of increased demand versus fuel cost. The economic desire to increase energy efficiency does just result in lower prices but also cleaner fuel sources. This has trended true over the last 150 years far before people became aware of environment consequences from rising fuel consumption.

Since rising demand, a product of rising consumption rates, drives technology interest in fuel efficiency it is healthier for future economies, and the environment, to encourage greater fuel consumption at consequence to the economy, and environment, at the present. That statement will remain true only so long as up scaling increase of efficiency outpaces up scaling rates of consumption over time. So far the difference in scale has shown true since the start industrialization and there is no indication that the difference in scale will decrease.

Another way to think about this is energy equivalence. As energy sources become cheaper, cleaner, and more available over time they allow greater access to energy by people with less purchasing power. A poor third world economy can grow in ways it could not before because less investment is demanded to achieve growth independence. These new and emerging energy sources and distribution methods are not created for humanitarian reasons. They are created from expensive investment to satisfy expensive first world energy demands. The people who benefit most are those with the greatest need in developing economies under high market pressure without the luxury of expensive investments in infrastructure or logistics. An under-developed economy with high market pressure is one where there is huge demand for raw goods/resources but that economy lacks the finances to invest in itself, such as Ghana under the cocoa industry.

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