In developed world energy intensity of GDP is decreasing even when you take into account imports. Post-industrial economies can grow while decreasing energy use.

What the author is suggesting is that the developing world should stop growing. I can't agree with that. They need their electricity and washing machines.

GDP per unit of energy use (constant 2011 PPP $ per kg of oil equivalent)

EU: https://data.worldbank.org/indicator/EG.GDP.PUSE.KO.PP.KD?lo...

US: https://data.worldbank.org/indicator/EG.GDP.PUSE.KO.PP.KD?lo...

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 demand growth because they want a certain minimum return on investment.

4. Investors need to invest money in instruments with a certain minimum ROI because if they don't, inflation will erode their savings.

5. This continuous growth requirement forces companies to compete for larger and larger portions of market share, which in turn forces their competitors to compete harder in response.

6. The end result is a sort of "Red Queen" effect where everyone is forced to compete harder and harder just to maintain his/her existing standard of living.

7. We know that the more extreme a competition becomes, the more ruthless the participants become, often to the point of acting immorally.

8. Therefore, we should focus on curbing inflation to curb the pace of overwhelming growth, and thereby restore some measure of social justice.

> from 1880 to 1975, when energy per capita is strongly growing, the world undergoes just one major economic crisis, in 1929.

> since 1975, after the rate of growth dramatically decreased, there has been a crisis every 5 to 10 years: 1975, 1980, 1991, 2000, 2008, 2012, and it would be no surprise to have a new one in the coming years.

These statements are just totally wrong. There were many more economic crisis between 1880 - 1975 and often those were worse then those since 1975.

These statements are just 100% opposite of every history of economics I have ever seen.

It seems he gets the causation totally backwards.

> and recurring recessions will become something normal in our economic system

Recessions are absolutely not linked to energy supply.

But now that I have listened to him he is 100% spot on about most things.

The only problems this guys has are:

1) He's biased for nuclear because it feeds him. Nuclear cannot be built without hydrocarbons and toxic nuclear waste is not something you can dig down into the ground without hydrocarbons, even if the radiation is only hazardous for 1000 years, we're not going to have enough energy to handle the waste.

2) He does not understand money enough yet. Fiat money cannot have value without hydrocarbons. GDP is 99% debt because today money is 99% debt and therefore neither has value. Money is something humans have arbitrarily invented without being inspired by nature, it does not exist!

3) He does not understand that some things run and use energy whether you use them or not. For example the routers on the internet because processors are synchronous. The solution is async. processors, but our economic system doesn't encourage energy saving research, at least before it's too late, which is now.

That said, if the energy density of uranium is 1000000x that of oil, which in it's turn is 1000x more than batteries; this guy for president?

As such, per capita energy usage isn't just linked to GDP, but also to Human Development Index (a composite index to quantify quality of life that includes GDP).

Here's what HDI vs. per capital electricity usage looks like: https://i.imgur.com/8otdGxP.jpg

Bubble size is proportional to population. While correlation does not imply causation, it's quite clear that as quality of life improves, so does energy usage, to a point.

The striking thing is the knee. The knee is mentioned in the parent article from a GDP point of view but I think that's only part of the story. On the low-energy side, you can see that a little bit of energy can dramatically improve your quality of life. At the very low end is where people are cooking with indoor stoves and dying to the tune of 3.8 million per year from indoor air pollution.

Then you see for places like the USA, we could cut our per capita energy usage in half and probably not be affected from a quality of life standpoint. We're saturated.

There is a worldwide moral imperative to increase per capita energy usage of people at the low end of this curve for quality of life reasons. They deserve the ability to choose how they spend their time. Doing so requires about a 2-4x increase in total world energy production.

Energy sources that can enable that kind of gain without causing more air pollution deaths and without causing climate change are well-known. Here they are as a function of carbon emissions (equivalent) per kWh generated: https://i.imgur.com/8LQFVMO.png

Not as crazy as the fact ISLM doesn't capture private debt, but still a huge problem

Yet, reduction of energy use per unit of GDP is not impossible. In the last 28 years there has been reduction by 35% overall.

FWIW, i want to point out that this is an often-overlooked leverage point for improving our situation. Our systems today are grossly inefficient. For example, something like 30%-50% of the electricity we generate (okay, transform) is lost in the grid on the way to the consumer. Much of it is lost after that too.

https://www.econtalk.org/andrew-mcafee-on-more-from-less/

That appears to be backed up here too; this article reports that the $GDP per kWh is increasing over time.

Does this then mean that reducing GDP will have disproportionately LESS of an effect on energy consumption than it will have on value? I.e. we will have to take a much bigger hit on value produced to effect energy consumed.

The cost of fossil fuel is low because the human work necessary to extract it is very low- it's a problem for the ecology due to no (immediate) human work cost for the Co2 damage. The cost of solar is even lower (which is why it's disruptive)- once you have the solar panel, you don't need any human work.

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.

Your best bet would be to reduce the energy consumption of things and have more power sources that have no CO2 emissions like hydro-electric and nuclear.

Nobody wants to admit that the only real way to limit energy consumption is a horrible dystopian future.

Read ancient history; you'll see that empires, for ages, relied entirely upon pillaging their neighbours for their own enhancement. The world economy was a strictly zero-sum game basically forever.

The political constructions of the past reflected that state of the matter. There was no social mobility because resource scarcity commanded that as a son of a mason, you couldn't be anything but a mason. And of course, 90% of people had to work in agriculture, anyway, just to feed everyone. There was no way out. Of course society was driven through rigid hierarchies.

Then at some point some guy discovered America, and a strong, growing influx of riches began pouring into Europe. People discovered absolute, continued growth. Then as this trend continued and England had cut down all its trees, they started using coal, and the movement accelerated itself, and went on until now.

As Jancovici remarks, we always went from some energy source to a more powerful, denser, more reliable one: hunting to agriculture, windmills and hand pumps to coal, coal to oil. We never went the other way around, but at some time we'll have to. How to cope?

Now let's talk for a minute about GDP. I had quite heated argument with people with economics background. Basically, they say that GDP can grow eternally because GDP is related to value, which has no physical existence. So though GDP generally implies some form of materiality (be it in the form of ore, grain, industrial goods, or services) it's not mandatory because you could for instance build a better car using no more materials than the previous one.

However it seems to me that this quickly wanders into philosophical territory: what is value? In economics, it seems related to human satisfaction. As the number of human beings on earth is physically limited (we could be 10 billions, 100 billions, but not an infinity), at some point that implies that individual satisfaction can increase indefinitely. That's a stretch, however you see it. That would mean that two humans exchanging a given set of resources in a closed room could increase indefinitely the satisfaction they get from their relationship, and so any arbitrary small country with as few inhabitants as you want could have an infinitely growing GDP, and reach individual nirvana and beyond. BTW I fail to see the point of free trade at this point... Standard neoclassic economics are full of such logical holes.

If you didn’t have growth, you’d all be waiting for your promotion at the power plant when someone dies and frees up a position for you.

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 the billionaries vs. hungry poor conflict rather than de-escalate it.

> inflation will erode their savings

> compete harder and harder just to maintain his/her existing standard of living

These are two different things. Savings are a stock, "standard of living" is a flow. The distinction matters here because GDP measures flows; the two are related through the money equation "MV=PQ".

As soon as there's a fiduciary duty to maximise ROI, morals go out the window. If you as an officer resist, the collective of shareholders will replace you with someone who will make more money.

There's a dissolution of responsibility that comes with the distributed nature of shares. The owner of a private company probably feels a certain amount of responsibility for the welfare of their workers. I'd be willing to bet most Amazon shareholders don't.

It's probably a naive opinion to hold, and I'm not saying every Amazon shareholder is personally responsible for the warehouse workers that can't use the bathroom without fear of reprisal, but the system is rotten.

Nice pocket philosophy, if only the world was a zero sum game, but it's NOT.

The past 300 years of growth in human prosperity should make that abundantly clear.

Past 30 years the world has reduced extreme poverty by half. Not because we in the developed world got poorer.

The only fix we need is to gradually increase taxes on resources until they match the environmental impact. Sure we nee to also regulate the market, etc. To avoid draconian schemes.

But a well regulated market with solid incentives can fix many problems.

They are all absolute statements, but I don't believe they're true most of the time.

1. I think most corporations are small companies

2. Microsoft didn't grow for almost a decade. Then they tippled in size. Are you suggesting that Microsoft didn't grow for a decade because investors didn't demand it, but were ready to triple in size whenever their investors showed up and demanded it?

3. This is true of any investment and not just true for professional investors.

4. This is true of everyone.

5. Most corporations pursuing continuous growth is a fallacy. The competition you describe is called Capitalism and it has many benefits. Not least of which are lower costs and better products/services for the consumer.

6. I disagree with the premise so I disagree with the conclusion.

7. Capitalism can amplify greed and greed can lead to acting immorally, which is bad, but I maintain this is rare.

8. I've been toying with the idea of the benefits of curving inflation in my mind. You're going to have to define what 'social justice' is and what restoring it looks like.

And sometimes its to the benefit of the environment, the employees and its in accordance with the rule of law.

> 4. Investors need to invest money in instruments with a certain minimum ROI because if they don't, inflation will erode their savings.

Inflation are low and predictable in the West. And investors would want to make money no matter what the inflation is.

> 6. The end result is a sort of "Red Queen" effect where everyone is forced to compete harder and harder just to maintain his/her existing standard of living.

That really isn't a logical conclusion.

> 8. Therefore, we should focus on curbing inflation to curb the pace of overwhelming growth, and thereby restore some measure of social justice.

I would recommend to you to really get into economics. You are making a lot of assumptions that really don't hold up.

We tend to think that all companies inevitably pursue monetary growth regardless of other costs. If you look at the average corporation that will likely not be true.

Big corporations tends to be greedy because that's how they got big. Not so greedy companies either don't grow or they get bought up by more greedy companies.

The majority of corporations may not agree with the philosophies of the big ones at all. But the big corporations eat more of the cake. One way to counteract this is to starve the bigger corporations of workforce.

Logically, this would never work if other countries don't do the same.

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?

Assume there is no inflation. If I have invested $625,000 and I want to retire with the ability to spend $25,000 per year on food, housing, medical care, taxes, travel, and insurance, then I require 4% growth (or dividends!) for that to be sustainable.

Another source of inflation is increasing wage & benefit demands, especially from large middle or lower classes who want to afford to consume more because they value the greater consumption as an important part of life, a noble and intrinsically morally good goal of bettering one’s self through self-determined hard work such that the value of your labor and skill increases over time.

In direct response to large classes of workers demanding more pay & benefits, companies will raise their prices to pay for those increases, again totally regardless of whether a stock market exists.

I think really inflation is a side-effect of nature, and thinking along the lines of how to long-term control or remove it is counter-productive, compared with accepting that it is inevitable and then trying to come to terms with living in the future world that this implies.

Agents in economics are typically modeled as maximizing wealth or utility, which is different from 4, which says agents want wealth to be non-decreasing.

Even at zero actual growth, you would have nominal growth that matches the inflation rate.

Inflation means that the prices of the products that the companies sell increase as well.

Inflation doesn’t matter

Companies that don’t grow are either dying or turning into DMV.

What you call social justice in reality would cement the status quo and deincentivize technological progress. See the lack of innovation in socialist countries. Great at copying, bad at inventing.

Say one country develops this utopia where everyone doesn't have to compete to survive, either companies or individuals.

Its neighbour though remains with the old Capitalist model. In a generation or two the struggling capitalist country could overtake the utopia one in production, wealth or even by force. Then you're back to square one.

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...

To be fair, EU investment for example, is biased towards equality instead of excellence, i.e. invest in poorer states to bring them up to speed instead of dumping everything on the best performers. Probably because of the nature of the union, where everyone has a decent say. Even so, some developed countries benefit disproportionately. But the world as a whole is not the EU.

What people in developing countries should do is say "yes sir, certainly", then proceed to work towards their own benefit. Like China did (the one thing they did right).

But that's the good kind of growth, you see?

I'm being sarcastic, of course. The ironic (and to me: annoying) thing about the really vocal moralists is that the concept of self-reflection seems to be entirely foreign to them. The problem is always with other people, and those other people just need to change, no matter at what cost.

I already am.

I've been at my job for 13 and a half years, I"ve moved up exactly 0 times. Someone has to quit/retire, get fired or die to free up positions and even then you only have 2 jumps until you're manager, from there you only move up to senior manager and then you're into corporate level positions. My senior manager has been here for the better part of 30 years and probably has another 15-20 in her at which time she'll almost certainly be replaced by someone from another office in another state as her boss's position was when she retired a few years ago (her direct reports were just given to someone already in a similar position in another state).

I discussed in many threads closely or loosely related to this topic and many HNers don't share this idea.

You can be a dev in any kind of company and hold any type of beliefs. Outside of SV and a few other places being a dev isn't that crazy money/career growth wise.

This is false. The CPI weights the basket of goods that comprise the index based on the types of goods that people actually consume, which includes housing (either in the form of rent or mortgage payments), energy, as well as food and consumer goods. It adjusts for consumption patterns monthly, and re-weights the entire index every 2 years.

The BLS surveys rental prices as well as calculating something called “owner equivalent rent” for owner-occupied housing.

> The OER and Rent indexes have the largest weights of the 211 item categories (item strata) that comprise the CPI market basket. As of December 2008 their shares of the total weight (their relative importances) in the CPI for All Urban Consumers (CPI-U), were 24.433 percent and 5.957 percent, respectively.

[1] - https://www.bls.gov/cpi/factsheets/owners-equivalent-rent-an...

I know what you're proposing will be very unpopular but I have an idea that will be even more unpopular: a federal property tax on land + buildings at (five percent of property valuation) per year. There will be absolutely no exceptions for anyone. Everyone must pay. This money will mostly go back to local governments, toward infrastructure and utilities (mass transit, water, electricity, fiber Internet, sewage, garbage collection, education, ... ideally automated as much as possible) and a portion will go to supplement VAT to pay for supplemental universal basic income (in addition to the freedom dividend) that more than covers the new property tax on a one bedroom somewhere in the continental United States (so not necessarily midtown Manhattan).

The key difference in what I propose is the lack of exceptions. Everyone must pay regardless of whether it is a strip club or a church. You don't pay, you get evicted within fifteen years or however long we decide. I recommend eviction should happen when unpaid taxes reaches 100% of property value.

My Hope is that this will absolutely crash the housing market and stop this irrational speculation in the housing market.