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Roadblocks in Australia’s Inevitable Energy Transition

Published by Anonymous (not verified) on Tue, 27/10/2020 - 6:00am in

Australia is currently undergoing what is acknowledged to be the fastest energy transition in the world. In the face of this rapid and uncertain transformational change, the federal government is pushing for a ‘gas-led recovery’ and a Technology Investment Roadmap that explicitly excludes support for solar and wind energy under the guise of a technology-agnostic approach. This brief piece discusses the Australian government’s energy policy and its role in impeding the inevitable transition to a fossil fuel free economy.

The impending retirement of coal

Wind and solar energy are currently the cheapest form of new energy generation, set to increasingly dominate national energy consumption as Australia’s ageing coal-fired generators retire. The challenge now lies in integrating increasing amounts of renewables into a power system traditionally built around the location of coal-fired generators, and electrifying heavy industry and transport.

The Australian Energy Market Operator (AEMO) – whose ownership is shared between government and industry – recently released its 2020 Integrated System Plan (ISP), a biennial 20-year blueprint to navigate the transformation occurring in Australia’s main grid, the National Electricity Market. It modelled five different scenarios, from slow to fast paced energy transitions.

Under the fastest scenario with high political, consumer and commercial motivation, renewable energy could account for 94.2% of total national energy consumption by 2040. In the business-as-usual scenario governed by current government policy, this proportion could still reach 74%.

What’s the target?

Despite the increasing uptake of renewable generation, the federal government has resisted setting any new targets outside of its unambitious commitment under the Paris Agreement to reduce emissions to 26-28% below 2005 levels by 2030. Furthermore, the achievement of the national Renewable Energy Target last year remains underwhelming given the government’s reduction of the target from 41,000 gigawatt hours (GWh) to 33,000 GWh of renewable generation by 2020.

State or territory
Renewable target
Net zero target

Australian Capital Territory
100% by 2020
By 2045

Tasmania
200% by 2040
By 2050

South Australia
100% by 2030
By 2050

Victoria
50% by 2030
By 2050

Western Australia

By 2050

New South Wales

By 2050

Northern Territory
50% by 2030
By 2050

Queensland
50% by 2030
By 2050

 

States and territories have largely taken the lead in setting renewable generation and net zero greenhouse gas emissions targets. Renewable targets coupled with net zero targets are an important and increasingly uncontroversial policy tool, yet it is critical they do not eventuate in ‘target techno-speak’ disguised as ambitious policy allowing for increased renewables without the explicit phasing out of fossil fuels.

In the absence of any national renewable or net zero targets, the federal government’s main climate strategy, the $18 billion Technology Investment Roadmap, has been described as a “roadmap to nowhere”. The five shortlisted technologies to be invested in over the next decade include carbon capture and storage (CCS) which is widely considered an unviable technology, and ‘clean’ hydrogen primarily produced from gas or coal gasification supplemented with CCS as opposed to ‘renewable’ hydrogen produced from renewable energy.


Source: Clean Energy Council, 2020, Clean Energy Australia Report

Gas is the new coal

In the context of the COVID-19 pandemic, the federal government has committed to a gas-led recovery. Gas is a fossil fuel whose emissions in 2018-19 were equivalent to 49% of total on-grid electricity emissions. This figure only accounts for gas extraction, processing, pipelines and use by industrial facilities, and is likely to be much higher when including gas-fired power stations and gas used in mining operations and in households. Replacing coal with gas is a marginal form of climate policy inconsistent with the Paris Agreement’s goal of limiting global warming to 1.5°C  above pre-industrial levels.

The Prime Minister recently made a suite of announcements in what he dubbed ‘energy week’, including plans to develop five major gas basins across the country to feed a new Australian Gas Hub in Queensland. The federal government justifies the need for new gas as a source of dispatchable energy to replace the traditional baseload energy – continuous and steady generation – that will be lost from retiring coal-fired generators.

While existing gas plants currently provide significant dispatchable support, AEMO’s ISP features a continuous reduction in gas generation and no need for new gas plants as the federal government claims. The ISP outlines that 63% of Australia’s coal-fired generation with a collective baseload capacity of 15 GW will retire by 2040. 26 GW of new grid-scale renewable generation – variable energy dependent on variable weather conditions – will be needed. 6-19 GW of new dispatchable generation – controllable energy that can be dispatched on demand – will be required to support the transition from a traditionally baseload energy-dominated to modern variable energy-dominated power system.

Gas vs clean dispatchable solutions

The 6-19 GW of new dispatchable generation referred to in the ISP includes batteries, pumped hydro, virtual power plants and demand side participation. AEMO suggests that new gas generation will only play a role if gas prices range between $4-6 per gigajoule (GJ) which is unlikely as domestic prices have been sky rocketing, ranging between $8-11 per GJ earlier this year. Meanwhile, the cost of batteries – a source of clean dispatchable energy – have been falling. The ISP’s findings satisfy the mainstream pursuit for a least-cost transition pathway (as opposed to a least-polluting transition pathway), and nonetheless the federal government has selected a high-cost, high-polluting pathway in its push for new gas.

Before becoming Prime Minister, Scott Morrison mocked Tesla’s plans to build what was until recently the world’s biggest battery in South Australia, likening the Big Battery to the Big Banana in Coffs Harbour. The Big Battery demonstrated its distinct usefulness just weeks after its connection to the grid after responding within a fraction of a second to the tripping of a 560 megawatt (MW) coal-fired generator in Victoria with no warning in 2017.

The Prime Minister’s preference for new gas over new batteries was further solidifed during ‘energy week’ when he announced that the government owned utility Snowy Hydro would build a 1 GW gas plant in the Hunter Valley to replace the retiring Liddell coal power station if the private sector did not commit equivalent dispatchable energy by April next year.

This sent a confusing signal to the market as AEMO had not identified a 1 GW capacity gap. The owner of the coal-fired generator, AGL, had already committed to replacing Liddell’s capacity largely with new battery storage. This decision, by a company once known as Australian Gas Light, demonstrates the growing preference for new batteries over new gas. One week after the initial announcement the Prime Minister revised the 1,000 MW threat to 250 MW which AEMO still has not identified as needed.

This created even more confusion in an already discouraged industry with a threat hanging over its head, prompting Atlassian co-founder Mike Cannon-Brookes to announce his willingness to meet the challenge if the government would clarify its ask of industry before hastily building a gas plant to be locked in for 40 years. This is yet another instance where billionaires such as Elon Musk and Mike Cannon-Brookes have been compelled to step in with clean solutions.

The energy transition is inevitable

The federal government has claimed a technology-agnostic approach to the energy transition, while taking advice to pursue a gas-led recovery from a National Covid Coordination Commission consisting of hand-picked members with strong links to the gas industry. The Prime Minister’s insistence on a ‘non-ideological’ approach to energy policy rests on a history of taking a lump of coal into parliament and comparing Big Batteries to Big Bananas.

In the face of confusing and unambitious national climate politics, Australia is currently undergoing what has been labelled the fastest energy transition in the world. Early and long-term planning is urgently needed to support the retirement of coal-fired generation over the next 10-20 years, the electrification of industries and transport, and the phasing out of fossil fuels.

The energy transition is inevitable. The government can either choose to speed it up or slow it down depending on whether it chooses to support energy sources that have a long-term future in the transition to a fossil fuel free economy.

The post Roadblocks in Australia’s Inevitable Energy Transition appeared first on Progress in Political Economy (PPE).

Wealth Transfers, Carbon Dioxide Removal, and the Steady State Economy

Published by Anonymous (not verified) on Fri, 18/09/2020 - 5:24am in

By Brian Snyder

In 2019, the U.S. per capita GDP was $65,000. It seems obvious that this level of economic activity is more than sufficient to meet the needs of the U.S. population; after all, if we can’t live fulfilled, productive lives in an economy producing $65,000 per person per year, more money and production will never be enough. Further, additional per capita economic growth in the USA is uneconomic. For example, economic growth to $75,000 per person per year will not increase our economic wellbeing nearly as much as it will decrease ecological wellbeing; hence, the justification for a steady state economy.


Just one example of wealth in the USA. Mansion in Newport, RI. (Image: CC BY 3.0, Credit: silvervoyager)

But much of the world is not like the USA. Afghanistan’s per capita GDP was $502 in 2019. Burundi’s was $261, and the average per capita GDP in sub-Saharan Africa was less than $1600. In these nations, most citizens cannot meet their basic needs—food, water, sanitation, electricity, education, and healthcare—at current levels of economic activity. In these places, a steady state economy is unsustainable because poverty is unsustainable.

There are two reasons we may consider poverty unsustainable. The first is simply definitional. One of my favorite definitions of sustainability is “meeting the needs of the present without compromising the ability of future generations to meet their own needs.” While this definition was originally used by the Brundtland Commission for “sustainable development” rather than “sustainability,” it works just as well for either. Given this definition, poverty is unsustainable because it does not allow for present generations to meet their basic needs.

But there is also a more fundamental reason why poverty is unsustainable, and it has less to do with poverty per se than the unequal distribution of wealth. If we consider sustainability to be “able to be sustained” or “able to be repeated for long periods,” then poverty itself is actually quite sustainable. Almost every human in history has lived in what we would consider abject poverty and could continue to do so for millennia.

Syrian Army

Poverty and an uneven distribution of wealth are major factors of the Syrian Civil War. (Image: CC BY 2.0, Credit: Freedom)

Yet while poverty may be sustained over long periods, a vastly uneven distribution of wealth cannot; just ask Marie Antoinette or Tsar Nicholas II. While the French and Soviet Revolutions were, in part, a reaction to the inequal distribution of wealth and extreme poverty within a country, unequal power and wealth between nations can also fuel international rivalries, terrorism, and wars, all of which are unsustainable regardless of the definition you choose. A large part of the reason that Afghanistan and Somalia have been fertile soil for terrorism over the last three decades is that they are some of the poorest nations on Earth. Likewise, intranational economic inequality and poverty is an important cause of the Syrian Civil War, the deadliest conflict of the 21st century.

In sum, poverty and the unequal distribution of wealth between nations is unsustainable, and per capita GDP growth is required in the developing world to rectify it. Without such growth, asymmetries in wealth will continue to incite violence.

CDR Systems as a Solution

If we agree that economic growth is counterproductive in wealthy nations yet productive in poor nations, we may then ask which policies will be useful for transferring economic growth from the developed to the developing world. One obvious alternative is to transfer wealth from rich countries to poor countries. However, if this wealth is used to invest in industries, especially extractive industries, such wealth transfers may become counterproductive. For example, imagine that the developed world provides $100 million in cash to country X to build a factory that exports goods to developed markets. In this case, the developed world may benefit from cheap goods, facilitating economic growth in the developed world and defeating the purpose of the transfer. In other words, creating more low-cost production centers in a Western-financed race to the bottom is not in anyone’s interest.

Instead, we need to find a cash flow that facilitates economic growth in the developing world without creating economic growth in the developed world. Given that the economies of poor and rich nations are intertwined, this is unlikely to be possible, but there may be industries that could be targeted and developed that come close. One possibility is investments in carbon dioxide removal (CDR) systems financed with developed-world cash and using developing-world labor and land.

Reforestation

Reforestation in Haiti. (Image: CC BY-SA 4.0, Credit: Cunningchrisw)

CDR, also called negative emissions technologies, are systems that use energy to remove carbon dioxide from the atmosphere. CDR systems range in technology from very low tech (like reforestation) to very high tech (like direct air carbon capture), and, at first glance, might not be the sort of thing many steady staters are inclined to support. After all, steady-state folks tend toward technological moderation and generally favor halting consumption growth, rather than developing new, often energy-intensive means for mitigating the impacts of consumption. Further, many CDR systems are likely to be unworkable or create larger problems than they solve. Hence, some skepticism is warranted.

But many CDR systems have considerable potential. Reforestation stores carbon and produces ecosystem services like soil protection, water retention, and wildlife habitat provision. Some bioenergy with carbon capture and storage systems may likewise produce ecosystem services if the biomass is harvested and managed sustainably. Enhanced weathering also is promising as a low energy means for sequestering carbon. And while direct air carbon capture systems are energy intensive, that energy could be supplied by renewable resources, especially in parts of sub-Saharan Africa with exceptional solar resources.  

Furthermore, CDR is likely the only plausible path toward meeting the Paris commitments. To limit the temperature increase to 1.5°C, we need to be at about net zero CO2 emissions in 30 years and achieve net negative emissions in the last decades of the 21st century. Because of our dependence on fossil fuels in industrial and power applications, it is highly unlikely that our gross emissions of CO2 will be zero around 2050. We would need some negative emissions to achieve a net zero emission. In other words, even if we decarbonize rapidly, it likely won’t be enough.  

The Function of Wealth Transfers and CDR

Consider a policy in which developed-world nations transfer wealth to the developing world for investments in CDR systems. This wealth transfer would act like a tax in the developed world, potentially reducing economic growth. Of course, some portion of this wealth transfer will return back to the developed world for purchasing technology for CDR implementation, subverting the purpose of increasing growth in the developing world without increasing growth in the developed world. Yet much of the wealth will be used to pay for labor in the developed world, especially in lower-tech CDR systems like reforestation and biomass-based systems. If much of the wealth from the policy stays in the developing world and isn’t used to buy developed-world goods and services, the policy may be effective at transferring wealth.

Jeff Bezos

Jeff Bezos has accumulated hundreds of billions of dollars. Image how many countries could be supported on his income alone. (Image: CC BY 2.0, Credit: Seattle City Council)

The use of wealth transfers to fund CDR has an advantage that less targeted wealth transfers do not have because CDR is, in a sense, parasitic. CDR does not produce something of value that can be sold in the same way that a factory or a coal mine does. Instead, it consumes wealth to produce a theoretical emissions credit that can only have value because governments require them. The physical “thing” itself, stored carbon, has no value—especially in its oxidized form stored in underground formations. Thus, CDR systems are akin to wealth furnaces that take land, labor, and capital and turn them into nothing that can be used to stimulate economic growth in the developed world.

We can think of investing in CDR as akin to investing in sanitation. Like sanitation, CDR produces a public good that is absolutely necessary, but funding it serves as an inefficiency for the economy. By tying CDR with wealth transfers, we may be able to increase this inefficiency, and thus slow growth, for the developed world while creating employment and infrastructure in the developing world.

A Just Transition

The nations of the developing world did nearly nothing to cause climate change, yet they are likely to bear a disproportionate share of the burden of the direct impacts of climate change and the indirect economic impacts of decarbonization. Not only are poorer countries less able to adapt to climate change, but by using up the carbon budget, wealthy nations have effectively foreclosed poorer nations’ abilities to extract and use their own fossil fuels.

village child

We need a just transition for countries who will suffer from climate change and are not economically stable. (Image: CC0, Credit: ajaykhadka)

As mentioned above, the transfer of wealth will help to rectify this injustice, but we need a means to determine how much money to transfer. One possibility is to use a climate easement system in which developing-world nations are compensated for the lost value of their hydrocarbon resources. In such a policy, nations may estimate the net value of their hydrocarbon resources and enter into easements with wealthy nations that compensate them for their lost value and ensure that the resources remain underground.

Climate and Energy are Not Just Developed World Problems

In discussions about climate policy, we tend to focus on wealthy emitters—the USA, China, Europe—and ignore the developing world. This makes sense because it is how we have dealt with nearly every international problem in history: The rich people get together and make decisions, and the poor people get ignored. But energy and climate are the glue that binds us all together. We cannot craft an energy and climate policy that ignores the developing world because, if we do, developing-world nations will either develop into major emitters or remain mired in poverty, susceptible to conflict as temperatures rise and resources decline. Thus, we need a climate and energy policy that includes an explicit path toward sustainable development (as opposed to unsustainable growth) for the developing world. Without such a path, climate policy will fail.

Brian F. Snyder is an assistant professor of environmental science at Louisiana State University and CASSE’s LSU Chapter director.

The post Wealth Transfers, Carbon Dioxide Removal, and the Steady State Economy appeared first on Center for the Advancement of the Steady State Economy.


Frederick Soddy’s Debt Dynamics

Published by Anonymous (not verified) on Sat, 12/09/2020 - 11:39pm in

In the field of ecological economics, Frederick Soddy looms large. Born in 1877, Soddy became a chemist and eventually won a Nobel prize for work on radioactive decay. Then he turned his attention to economics.

Between 1921 and 1934, Soddy wrote four books that looked at how money relates to the physical economy. For his ground-breaking work, Soddy was rewarded with deafening silence. Here’s how ecological economist Eric Zencey puts it:

… Soddy carried on a quixotic campaign for a radical restructuring of global monetary relationships. He was roundly dismissed as a crank.

(Eric Zencey in Mr. Soddy’s Ecological Economy)

Although ignored during his life, Soddy’s work would become a central part of ecological economics. Let’s have a look at Soddy’s thinking.

Wealth vs. virtual wealth

Like a good natural scientist, Soddy insisted that human society is constrained by the laws of physics. Humans survive, he noted, by consuming natural resources. Exhaust these resources and we’re done for.

Think of humans (and our economy), says Soddy, like a machine. We transform energy into physical work. Like all machines, we’re bound by the laws of thermodynamics, which say that you can’t get something for nothing. Energy output requires energy input. That means humans are forever dependent on natural resources.

Now comes the problem. Our biophysical stock of resources — what Soddy called ‘wealth’ — is bound by the laws of thermodynamics. But money — which Soddy called ‘virtual wealth’ — is bound only by the laws of mathematics. Money can grow forever. Natural resource extraction cannot. This mismatch, Soddy claimed, is the root of most economic problems.

Cows and virtual cows

Here’s an example of Soddy’s thinking. Suppose that Alice is a would-be cattle farmer. She inherited some land and wants to use it to farm cattle. The problem is she has no money.

Not to worry. Alice goes to the bank and gets a $100,000 loan. With this money, Alice buys 100 cows. She’s now a cattle farmer — her dream is fulfilled!

Wait, says Soddy. Alice has a problem. She’s invested her ‘virtual wealth’ (money) in ‘real wealth’ (cows). But her ‘virtual wealth’ came from interest-bearing debt. That means the amount she owes the bank grows with time. Let’s have a look at this dynamic.

Banks usually require that you make regular payments on your debt. But to simplify the math, let’s assume Alice’s bank operates differently. It requires no regular payments. Instead, after t years, the bank demands full repayment (with interest). The amount Alice owes depends on three things:

  1. The size of her loan (the principal, P)
  2. The interest rate (r)
  3. The time (t, in years) since her initial loan

Assuming interest accrues annually, here’s the formula for the amount (A) that Alice owes:

A = P(1 + r)^t

Suppose the bank charges 5% interest (r = 0.05). Here’s how much Alice will owe for various call-in times:

Call-in time
Amount owed

5 years
$127,628

10 years
$162,889

20 years
$265,330

30 years
$432,194

What’s important are the dynamics of Alice’s loan. As the call-in time increases, the amount she owes grows exponentially. This exponential dynamic, says Soddy, is a problem. Here’s why.

Alice used her $100,000 loan to buy 100 cows. If the bank calls in her loan after 10 years, she owes $163,000. That’s the equivalent of 163 cows. If Alice wants to avoid bankruptcy it seems she has only one choice. To repay her loan, Alice must breed more cows.

So here is the problem with interest-bearing debt. It comes with a baked-in need for economic growth. Or so it seems …

Inflating away debt

Repaying interest-bearing debt doesn’t necessarily require economic growth. There’s a second option. Interest-bearing debt can be paid back with inflation.

To see how, let’s return to farmer Alice. With her $100,000 loan, Alice bought 100 cows. After 10 years, the bank calls in her loan at $163,000. If cow prices don’t change, Alice needs to sell 163 cows to pay her debt. At first glance, it seems like her only option is to breed more cows. But there is an alternative. She could raise the price of cows.

Alice bought her cows at $1,000 per head. If she sells them for $1,630 per head, she can repay her loan without breeding more cows. So repaying interest-bearing debt doesn’t necessarily require economic growth. It can also be financed with inflation.

Breadth and depth

Our toy model of debt (based on Soddy’s reasoning) leads to a simple conclusion. If interest-bearing debt is to be repaid (en masse), there are only two options:

  1. The economy must grow
  2. Prices must grow

Jonathan Nitzan and Shimshon Bichler call these two scenarios breadth (economic growth) and depth (inflation). Although it’s theoretically possible to pursue both strategies at once, Nitzan and Bichler find that real-world societies tend to be single minded. They cycle between rapid growth with slow inflation (breadth), and slow growth with rapid inflation (depth). (For details, see Chapters 15 and 16 of Capital as Power.)

Both scenarios allow societies to pay off debt en masse. Yet both have problems. Let’s start with breadth. It’s simply suicidal (and impossible) to pursue economic growth forever. At some point we’ll either exhaust our resources and/or pollute the environment so badly that growth will cease. So paying off debt with perpetual growth is not an option.

What about depth? At first glance, it seems like inflating prices is a sustainable way to deal with debt. After all, the environment doesn’t care if prices grow exponentially. But humans do seem to care. Few people want inflation. Why?

The answer can’t be found on paper. That’s because in theory, inflation is a uniform increase in prices. But in practice, it never works this way. Real-world inflation is always differential. Some people are able to raise prices faster than others. This means that inflation always redistributes income. Unfortunately, the winners tend to be the powerful. (For details, see Jonathan Nitzan’s thesis Inflation As Restructuring.)

So based on Soddy’s reasoning, we find that interest-bearing debt comes with a fundamental problem. There is no fool-proof way to pay it back. Perpetually economic growth isn’t an option. And if we try to inflate away debt, the accompanying income redistribution creates instability. It seems there’s no way out of debt.

Debt default

Actually, there is a way out of debt, and it’s surprisingly simple. We wipe the slate clean. We debt default.

In his book Debt: The First 5,000 Years, David Graeber argues that throughout history, default was the most common way of dealing with debt. Often this happened on a large scale in something called a ‘debt jubilee’. Unpayable debts were wiped off the books, allowing debtors to start fresh. Of course, this wasn’t a long-term solution. Eventually debts would accrue again, requiring another jubilee. But as long as debt loads remained reasonably small, the cycle could repeat without too much trauma.

This debt cycle is a good example of a wider phenomenon found everywhere in nature — stability through fluctuation. Natural systems are stable not through stasis, but through small-scale fluctuations. These fluctuations are a way of mitigating the exponential dynamics that would otherwise be catastrophic.

As an example of such fluctuation, take population growth. If left unchecked, populations (of any organism) tend to grow exponentially. But they never grow forever. Eventually resources are depleted and the population declines. When the population is again small enough that resources are plentiful, exponential growth resumes. The result is a boom-bust cycle — stability through fluctuation.

Of course, if the fluctuations are huge, we can hardly call this ‘stability’. But in most healthy ecosystems, population fluctuations are small. The key to dampening boom-bust cycles appears to be diversity. When there are many species in an ecosystem, each keeps the population of others in check. Prolonged exponential growth never gets a foothold.

Debt monoculture

In nature, the surest way to provoke exponential growth is to destroy diversity. This is something that industrial farmers know well. Here’s their recipe. Cut down a forest, plant a single crop, and wait … for the exponential growth of pests. In nature, monoculture is the enemy of stability. The same is probably true among humans.

Back to Soddy’s debt dynamics. Soddy thought that the exponential dynamics of interest-bearing debt were a problem. Looking at nature, however, and we realize that exponential dynamics are everywhere. So it’s not the dynamics themselves that are the problem. The trouble starts when these dynamics go unchecked. In nature, exponential growth goes unchecked when we plant monoculture crops. In human societies, exponential growth goes unchecked when we have debt monoculture.

The term ‘monoculture’ is especially apt, because debt is literally a culture. Debt is an idea — a convention of quantifying property rights, and then applying exponential dynamics to these rights. The dynamics themselves are not the problem. The trouble starts when the idea of interest-bearing debt becomes a monoculture.

Interestingly, throughout most of human history the use of debt was limited. And when it was used, many people were skeptical that debt should accrue interest. Hence the ban, in many medieval societies, on interest-bearing debt (dubbed usury). Think of this skepticism of debt as a sign of cultural diversity.

Debt, anthropologist David Graeber argues, is just one particular way of solving a fundamental social problem. All societies function by keeping track of a web of social obligations. Throughout most of human history, these obligations were tracked loosely and qualitatively. Alice helps Bob catch a fish. Bob returns the favor by helping Alice cook. Different cultures (and even different sub-cultures) had different ways of conceiving and tracking these obligations. Cultural diversity.

Then came capitalism.

There are many ways that capitalism is different from other forms of culture. But perhaps the most important is the use of quantification. In capitalism, the web of social obligations (that have always existed) suddenly became quantitative. Bob doesn’t owe Alice a favor. He owes Alice $10. And if he doesn’t pay, that amount grows exponentially with time.

The idea of interest-bearing debt is an old one. But it’s only with capitalism that this idea became widespread. In other words, capitalism is the first debt monoculture. Capitalism takes the diverse ways of thinking about social obligations and replaces them with one. Interest-bearing debt.

As with any monoculture, we expect boom-bust dynamics to be amplified. And so they have been. But here’s the terrifying truth. For the last 200 years we’ve been riding one long boom. For two centuries, debt has grown continuously. We’ve achieved this by perpetually consuming more resources and by perpetually raising prices.

Eventually there will be a reckoning. Societies like the United States are now plumbing the depths of income inequality (i.e. income redistribution). And humans are pushing the limits of the Earth’s carrying capacity. So what’s worked for the past 200 years won’t work for the next 200.

It seems clear that debt monoculture is doomed to fail. So in a way, Frederick Soddy was right. The dynamics of interest-bearing debt are a problem. But only because we’ve allowed them to become the dominant human culture.

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[Cover image: Linda Hall Library]

Further reading

Graeber, D. (2010). Debt: The first 5,000 years. New York: Melville House Pub.

Nitzan, J. (1992). Inflation as restructuring. A theoretical and empirical account of the US experience (PhD thesis). McGill University.

Nitzan, J., & Bichler, S. (2009). Capital as power: A study of order and creorder. New York: Routledge.

Soddy, F. (1926). Virtual wealth and debt: The solution of the economic paradox. London: George Allen & Unwin.

Soddy, F. (1934). The role of money: What it should be, contrasted with what it has become. London: George Routledge & Sons.

Zencey, E. (2009). Mr. Soddy’s ecological economy. The New York Times. http://www.nytimes.com/2009/04/12/opinion/12zencey.html

Uncommon Sense—The Foreword

Published by Anonymous (not verified) on Fri, 04/09/2020 - 5:25am in

By Brian Czech

© 2020, Steady State Press
ISBN: 978-1-7329933-0-3
Format: Paperback

Editor’s Note: This foreword is an excerpt from the Steady State Press’ forthcoming book, Uncommon Sense: Shortcomings of the Human Mind for Handling Big-Picture, Long-Term Challenges by Peter Seidel. Preorder a copy now.

I first encountered Peter Seidel at a Society of Environmental Journalists conference in Wisconsin. Or perhaps it was a conference of the U.S. Society for Ecological Economics in New York. Neither of us recall for sure, but we both noticed one thing: Our paths crossed regularly during that first decade of the 21st century. Not only did we find ourselves at the same conferences, but in the same sessions and in the same conversations—and invariably on the same side, in the event of controversy or debate. Most notably, we both recognized limits to growth and the fundamental conflict between economic growth and environmental protection.

Now, I have the privilege of penning the foreword for the latest in a string of salient books in which Seidel offers a lifetime of wisdom on the “big-picture, long-term challenges” facing humanity.

Seidel is an elder statesman of limits to growth, and he had been researching, writing, and conferencing on the relevant topics for decades before I came along with my specialty on the conflict between economic growth and biodiversity conservation. Biodiversity was big in the 1990s and early 2000s; bigger than climate change in academia and in the environmental movement. By then, though, Seidel had seen it all: DDT, a burning Cuyahoga River, Love Canal, the destruction of the ozone layer, coral bleaching, endangered species, resource shortages, and wars too numerous to speak of. Biodiversity loss and climate change were just two more insults—albeit huge ones—heaped upon a planet subjected to rabid GDP growth.

Seidel took an interest in my muffled efforts—with me in the silenced depths of the U.S. Fish and Wildlife Service at the time—to raise awareness of the trade-off between economic growth and environmental protection. He was one of the first 50 signatories of the CASSE position statement calling for a steady state economy, along with the likes of Herman Daly, William Rees, and Richard Heinberg. He was a no-nonsense, sound-science, non-fantasy futuristic thinker, and I took an interest in his work as well, reading several of his books and engaging in lengthy discussions with him on the future of America, the planet, and Homo sapiens.

I could see Uncommon Sense coming. I’d read There is Still Time, the predecessor book, and I knew Seidel had a rare, holistic sense of limits to growth. I was thrilled to hear of his interest in revising There is Still Time—which suffered from production problems and practically zero marketing—into a new book with an apropos title, updated data, and a solid plan for distribution.

Peter Seidel

Author Peter Seidel. (Credit: Gordon Baer)

With Uncommon Sense, I believe Seidel is at the peak of his game. It may seem a peculiar thing to say about an author in his 9th decade, but it’s true in my opinion, and here’s why: While Seidel’s penchant for prose was fully developed by the time he wrote, for example, Invisible Walls (Prometheus, 1998), his inquisitive mind only found more issues to integrate in the decades since. Uncommon Sense packs an impressive sweep of issues into such a compact book. No book that I’m aware of covers environmental, evolutionary, psychological, social, political, and religious subject matter into one cogent, flowing analysis from a limits-to-growth lens. Certainly not in less than a hundred pages!

The topics aren’t just packed in, though, like sardines squished into some unceremonious can. Seidel has something important to say about each of these topics. While some readers will have encountered similar lines of thought on some of the topics, few readers will fail to find something original, unique, or at least new to them in the pages of this prescient book.

It’s not that Seidel has all the answers, nor has he written the perfect book. (Who has?) As a student who studied the molecular basis of evolution as a supplementary topic during my Ph.D. research, I found the segments on the evolution of the human brain to be somewhat sketchy and lacking corroboration from human DNA analysis. Yet I also found myself thinking, “Maybe he doesn’t have the nucleotides mapped out, but how could he possibly be wrong?” The human brain would indeed have evolved the way he described; if not, surely we’d be behaving differently.

Seidel took on a daunting challenge in writing Uncommon Sense. The task he bore was not simply to journalize and lament on limits to growth, but to analyze, to penetrate, to dissect what it is about Homo sapiens that leads us to the limits as a moth to a flame. Why don’t we stop? Why should we? Can we?

The last question, of course, is the most challenging of all for any writer of such a sweeping book. In my opinion, Seidel provides a most refreshing approach. He doesn’t sugarcoat the answer. You won’t find any wishful notions of “green growth,” “mind over matter,” or “have your cake and eat it too” in Uncommon Sense. In his concluding chapter, Seidel comes clean on the prospects for the human race to handle the big-picture, long-term threats. The prospects, it turns out, are far from sure, easy, or even likely. It’s going to take some work, folks.

But then, humans have evolved to strive, to fight, and to work. We just need to apply a little more Uncommon Sense.

Brian Czech

Brian Czech is the Executive Director of the Center for the Advancement of the Steady State Economy.

The post <em>Uncommon Sense</em>—The Foreword appeared first on Center for the Advancement of the Steady State Economy.


The Silver Lining of the COVID-Caused Recession is Fading Fast

Published by Anonymous (not verified) on Fri, 21/08/2020 - 5:04am in

By Madeline Baker

From February to mid-April 2020, in an early and shocking stage of the COVID-19 pandemic, greenhouse gas emissions plummeted worldwide. Nowhere was the reduction more notable than in China, the country with the highest emissions. According to Lauri Myllyvirta, the lead analyst at the Centre for Research on Energy and Clean Air, China’s carbon dioxide emissions fell by 25 percent from the end of January through mid-February. Also, for the month of February, average coal consumption at power plants fell to a four-year low, and oil refinery operating rates fell to the lowest level since fall of 2015. This translated to lower levels of nitrous dioxide in China; NO2 levels the week following the Chinese New Year were 36 percent below what they were for the same week the previous year. Meanwhile liquid fuel consumption was 20 to 30 percent lower in March 2020 than in March 2019.

 

NASA tweet demonstrating COVID-caused reduction in CO2 emissions.

 

Along with reduced carbon emissions, industrial output in China reportedly fell by a whopping 13.5 percent in January and February from the previous year. This translated to an economic contraction of 6.8 percent (annualized rate) for Q1, the first quarter since 1992 with declining GDP! Beijing was so taken aback that, for the first time in 30 years, China has no annual growth target.

Given the clear and significant benefits of the shutdown, not just for China but for the global ecosystem, it seems more than logical to ask: Should China, or any other nation for that matter, be striving for pre-pandemic GDP figures, and thenceforth further growth besides? Why shouldn’t our nations, more or less “united” under a UN charter, focus instead on combating the next deadly crisis, or protecting the environment, or the diplomacy of peacekeeping?

Unfortunately, these questions are becoming moot, especially for China, which is already ramping up to pre-pandemic industrial capacity. The Chinese appear to be focusing heavily on power generation, increasing capital spending on utilities by 14 percent from January-May compared to the same period last year, “even as overall capital spending fell by 6 percent.” China also consumes more coal than any nation by a large margin, and accordingly saw carbon dioxide emissions four-to-five percent higher in May of 2020 compared with May of 2019 as the post-lockdown economic push kicked into high gear. Fortunately, the May spike in CO2 emissions appears to have been temporary, abating in June and allowing for projected overall emissions for 2020 to remain 6 percent below 2019 levels. Still—a six percent reduction in emissions is a far cry from the initial 25 percent drop we saw during the lockdown period, and a far cry from the kind of reduction we need for serious mitigation of climate change.

Sustainability experts such as Vinod Thomas for the Brookings Institute are urging the public to view the COVID-19 disaster as akin to an environmental crisis, most notably climate change. Bill Gates makes a similar argument. Globally, the death toll from COVID-19 has surpassed 790,000. We cannot know how many will ultimately die from COVID-19, but we do have estimates for the number of deaths already caused by climate change. The World Health Organization, for example, estimates that 150,000 deaths per year are attributable to climate change, and this number will only continue to rise over the next few decades as we’re locked into the momentum of global warming. Shane Skelton, former energy advisor to U.S. House Speaker Paul Ryan, warned that climate change “will be just as bad as coronavirus when we’re really feeling it.” Is anybody listening?

Out of Sight, Out of Mind

For virtually all of modern history up until the outbreak of COVID-19, society has functioned primarily in a growing economy (all the while headed toward limits to growth). Since the outbreak, however, society’s priority has been public health. With this common good as a powerful motivator, people have been making lifestyle changes they would have previously never considered, such as social distancing, wearing masks, and avoiding close contact with family members. Unfortunately, it took a healthy dose of panic and, in many cases, government mandates for individuals to shift their priorities and act accordingly.

Typhoon and climate change

The devastating effects of typhoon Haiyan on the Philippines. Another result of man-made climate change killing thousands of people and leaving millions homeless. (Image: CC BY-SA 4.0, Credit: Lawrence Ruiz)

So, why is it that despite a large body of evidence warning us of the impending climate crisis, we have been unmotivated to mitigate it? Common sense should reveal that the ecosystem is just as vital a common good as public health, but for many of us in wealthier countries, and particularly in urban areas, the natural environment is somewhat “out of sight, out of mind.” The number of people we find suffering from the effects of climate change is much lower compared to the number of those we know who are sick or dying from COVID-19. While the virus is widespread throughout socioeconomic classes, climate change adversely affects lower-class communities and people in developing countries first and worst. As noted in a study published by the Center for Global Development, “Climate change will be awful for everyone but catastrophic for the poor.”

Further exacerbating the ignorance of the developed world, and especially in the U.S. government, are the vested interests of many powerful players causing climate change. While corporations and political representatives who initially downplayed the effects of the virus have had to renege on their statements due to the massive economic shutdown, the energy majors have been monkeywrenching U.S. policy pertaining to greenhouse gas emissions. For example, Big Oil spent “more than $2 bn…lobbying Congress on climate change legislation between 2000 and 2016.” Expenditures like this make it seem unlikely that we can expect behavioral mandates—federal or state—to mitigate climate change anytime soon.

Sweeping Systemic Change Needed Now

The science is clear and bolstered by evidence from the COVID-caused recession in China: There is a fundamental conflict between economic growth and environmental protection. Recent months have confirmed that a return to our pre-pandemic lifestyle means a return to unsustainable resource extraction and emission rates. Not only have efforts to get the global economy “back on track” come with “compromising global investments in clean energy and weakening industry environmental goals to reduce emissions,” but other lifestyle changes to avoid the virus threaten serious regression in terms of environmental protection. For example, more people are choosing to drive to avoid contracting COVID-19 on public transit, and single-use plastic has become significantly more prevalent in restaurants and food-delivery services as they struggle to keep up with sanitation guidelines.

It’s hard to get enthused about “reduce, reuse, recycle” when we are told that every surface we touch may be contaminated with a deadly virus. Even reverting to pre-pandemic waste practices, which weren’t very sustainable to start with, could take re-education on a massive scale. It just wasn’t wise to get boxed into this corner; up hard against limits to growth.

The global infrastructure vulnerabilities that have been exposed in the struggle to combat the novel coronavirus reveal one thing for sure: Tackling climate change, one of many growth-induced environmental problems, requires an even more systemic approach than recovering from COVID-19. The only solution to these problems is a comprehensive policy shift, first by developed nations, toward a steady state economy, where population and consumption are stabilized within ecological constraints.

If we start to make the transition now, policy reforms could perhaps still be gradual and structured, without the chaos and suffering that comes with a macroeconomic supply shock. We need our leaders and institutions to acknowledge the conflict between economic growth and environmental protection now. Otherwise, we are unmistakably headed for more environmental breakdowns, pandemics, and long-running recessions.

Madeline BakerMadeline Baker is a former CASSE intern (spring 2020) and a senior majoring in International Economics and Finance at the Catholic University of America.

The post The Silver Lining of the COVID-Caused Recession is Fading Fast appeared first on Center for the Advancement of the Steady State Economy.


Winning the Game of Life

Published by Anonymous (not verified) on Wed, 12/08/2020 - 12:22am in

A few weeks ago I took a dive into the empirics of life expectancy. How can we live longer, I asked, without consuming more energy?

In the past, we’ve used fossil fuels as a crutch. To increase life expectancy, we’ve consumed loads more energy. Figure 1 shows the trend across all countries.


Figure 1: Life expectancy vs. energy use per capita. I’ve plotted here international data relating life expectancy at birth to energy use per capita. Lines represent the path through time of various countries from 1960–2015. The black line shows the average trend. [Sources and methods]

Although using more energy does increase life expectancy, it’s not a sustainable option for the future. Increasing energy use by an order of magnitude (from 10 GJ to 100 GJ per person) only gives about 20 extra years of life. That’s not efficient. And it’s certainly not sustainable.

So the question is, how can we increase life expectancy without using more energy? To answer this question, it’s helpful to define something called the ‘energy-life-expectancy residual’. This is the difference between a country’s life expectancy and the international trend.

Figure 2 shows some examples. Here the black line is the international trend between life expectancy and energy use per capita. I’ve highlighted 4 countries that depart sharply from this trend. The average Nigerian, for instance, lives 12 fewer years than expected from the energy-life-expectancy trend. The average Costa Rican, in contrast, lives about 10 years longer than expected from the trend. Similar discrepancies occur at higher energies. The average Russian lives 4 years less than expected from the international trend. The average Netherlander lives 7 years longer than expected.


Figure 2: Same energy use, different life expectancy. Grey dots show the energy-life-expectancy data for all countries. On top of this data, I’ve highlighted two pairs of countries that have similar energy use, but different life expectancies. The ‘life-expectancy residual’ is the deviation from the international trend. [Sources and methods].

Winners in the game of life

In Living the Good Life … Without Killing the Planet, I took a stab at seeing what causes these energy-life-expectancy residuals. The results sparked much discussion. A common request from readers was to see which countries were doing ‘best’ and which were doing ‘worse’.

Here’s what the data says.

Figure 3 shows the countries that are winning the game of life. These are the 10 countries that have most improved their energy-life-expectancy residuals.

Let’s unpack what this means. First of all, it’s not about the overall increase in life expectancy. Rather, I’m measuring the change in life expectancy relative to the international trend. In other words, the countries in Figure 3 have beat the average.


Figure 3: Ten countries that beat the energy-life-expectancy trend. Here are the 10 countries with the greatest increase in the energy-life-expectancy residual. I’ve ranked panels (from top to bottom) in descending order. In each panel, the grey line shows the international trend between energy use and life expectancy. [Sources and methods]

Most of these countries have drastically increased life expectancy without using more energy. Some countries (like Tajikistan and North Korea) have even managed to increase life expectancy while decreasing energy use. Seeing North Korea on this list is a bit surprising, given its bizarre brand of kleptocratic communism. Living longer, it seems, doesn’t require freedom or free markets.

I’m not an expert on international development, so I’d like to hear your thoughts about what’s going on here. Why are these countries winning the game of life?

Losers in the game of life

Now let’s turn the table and look at the countries that are losing the game of life. Figure 4 shows the 10 countries whose life expectancy has decreased the most relative to the international trend.


Figure 4: Ten countries that fell short of the energy-life-expectancy trend. Here are the 10 countries with the greatest decrease in the energy-life-expectancy residual. I’ve ranked panels (from top to bottom) in ascending order. In each panel, the grey line shows the international trend between energy use and life expectancy. [Sources and methods]

Notice that other than Eswatini and Namibia, all of these countries have increased their life expectancy in absolute terms. But they have done so slower than the international trend. In other words, greater energy use has paid off less than expected.

Interestingly, half of these countries are island nations (St. Vincent, Seychelles, Tonga, St. Lucia, Grenada). These nations had higher life expectancies to begin with. When they increased their energy use, it seems that life expectancy regressed towards the mean.

And what’s going on in Eswatini? (It’s also known as Swaziland.) From 1990 to 2007, Swazi life expectancy collapsed — decreasing from over 60 years to less than 45 years. I’m no expert, but I suspect we’re seeing the results of the HIV epidemic. According to Wikipedia, a quarter of all Swazi adults are HIV positive — the highest rate anywhere.

Zero sum, by definition

I’ll close by noting that the game of life, as I’ve defined it here, is zero sum. I’m measuring life expectancy relative to the international trend, which means that there are always going to be winners and losers. Because of this fact, I don’t think that beating the international trend should necessarily be a policy goal. It would be perverse for all countries to try to ‘beat the average’, since by definition, that’s impossible. Still, it’s interesting to see which countries do better (in relative terms) than others. The harder task is to figure out why this is happening.

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Sources and methods

Energy use data is from the World Bank series EG.USE.PCAP.KG.OE. I’ve added an estimate for the energy consumed though food (2000 kcal per person per day). Life expectancy (at birth) is from the World Bank series SP.DYN.LE00.IN.

I calculate the energy-life-expectancy trend (in Figures 1 and 2) using a locally-weighted polynomial regression. Residuals are then measured as deviations from this regression.

I’ve defined ‘winners’ and ‘losers’ as follows. In each country, I measure the energy-life-expectancy residual in the first available year and last available year. ‘Winners’ have the greatest difference between the two observations. ‘Losers’ have the smallest (i.e. most negative) difference between the two observations.

The Paradox of Individualism and Hierarchy

Published by Anonymous (not verified) on Fri, 31/07/2020 - 11:59pm in

Tags 

Energy, Psychology

In the early 1970s, Geert Hofstede discovered something interesting. While analyzing a work-attitude survey that had been given to thousands of IBM employees around the world, Hofstede found that responses clustered by country. In some countries, for instance, employees tended to prefer an autocratic style of leadership. But in other countries, employees preferred a democratic approach. These differences, Hofstede proposed, were caused by culture.

Today, Hofstede’s work has blossomed into the field of ‘cross-cultural analysis’. It’s a vibrant discipline that looks at how attitudes and beliefs vary between societies. The tools of the trade are simple surveys and questionnaires. But the goal of cross-cultural analysis is ambitious. It aims, as Hofstede puts it, to understand the ‘software of the mind’.

✹ ✹ ✹

Geert Hofstede didn’t invent the idea that culture varies between societies. (That idea is probably as old as culture itself.) But he did pioneer the quantification of culture. Before Hofstede, there was much grand theory, but little measurement. Theories of culture date at least to the Greeks, who were perhaps the first to give culture a name. (They called it the nomos.)1 The modern theorization of culture, however, probably began with sociologist Max Weber.

Like many social scientists, Weber wanted to understand the origin of capitalism. Why, he asked, did capitalism arise in Western Europe? His answer was that Westerners had adopted a peculiar attitude towards work — what Weber called the protestant work ethic. Rather than see work as a chore, protestants (especially Calvinists) saw industriousness as a virtue. This culture shift, Weber argued, was key to understanding the emergence of capitalism. Without the idea that work was a virtue, people would meet their basic needs and then relax. But when work became a goal in itself, the wheels of capitalist accumulation were set in motion.

While Weber’s specific hypothesis may not be correct, it’s now clear that he was onto something. The transition to capitalism came with a host of changes in people’s worldview. Evolutionary psychologist Joseph Henrich calls it becoming WEIRD. This is his acronym for ‘Western, Educated, Industrialized, Rich and Democratic’. It’s a clever double entendre because people in WEIRD countries are legitimately weird. From visual perception to attitudes about cooperation, WEIRD people have psychologies that differ from the rest of the world. (For an exposition, see Henrich’s seminal paper The weirdest people in the world?)

That brings us to economics. Like Weber, economists explain the origin of capitalism in terms of a cultural shift. But rather than focus on work ethic, economists focus on exchange. It’s the belief in unfettered market exchange, they claim, that leads to economic development.

Interestingly, the quantification of culture seems to support this view. People in developed countries tend to be more individualistic than those in less developed countries. WEIRD people also tend to be more skeptical of autocracy and more receptive to norm-shirking behavior (behavior that economists would call ‘innovation’). This evidence seems to support the narrative (cherished by economists) that economic development is a product of the free market.

A paradox

Although WEIRD psychology fits well with the free-market narrative, it’s not clear that this narrative is actually true. In fact, there’s good evidence that economic development involves not the spread of the market, but rather, its death.

Industrialization is associated with the growth of large institutions — big firms and big governments. (See Energy and Institution Size for a review of the evidence.) Look within these big institutions and you won’t find a free market. Instead, you’ll find a chain of command that concentrates power at the top. In an important sense, then, economic development involves not the spread of the free market, but the growth of hierarchy. (For details, see Economic Development and the Death of the Free Market.)

If industrialization involves the growth of hierarchy, we’re left with a paradox. Developed countries are both more hierarchical and more individualistic than their less-developed counterparts. How can this be true?

I explore here an interesting possibility. What if individualism does the opposite of what we think? Rather than promote autonomy, might individualism actually stoke the accumulation of power? This idea sounds odd at first. But I hope to convince you that it’s plausible.

Narrative 1: Developing through the free market

We’ll begin our journey into culture by looking at the evidence for cultural change. I’ll first look at this evidence in a way that supports the free-market narrative. Afterwords, I’ll turn this narrative on its head.

To get into the free-market mindset, we’ll drink the neoclassical Kool-Aid. According to neoclassical economics, the best way to promote economic development is to liberate self-interest. Let people act for their own gain, say economists, and economic development will take care of itself. This concept of the ‘invisible hand’ defies the ethic (ingrained in many of us from birth) that selfishness is a vice. In economic theory, selfishness is a virtue.

Despite its counter-intuitiveness, the idea of the invisible hand seems to be supported by cross-cultural analysis. As societies industrialize, the following cultural shifts tend to occur:

  1. People become more individualistic.
  2. People become more skeptical of authoritarian power.
  3. Norms weaken and people become more tolerant of deviant behavior.

In general, then, economic development comes with greater autonomy of the individual — at least as perceived by cultural ideals.

Individualism

Let’s look at the evidence for culture shift. We’ll begin with a measure of culture pioneered by Geert Hofstede. Based on his analysis of IBM employees, Hofstede proposed a cultural spectrum between ‘individualism’ and ‘collectivism’. Hofstede describes this spectrum in Table 1.

Table 1: Individualism vs. Collectivism
Source: Dimensionalizing Cultures: The Hofstede Model in Context


Figure 1: As societies industrialize, they become more individualistic. I plot here Geert Hofstede’s individualism index against energy use per capita in various countries. [Sources and methods]

To measure the individualism-collectivism spectrum, Hofstede created the ‘individualism index’. The larger this index, the more individualistic the culture. In Figure 1, I’ve plotted Hofstede’s individualism index (in different countries) against energy use per capita. Individualism, it seems, tends to increase with industrial development. So the evidence suggests that if you let individuals pursue their self interest, economic growth will take care of itself.

While the results in Figure 1 seem straightforward, there’s an important caveat. It’s not clear that Hofstede’s individualism index actually measures what he claims. Hofstede created the index by weighting responses to a dozen or so questions, assigning some responses to the ‘individualist pole’ and others to the ‘collectivist pole’. Unfortunately, it’s not obvious that the questions on the ‘collectivist pole’ are actually related to collectivist ideology. But despite these problems, Hofstede’s results have been replicated using more credible metrics.2 So it seems safe to conclude that people become more individualistic with economic development. Point for the free-market narrative.

Power distance

Let’s move on to another cultural metric pioneered by Geert Hofstede — one that he calls the ‘power distance index’. This index measures the degree to which people believe in autocratic rule. When people are skeptical of autocratic rule, the ‘power distance’ is small. But when people believe that autocracy is ‘natural’ (and that obedience is a virtue), the ‘power distance’ is large. Hofstede describes the two poles in Table 2.

Table 2: Large vs. Small Power Distance
Source: Dimensionalizing Cultures: The Hofstede Model in Context


Figure 2: As societies industrialize, they become more skeptical of autocratic power. I plot here Geert Hofstede’s power distance index against energy use per capita in various countries. A decrease in the power distance index indicates that people are less inclined to prefer autocratic rule. [Sources and methods]

In Figure 2, I plot Hofstede’s power distance index against energy use per capita. As energy use increases, power distance tends to decrease. This indicates that as societies industrialize, people become more skeptical of autocratic rule.

As with the trend towards individualism, this growing skepticism of power fits with the free-market narrative. Economists like Milton Friedman love to emphasize the ‘free’ part of the free market. (Never one for subtly, Friedman drove the point home in a book called Capitalism and Freedom). The cultural evidence seems to be on Friedman’s side. As societies industrialize, they become more skeptical of autocratic power, and hence, more ‘freedom loving’. Point for the free-market narrative.

Cultural Tightness

Since Hofstede’s pioneering work in the 1970s, scientists have created many different measures of culture. Perhaps the most famous is psychologist Michele Gelfand’s distinction between ‘tight’ and ‘loose’ cultures. ‘Tight’ cultures, she proposes, have strong norms and a low tolerance of deviant behavior. ‘Loose’ cultures have weak norms and a high tolerance of deviant behavior.

Table 3 shows the questions Gelfand uses to gauge cultural tightness. Answering ‘yes’ to questions 1, 2, 3 or 5 and ‘no’ to question 4 indicate tighter culture. From these questions, Gelfand constructs a ‘tightness index’.

Table 3: Measuring cultural ‘tightness’
Source: Rule Makers, Rule Breakers


Figure 3: As societies industrialize, cultural norms loosen. I plot here Michele Gelfand’s index of cultural tightness against energy use per capita in various countries. Tighter cultures have stronger norms and less tolerance for deviant behavior. [Sources and methods]

In Figure 3, I plot Gelfand’s index of cultural tightness against energy use per capita. As energy use increases, cultures tend to become ‘looser’, meaning they become less conformist and more tolerant of deviance. (Note, though, that the trend is weak.)

Our measurement of culture again seems to support the free-market narrative. Economists claim that competitive markets drive innovation. But this works only if people are receptive to new ideas. Apparently such openness tends to increase with industrialization. Point for the free-market narrative.

✹ ✹ ✹

Let’s summarize this foray into cultural measurement. Industrialization comes with a host of cultural changes — a fact that is unsurprising. It’s not our DNA that separates industrial humans from our ancient ancestors. It’s our ideas.

That being said, the direction of the cultural shift is somewhat surprising — especially to critics of mainstream economics (like me). The evidence points to a cultural shift towards individualism — exactly what economists say is required for free markets to work. But when viewed through an evolutionary lens, this cultural shift is odd. The problem is that in evolutionary terms, the interests of individuals rarely (if ever) align with the interest of the group. Your best option, as a selfish individual, isn’t to contribute to society. Your best option is to free ride. This means that the success of social species (like humans) depends crucially not on elevating self interest, but on suppressing it. (See Unto Others for an exposition.)

Contrary to what evolutionary theory claims we should do, humans seem to have industrialized not by suppressing self interest, but by stoking it. Does this mean evolutionary theory is wrong? Unlikely. The crucial point is that we’ve so far measured human ideas. But evolution cares only for actions. Now here’s the curious thing. When we measure human actions, we get a very different story than the one told by our ideas.

The disconnect between ideas and actions

Ideas are not the same as actions — a fact that the founders of the United States made clear. In crafting the Declaration of Independence, Thomas Jefferson heralded the unalienable rights of individuals:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.

Curiously, Jefferson wrote these words (which have become synonymous with human rights) while owning hundreds of slaves. Obviously Jefferson’s ideas were disconnected from his actions. This example illustrates a basic fact of life. Although we’d like to think that our actions align with our ideas, they need not.

This disconnect is important, especially if we want to ground the study of culture in evolutionary theory. In evolutionary terms, all that matters is what our ideas do (to our behavior). What we think they do is irrelevant. For this reason, evolutionary biologist David Sloan Wilson argues that belief systems are often ‘massively fictional’. Their claims about the world are different than their effect on behavior:

Groups governed by belief systems that internalize social control can be much more successful than groups that must rely on external forms of social control. For all of these (and probably other) reasons, we can expect many belief systems to be massively fictional in their portrayal of the world.

(David Sloan Wilson in Darwin’s Cathedral)

Having measured how ideas change with industrialization, let’s do the same with behavior. As you’ll see, doing so turns the free-market narrative on its head.

Narrative 2: Developing through hierarchy

Human behavior obviously has many dimensions. But here I’ll focus on just one: the tendency to organize using hierarchy. This tendency needn’t have a direction. But if it did, the cultural evidence suggests it should be downward. That’s because industrialization brings a shift towards individualism. With this shift, we’d expect societies to also become less hierarchical. But that’s not what happens. Instead, hierarchy actually increases.

There are many ways of looking at the growth of hierarchy, but perhaps the simplest is to count managers. That’s because the job of a manager is to control the activity of other people. It’s a job that, without hierarchy, couldn’t exist. So counting the relative number of managers gives a window into the extent of hierarchy.

When we count the number of managers (a measurement of human behavior), we get a very different story than the one told by the measurement of culture. With industrialization comes a trend towards more hierarchy (not less). Figure 4 tells the tale. As energy use per capita grows, so does the relative number of managers. True, this is indirect evidence for the growth of hierarchy. But with a little math, we can show that the trend in Figure 4 is exactly what we’d expect if hierarchy increases with energy use. (See Economic Development and the Death of the Free Market for details.)


Figure 4: As societies industrialize, the relative number of managers grows. I plot here the managers’ share of total employment against energy use per capita. Lines represent the path through time of countries. The black line is the average trend. For sources and methods, see Economic Development and the Death of the Free Market.

In light of this growth of managers, our measurements of culture now seem paradoxical. At the very time that societies became more individualistic, hierarchy actually increased.

To drive this point home, let’s directly compare ideas and actions. We’ll plot our cultural metrics (ideas) against the managers’ share of employment (action). Figures 5 to 7 show the comparison, with fascinating results. Our cultural metrics correlate with the growth of managers — but in the wrong direction. As the relative number of managers grows:

  • individualism increases (Figure 5)
  • power distance decreases (Figure 6)
  • culture becomes looser (Figure 7)


Figure 5: Societies become more individualistic as the number of managers grows. I plot here Geert Hofstede’s individualism index against managers’ share of total employment in various countries. [Sources and methods]


Figure 6: Societies become more skeptical of autocratic power as the number of managers grows. I plot here Geert Hofstede’s power distance index against managers’ share of total employment in various countries. [Sources and methods]


Figure 7: Societies become ‘looser’ as the number of managers grows. I plot here Michele Gelfand’s index of cultural tightness against managers’ share of total employment in various countries. [Sources and methods]

It seems that there is a mismatch between our ideas and our actions. When we measure ideas, we see a trend towards more individualism, more skepticism of power, and greater tolerance for deviance. Yet when we measure behavior, we see a trend towards more hierarchy. In other words, people claim to believe more in autonomy while at the same time living as subordinates within ever larger hierarchies.

This is the paradox of individualism and hierarchy.

Resolving the paradox

As a scientist, I live for a good paradox. Why? Because paradoxes signal an inconsistency in our knowledge that we must resolve. When we find a paradox, one of two things must be true:

  1. The evidence (that leads to the paradox) is wrong
  2. Our ideas are wrong

So which is the case here? Since empirical research is always uncertain, it’s possible that the evidence (above) is wrong. But let’s assume that the evidence is sound. This means that both individualism and hierarchy grow together. How can we resolve this paradox?

We’ll start by defining the concepts at work, beginning with autonomy. To be autonomous is to control your own actions. By extension, to lack autonomy is to lack control over your actions. Now let’s think about how humans lose autonomy. “Man is born free,” Rousseau famously noted, yet “everywhere he is found in chains”. The chains are (mostly) metaphorical. We lose our freedom by surrendering control of our actions to other people. In other words, by becoming subordinates.

The act of subordination is an intrinsic part of hierarchy. A hierarchy is a nested set of power relations between superiors and subordinates. Because of this element of subordination, it seems paradoxical that people could claim to believe more in individual autonomy while simultaneously working in ever larger hierarchies.

Diving a little deeper, though, and we realize that there needn’t be a paradox. The key is that our perception of the world is likely driven not by the larger social context, but by our interaction with specific people. In a hierarchy, our perception of autonomy is probably driven by interaction with direct superiors. Now here’s the crucial part. This interaction is largely independent of the size of the hierarchy in which we work. If you have a tyrannical boss, you’re going to feel subjugated … regardless of whether you work in a huge company like Walmart or a tiny mom-and-pop shop. So your perception of autonomy comes not from the size of the hierarchy in which you belong, but from the strength of the power relations within it.

This distinction is key. Our evidence for hierarchy (the growth of managers) measures the size of hierarchies. It says nothing about the strength of power relations within each hierarchy. Now, it seems intuitive that power relations might strengthen as hierarchies grow larger. But this need not be the case. In fact, it’s plausible that larger hierarchies actually have weaker power relations. If this is true, it means that people work in ever larger hierarchies while perceiving that they have more autonomy.

Sam Walton vs. Al Capone

To resolve the paradox of individualism and hierarchy, I’ll distinguish between two dimensions of power:

  1. the number of people you influence
  2. the strength of this influence (per person)

The transition to capitalism, I argue, is associated with a vast increase in the size of hierarchies. This means that the number of people influenced by elites has greatly increased. At the same time, the strength of influence per person has probably declined, meaning subordinates perceive that they are more autonomous.

To frame this distinction, consider the difference between Sam Walton and Al Capone. As one of the most notorious gangsters in history, Al Capone had near absolute control over his subordinates. (Disobeying Capone meant risking death.) So in Capone’s gang, power relations were strong and (perceived) autonomy was likely limited. Now contrast Al Capone with Sam Walton, the founder of the largest corporation that has ever existed (Walmart). Compared to Capone, Walton’s control over subordinates was quite loose. And yet despite this looseness (perhaps because of it), Sam Walton controlled far more subordinates than Capone ever did. Capone demanded exacting obedience from (at most) a few thousand gang members. Sam Walton, in contrast, demanded loose obedience from millions of Walmart employees.

I compare the capitalist Sam Walton to gangster Al Capone because mafia organizations like Capone’s are essentially relics of the past. They’re organized around family ties, with control over the hierarchy largely a function of lineage. This system of lineage-based organization is probably the default mode of human hierarchy. It’s common in simple chiefdoms. And it’s found in all feudal societies.

As a rule, lineage-based hierarchies constrict autonomy. By design, inherited status makes it difficult both to move between hierarchies and to advance within them. Take feudal serfs as an example. If a serf didn’t like his lot in life, he couldn’t just find another master. (Serfs were tied to their lord for life.) And it was impossible for serfs to become lords. So vertical mobility wasn’t an option.

The transition to capitalism did away with this suffocating system. In capitalist societies, power became vendible. This change likely meant that capitalist hierarchies became looser than their feudal counterparts. The stifling order of birthright gave way to a more dynamic order based on ownership. And so autonomy increased. (For a discussion of this transition, see Jonathan Nitzan and Shimshon Bichler’s Capital as Power.)

From feudal clan to business firm

The transition to capitalism saw the demise of the feudal clan (based on the extended family) and the rise of the nuclear family. It’s a story of the break-up of collectivism and the rise of individualism. (Or so it seems.)

Looking at the spread of individualistic psychology, economic historian Jonathan Schulz and colleagues recently found that it was strongly linked to cousin marriage. The lower the rate of cousin marriage, the more individualistic people’s psychology. The reason for this connection, Schulz argues, is that cousin marriage was a potent way of unifying the extended family. So when people stopped marrying their cousins, the feudal clan dissolved into the modern nuclear family.

So why did people stop marrying their cousins? Schulz thinks it was because of the (Western) Catholic church. In the Middle Ages, Catholic priests became obsessed with incest, and eventually banned cousin marriage. The effect, Schulz proposes, was to kill the feudal clan and give rise to an individualistic worldview. It’s a tale of the death of collectivism and the rise of individualism. But this is only part of the story.

The other side of the story is that at the same time that the family unit shrank (and people became more individualistic), the family also ceased to be the unit of economic organization. The feudal clan was replaced by the business firm. And business firms grew larger than any feudal clan ever was. (Think Sam Walton versus Al Capone.) So people’s ideas became individualistic at the same time that their behavior became more collectivist.

The double-edged sword

Hierarchy and individualism grow together. That’s what the evidence tells us. I’ve so far tried to explain how this paradox can be resolved. I’ll conclude by going a step further. Might individualism be a prerequisite for large hierarchies?

Here’s why this may be true. Hierarchy is an organizational tool that comes with both benefits and costs. The benefit is that hierarchy is a potent way of organizing large groups. By concentrating power, hierarchical groups can act cohesively in ways that egalitarian groups cannot. (For details, see Peter Turchin’s book Ultrasociety.) This cohesiveness is a huge advantage in group competition. But it comes with a cost — namely despotism. When groups use hierarchy to organize, rulers inevitably use their power to enrich themselves. This despotism, in turn, undermines the benefits of hierarchy to the rest of the group. So to reap hierarchy’s benefits, groups must concentrate power without succumbing to despotism.

Perhaps individualism grows with hierarchy because this worldview is a tool for limiting despotism. This is speculative, but plausible. The idea is that if you believe in autonomy, you’ll tend to oppose despotism. In so doing, you’ll increase the benefits of hierarchy. The result, paradoxically, is that rather than destroy hierarchy, individualism actually feeds its growth.

If true, this story turns economic theory on its head. It means that enshrining the rights of individuals doesn’t lead to atomistic free markets. It leads to collectivist hierarchies. One has to marvel at the irony. By preaching the miracle of the market, neoclassical economists may have helped forge their own collectivist nightmare.

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Sources and methods

Individualism and power distance

Data for the ‘individualism’ and ‘power distance’ indexes come from Geert Hofstede’s book Cultures and Organizations: Software of the Mind. In addition to measures for specific countries, Hofstede reports measures for the following regions: (1) Arab countries; (2) East Africa; and (3) West Africa. Based on Hofstede’s notes, I disaggregate these regions as follows:

  • Arab countries = Egypt, Iraq, Kuwait, Lebanon, Libya, Saudi Arabia, United Arab Emirates
  • East Africa = Ethiopia, Kenya, Tanzania, Zambia
  • West Africa = Ghana, Niger, Sierra Leone, Togo

I assign each country Hofstede’s metric for the region.

Cultural tightness

Data for cultural ‘tightness’ comes from Gelfand and colleague’s recent preprint The Importance of Cultural Tightness and Government Efficiency For Understanding COVID-19 Growth and Death Rates. You can download the data at the Open Science Framework: https://osf.io/pc4ef/

Energy

Data for energy use per capita comes from the World Bank, series EG.USE.PCAP.KG.OE. To these values I add an estimate for energy consumed through food (2000 kcal per day).

Managers

Data for managers’ share of employment comes from ILOSTAT, Table TEM_OCU, series EMPoc1P.

Matching data

Neither Hofstede’s nor Gelfand’s data come with measurement dates. Here’s how I match their measurements with energy and management data.

According to Hofstede, most of his data was gathered in the late 1960s and early 1970s. I match his reported metrics with energy data from 1970 (or the available year that is closest to 1970. Managers data begins in 1990. To match it with Hofstede’s metrics, I average the manager data over the whole period of available data.

Gelfand’s data was first reported in a 2010 paper. I assume that this was the date of data gathering. I match Gelfand’s data with energy use data in 2010 (or the available year closest to 2010). I match Gelfand’s data with the average of managers data over the period 1990-2010.

Notes

  1. In their book Capital as Power, Jonathan Nitzan and Shimshon Bichler put the Greek concept of the nomos at the center of their theory of capitalism. You cannot understand capitalism, they argue, without understanding the capitalist nomos. Nitzan and Bichler trace their thinking to Cornelius Castoriadis, who in turn, traces his thinking to Aristotle.↩
  2. Hofstede created his individualism index using a factor analysis of IBM survey questions. On the individualist pole were people who ranked ‘free time’, ‘job freedom’, and ‘job challenge’ highly. On the collectivist pole were people who ranked ‘job training’, ‘physical conditions’, and ‘use of skills’ highly.

    It’s not clear that this collectivist pole is the opposite of the individualistic pole. Rather than emphasize a lack of freedom or dependence on others, the collectivist pole seems to emphasize job conditions. There may be a hierarchy of needs at work here. When struggling to meet your material needs, you’re likely more concerned with job conditions than with personal freedom. But as your standard of living improves, you become concerned with a ‘higher’ set of needs.

    Many people have raised this objection to Hofstede’s individualism index. Still, follow up research that uses more convincing questions to gauge ‘collectivism’ correlate strongly with Hofstede’s original work (see Gelfand et al., Minkov et al and Schulz et al.)↩

Further reading

Fix, B. (2017). Energy and institution size. PLOS ONE, 12(2), e0171823. https://doi.org/doi:10.1371/journal. pone.0171823

Fix, B. (2019a). An evolutionary theory of resource distribution. Real-World Economics Review, (90), 65–97. http://www.paecon.net/PAEReview/issue90/Fix90.pdf

Fix, B. (2019b). Energy, hierarchy and the origin of inequality. PLOS ONE, 14(4), e0215692. https://doi.org/10.1371/journal.pone.0215692

Gelfand, M. J., Bhawuk, D. P., Nishii, L. H., & Bechtold, D. J. (2004). Individualism and collectivism. Culture, Leadership, and Organizations: The GLOBE Study of 62 Societies, 437–512.

Henrich, J., Heine, S. J., & Norenzayan, A. (2010). The weirdest people in the world? Behavioral and Brain Sciences, 33(2-3), 61–83.

Hofstede, G. (2011). Dimensionalizing cultures: The Hofstede model in context. Online Readings in Psychology and Culture, 2(1), 2307–0919.

Hofstede, G., Hofstede, G. J., & Minkov, M. (2010). Cultures and organizations: Software of the mind. (3rd ed.). New York: McGraw-Hill.

Minkov, M., Dutt, P., Schachner, M., Morales, O., Sanchez, C., Jandosova, J., … Mudd, B. (2017). A revision of Hofstede’s individualism-collectivism dimension. Cross Cultural & Strategic Management.

Nitzan, J., & Bichler, S. (2009). Capital as power: A study of order and creorder. New York: Routledge.

Schulz, J. F., Bahrami-Rad, D., Beauchamp, J. P., & Henrich, J. (2019). The church, intensive kinship, and global psychological variation. Science, 366(6466).

Sober, E., & Wilson, D. S. (1999). Unto others: The evolution and psychology of unselfish behavior. Harvard University Press.

Turchin, P. (2016). Ultrasociety: How 10,000 years of war made humans the greatest cooperators on earth. Chaplin, Connecticut: Beresta Books.

Wilson, D. S. (2010). Darwin’s cathedral: Evolution, religion, and the nature of society. University of Chicago Press.

Living the Good Life … Without Killing the Planet

Published by Anonymous (not verified) on Sat, 18/07/2020 - 12:31am in

How can we live the ‘good life’ without killing the planet? My last post on energy and empire got me thinking about this question. We know that human welfare improves as we use more resources. But it’s suicidal for all of humanity to pursue this path. If the whole world lived like Americans, we’d triple our carbon emissions.1 So that’s not an option (not a sane one, at least).

How, then, can we improve human well-being without consuming more resources? Many people have an opinion on this question. But instead of giving you my opinion, I’ll look at the evidence. Let’s see what countries actually do to improve human welfare without using more energy.

Measuring well-being

I’m going to measure well-being using life expectancy (from birth). It may seem like a crude measure, but the more I think about it, life expectancy is probably the best measure of welfare we have. First, people universally want to be healthy. And there’s no better way to measure health than to see how long people live. Second, ‘health’ is holistic — it’s affected by your whole life experience. Health tends to worsen when you’re stressed, unhappy, and otherwise malcontent. I think it’s reasonable, then, to use life expectancy to measure human welfare in a holistic sense.

So how can we increase life expectancy? The route we’ve taken for the last two centuries is to consume more energy. Make no mistake, this works. As Figure 1 shows, using more energy (per person) reliably increases life expectancy. The black line is the trend across all the data. Countries that start at agrarian levels of energy use (about 20 GJ per person) can expect to gain, on average, about 20 years of life expectancy as they industrialize.


Figure 1: Life expectancy vs. energy use per capita. I’ve plotted here international data relating life expectancy at birth to energy use per capita. Lines represent the path through time of various countries from 1960–2015. Select countries are labeled with their alpha-3 code. [Sources and methods]

This life-expectancy gain from using more energy is important. But notice that it’s extremely inefficient. To live 35% longer, we need to consume, on average, 1000% more energy per person. That’s hardly a large return. In fact, energy use accounts for less than half of the variation in life expectancy.2 Clearly there are other ways to improve human welfare that don’t involve consuming more resources.

Figure 2 illustrates this fact. Here I pair countries that have similar energy use. Costa Rica and Nigeria, for instance, both consume about 40 GJ of energy per person (per year). And yet their life expectancies are wildly different. The average Costa Rican can expect to live to 80; the average Nigerian, to barely over 50. At higher energy use, similar differences exist. Russians and Netherlanders both consume roughly 200 GJ of energy per person (per year). Yet on average, Netherlanders live a decade longer than Russians.


Figure 2: Same energy use, different life expectancy. Grey dots show the energy-life-expectancy data for all countries. On top of this data, I’ve highlighted two pairs of countries that have similar energy use, but different life expectancies. [Sources and methods].

Life expectancy residuals

As Figure 2 illustrates, life expectancy is clearly affected by something other than energy. In statistics, we call this unexplained effect a ‘residual’. Visually, the ‘life expectancy residual’ is the vertical distance between the average-trend line in Figure 2, and the life expectancy in a given country. I’ve illustrated the residual for present-day Nigeria. The average Nigerian lives 12 fewer years than expected from the energy-life-expectancy trend. The average Costa Rican, in contrast, lives about 10 years longer than expected from the trend.

These ‘life expectancy residuals’ hold the key for understanding how to improve human well-being without using more resources. To lift the veil on this elixir, we need to explain the residuals.

The first step is to calculate the life expectancy residuals for all countries. Figure 3 shows the results. As in the previous figures, the horizontal axis shows energy use per capita. But rather than show life expectancy, the vertical axis now shows the life expectancy residual — the deviation from the average trend. Residents in countries above the dashed horizontal line live longer than expected from the energy-life-expectancy trend. Residents in countries below the dashed line live shorter than expected. Our goal is to explain this blob of data. Why are some countries above the dashed line and others below? What do they do differently?


Figure 3: Life expectancy residuals. This figure removes the trend between energy use and life expectancy. I plot here the deviation from the trend — the years of life expectancy that are not ‘explained’ by energy use. Lines represent the path through time of countries. [Sources and methods]

To understand these life expectancy residuals, we’ll see what they correlate with. Here’s an example. Suppose we have data for the portion of people who smoke tobacco. We’d expect this data to correlate negatively with life expectancy residuals. This means that irrespective of energy use, smoking tends to lower life expectancy. Now suppose that wearing seat belts correlates positively with life expectancy residuals. This means that irrespective of energy use, wearing seat belts tends to increase life expectancy. So to live longer without consuming more energy, we should wear seat belts and not smoke.

Now to real-world data. To understand the energy-life expectancy residuals, I compare them to (almost) every series in the World Bank database.3 If you’re not familiar, the World Bank database is arguably the most comprehensive dataset of human society ever constructed. It contains nearly 7000 different data series that cover virtually all aspects of human life.

I’ll show you here the 10 World Bank metrics that correlate most positively with the energy-life-expectancy residuals. These are things that improve human well-being without using more energy. Then I’ll show you the 10 metrics that correlate most negatively with energy-life-expectancy residuals. These are things that worsen human well-being (without reducing energy use).

How to increase life expectancy without using more energy

Figure 4 shows the 10 World Bank metrics that correlate most positively with energy-life-expectancy residuals. When societies do these ten things, people tend to live longer without consuming more energy.


Figure 4: The top 10 things that increase life expectancy without using more energy. I show here the 10 World Bank metrics that correlate most positively with energy-life-expectancy residuals. The horizontal axis shows the correlation for each metric, measured across all countries in a single year. Boxplots show the variation in the correlation over time. I’ve ranked the metrics by the median correlation. Note: CPIA stands for the Country Policy and Institutional Assessment.

Let’s walk through the chart. The horizontal axis in Figure 4 shows the correlation between the given metric and energy-life-expectancy residuals. The larger the correlation, the more tightly life expectancy increases with the given metric. The boxplots indicate the variation in the correlation over time. (Here’s how you read a boxplot. The vertical line indicates the median of the data. The ‘box’ indicates the middle 50% of data. And the horizontal line indicates the data range.)

Now to the results. The series that correlates most strongly with energy-life-expectancy residuals is the part time employment rate of females. In fact, the part time employment rate appears three times in Figure 4 — once for females, once for males, and once for the whole population. This result is surprising. Many sociologists see part time work as a bad thing. It usually pays worse than full time work. And part time jobs are more precarious, and often come with fewer health benefits. (See Guy Standing’s book The Precariat for details.) So why does more part time employment correlate with a longer life expectancy?

This result doesn’t make sense … until we unpack the data itself. It turns out that ‘part time employment’ is defined as working less than 35 hours per week. In the United States, that’s certainly ‘part time’. But in other countries it’s not. In Norway, for instance, the average work week is 34.6 hours. So according to the World Bank’s definition, the majority of Norwegians work ‘part time’.4 But it’s not like the Norwegians are suffering. Their benefits are famously luxurious — a minimum of 25 paid vacation days, not to mention universal health care. It’s something the average American can only dream of. So while the data ostensibly measures ‘part time work’, it’s actually measuring (indirectly) the average length of the work week. The results, then, suggest that when the whole population works fewer hours, human well-being benefits.

Let’s move down the list. The second strongest correlation with our life expectancy residuals is primary school enrollment. The more primary-age children who are in school, the longer people tend to live. In some ways, the importance of education is unsurprising. We know that it benefits children. But how does education benefit the whole population? Hold on to this question, because I’ll save my thoughts on it until the end.

Next on our list is the percentage of people with access to electricity. This result is interesting. Electrification of the energy supply generally happens as societies consume more energy. This means there shouldn’t be much of a correlation between access to electricity and our life expectancy residuals. (If electricity access increases tightly with energy use, there’s no ‘electricity residual’ left to correlate with our life expectancy residual.) What I suspect is going on here is that there’s an equity issue at work. Yes, electricity use spreads as energy use increases. But it spreads unevenly. Sometimes there are great gaps within countries. The urban rich consume electricity. The rural poor do not. The evidence tells us that reducing this electrification divide increases life expectancy.

All of the remaining series (except one) in Figure 4 come from the Country Policy and Institutional Assessment (CPIA). These are not direct measurements, but rather ‘assessments’ created by the World Bank based on different sets of criteria.5 While we should treat such assessments with uncertainty (there’s inevitable subjectivity involved), the results are still interesting.

Let’s start with property rights and rule-based governance. As this metric increases, so does life expectancy. It’s tempting to focus here on the word ‘property’, but a look at the CPIA methods shows that they’re mostly ranking the ‘rule of law’. It’s actually straightforward to relate this directly to life expectancy. Absent the rule of law, the evidence is pretty clear that human societies become more violent. In pre-state societies, the murder rate is often an order of magnitude higher than in state societies. (See Steven Pinker’s book The Better Angels of Our Nature.) The rule of law may directly increase life expectancy by decreasing violence. The rule of law probably has other indirect effects on human welfare, but these are less straightforward to parse.

Next on the list is equity of public sector resource use. As public sector spending becomes more ‘equitable’, life expectancy increases. This metric ranks governments’ attempts to alleviate inequality, both by measuring poverty and by redistributing income through progressive taxation. No surprises here. We know that inequality is corrosive to human welfare. So making society more equitable makes people live longer. (See The Spirit Level for a discussion of the harmful effects of inequality.)

Next on the list is transparency, accountability, and corruption in the public sector. As transparency and accountability increase, so does life expectancy. This metric measures equity, but this time in terms of control over government. Again, no surprises. If the government is corrupt and oligarchic, it will tend not to care for its citizens. As a result, life expectancy suffers.

Last on our CPIA list is policies for social inclusion/equity. We can think of this metric as a broad ranking of the welfare state. It includes policies for gender equality, social safety nets and investments in education. So improving the welfare state increases life expectancy. That’s unsurprising. Improving human welfare is the raison d’être of the welfare state.

Finally, the 10th metric on our list is manufacture exports as a percentage of merchandise exports. (Here ‘merchandise’ is synonymous with all ‘goods’, meaning everything that is not a service.) What does manufacture exports have to do with life expectancy? I’d guess that it mostly indicates a country’s position within the global economy. Countries that export more manufactured goods are, by extension, exporting fewer natural resources. This plays into the idea of the ‘resource curse’.

In the mid-20th century, economists noticed that many countries that were rich in natural resources tended to have sluggish economic development. Of course, the idea that natural resources themselves could be a curse is absurd. It’s how the resources are exploited that matters. The whole point of having natural resources is not to export them, but to use them yourself. But countries that are on the periphery of the world economy don’t (can’t?) do this. They ship their resources off to other countries. And they suffer for it. Such resource-exporting countries sell natural resources cheap and buy back manufactured goods dear. That’s the opposite of what wealthy countries do. And, it seems, this difference is reflected in life expectancy. (For a good investigation of unequal resource flows in the global economy, see Alf Hornborg’s book Global ecology and unequal exchange.)

How to decrease life expectancy without using less energy

Let’s turn now to the things we don’t want to do to increase human welfare. Figure 5 shows the 10 metrics that are most negatively correlated with energy-life-expectancy residuals. Increase these ten things and people die younger (without using less energy).


Figure 5: The top 10 things that decrease life expectancy without using less energy. I show here the 10 World Bank metrics that correlate most negatively with energy-life-expectancy residuals. The horizontal axis shows the correlation for each metric, measured across all countries in a single year. Boxplots show the variation in the correlation over time. I’ve ranked the metrics by the median correlation. Note: ILO stands for the International Labour Organization.

Interestingly, lack of education tops the list of ‘bads’. In fact, 5 of our 10 metrics are education related. These include:

All of these education indicators are self-evidently bad for children. What is less obvious is that they’re bad for the whole population. When schooling is worse, it seems that everyone dies younger (on average). Why? Hold your thoughts until the end.

Let’s move on to other metrics. The portion of expenses spent on goods and services is third on our list. As with part time employment (in Figure 4), the name of this metric is misleading. It actually measures the portion of government expenses spent on goods and services.6 This is really a measure of the financial health of government. We can see this by looking at the other two major categories of government spending. They are: (1) employee compensation; and (2) social benefits, subsidies and grants. Let’s put it this way: a government that spends most of its money buying office supplies can’t do much for its citizens. It can’t pay its employees well. Nor can it provide services to the population. So when government spending on goods and services increases, life expectancy decreases. That makes sense.

Let’s move down our list again. It seems that life expectancy decreases as more women enter the workforce. Wait … what? This result seems absurd, but I’ll explain why it makes sense in a second. First, let’s define the data. The ratio of female to male labor force participation rate measures the relative number of females in the workforce compared to the relative number of males. Surprisingly, more females (relative to males) tends to worsen life expectancy. The same is true for the labor force participation rate of females. The larger the fraction of females in the workforce, the lower the life expectancy.

This result is surprising because a key goal of the feminist movement is to give women the right to do paid work. Could this movement be harming human welfare? I think the answer is almost certainly no. What’s actually going on here is that female participation in the labor force measures two things:

  1. The ability of women to enter the paid workforce.
  2. Male withdrawal from the workforce.

These two things likely impact society very differently. It’s almost certainly a good thing for women to have the right to do paid work. Having this right means women work because they want to, not because they have to. But when males withdraw from the workforce, things are very different. Then women do paid work out of necessity.

When men withdraw from the workforce, it’s usually because they can’t find a job. And when unemployed, men generally don’t pick up the tasks that would have been done by women. Instead, they often do nothing. They resort to substance abuse and sometimes even crime. (For a good discussion of what men do when there’s no paid work, see Dmitry Orlov’s book Reinventing Collapse.)

Looking at the data, the countries with the highest female participation in the (paid) labor force are mostly in sub-Saharan Africa. These countries are hardly bastions of feminism. Women here are likely doing paid work because they have to … because men are not. So it seems that when women are forced into the paid labor force (because men have withdrawn), life expectancy suffers.

At the end of our list of metrics is employment in agriculture. For a given level of energy use, life expectancy decreases if more people work in agriculture. This is interesting because agricultural employment is intimately linked to energy use. (Getting people off the land requires using more energy.) Why does having more people in agriculture lower life expectancy? A simple explanation is that health care is usually better in urban areas. If more people work on the land, access to healthcare will be worse, and so life expectancy will be lower.

There is, however, a more subtle reason that having more people in agriculture lowers life expectancy. Put simply, countries don’t need to grow their own food. They can import it instead. This is the strategy of wealthy island states like Singapore. It grows almost no food, and yet enjoys a high standard of living. How? By being a business center. Wealthy countries like Singapore are at the core of the global economy, allowing them to urbanize without growing their own food. Thus they get the benefits of urbanization without the (direct) energy costs of agriculture.

Staving off ignorance

I asked you to hold your thoughts on education until the end. Now let’s discuss it. What leaps off the page in Figures 4 and 5 is the importance of education. When more children are in school, the whole population seems to live longer (Fig. 4). Conversely, when fewer children are in school, (or when school is worsened by decreasing the number of teachers), the whole population dies younger (Fig. 5).

I’m obliged to point out first that we’re dealing here with correlation. We haven’t established that universal schooling causes people to live longer. The fact that it could, though, is important. It’s also a bit counterintuitive.

It’s easy to see how things like healthcare make people live longer. Healthcare directly saves lives. But how would education raise life expectancy? Perhaps education improves the welfare of children, and this benefit carries over into adulthood. This is certainly plausible. But there’s also a more expansive case to be made for the benefits of education. Think about it this way. Humanity is always one generation away from ignorance.

Think about everything that you know — all the facts, skills, and tricks that you use in your job and in your life. Unlike most animals, you were not born with these skills. Instead, you acquired them from the previous generation of humans. And this previous generation acquired their skills and knowledge from the generation before. And so on.

In an important sense, the only thing that separates modern humans from our ancient forebearers is this cumulative transmission of culture. We have at our disposal the skills and knowledge of thousands of previous generations of humans. Destroy our machines and infrastructure and we’ll rebuild them (as after World War II). But block the transmission of culture and we’d be back to the Stone Age.

In the past, cultural transmission was passive, in the sense that it wasn’t planned. But today we have a system of deliberate cultural transmission. We call it education. The point of this system is to transfer to each new generation the cumulative knowledge of all previous generations. The better the education system, the better this cultural transmission.

When you frame education this way, it’s unsurprising that it relates to life expectancy. Literally all of the skills and knowledge that we use to improve human welfare are learned. Block or damage the learning of these skills, and human welfare suffers.

So if we want to improve human well-being without consuming more resources, I think we have a clear path. Invest in education. Invest in passing on (and improving) humanity’s cumulative knowledge.

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Sources and methods

All data comes from the World Bank. You can browse the data at data.worldbank.org, or download the whole database here. Energy use per capita data comes from series EG.USE.PCAP.KG.OE. Life expectancy (at birth) is from series SP.DYN.LE00.IN.

I calculate the energy-life-expectancy trend (in Figures 1 and 2) using a locally-weighted polynomial regression. Residuals are then measured as deviations from this regression. For residual analysis, I include only World Bank series that cover at least 50 countries over a period of 20 years or more.

Notes

  1. According to worldometer, the United States emits about 15.5 tons of CO2 per person (per year). The world average is 4.79 tons per person. So bringing the rest of the world up to US levels of fossil fuel consumption would roughly triple our carbon emissions↩
  2. We can use a simple regression to measure the variation in life expectancy that is ‘explained’ by energy consumption. We assume that life expectancy grows linearly with the log of energy use. For this regression, R2 = 0.44. This indicates that 44% of the variation in life expectancy is ‘explained’ by changes in energy use. I’ve put ‘explained’ in scare quotes because we’re talking about a statistical explanation, not a causal one.↩
  3. I discard World Bank series that are directly related to life expectancy — things like death rates and disease rates. I also throw away data about GDP and/or the energy intensity of GDP. I do this because (1) ‘real’ GDP is a flawed metric; and (2) it is strongly correlated with energy use, and hence, material flows. I’m interested here in ways of improving well-being without using more resources.↩
  4. Actually, the World Bank is in this case using data from ILOSTAT. So the definition of ‘part time’ technically comes from ILOSTAT, not the World Bank.↩
  5. You can read about the Country Policy and Institutional Assessment’s ranking criteria here.↩
  6. In this case, the World Bank data comes from the IMF. You can find the government expense criteria in the IMF manual.↩

Further reading

Hornborg, A. (2011). Global ecology and unequal exchange: Fetishism in a zero-sum world. New York, NY: Routledge.

Orlov, D. (2008). Reinventing collapse: The Soviet example and American prospects. New Society Pub.

Pinker, S. (2011). The better angels of our nature: Why violence has declined. New York: Penguin Books.

Standing, G. (2011). The precariat: The new dangerous class. New York: Bloomsbury.

Steinberger, J. K., Lamb, W. F., & Sakai, M. (2020). Your money or your life? The carbon-development paradox. Environmental Research Letters, 15(4), 044016.

Wilkinson, R. G., & Pickett, K. (2009). The spirit level: Why more equal societies almost always do better. New York: Penguin Books.

How to Make a Billion Tons of Carbon Dioxide Disappear

Published by Anonymous (not verified) on Thu, 16/07/2020 - 3:59am in

Three great stories we found on the internet this week.

Rock the world

A new study has found that a simple farming fix could eliminate a billion metric tons of carbon dioxide from the atmosphere if just three countries adopted it. 

China, India and the United States are the three biggest emitters of greenhouse gases. If those countries started spreading rock dust on their farmland, it could massively reduce CO2 emissions. This is because the process isn’t just carbon neutral — it’s carbon negative. When the silicate material in the rock dust is dissolved by rainwater, it sucks carbon dioxide out of the air, washing it away as runoff. The lead author of the study described it as “a straightforward, practical CO2 drawdown approach” that could eliminate half the amount of greenhouse gases produced by all of Europe. 

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The rock dust has the added benefit of helping to rebuild overworked soil, and the researchers say that concerns about the process requiring harmful mining activities can be addressed by using recycled “waste rock” that’s already being produced by mines, making the solution a win-win-win. 

Read more at the Washington Post

Online cooperation

A new app is bringing the employee-powered co-op model into the digital age. The platform, Up & Go, is cooperatively owned by 51 Latin American housekeepers. The “owner-workers” share office space, customer service representatives and ownership of the app itself. With a few taps, clients can hire one of the housekeepers for residential or commercial services; meanwhile, the housekeepers get to be their own bosses and keep regular work rolling in.

View this post on Instagram

We are ready to help you keep your space clean and healthy! Our members, like Brightly Cleaning, worked diligently to update our policies and procedures to bring you our best home cleaning, safely. Check out our services on www.upandgo.coop (link in bio).

A post shared by Up & Go (@upandgonyc) on Jul 6, 2020 at 9:12am PDT

By combining the employee-centered co-op model with a TaskRabbit-style digital economy tool, Up & Go hopes to reap the benefits of both. One way it has done this is by ensuring its co-op members are well protected during the pandemic — which can be hard for other workers whose bosses may prioritize profits over safety.

“This is where we really saw the power of the co-op. We had these systems in place,” said one member. “Everything was grounded in the worker’s experience, rather than: ‘We need to make as much money as possible, let’s send people out even if they don’t have adequate protective gear.’” That doesn’t mean the profits aren’t rolling in, however — one Up & Go member the New York Times spoke to said the app has increased her average hourly wage to $25 from the $11 or $12 she was making when she used fliers.

Read more at the New York Times

The tok is ticking

Indigenous women in Canada are woefully underrepresented in media, so they’re using TikTok, the dance-happy digital platform, to represent themselves. The Tyee reports on Sherry McKay, an Oji-Cree woman from Winnipeg, who was working toward a degree in media, but was forced to leave school for lack of funding. So she turned to TikTok, where she’s now one of the platform’s many Indigenous stars who have helped the hashtag #NativeTikTok reach almost 200 million views. “Not only does it bring people together, in a certain sense it’s an eyeopener,” said Ticia Johnson, who is from the Gitxsan Nation and goes by Ticaks on the platform. “There are a lot of cultures out there that I never really got to see until I was on TikTok.”

Read more at the Tyee

The post How to Make a Billion Tons of Carbon Dioxide Disappear appeared first on Reasons to be Cheerful.

Why America Won’t Be ‘Great’ Again

Published by Anonymous (not verified) on Sun, 12/07/2020 - 12:47am in

Tags 

Energy

They called him the ‘Little Emperor’. Romulus Augustus — better known as Romulus ‘Augustulus’ (‘Little Augustus’) — was the last Western Roman Emperor. He assumed the throne at the age of 16 during a period of unprecedented strife. There had been 8 emperors in the previous 20 years. Like his predecessors, the Little Emperor’s reign was short. It lasted less than a year. In 476 CE, Augustus was deposed and the Western Roman Empire came to an end.1

One wonders what Augustus said to his followers during his reign. As little more than a proxy for his military-general father, Augustus left no monuments and made no decisions. But what might he have said in private? Perhaps he promised to ‘make Rome great again’. …

✹ ✹ ✹

We are perennially fascinated with the rise and fall of the Roman Empire. Why? Likely because its collapse cast such a long shadow on Western Europe. Once the center of civilization, the Roman collapse sent Western Europe into a dark age. It would take a millennia to recover.

Interestingly, the Roman elite seemed to be the last to recognize the empire’s decline. True, during Augustus’ reign the elite probably knew that the empire was a shadow of its former self. But elites were too busy squabbling over power to care much for the long arc of history. In their eyes, a return to Roman ‘greatness’ was probably forever on the horizon.

Perhaps the best characterization of this elite attitude comes not from history, but from science fiction. In his Foundation trilogy, Isaac Asimov imagines a galactic empire that sits on the verge of collapse. Scientist Hari Seldon sees the writing on the wall. But the leaders of the galactic empire do not. They’re too busy squabbling amongst themselves.

This lack of elite awareness, I’d guess, is a general rule. As empires collapse, elites are usually the last to know. Take Donald Trump. As the US empire slowly declines, Trump promises to restore America to its imperial heights. He’ll ‘Make America Great Again’. Like most elites, Trump is too busy gripping power to see the writing on the wall.

What is this writing? And how can we read it?

In Asimov’s Foundation, Hari Seldon uses ‘psychohistory’ to predict the galactic empire’s impending collapse. A kind of statistical mechanics for humans, psychohistory is the social scientist’s dream. It predicts with uncanny accuracy the course of humanity. Sadly, psychohistory doesn’t exist, nor will it likely ever exist. So we’re forced to find a more crude window into empire’s rise and fall. That window will obviously be history. But what is the language?

The history of empire, I argue, isn’t written in the speeches and proclamations of elites. Instead, it’s written in the language of energy. Although the motivations for empire building differ between societies, the end result is always the same. A successful empire centralizes the flow of energy. This means that energy use (per person) in the empire’s core will dwarf energy use in the periphery. The degree that this is true marks the degree that the empire is successful.

Energy use, then, provides a window into the rise and fall of empires. Let’s look through this window and see what we find.

The rise and fall of Western civilization

We’ll look first at the grandest scale of all — the 10,000-year history of civilization. Permanent settlements first arose in the Mediterranean basin in an area that anthropologists call the ‘Levant’. It was here that agriculture started. And it was here that agriculture was first intensified using irrigation. Not surprisingly, the Levant was where the first empires emerged.

The rise and fall of these proto-empires should be written in the language of energy. Unfortunately, the ‘book of energy’ has long since been lost. The first civilizations kept few written records. And most of their physical artifacts have been destroyed. So how can we estimate the energy use of early empires? We make an educated guess.

That’s exactly what Ian Morris does in his book The Measure of Civilization. Morris estimates energy use in antiquity. His results are fascinating, so I’ll present them here. But keep in mind that Morris’ data is less of a measurement and more of a back-of-the-envelope guess. Over the whole of antiquity, Morris estimates energy use in both the ‘West’ and the ‘East’. By ‘West’ Morris means the basin of civilization in the Mediterranean. By ‘East’, he means the basin of civilization in China.

What I do here is simply divide the two series. I compare energy use in the ‘West’ relative to in the ‘East’. This ratio gives us a window into the rise and fall of Western empire. The greater the energy ratio between West and East, the more successful is Western empire. I’ve plotted this ratio in Figure 1. The rise and fall of the West is unmistakable.


Figure 1: The rise and fall of the ancient ‘West’. [Sources]

I’ll start by acknowledging the scale of history shown in Figure 1. It covers some 15,000 years — a period so long that it’s hard to grasp. To get some perspective, the entirety of industrial society covers just 1% of this time.2

Let’s go back to the beginning of civilization. After a hundred thousand years (or more) of living as hunter gatherers, humans started to farm. This happened first, we think, in the Mediterranean. We can see this Promethean event written in Morris’ energy data. Some 14,000 years ago, energy use in the ‘West’ started to pull away from energy use in the ‘East’. To give you some perspective on this timeline, I’ve marked in Figure 1 some important historical events. Dates are obviously approximate. (Note: I’ve used the ‘common era’ dating system. Negative years indicate ‘BCE’. Positive years indicate ‘CE’.)

Around 9,000 BCE, relative energy use in the ‘West’ peaked and began to slightly decline. While we should treat this peak with appropriate uncertainty (the data behind it are rough guesses), it has a simple explanation. It’s around this time that farming started in the East. So the relative gains of the West, where farming first arose, began to level off.

Then around 5,000 BCE, the West again began to boom. The first city (Uruk) was born, as was the forging of bronze. And for the first time, language was written down. This boom coincides, unsurprisingly, with the dawn of irrigation. Without irrigation, the bounty of agriculture was unpredictable. This made empire-building difficult. If farmers couldn’t reliably feed themselves, they could hardly pay tribute to an imperial power. Irrigation ‘fixed’ this problem by making harvests predictable. As a result, the first empires flourished.

The energy bounty of irrigation, however, was not shared equally. This fact is written in the record of human height. Carles Boix and Frances Rosenbluth find that as civilization arose, average height plummeted. In other words, health and nutrition worsened. But royalty bucked this trend. Kings and queens, Boix and Rosenbluth show, remained tall. This suggests that rulers used the bounty of irrigated agriculture mostly to enrich themselves.

As an example of this inequality, think of ancient Egypt. Rather than share the energy bounty, Egyptian pharaohs built pyramids — colossal monuments to their own vanity. That so much energy could be squandered on something so useless is a testament both to the wealth of these first empires and to the depravity of their rulers.

Back to Figure 1. The pinnacle of Western empire came, interestingly, not with the Romans but far earlier. As written in the language of energy, Western superiority peaked around the time of the Akkadian Empire — roughly 4,000 years ago. This peak has less to do with events in the West and more to do with what was going on in the East. It was around this time that the first Eastern empires emerged. The pinnacle of (relative) Western energy use came as the Xia Dynasty was formed in China. Western empire continued (for instance, with the conquests of Alexander the Great), but the West’s advantage relative to the East slowly declined.

The Roman Empire, which emerged around 2000 years ago, briefly paused this decline. But when the Roman Empire collapsed, Western decline accelerated. It didn’t level off until the depths of the Middle Ages, at which point Europe was a provincial backwater.

With this sprawling history in mind, let’s return to our friend ‘Little Augustus’. As the last Western Roman emperor, what power did Romulus Augustus have to stave off collapse? Likely very little. By the time Augustus assumed the throne, the empire had been in decline for centuries. The exact reasons for this decline are still debated. But the fact that it happened is undeniable. It’s written in the language of energy.

There’s an interesting paradox here. Elites, as a rule, are forward looking.3 Worried about losing their power, elites scheme incessantly about the future. Historians, in contrast, are backward looking. It’s their job to study the past. Yet paradoxically, it’s backward-looking historians who are best equipped to see an empire’s future. The long arc of empire’s rise and fall is evident only when you look at the past. Busy scheming about the immediate future, elites rarely see this long arc of history. And so they rarely anticipate imperial decline.

The rise and fall of the British Empire

A thousand years after the Roman Empire collapsed, Europeans again conquered the world. Millions of words have been spilled trying to understand this return of Western dominance. I won’t add to the noise here. Instead, I’ll be content to watch history happen. Like the rise and fall of the Roman Empire, the rise and fall of European empires is written in the language of energy. Let’s read this ‘energy book’.

In the last 500 years, Europe has had many empires — Portuguese, Spanish, Dutch, French and Russian to name a few. But all of these empires paled in comparison to the British Empire. For most of the 19th century, Britain effectively ruled the world. It created a sprawling, global empire upon which the ‘sun never set’. But, like all empires, the sun eventually did set on the British Empire. In fact, the rise and fall of Britain was more spectacular than the rise and fall of Rome. The British Empire burned more brightly and more briefly.

Figure 2 tells the tale. Here I plot British energy use per capita relative to the average in rest of the world. Britain began, in the 14th century, as an unremarkable nation. When it first colonized North America, Britain consumed roughly the same energy per person as the world average. But that would change.


Figure 2: The rise and fall of the British Empire. [Sources]

Not only did Britain conquer the world, it became the world’s first industrial superpower. Britain plundered the resources of the world at the same time that it plundered the coal reserves under its belly. The results were spectacular. From an unremarkable nation in 1600, Britain accumulated so much power that by the late 1800s it was effectively the world’s administrator. This rise is written in the language of energy. At the empire’s peak, the typical Brit consumed about 7 times more energy than the world average. This pinnacle, however, would be short lived.

Before we discuss the fall of the British Empire, I can’t resist framing its rise in terms of the birth of my own discipline, political economy. I’ve marked in Figure 2 the publication of two seminal texts: Adam Smith’s The Wealth of Nations and Karl Marx’s Capital. Both grappled with the changes engulfing British society.

When it comes to empire, Adam Smith is important because he started a long line, in political economy, of imperial apologetics. As empire spread through force and plunder, you could count on the admirers of Adam Smith to see ‘free markets’ everywhere. This worldview was solidified in the ‘marginal revolution’, during which neoclassical economics was born. The timing of this revolution is ominous. Faith in markets was perfected at the height of British imperialism.

Karl Marx, in contrast, saw empire for what it was — a sprawling octopus whose arms sucked resources from the world. A fierce critic of British rule in India, Marx is the father of many anti-imperial schools of thought (like dependency theory and world-systems theory). Marx even recognized the ‘metabolic rift’ in British society that was being driven by industrialization. (Human refuse, for instance, was no longer being returned to the land.) But despite his insight, Marx succeeded in doing the same thing as the neoclassical economists: rather than create a science, he created an ideology. Millions would suffer as a result. (See the discussion of China below.)

Back to Britain’s rise and fall. During its century of dominance, Britain was able to maintain global peace (of a sort). As the unchallenged superpower, Britain acted as the world’s police — a Weberian ‘peacemaker’ that reserved the sole right to use violence. Perhaps paradoxically, this long peace began to unravel as a series of ‘ententes’ were formed.

In hindsight, this is understandable. Strong empires don’t sign peace agreements. They enforce their will unchallenged. So the series of ententes that Britain signed at the turn of the 20th century signaled the weakening of its empire. And this is written in the ‘book of energy’. When Britain signed (with France) the Entente Cordiale in 1904, its energy free-fall had already begun. This fall would continue through two world wars, up to the present. The only interlude was in the 1980s, when Britain briefly exploited a bonanza of oil in the North Sea. But that wouldn’t last. North Sea oil production soon peaked, and the energy free fall continued.

That brings us to Brexit. The Brexit movement is, in many ways, the British equivalent of Donald Trump’s campaign to ‘make America great again’. Brexiters long for a return to British ‘greatness’, recalling a time when Britain was ‘independent’ of Europe. But as many commentators have observed, this return to ‘independence’ is an illusion. Britain was never ‘great’ as an independent nation. It was ‘great’ as an empire. And that empire, it seems, is gone forever.

The Brexit movement won’t bring back the British Empire any more than the ‘Little Emperor’ brought back the Roman Empire. If anything, the Brexit movement is similar to the fracturing of the Roman Empire after Romulus Augustus was deposed. What ensued was not imperial ‘greatness’, but feudal backwardness. Is this what’s in store for Britain? Only time will tell. …

The rise and fall of the American Empire

As the British Empire declined, the American Empire rose. Although unremarkable in many ways, the American Empire is unique in at least one regard. It’s the first empire that denied its own existence. The British celebrated their empire loudly, as did other imperial rulers in history. But Americans bucked the trend. They created an empire, but never called it that. It was merely a ‘sphere of influence’.

Let’s not mince words. Just like the British (and the Romans long before), Americans stationed military garrisons around the world. They created a vast supply chain that brought resources to the United States. And they punished groups that defied American power. That’s empire in everything but name.

Like Britain, the rise and fall of the American Empire is written in the language of energy. But unlike Britain, which declined as rapidly as it rose, the American rise and fall is less spectacular (at least so far).

Before getting to the data, I’ll point out an important difference between Britain and the United States. Britain is an island whose geographic boundaries didn’t change as it conquered the world. That makes estimating energy use per capita fairly straightforward. The US, in contrast, was a colony that expanded its own territory at the same time that it expanded its imperial power. This changing territory makes it more difficult to track energy use per capita. The further back in time we go, the more poorly defined ‘US energy use per capita’ becomes. For that reason, I’m skeptical of some of the energy data that I present here.

Figure 3 shows the rise and fall of the US empire, written in the language of energy. Unlike Britain, the US seems to have risen and fallen twice. The first peak occurred just before the Declaration of Independence — perhaps not coincidentally near the peak of the US slave trade. The second peak happened after World War II.


Figure 3: The rise and fall of the American Empire. [Sources]

The first peak, I’ll admit, may not have actually happened. Or if it did occur, it may have been less pronounced than shown in Figure 3. The reason I’m skeptical of this first peak is because I don’t have confidence in the underlying data. I estimate energy use per capita by dividing aggregate US energy consumption by US population. The problem is that during colonial times, it’s not clear that the energy data uses the same geographic boundary as the population data. For that reason, I’d mark the first energy peak with an asterisk (* needs independent confirmation).

Data uncertainty aside, let’s look at the energy trends. What seems clear is that from initial colonization, American fortunes rose rapidly, peaking around the time of the Revolutionary War. In other words, at its official birth the United States was already a wealthy society. This is unsurprising. Epoch-making documents like the Declaration of Independence or the US Constitution are rarely forged by impoverished societies. If you’re struggling to feed yourself, you don’t write moral treatises.

The good times of American Independence, however, didn’t last. As Americans conquered the continent, internal tension brewed. This tension is written in the language of energy. From its peak at American independence, relative US energy consumption declined throughout most of the 18th century, reaching a low in the mid-19th century. It’s perhaps not a coincidence that it was then that the Civil War erupted. In his book Ages of Discord, Peter Turchin analyzes the long-waves of American social stability. His waves match (at least roughly) what’s written in the energy data. Turchin finds that social stability peaked after independence, but reached a trough by the Civil War. Stability rose again during the good times after World War II. But today, social stability is on the decline.

Back to the energy data. After the quagmire of civil war, American fortunes rose again. By the turn of the 20th century, the American empire was in full swing. As revealed by energy consumption, the ‘American century’ lasted roughly 70 years (1900–1970). During this time, the typical American consumed about 6 times more energy than the world average. The peak of US supremacy came during World War II. At the height of its war machine, the US consumed roughly one third of the world’s energy. It’s doubtful that any other society has achieved this feat. And given that fossil fuels are being rapidly exhausted, it’s doubtful that this feat will ever be matched. (Let’s hope it’s not. Fossil-fuel-driven empire is ecologically suicidal.)

As with all empires, the US empire eventually declined. Looking at the energy records, the end of US dominance came around 1970. It was then that the US energy supply became unstable. In 1970, US oil production peaked. And geopolitical events made importing oil more difficult. Unhappy with US foreign policy, the oil cartel OPEC decided to limit the taps. As a result of both events, relative US energy use began to fall. This decline was halted, briefly, during the boom of the 1990s. But then the dotcom bubble burst, and the energy slide continued. Today, it shows no signs of stopping.

That brings us to Donald Trump. In hyperbolic fashion, Trump promises a return to American ‘greatness’. But it’s a return that, in all likelihood, will never happen. The pinnacle of US empire has long passed. Like ‘Little Augustus’, Donald Trump commands an empire in decline. He shouts loudly, but on a shrinking American stage. For that reason, it would be fitting to call him the ‘Little Emperor’.

The fall and rise of the Chinese Empire

No story of empire would be complete without discussing the rising power. Today that’s China. Unlike Britain and the US, the story of Chinese empire is not of rise and fall, but of fall and rise.

During the Middle Ages, China was the center of world civilization. But with the European renaissance, that would change. In the 19th century, Europe colonized China (although never as completely as it colonized neighboring India). Colonization eventually ended in the 20th century with the Chinese communist revolution. But this revolution didn’t end Chinese suffering. If anything, it exacerbated it. Still, China eventually emerged as an industrial power. In the last 40 years, its transformation has been remarkable. And the whole story is written in the ‘book of energy’.

Figure 4 tells the tale. We begin in 1700, at the pinnacle of the Qing Empire. At this time, Britain was just starting to industrialize. To guard its domestic industry, Britain banned the import of Asian textiles. (This use of protectionism to industrialize is a repeated feature of history. See Ha-Joon Chang’s Bad Samaritans for details.) By 1800, European dominance was in full swing, and relative energy use in China started to decline. Still, the Qing Empire ruled roughly a third of the world’s population.


Figure 4: The rise and fall of the Chinese Empire. [Sources]

In the mid-19th century, Britain and France sought to colonize China and engaged in a series of Opium wars. By the early 20th century, the Qing dynasty collapsed, and China was sent into political turmoil. It’s relative decline continued.

Interestingly (but perhaps not surprisingly), the Chinese Communist revolution happened as China’s fortunes hit rock bottom. It’s worth pausing here for a theoretical note. In his theory of social transition, Karl Marx predicted that communist revolutions would happen in the most ‘developed’ capitalist societies. He was wrong. All of the communist revolutions in the 20th century happened in relatively peripheral societies. Communist revolutionaries didn’t overthrow industrial capitalists, as Marx foresaw. Instead, they did away with agrarian aristocrats. This put revolutionaries in charge of managing industrialization.

The problem for the revolutionaries was simple. Farmers didn’t share their central-planning ideology. This meant that communist leaders had to force change. And so they did. Like Stalin before him, Mao forced Chinese farmers to collectivize. He proclaimed a ‘Great Leap Forward’. But the result was a perverse type of ‘greatness’ — the ‘Great Chinese Famine’. Mao’s politically induced famine was perhaps the most devastating in human history. As many as 40 million people may have died. It’s worth remembering this fact when we read Marx. When put in action, Marx’s ideology plumbed the depths of depravity.

Although it hardly speaks to the extent of Chinese suffering, the Great Famine is written in the ‘book of energy’. It appears as an energy trough around 1960. After this trough, Mao would proclaim another revolution — the ‘Cultural revolution’. China’s fortunes began to rise. But the greatest changes would come after Mao’s death. When Mao died, the Chinese government abandoned hardline command and control. Instead, it let (big) firms take some of the economic reigns. After this reform, the growth of Chinese energy use was spectacular.

Notice, however, that Chinese energy consumption has only recently surpassed the world average. Today, the typical Chinese citizen consumes about 1.3 times more energy than the world average. While China is on the rise, it has yet to catch up to the fading imperial power, the United States. Today, the typical American consumes about 3.8 times more energy than the world average. Although the US is in relative decline, it’s still a far wealthier nation (on average) than China.

This picture would change, though, if we focused on the center of Chinese power — cities like Shanghai and Beijing. That’s because China is marked by a great urban-rural divide. In 2012, Chinese urbanites earned about 300% more than their rural counterparts. In contrast, American urbanites earn only 36% more than their rural counterparts.4 This divide means that speaking about ‘average Chinese energy use’ is misleading. Some Chinese live much like modern Americans. Others live more like Americans of the 18th century. In the language of world-systems theory, we’d say that China ‘includes its own periphery’.

There’s another caveat to Figure 4 that arise from mathematics. China accounts for roughly a fifth of world population. Mathematically, it’s difficult for the energy use of such a large nation to pull away from the world average. Why? Because as its energy use increases, it pulls the world average up with it.5

Caveats aside, it’s undeniable that Chinese empire is on the rise. When the peak will come is difficult to predict. But the evidence suggests we’re headed for a ‘Chinese century’.

Greatness without empire

The rise and fall of empire is written in the language of energy. But we shouldn’t mistake imperial ‘greatness’ for human well-being. True, well-being is correlated with energy exploitation. But only to an extent. Other social factors also matter — fair access to healthcare and education to name a few.

As empires decline, citizens should be aware of two things. First, their imperial ‘greatness’ is probably gone forever. Second, there are other ways to be ‘great’. A society can be ‘great’ not by conquering the world, but by becoming sustainable and equitable. But unlike imperial power, this alternative type of ‘greatness’ won’t be built by elites. Like always, elites are too busy squabbling over power to see the writing on the wall. But this time the writing signals a warning not just for one empire, but for the whole of humanity: become sustainable or risk collapse. It’s up to us to make the sane choice.

[Cover image: John Gast]

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Sources and methods

World

Energy data comes from:

Population data comes from:

To calculate energy use per capita from 1820 CE to 2018 CE, I divide world energy use by world population. Morris’ pre-1800 energy data is already expressed in per capita terms. The various datasets aren’t consistent with one another. To make a continuous series, I splice the data together backwards in time, keeping the BP series at their original values. Then I interpolate linearly within the series to get estimates in each year.

Ancient East and West

Estimates for energy use per capita come from Morris Table 3.1 and Table 3.4.

Britain

Energy data comes from:

Population data comes from:

  • 1965–2018: World Bank series SP.POP.TOTL
  • 1560–1965: Paul Warde’s Energy Consumption in England & Wales: 1560–2000

I calculate energy use per capita by dividing energy use by population. I splice the data series together by indexing the Ward series to the BP/World Bank series in 1965.

United States

Energy data comes from:

Population data comes from:

  • 1960–2018: World Bank series SP.POP.TOTL
  • 1790–1959: Historical Statistics of the United States, series Aa6–8
  • 1630–1780: Historical Statistics of the United States Volume 2, page 1168

I calculate energy use per capita by dividing energy by population. I then splice the resulting per capita series backwards in time, keeping the BP data at their original values.

China

Energy data comes from:

  • 1965–2018: BP Statistical Review of World Energy, 2020
  • 1 AD–1964: To my knowledge, there’s no good data on China’s energy use prior to 1965. Here’s my solution. I plug my nose and look at the correlation, in the World Bank data, between international energy use and ‘real’ GDP. I regress this relation and then use the equation to estimate China’s energy use from Angus Maddison’s estimates of China’s GDP. Obviously this estimate must be treated with caution.

Population data comes from:

I splice the Maddison/World Bank estimates to the BP series.

Notes

  1. By convention, Romulus Augustus is treated as the last Western Roman Emperor. The Eastern Roman Empire continued long after Augustus. And there were a few people who, after Augustus, proclaimed themselves ‘emperor’ of the West. But none were widely recognized.↩
  2. I assume here that the industrial era covers roughly 200 years, which is roughly 1% of the 15,000-years period shown in Figure 1.↩
  3. On the ‘forward-looking’ worldview of elites, Shimshon Bichler and Jonathan Nitzan note another paradox. It’s impossible to ‘look’ into the future (it hasn’t happened yet). This means that the ‘forward-looking’ worldview of elites is, in reality, backward looking. But unlike historians who are concerned with the long arc of history, elites look ‘forward’ by analyzing the recent past. For modern elites, the most important element of the recent past is the motion of the stock market. For more details, read Bichler and Nitzan’s A CasP Model of the Stock Market.↩
  4. According to 2018 census data, US urban dwellers (those in ‘Metropolitan Statistical Areas’) had an average income of $52,245. Rural dwellers had an average income of $38,338.↩
  5. We could solve this mathematical problem by comparing China to the rest of the world (excluding China). But since I haven’t done this for the US or Britain, I won’t do it for China.↩

Further reading

Bichler, S., & Nitzan, J. (2016). A CasP model of the stock market. Real-World Economics Review, (77), 119–154.

Boix, C., & Rosenbluth, F. (2014). Bones of contention: The political economy of height inequality. American Political Science Review, 1–22.

Chang, H. (2008). Bad samaritans: The myth of free trade and the secret history of capitalism. Bloomsbury Pub Plc USA.

Morris, I. (2013). The measure of civilization: How social development decides the fate of nations. Princeton: Princeton University Press.

Smil, V. (2010). Energy transitions: History, requirements, prospects. Santa Barbara: Praeger.

Turchin, P. (2016). Ages of discord: A structural demographic analysis of American history. Chaplin, CT: Beresta Books.

Warde, P. (2007). Energy consumption in England & Wales, 1560-2000. Consiglio nazionale delle ricerche, Istituto di studi sulle societa del Mediterraneo.

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