Limitless Growth Is Possible If We Run Our Economies Correctly | Economics Explained
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0:00 - 2:15 Intro
2:16 - 3:12 Brilliant
3:13 - 4:02 GDP growth
4:03 - 4:53 Is growth bad?
4:54 - 7:00 Inequality
7:01 - 9:00 Resource depletion
9:01 - 11:01 Quality over quantity
11:02 - 12:22 Digital economy
12:23 A better way forward
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I completely agree with you.
Right now gaming companies are working on VR, if they can finally get VR games like Fallout and get tactile suites up to the point where we can actually interact with anyone on the planet in real time, it'll change everything.
Even the concept of space will change when a tiny apartment becomes an unlimited virtual space.
This video was produced before why re-upload
@@hexadecimal5236 there is also reason to think virtualization is key because we are already doing it at smaller scales. For example, each process in an operating system gets the whole memory to itself as virtual memory despite the physical memory being smaller. The os swaps them around when they aren't being used by any one process to make it look like each process has that much memory available.
A simpler example would be minecraft where blocks spawn and despawn around you without your notice. So it gives the impression of loading the entire world, despite only loading what it needs.
Please make a video about Bangladesh economy
And one for uk...
The majority of fossil fuels now exist outside the West. The real reason for global warming being pushed is racist and imperialist.The West agreed that we should not buy these fuels and enrich the rest of the world. by competing on price for them against India and China. Green energy is racist and imperialist. Which is why I support it. We need to keep the money in the West and crush the rest of the world. There is no greenhouse effect. There is a dollar effect.
"ANYONE who believes that exponential growth can go on forever in a finite world is either a madman or an economist,” Kenneth Boulding
Said by an economist
Evolution has been doing it for billions of years and so far there’s no end in sight.
@@xhelloselm evolution isn’t growth!?!
Expand your horizons beyond Earth...
This will be relevant once the entire universe is fully optimised to fulfil peoples desires, until then exponential growth can realistically go on forever
"Even Switzerland has the good sense to diversify into dodgy banking" 😂😂😂😂 I just about died of laughter 😂😂
Definitely a classic.
timestamp?
And chocolate! I was surprised he didn't mention the brown yummy!
@@samsawesomeminecraft 10:24
I think you need to challenge the initial assumption...that human demand is infinite.
You can see that this is challenged later in the video...fast fashion is the clearest example.
Fast fashion exists in order to CREATE demand. We make cheap garbage clothes and new styles every year for only one purpose...so that people will buy them. If we built quality clothing that was durable and lasted a long time in styles that were not tacky after a few times wearing then we would consume LESS CLOTHING. I.e., our natural demand for clothing isn't infinite, consumption is artificially created through branding, advertising, and cheap disposable goods.
Durable long lasting clothes are available on the market I have been wearing the same winter jacket for 10 years and it is still in good shape. The very fact that some people choose fast fashion anyway further evidence that human demand is infinite.
Furthermore even if all of a person's needs and desires could somehow be satisfied that person would still have a nonzero demand for stored matter and energy so they could maintain their lifestyle for longer since no resource can last forever.
@@friendguy13 humans wants aren't unlimited. They are fulfilled once maslow's hierarchy of needs reaches it's topmost tier. But the reason they are considered unlimited is because once their personal wants are complete, humans start reproducing more than average or compete to give more resources to their loved ones.
And lack of understanding. Most people don’t know the answer to this question: What is the one thing we all pursue for its own end?
More important than GDP is GDP per capita. If you just measure GDP it looks like an improvement to have a higher population who are poorer on average.
This is a really good point
the problem with GDP per capita is its an average, so one billionaire can offset thousands of minimum wageworkers. I prefer modal disposable income ( how much disposable income is most common in a society ) so that one billionaire can not give the impression that the DRC is experiencing tremendous economic growth.
Careful with that though. This road can lead to genocide.
@@acctsys the DRC beat you to that , by a lot
GDP per capita has many flaws and it's a very popular metric anyway
The problem here is that selling jackets that will last a lifetime is not as profitable as selling jackets that will only last one year or two; even if you sell that first jacket for 10 times the price of the second.
Companies will always try to increase their profit; but governments could tax polluting material like plastic, and then use the money from this tax to subsidize companies producing durable goods.
The more of these sustainable companies we have, the more likely people are to realize where their money should go.
Governments already tax everything and still have yet to prove their worth at solving anything besides solving the issue of Syrian chikdren going to school unbombed. Time to cut taxes and give people money/power back. Governments have a vested interest in keeping you poor. I would buy organic eco friendly products if I got to keep more than half my pay cheque.
F..k" privite public "partnership. Its called facism and thats exactly what wef wants .We Can support companies that create durable products with ongoing low fee in return for long term servis ...No gov is reqiared.
Some people need a jacket "now", not in 6 months when it will be summer again. Cheap jackets also have thinner margins and it might not make sense to make just a few.
It would be useful to have some measure of average usable lifetime on certain products - like cars, appliances etc. Some way for consumers to compare products, especially for high-value ones.
Also: Right-to-Repair laws. Mandate that products have to be able to be repaired by consumers and all this anti-repair bullshit is illegal both in design and in marketing.
Sam Vimes' boot theory strikes again!
How tremendous an impact can an idea like paying more attention to Material Productivity/GDP per material use, rather than other GDP based Metrics, can have on our own personal perspective of Economic Growth! Amazing!
That ratio would basically be the price of energy.
We pay attention to what we pay for. As labour is the most expensive input in many industries in many places, we pay a lot of attention to labour productivity. The only (market based) way that focus will shift to material intensities is if these are priced much much higher (e.g. through massive carbon taxes and extraction fees)
even if you have a more efficient use of resources per GDP, you will get a less efficient use of human resources if you value free time and leisure, self actualization, ect. peoples Jobs will be more and more sophisticated and abstract and thus more disconnected from anything concrete. For many people, this means more alienation and disillusionment, or at least disassociation at work, which is already a well known, ongoing social phenomenon. people will be working harder and longer in Jobs that they don't understand and don't see the point of, just so the GDP can go up. Marxian alienation will keep ratcheting up, creating social unrest anyway.
The more material you consume, the better. You need a house to live in, not netflix.
Manufacturers want to lower quality, not improve it, because it's both cheaper and creates repeat business.
The worst part about this recession is that consumers are racking up credit card debt. In April alone, credit card debt went up 20% while rates have doubled in a year. Inflation is so high that consumers are literally taking debt for basic life necessities. Collapse is near.
Collapse is generous
1st time in our history with a full generation that wasn't taught financial literacy, civics, Google fixes their problems if their parents don't do it for them.
Reckoning for participation trophies is incoming
Inflation is gradually going to become part of us and due to that fact any money you keep in cash or in a low-interest account declines in value each year. Investing is the only way to make your money grow and unless you have an exceptionally high income, investing is the only way most people will ever have enough money to retire. Personally I hired ‘’"Nicole Ann Sabin"’’ a financial advisor who sets asset allocation that fits my tolerance and risk capacity, investment horizon, present and future goals.
Yep, I haven't had any cc debt for most of my life, last year and a half? 7.5k in cc debt.
Hey I learned this details in highschool regarding the great depression. Apperently credit became too popular than what was sustainable.
There is a danger in prioritizing "infinite growth" or growth in general. Marketing especially is guilty of "creating desires," even desires that are harmful to its customers (like smoking), all in the pursuit of growth.
If economics is to be used to help "society," then examining our desires (manufactured or otherwise) may need to be a part of the equation.
Most of the purpose of marketing is 'creating desires.'
People buy bottled water now because the advertising has convinced them that drinking tap water is lower-class, and bottled water is somehow better because it comes from volcanic rock or some nonsense like that.
This indeed. If they would correct GDP for fulfilled desires (amound of accessible food, housing, social/mental welfare), you could achieve growth by managing desires (if people expect less, their desires are easier fullfilled, thus more growth).
Ofcourse society is much more complex, which is why a metric like GDP (capturing only monetary value of society) can never be enough to measure how well a civilization is doing. A more complex model is needed. I really like the dougnut model: th-cam.com/video/Rhcrbcg8HBw/w-d-xo.html which optimizes more important parameters than GDP.
just because something is harmful doesn't mean it should not exist. There are a lot of people who enjoy smoking because there is a great pleasure in smoking cigarettes. Obviously they know it's not healthy but so what? If you like cakes you don't eat them because they are healthy
@@sten260 I dont completely disagree with you- but I also didn't mean that we need to get rid of "harmful" things.
Many of the issues we are seeing today, are (I believe) by-products of valuing growth over anything else. We are indirectly encouraged and incentivized to lie and manipulate information in order to produce "growth."
If we stop making growth itself so desirable, perhaps society will be able to make more... idk "accurate desires?"
@Nicod3m0 Otimsis well if people like tik toks so be it. Why is this an issue? we should provide digital services that people want right?
Even by making current resource use more efficient, we’re still using the same finite resources, so infinite growth is just as impossible. Growth may continue a bit longer but it doesn’t fundamentally change the equation.
Something I found interesting when looking at history is that things tended to get cheaper over time. There may have been some production increases but while hand made good are very expensive they often were built from the highest quality material because the best way to get economy was to go for longevity. Since the population stayed static there were actually deflationary pressures. The overall amount of good was low at the time and it was one thing that really helped to increase the standard of living. We would have to have a major shift in policy but it's a smart thing to do on a personal level especially since you get to have nicer stuff although less new stuff.
Those are called "luxury goods" today = )
Falling rate of profit be like:
The trend of things becoming cheaper has a limit. The resources most things are built from become harder to mine every year now.
We've had things getting cheaper for so long because technological growth. Technological growth can only go so far though before the difficulty of mining out weighs it
@@loowyatt6463 there is no limit to technological growth. Economists always lock us into the surface of the earth. Real entrepreneurs look above to the moon and below into the underground to find new resources. Also, economists are like Malthus who said the finite world would cause shortages. Those are the ones who get headlines and make the people pessimistic. Milton Friedman is the economists we need as he knows how the world truly works.
@@funveeable For starters of course there is a limit to technological growth. At a certain point of growth you'd reach the limit of know information and application of that knowledge.
Mining in space is century's off and far more complicated that you think. For starters how do you transport those resources to the planet from space?
Second problem when do you get the resource here how do you stop it collapsing the market. For example say you brought back millions of tonne of iron, that would crash the market making iron worth almost nothing. So whoever invested into getting those resources won't get any profit.
Third problem none of the technology to make this feasible exists.
Who knows in the future technology may make it feasible. Until then you can predict with what you know. So sure we may be able to mine in space but we may also find god's real, who knows when your talking hypothetical.
Frankly not a single person on the planet is even trying to space mine right now. We have a explosion of private space company's and not a single one is looking into it. So if there's not even research into you can't assume this will happen.
The tricky part is how we actually use this information. Material productivity measurements won't do much to sway those with the means of production if they're still profiting from our current unsustainable model.
In the long term material productivity will automatically increase because essentially it's just improving the economy's efficiency, which as technology progresses and economic activity occurs efficiency/ material productivity will gradually increase, so it's in the producers best interests to increase material productivity since it can cut costs for them to be more competitive.
There is a shift in our economy towards more durable and higher quality products already.
Focus on material productivity would support this. But yes, consumers would also have a thought and adapt more.
Well the other side that no one is speaking is that it's not always good either. One of the worst disasters in human history with unseen effects was one of the best material productivity increases that ever happened. Do you remember leaded fuel? Was so much better than what they had for the same cost, weight etc but so much worse for humans and the environment. Same for CFCs. Funny thing they both came from the same man.
Anyway point being i believe there should be
GDP
-------
Material growth(+ or * some smarter people than me will figure out the correct equation) pollution
By taxing wasteful material use.
@@Gimmegames4free6942 History suggests that the logic of growth will ensure that any efficiency gains are wiped out by aggregate increases in production
en.wikipedia.org/wiki/Jevons_paradox
"Infinite growth" always reminds me of Asimov's "The Last Question". We'll keep going until we suck up all the energy in the universe.
That's the only thing we can do though. We need energy to live at the end of the day, even down to the most basic lives. Sucking up the energy of the universe is pretty much the only goal.
The universe is effectively infinite. Don't worry.
love that story, thats the best ending :)
@@acctsys I have bad news.
@@fortoday04 Do tell
The problem with limitless growth in a finite world is if demand would ever intersect ultimate resource availability. The problem I have with economics is the assumption that human wants are limitless. They are not. Even in the most materialistic sense, life has finite timespan in which to express those desires. Additionally, awareness of what could be desired is limited by the experience and exposure of those capable of desiring. Would you desire an iPhone if you lived in 1888? The result is a complicated matrix of social conditioning, cultural expectation, resource availability and ingenuity in exploiting available resources. Something even a supercomputer could never calculate for.
Our wants and needs are limitless because we are the ones inventing them, and we don't know what we want until someone creates it first. The iPhone is a good example. No one desired it in any time period of history because it didn't exist. But thanks to Steve and his team's ingenuity and the resources available, they managed to create this need and a market for it.
The problem with a limited growth model is assumes the world is sustainable. There is literally no scientific evidence for this, indeed quite the opposite, sudden ecosystem collapse and climate change are things that would happen without humans. This is no reason to create our own disasters but it is evidence that standing still would have the same effect and burning through our resources.
Human desire is limitless because once we have something we don't stop, we want a better one and we want more. Do you think tech companies like Intel, AMD, Nvidia, Apple and Qualcomm one day are gonna say "you know what, computers are fast enough we don't need to make a faster computer"? NO! They are not going to say that because consumers demand better computers because no matter how much processing power a computer has, people will demand more. Do you think I'm content with the i7 and RTX 3060 in my gaming laptop? No I'm not, I have those components in my laptop because that's what I could afford but if I could snap my fingers and make both of them 10 times more powerful obviously I would.
@@drabberfrog exactly and the entrepreneur's job is to predict that and try to fulfill their customers' new needs. If he gets it right, then it's a profit. If not, it's a loss
@Drabberfrog, I feel like you are missing the point of the comment. I think he wanted to say that in capitalism we are conditioned to always want more without asking if it is actually something we need. A good example is a villa, you could want one but do you need it? Does is actually make you more fulfilled? Does it make you live longer? I know I would not want a villa even if I could. In the end it is just a lot of space that needs to be looked after. I rather share the things I have with the people around me because that actually gives me more fulfilment. One can be content with what one has.
The fundamental issue with modern day 'economy' is that it's completely based on 'number go up'. Focusing solely on the _monetary_ side of things is why the world is getting rekt for starters; the _true_ price is presented to future generations, who might not even be born at the rate we're destroying things.
Filling the need should ever come before fulfilling the greed.
time to watch kurzgesagt
Why do you want our population and species to decline? You should want the human race to grow in prosperity.
@@AR-rn8ok No and no. We are far too many already, to reduce our numbers wouldn't be bad for starters (natural decline after the boom of the 1900's).
I want people to have a fulfilling life, not a prosperous one. And especially not at the cost of all other life on Earth, including future generations of humanity.
When you use the word "we" i'm assuming that you're talking about you and your friends? Or do you have a mouse in your pocket? I'm not destroying anything. The governments of the world are and have been destroying everything for decades. Yet you and your friends keep supporting them. YOU are part of the problem!
@@mattolivier9465 Have you recently purchased any hamburger? Steak? A car? Computer components?
Just by breathing every human being is contributing. Some more than others, especially if they're in 'rich' countries.
This is both an economic and a political issue, but continuing the current economic path will only result in complete societal collapse and continued extinction of far too many species of life on this planet.
Why has growth decoupling from resource use been present in theory but absent in the real economy for many decades?
You gave the answer: People want more. So whenever there is a jump in material productivity, we don't produce the same value with less resources or more value with the same amount of resources - we produce more value and using up still more resources. These are called rebound effects and largely mediated by price mechanisms, production capacity and availability. The same applies to labor: We could easily all just work half as many hours and still enjoy the relatively comfortable lifestyles of the middle class in the 90ies. Instead, we work as much as back then and rather consume more. We are not even reducing by 40 or 20%.
No, not that people want more. It's that governments want more. Governments control more. Governments are the problem.
@@mattolivier9465 lol
I agree with climate change and the fact that our lifestyles are already quite comfortable in the first world. It is time we start prioritizing work-life balance over economic growth.
A few thoughts.
Increasing material productivity through a greater digital economy will still be tied to material resources, like you've pointed out. The digital transformation definitely increases the value of those materials but its acting as a multiplier or exponent on the value but its still coupled to the production of the materials. I don't really think it makes to think that this multiplier could or would reach infinity. It would need to reach infinity to take limited resources into unlimited value. The base issue of finite to infinity is still there. At best it increases the material value maybe even exponentially but doesn't over come infinity.
I wonder if a better framing for the fundamental problem of economics is humans have desires beyond our resources. This doesn't necessarily have to be an infinite amount.
Doesn't decreasing our growth based on producing more materials have the same issue as zero growth for impoverished economies. As in how much comfort is watching Netflix when you don't have a home or know where your next meal is coming from. Any suggestion to address these material realities in infinite growth based on a digital economy model I would think could be applied to zero growth model maybe with some slight changes.
Main issue with that reasoning is... At what timescale do you consider that sustainability is reached.
The act of living consumes materials there is no escaping that, you need some kind of environment to live and said enviromnent is not eternal, saying "let"s stop growing" is saying "I only care about X generations." X being a big number.
Growing can create the potential to extend that environment in time (or create new ones.) Hence increasing that X by several order of magnitudes.
And the thing is, the goal of zero growth is to make a world livable for as long as possible, in that sense it is self-defeating.
If we expand beyond Earth into space in the next thousand years material resources will be so plentiful it will essentially become infinite. So the formula still works.
Interesting and largely valid thoughts, but you're not really disagreeing with the video (at least until the end where you want to use a modified version of zero growth), since there was a clear cut-off point prior to infinity: becoming multi-planetary. I suppose that makes the title of the video technically untrue, but discussing 'infinity' vs 'completely beyond the scope of current political/economic considerations but still finite' seems more like philosophy or even science fiction than economics to me.
@@meneither3834 thats an interesting point. I'm not sure I understand what you're saying.
I agree the act of living requires the transformation of materials from the environment of that living thing and we can call that consumption.
I think im confused by what you mean by growth. It seems like you're saying growth is increasing the amount of generations that can live or growing humanities lifespan. Correct me if I'm wrong on that.
When I'm referring to growth I'm talking about growing the GDP or the rate of measured production in an economy. So zero growth would be setting a constant rate of production or we can call it consumption. This wouldn't actually apply limit to human generations but it would limit the amount of humans that can exist comfortably or at all in a given generation.
@@MadPutz The scale is definitely there to be essentially infinite. Though I wonder if this is the healthiest thing to focus on for humanity's relatively immediate future.
I agree in principle, but couple of thoughts:
1. Compared to "physical" economy, digital economy is even easier to outsource/relocate.
As an example, your stock video bank buying up videos from Eastern Europe, because they cheaper. Tram depo at 13:10 is in Moscow (those are Russian-made trams with recognizable Moscow transport wave pattern on the side).
2. I am for better things instead of cheaper things, but that would clearly require mental shift and not a quick policy fix. I consider planned obsolescence an idea which has been most damaging to the environment, but it is more prevalent in higher end goods.
I think the idea is around a long time and no change of mind is insight. Same as climate change, without governmental steering, the free market and what people end up buying wont change fast enough.
If you acknowledge the global extinction rate, the system, the biosphere is strongly endangered.
There is no time anymore to hope things will change slowly and freely out of generosity.
The premise of humans having unlimited [material] desires cannot be taken for granted. This is taught as a maxim in Econ 101, but it is only a maxim for capitalism - not economics as a whole. It is extremely difficult for me to imagine most of our ancestors agreeing that they had infinite material desires.
I would say human nature's most foundational desires are for purpose; community and family; survival and comfort; and the pursuit of art, intellect, and spirit. Materially, plenty of us would be satisfied with a limited amount.
Reality says you're wrong. There are very few people who wouldn't happily want "more".
We are told we want more by all the ads everywhere you go. Who creates these ads, the rich. So basically the rich are telling us we need more and more. I wonder how getting rid of ads would change the world. So one on here tell me please hahaha
@@davidconsumerofmath and that's human nature or publicity and a society that tells us to want more?
Unlimited and infinite are not the same. Obviously a single human being can never consume infinite ressources. But if you claim that human desires are limited, the burden of proof is on you to show what those limits are
You would only be satisfied if you had an equal amount to most other people. Economics has NEVER been the problem. Government meddling with economics has ALWAYS been the problem.
The big flaw, and I'm pretty sure you mentioned it, is that we are still hard tied to limited resources. Yes the digital economy is far more effective at turning materials into value than any other industry in history but as you mentioned, it still requires power, maintenance and everything else that comes along with machinery. I wonder what the metric for bit/watt is, seeing as the internet now is over into the zettabytes. Plus renewables aren't renewable. Solar panels require coal (or some other extremely high carbon substrate) in their manufacturing. Wind requires rare earths and they run out too, as well as the wear and tear of usage on the motors, bearings etc. Its always consumption, regardless of how "green" it is. The only way to solve the problem is to continually grow the resource pool at the same time. Even at a best case, we are absolutely hard limited to the life of the universe. At the end of the day, we need to make the best use of what we have, regardless of sustainability (primarily because that's built into the best use).
Just use nuclear power that's the most efficient and cleanest power source and mix it with other power sources.
For that we will invent and perfect new ways to produce electricity, like tidal power, unconventional wind farms, nuclear fusion etc.
Or just have less people, which would use less resources. The fact is, there simply isn't enough on the planet to give everybody a western lifestyle. I think we'll figure that out soon enough as more and more countries around the world try to reach that goal.
Yeah but that's kind of the point of this video, digital economy will extend the resource limits we have until to the point where new sources are easily obtainable(asteroid mining, new materials ect).
The thing is that except in the case of fossil fuels, for which there are renewable replacements which fulfill the same economic role as recycling/repurposing, most resources can be recovered or recycled. Now this is uncommon now sense it is much cheaper to simple mine more resources and it will be that way for a long time. however eventually the cost of mining resources for most will be lower than the cost of repurposing already "used" resources. At that point people will begin t recycle.. a lot, sense there will be a strong economic incentive for it. If you look at the economy this way you will see that what matters is not the "total resources expended" but how many resources you expend over a certain time interval because those resources can and will be repurposed.
I think the optimal route is specifically reduction in waste rather than the more broad improved use of resources. Needs are varied and we won't ever replace real food, housing, and energy with virtual food, housing, and energy no matter how much Zuckerberg may want that. The crux or sustainability is to be next zero or positive over the life of the resource. Consider a hypothetical sustainable car: the car would be made from metals in such a way that they can be recycled with high efficiency with the slag being reprocessed as an ore of the base metal. The car would be powered by biofuel (I'm hesitant to say batteries here because the common chemistries used aren't easily recycled). The biofuel could take the form of minimally processed oils such as biodiesel or organic mass processed into your hydrocarbon of choice using pyrolysis (solar or nuclear possibly) and a Fischer-Tropsch device. Emissions in this case would be equal to carbon captured by the biomass.
With the exception of things we fire out of earth's orbit, we need to keep in mind that almost all material mankind started with is still here in one place or another, it's location just changes. We won't run out of anything, it will just become a more chaotic form and be harder to access and hence more expensive. If we take care to treat the waste and inefficiencies as the mines of tomorrow, growth can continue until the last rare earth metal is at the whim of humanity.
Reduction in waste would require intense global cooperation and enforcement. Totally possible but the incentive to defect and externalize your waste for profit is forever there. Like a prisoner's dilemma. Any country choosing to defect for an industry to avoid paying for waste earns an advantage.
Trains are a good solution because they are easily electrified, more environmental friendly, and more efficient than cars
@@EricVulgaris Yes, finally ethically valid forever wars. Wars to protect & secure the continunity & sustainability of our pure Blue & Green World.
@@EricVulgaris that's exactly the problem with achieving a sustainable economy: from a game theory perspective over timescales the size of a generation, its absolutely more advantageous to go the unstainable route for personal (or national) advantage. Even if everyone can cooperate, a single entity would benefit massively in comparison to their peers by going the "profitable, but unstainable" route. Any sustainable strategy outside of widespread collectice desire for optimizing very long term growth is metastable at best.
if we changed “GDP/material” to “GDP/non-recyclable material” then this would account for waste
I recently independently realized that I want to have the best things that I use consistently rather than a lot of things that I don't really use. For example, I have a set of earbuds that I find to be fantastic and I use them nearly every day. Rather than having more earbuds, I'd rather just spend good money on those. There's some way to turn this into a minimalism argument, and while that's not exactly where I was going, it's not wrong in the context of what we're looking at.
Agree completely. However I struggle with this idea when it comes to luxury goods. Should I splurge on a $4,000 wallet that will last a lifetime and I can pass to my son? Or just buy three cheap Casio ones my whole life? Which has better outcomes for society and resources?
I agree. I would rather (and have) spent a few thousand dollars on a coat that I fully expect to last me at least the next 30 years, rather than spend money on anything that will get holes in the pockets after 1 winter.
@@raivolution I would make the argument that if it's three wallets to last you a lifetime, they're of high enough quality. I don't have the newest and greatest iPhone or something, but I have a phone that exceeds all of the things I ask of it to do on a daily basis.
@@raivolution consider that increased price doesn't always mean increased quality either. planned obselescence happens at every level. also, if you find the skills to mend leather, for example, you can extend the life a little bit.
@@shadowfax333 true, but I don't think I am going to be happy living my life with the expectation that my nice things will be stolen. I'm not going to forgo the thing I would prefer just because of the possibility of it being stolen.
I thought Covid was going to be the thing that forced the correction. And then it made it worse. The current model is totally unsustainable. Not from a financial perspective but just from a “people need to afford to live” perspective.
Unfortunately, the only thing that will force the correction is slamming into the brick wall of resources and labor versus growth. The people in charge are not even going to pump the brakes before we all go into that wall together.
Lightbulbs to me are the best example of growth. It was possible to build lightbulbs that last for 100s of years (some are still going that were installed in the 1800s), but the lightbulb industry would have stagnated. So they built them to break, so people would need to keep buying them.
We also wouldn't have fancy LEDs.
These more durable lightbulbs sucked though. The ones with shorter lifespan can be much brigther.
Even if we start using Material Productivity, how do we stop it from being affected by Goodhart's law? ("When a measure becomes a target, it ceases to be a good measure.”)
It'll never be the only measurement we use, which is the solution to that connundrum. Optimising for only one criteria can lead to some pretty perverse situation. Optimising for 15 different ones almost can't help but improve things in a genuine sense.
Don't mess with prices. No good intention is worth messing with prices especially in the long run.
When faced with dread, people look toward government and that will only make things worse. No welfare, subsidies, or any market interference will keep people true and watchful over time by using prices.
I play a lot of Sid Meier's Civilization and my overall strategy is to keep high resource production. In the real world that, to me, means keeping resources wifely available but relatively expensive. As long as people use their resources wisely then at least something was gotten out of the resource. The opposite example is burning gas while in the drive thru.
Wifely indeed
You sound like you use reddit
This might be the gayest comment ive ever seen
Governments are the largest polluters and wasters of resources. Wake up!
mmm wifely resources
I felt a little bamboozled after watching this: at the start of the video, at 4:14 you say "We _can_ improve how much we get out of these limited resources by using more efficient farming techniques, recycling, exploring renewable and building out infrastructure, BUT there is still ultimately a limit." and the video continues.
But then at the end you say that those exact same things, framed as material productivity, are all that's required for unlimited growth. confused..
EE is making the case that if we measure growth with a metric like GDP/resource used then that will shift our economies into a state where growth will mainly come from the infinite potential of human creativity. Basically the only growth from physical industries will be from making things more efficiently or that are higher value, and most economic growth will come from services requiring minimal resources like digital products
The end result would be to end up with a circular economy, where every resource used is recycled into something else. Where we can sustain physically while still growing. As long as growth comes from human creativity, packaged in light.
This channel is not reliable, the video doesn't really answer anything
“Re-elect governments that provide strong material productivity growth”
I don’t know if enough voters would think about that for it to be something to motivate politicians to focus on it
Most economists struggle with the concept that real people are not rational actors with perfect information like in their models.
Indeed, the solution is simple don't focus on economic parameters but focus on quality of life. No-one is getting happier from a 3rd or 4rd iphone, no-one gets happier from pollution that makes us sick but is ignored in economic growth figures. People may get happier if they have to worry less about work and economics and are able to spend more time with friends and loved ones.
Silent willy gets it
@@larrydickenson9414 Problem isn't with the economics here but rather with modern liberal democratic institutions which haven't been updated with Time. People act upon incentives & it remains true wherever you go.
When you give every fella a voting right irrespective of how productive they are then they would easily abuse the welfare state. Since in almost every nation a small Minority usually pays more taxes than others yet have voting rights equal to a freeloader in society.
You see this practically everywhere. Politicians naturally want to remain in power and want more votes so why would they focus on productivity? We need a new style of republic if we want productive results.
@@gabbar51ngh I would genuinely prefer some form of Russian or Chinese communism that they tried on last century than what you're implying with that comment right there. And that's not and endorsement of those heinous chapters of human history by any means. What you're suggesting is abhorrent.
"Infinite Growth" that's what the Sales Mngr was preaching in the morning meeting fast forward 7mths to now he's preaching "buckle down we're in for a ride and the reality is some of you won't survive"
That's literally true for some europeans this winter with the lack of energy to sufficiently power homes when it gets cold.
I read the notification, immediately thought “bullshit.” Can’t wait to see how you prove me wrong
I like this. I also believe (though I am also not a political scientist) that decreasing income and wealth inequality would decrease people's desires. As humans, we are always comparing ourselves to our neighbours, and now with social media our 'neighbours' include much wealthier people, are desires are that much more beyond our means and leads to people spending more on fast fashion etc. Higher material productivity, lower income inequality.
2 things to consider:
-Not all desires are material or of service-nature (especially some psychological desires) and thus cant be solved by a growing economy, which very well means that some coming hurdles might only be able to be solved by not growing an economy
-there are some hard limits on science and technology, especially regarding complexity. Macroscopic thermodynamics, for example, is pretty much a solved physics theory. We know all which goes on there. We cant do more intricate stuff there, a basic piston will always behave like a basic piston, not otherwise. Innovation in in this case can only consist of a) optimazation of existing processes, which does not make something new, but only makes things easier to operate (on which there are hard thermodynamical etc. limits too, e.g. you cant really make a gas motor much more efficient than we already have made it, we cant innovate a normal gas engine into powering a space station). No new functions. Or b) making the stuff more complex, i.e. bigger. Think of our basic technology being on the level of a neuron, and the possible technology being on the level of a human brain. With that though, the hard material limits come into play again, as there are around 86 billion neurons in a human brain, but we may only have the resources to construct a few million. No infinite growth possible there.
And last, on a metaphysical level, the concept of entropy itself disproves infinite growth.
You seem to be arguing with the title of the video rather than anything within the video. Unsurprisingly it's focused on economics, rather than psychology, metaphysics or whatever.
To give a prominent example of where you're talking past EE, he explicitly states that he's talking about humanity only before we become properly interplanetary. Which is of course the correct scope of the discussion as far as any current economic/political/social considerations are concerned.
@@davidlovesyeshua Nevertheless, the age of great innovation is probably behind us. I do not think we can innovate ourselves out of the current mess. It's the economy itself that should be reformed, including the 'fact' that people have 'unlimited wants'.
I think the theories mentioned in this video also don't take changes of human behaviour into account. Is human desire really infinite? Think about that theory about Japan's economic stagnation.
Even with entropy, the universe is still expanding. We can grow infinitely.
1. All desires can be satisfied by sufficiently advanced technology. If nothing else works, with a simulation that fools your brain. Or reprogramming your brain to not want those things, if you want to go in the dystopian direction.
2. There are no hard limits on science and technology. Innovation isn't just optimization, it's also about inventing entirely new things. For example, when you can no longer optimize an internal combustion engine, you can switch to electric motors and batteries. Or compact fusion reactors that can use garbage as fuel. There's no (practical) limit to innovation because our world is infinitely complex.
3. I really don't understand that neuron stuff. Why would we only be able to make a few million? That doesn't make any sense. Also a neuron is extremely inefficient, just using known physics it's possible to make trillions of times more efficient ones. We don't know how, but we know it's possible.
4. Not even thermodynamics is a limit. In an expanding universe we can beat it. Both the first and second laws.
5. Also what if ours is not the only universe, and it's rules are not the only possible ones? Modern physics allows infinite number of universes, and in many ways even demands their existence.
I think the trouble with our current economic system is often growth goes hand-in-hand with the consumption of non-renewable resources. Producers are incentivized to consume more rather than promote efficiency or reduce waste because consumption is just cheaper. Ex: it's more valuable to grow a ton of corn and then let a lot of it rot in the field because to pick and distribute all of it would increase labor and transportation costs while lowering the price of corn to the point where frugality is more expensive than waste. This also puts a greater burden on the poor who will face the most serious impacts of excess waste and climate change. Until our governments can impose greater costs on those who create waste can we start moving our economy to creating more value through less-consumptive production.
I have news for you: The consumer creates waste, that's you and I.
@@nobodymister5435 we create waste because the market allows it. The company should be responsible for the market powers, not the consumer which will always seek the cheapest option.
Why should the consumer be ostracised for not recycling, when the company making the packaging doesn't care either and just has a better PR team.
Newsflash: if the market wasn't overflowing with wasteful stuff, we wouldn't be wasting as much...
@@nobodymister5435 you might wanna look up industrial waste vs consumer waste quantities. Textiles especially but take your industry pick.
This is called the Jevons Paradox.
@@Spectification In general the market only does what the consumer allows. you have the relationship between the market and the consumer backwards. the burden in any market economy is inherently on the consumer to make the correct demands of the market. as the market is a system incentivized only to obey the whims of consumers (this is also why government regulation exists. some consumers will demand things that most reject but in enough quantity for someone to supply without additional presures)
if consumers were not buying fast fassion then the market would kill the companies that produce it. while this relationship is less true for essential goods like food, and water this is not where the majority of the waste exists. IS there an unacceptable amount of food waste? YES! (though not as much as some people believe. lots of the food often included in waste statistics would not pass FDA saftey regulations or falls below quality standards during transit.) but is it's impact anywhere near as bad or as unnecessary as fast fashion trends? not even close. IF consumers demand long lasting clothing designed to meet their needs and comfort rather than Flimsy flash to use in games of one-upmanship then the market will respond. the market has ALREADY responded to consumer demand for less packaging materiel waste (not hard to convince the participants in said market. if the water bottle uses 66% less plastic it costs then signifigantly less to make even if not quite as much as materials saved.)
We essentially live in a post scarcity world when it comes to food, especially in the U.S. Yet 1 in 5 children in this country go hungry everyday. The biggest issue with capitalism and thus the way most economists think is that more goods/more growth will solve our problems despite evidence showing the contrary. We have plenty of food to feed all of our citizens but we let it rot in the fields and in dumpsters behind stores because that is what is most profitable.
If it cost me more to store, pack, and transport/distribute, let's say, milk or vegetable, than to just dump it, then I'll just dump it.
Why would you expect me to do otherwise?
I'm *not responsible* for your well being, just like you are not responsible for mine. Each one of us is responsible for our own well being.
@@ihl0700677525 believe it or not some humans choose to help others even when there is no benefit to them or even a cost. Because like the original comment is saying, what makes the most sense financially, in the moment, for a given individual may not be what is best for the evolution of that society in the long term.
@@rafaelvazquez7465 _"some humans choose to help others even when there is no benefit to them or even a cost"_
Yea, sure. There are altruistic people out there, but vast majority of us humans are opportunistic and selfish.
Perhaps it's difficult for an altruist to understand how/why others seems so indifferent or unwilling to make sacrifice to help others, and so here's the answer: either because have other more pressing priority, or we simply do not believe in your cause (or sympathize with you enough) to help you.
Basically, for most people (including myself), the default stance is as long as we are not causing the harm, we have *no obligation to help.*
_"what makes the most sense financially, in the moment, for a given individual may not be what is best for the evolution of that society in the long term"_
If you think so, why don't *you* buy/collect left over produces (which I'm about to dump) and then store/distribute it yourself?
If you want live by your words, you should gather likeminded people, raise some money, buy/gather those some left overs, and go distribute them to the poor yourself.
@@ihl0700677525 you are looking at this as an individual. Personally I don’t care if you throw your food away, but I support those who do take the time to set up food shelters and take donations because you never know; the kids who receive that charity may end up solving cancer and I am selfish in the sense that I know I don’t want to die from cancer but I know I can’t solve it myself so the best I can do is help the next generation be in the best position to solve it for me.
@@rafaelvazquez7465 _"the kids who receive that charity may end up solving cancer"_
Please don't use this silly excuse. Using the same logic, those kids might end up as criminal, serial killer, or dictator, who knows?
We can't predict such thing with any degree of certainty, therefore we should not use it to make decision, not to mention as a basis for a public policy.
I believe our society should focus on maximizing individual freedom, so each one of us shall be free to pursue our own dream.
If you choose to dedicate your life to find the cure for cancer, you should do it by your own *free will,* not because a guy with cancer help you some 20 years ago, so you felt compelled to go down this path.
Tried to find the material productivity vs time graph for Australia and couldn’t easily find any info on it. Just goes to show that more attention does need to be paid to it. Great work getting this info out there and getting more people to focus on the measurements that matter.
Thank you so much for making this video. I think this is the most important topic in the world right now and cthis channel is the perfect place to make a start in actually trying to get a grip on this topic.
There's a lot of extreme positions on this topic that are just no good and you have shown this clearly. There's also a lot of great discussion in the comments that helps a lot in figuring things out.
Yes but not every country is at the same level of development, what you say is true for developed nations. Their only way to grow further is through technological advancement and increased efficiency and productivity. But for the majority of the world which is still emerging, growth is still heavily driven by pure labor force
This labor could be used to advance a nation's technology if given the proper assistance. ONE example I can think of is that it takes labor to build a coal fired power plant but it also takes labor to manufacture solar panels and wind generators. The problem might be access to the technology involved in the manufacturing process. Which, in my opinion, might be in our best interest.
@@simplethings3730 think about it like this, in a frontier country's airport its cheaper for 30 people to bring your luggage by hand than to install conveyor belt. of course as those countries eventually develop technology will be feasible to replace the labor force. but for a lot of african and asian countries thats still in the distant future.
@@FinancialInterest101 hopefully not too distant. 😁
@@FinancialInterest101 emerging countries arent necessary anymore and the total human population should be limited. most people are useless in the scope of the future, we dont need this many people other than to constantly grow economies. there must be a culling for the greater good
@@simplethings3730 it's not like they don't know how to produce solar panels, it's just not profitable. Solar panels and wind generators are extremely expensive to make yet provide very little electricity. So it's more profitable to build another coal fired power plant for cheap and sell electricity from that and actually make money.
I simply don't believe that needs are infinite. They are finite, and once they're exceeded, spending efficiency goes out of the window. Because spending more beyond certain point doesn't meaningfully improve the quality of life
Some people don't have the wisdom to know what enough is. Their appetite is impossible to satisfy.
As economies grow, so do needs. No one would have ever imagined that we would need smartphones, but that is our new reality. "Needs" like modern medicine, high speed transportation, and comfortable housing are all modern concepts. We cannot imagine the needs of tomorrow, because they have not been created yet.
Humans will always find a way to improve quality of life, if given the opportunity.
Thank you for the production of this timely video! It was easy to understand and very well presented !
Here's hoping!
Making high quality goods kills demand because high quality things last longer, when damaged people repair them because it’s cheaper. Also in the end resources are still finite.
I take issue with the claim that humans have unlimited desires. It may be possible that on average humans desire more than what is materially available for them, but even that isn't certain.
Exactly.
I've never desired a supercar, so making those super cheap wouldn't make me buy one (I would buy a decent and cheap rotovator however).
And collapse of some society could radically lower human desire. For example, if fossil fuel become really sparse, we would not think about buying plastic toys but saving fuel for heating and electricity
It will be interesting to see if the Must Kill All Carbon community will overcome their pathological hate of responsible nuclear power generation.
Must kill all carbon isnt most of them. But at the same time, carbon exhaust isn’t a good solution if you live in a dense city. Especially when other sources of energy are more abundant and seemingly closer to infinite than the limited about if carbon on the planet.
Blame your government. I was pushing for Thorium nuclear reactors when I was in the 5th grade. Now I'm 48. I don't have any hope for humankind. Silly people keep empowering governments around the world which in turn are destroying and wasting everything.
The half measure position taken in this video is a rosy optimistic stance that effectively plays with fire. The reality is that we are already too far gone and need drastic measures to course correct, not hope that the same things that got us in this mess will drag us out of it
We can get to the point where we have perfect use of material. Waste nothing, recycle everything, limit usage. The problem is Asimovs last question, eventually we will run out of energy. Energy is the base resource.
The thing is, 100% efficiency does not happen in the real world. Lossess and inefficiencies are inevitable due to the increase of entropy (the materials are ultimately converted to the unusable dispersed form)
Timecodes:
0:00 Intro
2:16 Brilliant
3:13 GDP growth
4:03 Is growth bad?
4:54 Inequality
7:01 Resource depletion
9:01 Quality over quantity
11:02 12:22 Digital economy
12:23 A better way forward
Thanks for the video!
thanks
Thank you
Thank you
The time codes are already in the video description (i.e., where you copied it from) but whatever. 🫤
@@justsaying2660 You are welcome :)
Sorry if I missed the point, but let's talk about this beyond a theoretical level.
Can the earth support 1 trillion humans? Probably not.
I mean we aren't going to feed each other by making videos for each other to watch. That has value but... supply and demand will reduce the value of those videos to nothing if people are starving to death.
I might have missed the point entirely but this whole video felt like it just kinda of meandered past that hard scenario of finite resources.
The whole video isn't to explain to you how infinite growth could work but rather to make you believe in it
What about circular economy? I would like to see you do a video on that as a sequel for this one.
Your animations are amazing .what do you use and how long did it take you to learn .
I've been a long time viewer and subscriber of this channel but this video has me really disappointed.
So many of this video's arguments are based on assumptions that are unsubstantiated or have been proven untrue. GDP growth is not strongly linked to the production of goods and services when the largest "creators of wealth" are things like stock price inflation via buybacks. Picketty's raising of all tides is clearly not representative of the actual functioning of the economy as we have seen real wages for average citizens in developed economies shrink while gdp growth has continued. The value added by "growth" is not questioned here in any meaningful way. A lot of the assumptions about this value do more to protect the status quo than any degrowth movement ever could. The central economic problem remains unsolved because despite certain individuals having an abundance of resources those resources address only their desires while the basic needs of many go unfulfilled. Why is there no question of distribution of wealth as this is a core tenet of the degrowth movement, that the wealth we have is sufficient but that distribution of that wealth is inefficiently allocated to meet many people's needs and desires? This video seems like it handwaves a lot of these important arguments. In the past you have highlighted nordic countries for the way their distribution of wealth has been a great benefit to their citiziens. Why is that same principal not even discussed? Why is the current system of production and distribution of economic value examined at all and given as a foregone conclusion? When it comes to unmet needs why is a lack of growth going to be what causes the poor to be outraged when we have seen extreme outrage over the past two years despite economic growth up until very recently? Why are none of these questions mentioned even in passing?
I'm very disappointed in this video's lack of attention to vital details of the degrowth argument and I hope that in the future more attention will be given to them. This doesn't feel like a well rounded discussion of growth vs degrowth so much as a dismissal of degrowth.
Preach. Dude either didn't do his research or got upset and is doing some Chicago school level bias. You think he would cite some empirical research showing how material productivity has lead to reductions in material footprint (never happened despite insane mat prod increases)
Simple is he is a free market capitalist at heart.
Literally all the resources, the desire, the need and the knowledge to create and produce exists and it all exists without having to even tie it to monetary means of coercion and myopic undemocratic self interests.
This could all exist without these particular perversed, manipulated markets and their illusory value.
You’re absolutely correct,
Growth and increased resource consumption isn’t even necessary in a system of artificial scarcity. What is needed exists and those who need it exist but capitalism in this particular form can’t put the two together.
Regulating greedy, selfish, sociopathic bastards and human centric legislation is what’s necessary as well as a systemic overhaul.
Many of capitalisms proposed representations of human nature could be preserved.
We have the data from countless systems and multiple implementations of blended systems, a better world for the masses is within our reach, but it’s never been the goal of the oligarchy nor this plutonomy.
Same; too much "how to maintain line going up" not enough "why must line keep going up?" As another comment mentioned, this video doesn't have any solid examples or provide many thorough sources. Maybe they'll make a follow-up more thoroughly covering how necessary constant growth is(or isn't if that's the case).
agree with most of these points. i expect cheerleading for capitalism from this channel, but i can usually see past that screen to learn something useful.
the other aspect that i think doesn't get covered enough is how societies can manage those infinite human desires. the role of marketing in enhancing consumer demand for evanescent material goods (a la fast fashion) seems very problematic to me (and i must confess to being an adbusters subscriber decades back, so this development sticks needles under my fingernails). whether it is amazon, or google, or facebook, or apple .. the biggest companies in america are all undergirded by manipulation of consumer demand via advertising. imagine if all that energy and capital were actually put towards making human lives actually better, instead of just a narcotic sop to temporarily mask the pain of modern existence. sure, telling people that they shouldn't want something goes too far, but that doesn't mean that we should just allow the endless encouragement of mindless consumption without a social (regulatory) response.
Yes I agree. We already have enough, it's just not distributed appropriately. This fantasy of more more more seems kind of childish at this point. It's hard for me to believe that economists haven't come up with a model that just works without continuous growth, it seems to my simple mind that it wouldn't be that difficult. Possibly there are such models but they get trodden down by the people hoovering up all the profits in our current system
Where does this dubious premise of ‘we have *unlimited desires* ‘ really come from? This video goes with this premise without actually questioning it
Great to hear that. I have been thinking along similar lines for many years. My way of saying more or less the same thing as this video is: one can grow the economy without consuming more ressources by doing R&D (Research and Development). It is equivalent because R&D yields either better products for the same amount of ressources, or the same products for less ressources. Another, and very different line of thinking is this: Not all resources are finite in practice. Water is nearly infinite, but gold is not. Therefore, we can redirect growth from that which require scarce ressources to that which require abundant ressources. One very current example of this is the effort to make lithium ion battery with as little cobalt as possible.
@economics explained.
Where did you get that B-roll footage of Broadbeach Waters on the Gold Coast?
What the video didnt mention is development and knowledge.
Knowledge based economies are highly scalable, even better than mentioned jacket or video.
New technology and understanding will be our best chance at growing our economy. We did this already, but technology was focused on producing more. Now its time for the shift to produce better and gain new functionality.
Technology, another exponential process. Going strong for at least 4 billion years. Were currently going up the hockey stick very quickly.
@@ngantnier I doubt that technology is exponential, it seems more likely that it would be logarithmic.
@@holowise3663 Fair enough. There must be some theoretical ceiling in place due to limits of the laws of physics. I think we're a long, long way away from there though. Maybe a million years?
This is an excellent video addressing one of the main problems of the current renewability goals. Thank you for making it and I hope you address it again later and go more in depth in various real world examples, so hopefully every one of us can make some small positive change in who/what we support, be it financially or politically.
An excellent video? IMHO it's mainly fantasy land and silly assumptions. Infinite growth in a finite world is physically impossible. Infinite economic growth is the wrong thing to chase anyway, we should aim at quality of life instead of economic growth. No-one is getting happier from having multiple phones, cars etc. there is a limit to the number of services one can consume. Enough is enough, certainly if those extra goods and services come with destruction of the environment we live in, pollution that makes people sick, polarization and break down of society, induces anxieties etc etc.
@@silentwilly2983 Seems like you don't know what growth means :)
Ever heard of the infinite amount of numbers between 1 and 2? I suppose not with your math talents. Alright that may be a bit harsh, but you're seriously way too arrogant for your own lack of knowledge.
To answer your points:
1. infinite does not equal natural infinity. So long as things are improving they're growing, and you can always get closer to the number two, even if you have to keep going further and further behind comma.
2. The economy is not limited to phones and cars. Having more online videos that discuss the various problems we humans have and philosophies we may apply are also included in resource costs. Specifically food, infrastructure, housing, man hours, etc.
3. The whole point of the video was about how to reduce pollution through focusing more on quality. So you are either being incredibly stuck up and narcissistic, or you didn't even watch the video (without being distracted with something else) before you commented. Please at least do your due diligence before you act stuck up and arrogant. Nobody likes people being arrogant, but if you are gonna be like that at least put in the effort into actually having a worthwhile opinion.
Maybe the first video of EE i can’t agree on because of 2 aspects:
- more expensive stuff is stuff that costs more to produce and by definition, it used more ressources to produce it since money is a way to allocate ressources. Of course this is not linear, since we can increase efficiency of production processes. The problem is: the first improvements are easy, the following ones are though. (Think about improvements of car mileage: in the 70’s it went really fast, now every percent is a huge investment for car manufacturers)
- services are using a huge quantity of ressources: consider the internet infrastructure, which is becoming a huge part of energy consumption globally, made from devices requiring rare minerals to be made, more mining processes… the average worker in a production process creates several 100K$ a year of value, without any travel, usually with a basic computer shared with the whole production line. To take your example, the average youtuber needs way more stuff, travels more as well, when the worker doesn’t
Economics 101! Soo much value in 14mins..Learnt soo much… Economics Really Rules The World! More than we ever thought
The idea of endless (exponential) growth is still only interesting to explore in a magical world where economies behave in ways that the models predict, rather than the real world that we live in. Aside from all those other real-world resource limitations mentioned (especially energy, fresh water, metals, etc.), this video ignores the inconvenient aspects of pollution, politics, demographics, and probably a bunch more. Hypothetically the the global economy COULD keep growing for quite a while if more and more products and services were digital, but we'd both also need to keep producing the digital economy in a fixed or declining amount of compute infrastructure (i.e. to avoid exponential growth in energy and materials needed), AND somehow have to stabilize or reduce all of the OTHER real-world stuff that the economy consumes, i.e. houses, food, cars, clothes, and so on, because we're already using more resources than is possible for a single planet to sustain. It would not be "endless" growth though; at some point, the way that "exponential" works is that you'd need to convert all those pesky consumers (i.e. people) into electrons or something. More likely, of course, is that economists would just start fudging the numbers, using Enron accounting, etc. - or the growth cycle would be reset by a major war or two, as it has done many times in the past.
More importantly, if you are paying attention to demographics, it is fairly obvious that we are headed for a period of economic decline, and possibly degrowth. This is not simply because we already hit peak oil and "renewables" are simply not able to provide the same amount of energy, but mainly because virtually all countries and regions of the world are aging rapidly, and heading for an environment of more retirees than young working-age people. Peter Zeihan talks about this a lot. The demographic issue is that retired people put their money in SAFE, low risk investments, i.e. their money is not available to use in capital investments, while young people fresh out of school have very little money, but have high consumption needs, so need to borrow a lot, i.e. go into debt. So, any businesses or industries looking to start up will have a hard time finding capital, and face an environment where they have fewer consumers, who are already saddled with debt. They will also have an increasingly hard time finding workers, so will have to pay more to attract labor - this is a key driver of inflation. These challenges mean that there will be fewer new businesses (and older businesses are always trying to become more efficient, with fewer workers), trying to chase after fewer customers. They can't all EXPORT their way to success either, since other countries are in the same boat (unless your market is Nigeria). This does not sound at all like a "high growth" environment to me, although of course there will still be some businesses and sectors that succeed and do well (among the many more that fail).
To sum up, "How can we make resource entropy more efficient?"
Check out syntropic farming, which is developed by Ernst Gotzh. With that farming technique (which is now upscaled to rival traditional farming), the soil is not depleted and you can actually create productive soil out of desolate one. I think they are currently preparing the mass scale models in Switzerland.
I typically prefer smaller government and less taxes, but the idea of a carbon tax intrigues me. It seems that it would even the playing field by increasing the cost of using cheap and dirty resources. That being said, I know very little about the specifics of a carbon tax and the pros and cons of one. Maybe you could make a video talking about it?
I'm not sure it's as simple as 'people would RATHER buy a £200 coat than a £2000 coat'.
Most people don't have £2000 sitting around to spend on things like coats. We barely earn enough to pay for life's absolute necessities, let alone money to spend on good quality clothing / food / cars / whatever. I understand your example was just rhetorical, but it's true in the real world - people buy what they can afford.
Which further supports the idea that the poorer, for lack of a better term, someone is, the more wasteful they must be. Given that, the best way to improve wastefulness is to enrich those who are the poorest at a faster rate than inflation through the use of available energy. Inhibiting or obstructing the use of fossil fuels inevitably hurts the poorest more and results in counterproductive waste increases.
@@TheJbh147 wrong...because the rich will not stop at ONE 2000dollar coat...they will buy 100 more.
@@willblack8575 my comment wasn't talking about the rich. It was talking about the poor. Of course the 1% of the 1% will use a disproportionate amount of resources, private jets being a major contributor. In general, though, the more money one has, the more efficient their resource use will be. This isn't rocket science and it has been studied. Decreasing poverty is the single largest opportunity to decrease wasteful resources.
If you can afford a £200 coat, you can afford a £2000 coat by saving over a longer period of time. If you need a coat now for warmth, you can buy a £200 coat, wear it while saving for the £2000 coat, buy the more expensive coat, and sell the less expensive one so the buyer won't have to buy new.
@@tkmonson right, and do you understand that this saving of £2000 for a single coat-an insignificant item in the grand scheme of things-is almost certainly going to be required to cover other costs in the meantime? For example let's say, to cover a sudden doubling of your energy bills overnight? And doubling again within 6 months? And again in 4 months?
Or... do you just think that people who live paycheck to paycheck are secretly rolling in cash but just don't manage their money properly?
You and I are talking about very different types of person.
P.s. I was simply using the example mentioned in the video. In reality, £200 on a coat is extortionate for most of us. As things stand in the UK currently, I'd feel anxiety and guilt at the thought of spending even £50 on a coat.
Would love to hear your thoughts on Saudi's Line City. Must be some mad economics going on there
Mad indeed. The Line is a joke. In every way from top to bottom it is ridiculous. I doubt construction will ever get beyond a few mansions at the end. The whole thing is just the royal family fighting each other for their share of money and power.
I'm a newcomer to economy, and I'm looking for resources and news about material productivity. My actual research on my traditional sources lead to no results. Where could I find more information about the subject?
Oh, and thanks for making economy so accessible and interesting to bystanders like me! You're my favourite channel on the subject.
Let's talk now 👆👆..
Great post my friend.
I appreciate everything you are sharing here. I always look forward to catching your newest post. 🌟
13:42 The story on material productivity is sadly even worse than shown here. The graph shown only includes US, Canada and Europe. However, these countries have outsourced a lot of their energy and resource intensive manufacturing to the developing world. If you include the developing world as well, and look at global material productivity, then it's only improved something like 25% over the last 30 years. Decoupling GDP growth from material use might be possible in theory, however, in practice we have never achieved this in any kind of substantial way. Assuming that remains true, we will, one way or another, have to stop growing eventually. Then we will be forced to tackle the challenging question of deciding how to deal with inequality in a world without growth.
I just want to give a HUGE thank you *from the depth of my heart* for literally having a chapter divider for the sponsored bit.
you my good man,
are a legend.
Interesting! Personally, I would expand it to Resource Productivity vs Material Productivity. The reason being that our economy doesn’t just need materials but also human power.
The principal limitation was always thought to be NRRs(Non-renewable Resources). We now realize how much emissions matter so it's a far more complex game.
Already starting off with a very bold assumption (that we have unlimited material desires), no wonder the conclusion is trash.
When you realise that the world has been growing in population since forever and this is the main driver of economic growth...
Seriously, we've never had a world that wasn't growing (or at least it didn't 'not grow' for very long). If we do stop growing, or even start shrinking, it will end badly...
Yep and the first people to starve will be the billions of emerging and developing nations peoples. Eco-facism is anti-human and these people are willing to sacrafice billions today for a hypothetical billions who live sometime in the future at no specific time period. Its insanity and delusional to think we can't keep solving our problems. We are so smart as a collective species. We've solved so many problems before we can continue as long as people keep having children and this anti-growth idea doesnt gain more traction.
*Every* process, economic or otherwise, carries physical externalisations.
Your conclusion is immediately rebuttable.
Very interesting video!
Key here is also the timeline. It is great to try for sustainable growth but to be honest, I don't see the world changing in the time we need it to change to prevent even more serious damage. To be effective, we truly do need to halt some luxury in most of the developed countries and stop growth (or limit it severely).
Even if we were to implement the perfect solutions right now, it would take time to change factories, have work forces shift around etc. And some countries will likely oppose some stuff as they want to grow faster for their capita's.
Also the goal of 'creating a sustainable Earth' right now is an unstable equilibrium (I first wrote that this was a Nash equilibrium, but thinking about it more, I don't think it is); it would be best for the world if we all do this together, but it is an unstable equilibrium as there is plenty of incentive for countries to deviate from it and take more for itself (note that I don't even think this is 'greedy' in a way, as in most cases these would be underdeveloped countries that would like more growth, and those countries were/are exploited by the developed countries). So there needs to be global policies in place to try and reach that equilibrium. This is why things like The Paris Agreement are vital and we really need a couple more of those type of agreements and have all countries on board with it (and stick with it). Perhaps a limit on global 'Material Productivity per capita' might be a good idea, where developing countries get a higher limit than developed countries...
But living standards aren't actually getting better in ways which most people want.
Which is having more purchasing power for fewer hours spent doing a job.
Having more things to purchase which makes life subjectively better isn't what everyone considers rising living standards.
I would rather have to work fewer hours and have the same standard of living as someone doing the same job 20 years ago.
As suppose to having better cars, phones etc
Also, due to stagnant wages not keeping up with inflation, people doing the exact same job now have to work more for less.
And putting up the retirement age means people have to spend more years of their limited life doing a job.
That can be done but would be the end of the nation that implements it. "Living standards have not improved" is a fallacy. They undoubtedly have, what you feel is the increased competition for basic resources. 70s had only the West competing for resources from all over the world. Now it's a bit more from Asia. It was way cheaper to grow in the 50s than it is now, for a developing nation
Consume less and you will be happier.
@@prajwal9544
I never said living standards have not improved. So...I don't get your point.
@@ZWD2011
Many people are having to do full time jobs and can't afford the basics like food, mortgage, bills etc
So the solution for most people on the planet isn't to consume less.
That's only a solution for extremely rich people. Because after a certain amount of wealth, you're not going to get any happier by having more.
Yet...they continue to accumulate more and more. So maybe we should restructure the economy, so it's not possible for a minority of people to siphon and hoard too much wealth.
This is a policy issue, something he said he wouldn't touch on but that I agree would have to be solved for the "infinite" growth to be possible by how he describes it. Capital gains growing faster than wages will inevitably lead to lack of purchasing power for the average worker and growth in inequality. But currently it can be complicated to try and tax wealth because if one country enacts such policies at least some of the wealthy will just move to another country.
“This problem was caused by free markets, and needs to be fixed.
Obviously, we can have limitless growth by using the free markets!”
Despite centuries of evidence to the contrary, somehow we should believe that the problems will be solved without intervention.
I miss when this channel was about education instead of propaganda
Great episode. Really got down to the basics.
What would a stable or declining population do to GDP and the standard of living, maybe look at Austria.
What effect will automating most of the mining, processing, transport and manufacturing do to a society. Will it depend on if they have these resources and the cost of energy.
The trick is to keep increasing services as material production falls (to save the world) and also importantly as material production automates.
We have already started a big shift to a more service based economy and it needs to keep going.
The problem is that short term profiteering has resulted in many service based jobs being part time minimum wage jobs. Jobs that offer little jobs security, benefits and stability of life for the employees.
Short term profiteers try and perform minimum quality service to reduce the labor required to perform the service vs the value charged for the service. Like why many service companies are famous for having 4 hour hold times trying to talk to an account representative. They could just hire more service reps or have their service reps better trained, better paid and working full time hours - but they do not want to because that would mean less up front profits vs investing in long term sustainability.
But if we can start to value services more resulting in paying service staff more we can maintain long term economic growth as those higher paid service staff continue to buy more services.
Let's talk now 👆👆.....
Would u please make a video on public education and private education. There pro and cons in economical standpoint
I concur. I'm sure a majority would. Florida would make a great case study and comparison with private vs public
Hey EE, I have a question: many times, when the economy grows due to some crisis, it is explained by "borrowing money from the future" or something like that. But obviously no one can eat bread that hasn't been made yet, and so people have to factually be more productive. So my question is, why can't you just do whatever it is people do when they "borrow from the future", and do that forever? Say before 2008, the standard of living was pretty high and people said (in retrospect) that it was unnaturally high and that to maintain it governments did something, that failed in 2008. But why does it need to fail? At every single point of time, people are more productive, and so unless people aren't actually creating more products (which usually isn't the case, and the economy actually grows meaningfully), what stops economies from doing that forever?
You need an outside supplement. It’s easy if another nation is injecting capital and products but you need someone to borrow from, eventually they will want their investment back.
@@patrickmcathey7081 was that the case with America before 2008? Kind of doubt it. And anyways the whole world economy was doing great back then
that explanation is a poor one. you cannot "borrow money from the future" what they mean is by not investing optimally we have lessened the future potential growth. you cannot sacrifice future growth for current growth forever because each sacrifice intrinsically lowers the ceiling. additonally that is not what happpened in 2008. In 2008 Housing was overvalued. people belived that Housing and the debts taken out to cover that housing were worth more than they were and were safer than they were. when this was demonstrably proven to be false it had knock on effects as the reality caught up to the bad investments and we became LESS productive not more productive for the next 5 years while we recovered.
it is absolutely falsoe that "At every single point of time, people are more productive" For example in 2021 people were far less productive than they had been in decades. productivity is variable and dependant on real world factors. you cannot simply assume line goes up. because eventually what goes up must come down.
@@smorcrux426 Yes it was, what do you think labor outsourceing is?
Material productivity. Haven’t heard this since Econ 202. Thanks for a great video mate.
What power plant was that footage at 8:53? It looks an awful lot like one that I worked on building years ago.
Let's talk now 👆👆...
Hi, thanks for the informative vid! is “material productivity” a good measure if most supply chains are now global?
It can be, the RME coefficients are just not super precise because of the issues you are eluding to.
Im not sure but I don't reckon globalisation would drastically change the effectiveness of different measurements for gdp though it can certainly improve the material productivity of most economies.
it's like how UK has halved its carbon output compared to few decades ago, but this is probably because UK outsourced their manufacturing to other country. It's hard to believe any country can reduce their carbon emission this fast.
@@xponen exactly, outsourcing changes lots!
I love your videos, but in this case, I don't think you could be more incorrect. Ultimately, every human endeavor runs up against the Laws of Thermodynamics. Rather than torture you with the details of this, suffice it to say that resources are finite. Also, human history has shown that humankind is extremely wasteful. If that isn't enough for you, the economic concept of "rational self-interest" has essentially been discredited in the past 15 years. (Certainly, starting in 2008 with the economic crisis and extending to the present with examples in the U.S., the EU, and China.) What you are suggesting isn't infinite growth. It's the temporary satisfaction of current needs, driven by the economic desire to increase profits. It expands in times of prosperity and contracts in times of decline. As can be seen from our experience with Covid or Putin's energy play in the EU, it can easily be brought to a halt when the critical resources disappear. What you're talking about makes for a very nice academic debate in a classroom. Other than that, it is pretty useless in the real world and certainly won't serve us in the future.
looks like u solved all of our problems. thank u
Let's talk now 👆👆
You fail to mention the only real limiting factor for a industrialised and technologically advanced economy, energy.
As a fact by closing the nuclear cycle there will be energy abundance for thousands of years, which will mean that all the potential progress will be realised and that 0 emissions economy will be possible.
It's going to be fun watching the debunking videos made in response to this one.
There's not much to debunk here. He admitted that we can't make infinite material goods and will have to switch to digital ventures that will become more and more meaningless and detached from the real world as time progresses.
If there's one thing that all economists can agree on, it's that economists will never agree on anything.
Ross from Accursed Farms says 'Hi'.
I've always viewed this problem of continuous growth by thinking of it as:
1) Finding more efficient ways of doing things to increase the size of an economy.
2) Innovating and developing new technologies which initially will be more complex and require more inputs (hopefully only labour) to create, but leads back to point one.
e.g. Computers are much harder to make than butter and require more people and resources. As computers get better the earlier models get cheaper and can be put to use making other industries more efficient. Efficiency is conceptualised as getting more stuff done for less input, thus improving our living standards and possibilities.
Could you make a video on Degrowth? I have started to hear more about it recently, even some villains like Thanos or the bad guys in the new Macgyver talked about the concepts. But I haven't seen a good discussion on it.
My main criticism of this video is that we do already live in a post-scarcity society. We have enough farmland to feed every human being on the planet, sadly we use most of it to feed cattle and to produce biofuels, and we destroy crops when we have an excess of them so that the price doesn't go lower. All we need to do is produce less meat, giveaway the excess to low income families, and, like you said, produce better quality products, putting an end to planned obsolescence.
Unlimited growth is only possibly if we go up the Kardashev Scale. Until we're a Type 1 society, growth is limited
Ok fairs fair, he mentions the Kardashev Scale peripherally around 7:17
This man loves space
We need our economy to be based on Isaac Arthur videos.
The kardeshev scale is outdated. It's not just about how much energy we use but how effecient we use it as well
How so? These levels are based on energy capabilities. Type 1 civilization will maximize harvesting of energy from earth, that doesn't get rid of the material limitations. A better argument for practical limitlessness would be Type 3, as that level has far more access to external material resources
It's really cool to hear you push quality, I think that's a big deal
Let's talk now 👆👆
This is a great video! Well done!
I don't like the clickbait title. It's not limitless, nor infinite. You never described anything that would end up as an infinity factor.
1: Our earth has a defined and finite amount of materials. If you're basing the idea on an earth-locked system, it simply won't work.
2: It is not proven (yet!) that we can effectively mine asteroids or other space resources.
2.1: Even if we could, nearby materials would run out eventually and we'd need to look for further sources, increasing transport costs.
The closest thing you described to infinity is the reducing material usage. But that will *never* be 0. That is something the universe has taught us by now. Nothing is free.
I would love to see a segment on economics for a world with declining populations. A number of countries are already entering this world. The rest are not that far behind. This world may not require economy-wide growth to maintain standards of living - as long as individual productivity is improving. This is the future. There should be a number of economists already studying this. Nobel prizes will be won by economists who solve problems associated with declining populations, and especially declining working age populations.
A study was conducted which found most women who weren’t having children above the replacement rate, showed they would like to have more, but were limited by their resources, so the solution will most likely come if people stop having to worry about finances and housing
The solution is robots. They'll replace workers, and also give people more time and money to raise children.
@@andrasbiro3007 Robots won't give your average joe more money
A good thought but aside to that - economists don't really solve problems, they point out how someone else has already done it by accident (and then everyone ignores that and puts exactly the opposite into policy). Similarly they shouldn't have any Nobel prize category (though they're a private org and can do whatever they want, even if that's because of their funding sources...).
@@machintrucGaming
Universal Basic Income.
Another argument is that by slowing down GDP growth, we can have better work life balances. John Maynard Kaynes predicted that by 2030 we would be working 15 hour weeks. This begs the question, is reducing carbon emissions and perhaps a 30-hour work week worth slowing economic growth? Personally I think it is.
Digital will be limited by the amount of energy consumers can access eventually. And if material goods get reduced in favour of digital, less jobs, less household incomes, less able to purchase material goods, no growth...surely...and elderly populations, less children being born making smaller workforces at some stage too.
In the second half of the economy, you are arguing that perpetual economic growth is possible if we change from focusing on making more stuff, you making better stuff. All this does is potentially prolong economic growth but we will still hit the limits to growth and growth will come to an end. Thisis unarguable.
And stopping global heating is now critical. Just this week, over 30 millions people have been impacted by huge floods in Pakistan. Another example of the impact of only 1.2 degrees of warming. It is going to get far worse. The only way to sustain economic growth is to fully decouple carbon emissions from growth. And the empirical evidence has shown that this is not achievable.
You then talk about the need to stop doing certain things, like fast fashion. So we cut back on fast fashion, eat less meat, fly less, become more energy efficient, stop using coal, oil and gas and so on. This will all reduce GDP. It will be replaced by renewables, increased plant based diets, recycling, using public transport more, electric vehicles, but less of them, buying things that last longer and are more easily repaired and so on. These things would add to GDP. But overall, we end up buying less in richer nations, replaced to some extent by sustainable growth in developing economies. Digital products will expand, but there are limits to this because in a sustainable economy, we won’t have enough spare income.
And one of the first things we need to do is stop using GDP. It’s a terrible measure of wellbeing, which ultimately is what matters. For example as obesity and diabetes increase GDP goes up. As we clean up an oil spill, a huge cost in environmental and miner terms, GDP goes up. This make little sense.
"The only way to sustain economic growth is to fully decouple carbon emissions from growth. And the empirical evidence has shown that this is not achievable."
What empirical evidence are you referring to? As far as I'm aware, nuclear energy has faced massively disproportionate social/legal barriers to its proliferation, compared to the actual dangers and difficulties that go along with it. Green energy has been underinvested in due to a combination of fossil fuel disinformation, successful political capture of resources in terms of subsidies by the same, short termism, and simple scientific ignorance. Electric vehicles have faced similar challenges. The largest economy in the world has been just barely sufficiently controlled by anti-science/nationalistic forces to completely cripple its climate policy (e.g. see Al Gore vs Bush in 2000). Large scale, scientifically rigorous economic damage estimates of climate change have only recently become widely available for use in policy decisions.
And in recent years, renewable energy in the form of solar/wind/batter tech has just started to become the most directly cost efficient form of new power installation in large parts of the world, without even taking into account negative externalities of fossil fuel sources. High tech plant based food alternatives to meat/dairy are only just starting to take off (and growing extremely rapidly compared to food as a whole or animal agriculture), and cultured meat is possibly right behind it. Electric vehicles have only just started to rapidly grow as a relevant fraction of the vehicle market, and self-driving technology, which might be just around the corner, would massively favor electric vehicles due to its greater ability to take advantage of lower costs/mile driven.
Just because economic growth has not, so far, happened decoupled from carbon emissions, doesn't mean it isn't possible in the future. It looks to me more like so far fossil fuel incumbents, scientific ignorance and inherent difficulties of technological and scientific progress have historically been greater than the efficiency/environmental/health benefits of and political desire for sustainable forms of growth. Many signs point to the possibility of that changing in the next few years.
If you are serious with your concern about global climate change, you should be blaming governments. Governments are the largest polluters and waste more resources than any other group. Why are you still supporting governments?
@@mattolivier9465 I don't blame "governments" any more than I blame "companies" or for that matter "people." And even if I somehow threw all the blame at the feet of "governments," societies/economies still need governments for a myriad of reasons. The solutions don't lie in ceasing to support "governments," but in ceasing to support individual politicians, administrations, or if necessary branches of governments while advocating for change and climate policy solutions.
Voting, protesting and other forms of non-violent political advocacy can be quite effective in enacting change if enough people engage in them productively.
Much like technology, while previous government policy has to a large extent gotten us into the climate mess we're in, current/future changes in government policy is one of the best shots we have to get out of it.
Overall I agreed with some of your points ... but I think the initial statement could do with revising ... we may have unlimited desires and limited resources ... but we have limited needs (food, water, shelter, etc.) that for many people aren't being met because, it seems to me, that economies focus on desire over needs, when we should, consider desires only after needs have been met. Wealthy nations could easily satisfy the needs of their populations ... but conservatives oppose that because it would upset the hierarchies they are so fond of (the 'wrong' people might advance their station!) and so we are stuck focusing on enriching the few's unlimited desires.
So basically you're saying we should go for the socialist model then? Well sure, if that's what you want then I have some great news for you! There are a bunch of nations out there that have done and are doing just that. Just head over to those places if you think capitalism is so evil and socialism is so great. Don't mind the mountains of corpses though, those are just there for decoration.
@@thatman8490 "Focus on needs ... desires only after needs have been met." Seems pretty obviously a closer analog to "Scandinavian Socialism" (just another mixed-market economic model with some relatively more socialist components) than to Communist Socialism from the second half of the 20th century.
And as far as I know, it's pretty hard to immigrate to the countries with the highest median living standards/life satisfaction, but if you do, you certainly won't have to worry about any corpse mountains. ;)
I agree but having your needs met is your own responsibility. Your neighbor is not responsible for you having food or not.
@@davidlovesyeshua Scandinavian model is a terrible model because it essentially means that other people have to give you things for free. Which is a bad economy
@@thatman8490 yes. Socialism is preferable to American fascism
How do countries measure resources used? It’s easy to compare between industries (ie. comparing material productivity of two different steel plants), but how do you do so across multiple goods?