
Exponential Economist Meets Finite Physicist - govind201
http://physics.ucsd.edu/do-the-math/2012/04/economist-meets-physicist/
======
kbenson
Wow, this has been on here a twice a few years back, but never had a single
comment. Here's to breaking the trend.

[https://news.ycombinator.com/item?id=5814769](https://news.ycombinator.com/item?id=5814769)

[https://news.ycombinator.com/item?id=6346156](https://news.ycombinator.com/item?id=6346156)

This is from the same site, from the title looks to be prior work on the same
topic, also submitted previously (6 years ago) with no comments:

[http://physics.ucsd.edu/do-the-math/2011/07/can-economic-
gro...](http://physics.ucsd.edu/do-the-math/2011/07/can-economic-growth-last/)

~~~
zipwitch
It's too challenging and bleak. Beneath the light tone, it mercilessly drives
home the truth that all of modern society exists in a _temporary_ historical
juncture that is not stable over a timespan of mere centuries. Instead of the
smoothly increasing "better everything" over time that was practically a
secular religion in the latter half of the 20th, we're told that things _will_
change drastically in the not that distant future, and _not_ in the manner
we've believed.

~~~
pzone
Nobody belongs anywhere, nobody exists on purpose, everybody's going to die.

How about saving the existential dread for your therapist? Let economists
focus on economics.

~~~
austinjp
Economics are driven by people. People have emotions. Failure to grasp this
leads to disaster.

------
AmirS2
This concern about economic growth in 1000+ years is entirely academic. The
more relevant question is whether exponential growth (at whatever rate) is
feasible for the next few decades and even centuries, and to me the answer to
that question is yes, just using the examples from the article. So we can
build appropriate policies for the present and near-ish future. Our
descendants can decide for themselves at that point whether it's reasonable to
continue economic growth, based on knowledge and science and experience they
have gained.

I mean, how many physical theories can be argued to work into the _infinite_
future? Does quantum mechanics or GR hold past the end of the universe? It's
not even a meaningful question. Why hold economic models to the equivalent
standard, when all that is needed is whether they hold in the relevant domain?

I feel that this question and argument is often used to try to draw the
conclusion that we must stop trying for economic growth NOW, because
_infinite_ growth is impossible. Maybe it is impossible, but I don't think
something happening or not happening at infinity or even in a thousand years
has any bearing on what _we_ should be doing _now_.

~~~
kbenson
From what I got out of it, they were talking about smaller timescales, on the
order of a couple centuries. The 1400 years was a sort of upper limit (our
planet consumes as much energy as the sun, hotter than the sun). 400 years was
where the atmosphere reaches the boiling point. Those of course are the steady
2%-3% increase numbers though, and assume there's actually enough energy to
reach those states, which there probably isn't.

------
roel_v
AKA: "physicist frames discussion with economist in terms of things he is
intimately familiar with but economist isn't, feels smug about his own
perceived superiority". Probably a reflection on his frustration with feelings
of being so much smarter than those 'economists' yet not being taken half as
serious. The fact that he thought this was even worth spending 2-3 hours on
writing up shows more about his lack of understanding of what economics is,
than what he probably thinks is an "exposure" of the inadequacies of economics
as a field.

(not an economist, but broad-minded enough to recognize someone who has spend
so much time in his own field to be completely rigid-minded about it. An
affliction rather common to CS types too, I'm sad to say, since as a software
engineer in research I spend quite some time around those)

~~~
kbenson
It can certainly read like that, but there is a note before the exchange
begins that explains his representation will be naturally biased, if by
nothing else than by his remembering his argument better than the opposing
argument. Additionally, he does concede some ground at the end.

That said, I'm not sure it's a _real_ exchange. It feels somewhat manufactured
to me. But that's somewhat irrelevant to the point, as long as the arguments
each side presents are conceivable for their professions and the current
prevailing beliefs within them (which I'm not qualified to judge).

In the end though, that's all irrelevant. The real question is whether you
find the _facts_ of the argument compelling and whether it changes your view
on anything.

------
DanielBMarkham
I apologize for not sticking it out until the end of the article, but it got
really painful about a third of the way through.

I am tempted to save this and put it under a file titled something like "why
scientists should not be economists" but I'm afraid it's a little too involved
for that purpose.

I mean no disrespect to the author: these all seem like good and reasonable
questions. To understand why this form of analysis does not work is to cut to
the heart of what the difference between economics and hard empirical
sciences. I will give a couple of examples, but I fear that folks who missed
it the first time around will not get it this time.

First, note that no matter what period in human history this conversation
occurred, it would follow the same pattern. "Here is a chart of the rate of
fishing from the pond near our Roman village. Certainly catastrophe awaits us
in just a few years", or one that actually occurred, "Population growth will
stagnate and we will have famine when the 1900s come. Why? Because we will
have ran out of grazing land for all the horses we will need"

Growth lines can't continue forever. Seems obvious. Yet somehow it always
turns out the thing you were measuring wasn't the important thing all along.
Sure, you can only fish so much -- but there are other ponds. Yep, can't have
that many meadows -- yet meadows aren't a constraining factor.

The reason why such analysis fails is that science is always seeking a
constrained and known system. Given controlled conditions, the falsifiability
and reproducibility of science says that given these inputs, these outputs are
likely to occur. Economics, because it deals with what people want, is under
no such constraints. Let's say you give everyone on the planet all the food,
shelter, and healthcare they need. End of money, right? Nope. People would
trade Justin Bieber concert tickets, or autographs of Elvis Presley. People
always want stuff they don't have, and they always like trading for it. That's
economics.

If economic systems were the same as physical systems, wow, we'd have a lot of
physicists who have made fortunes playing the stock market. We do not.

------
mirimir
OK, so I'm neither a physicist nor an economist. But I don't get why aggregate
economic value couldn't grow indefinitely. For example, consider software.

Poorly written code might not be very valuable, because it's slow and crashes
often. Well written code would arguably be more valuable. It would also waste
less electrical energy, and produce less heat.

Indeed, code could do entirely new things, using less material and energy
inputs, that are worth much more. Maybe I'm missing something, but that seems
distinct from increasing efficiency. There's a limit to efficiency, but no
limit to value.

~~~
bcoates
You're not missing anything.

The author seems to be (accidentally or intentionally) part of an ultra-
heterodox economic school that believes that all economic value, across all
times and places, comes from the consumption of energy.

They base this mostly on that graph near the top of the article that shows
that energy consumption was growing exponentially during the industrial
revolution.

He then goes on to imagine that 3% economic growth means that in 200 years
we'll all have 400 times as many cars and refrigerators (or maybe just one car
the size of a luxury yacht), eat 400 times as much food, have houses 400 times
as big, etc.

~~~
Terr_
> The author seems to be (accidentally or intentionally) part of an ultra-
> heterodox economic school that believes that all economic value, across all
> times and places, comes from the consumption of energy.

Ultimately all life is based on exploiting energy gradients. Economic value
without using more energy is ultimately an _efficiency_ improvement, an
investment of past energy which is proving beneficial.

~~~
digi_owl
On top of that you get Jevon's Paradox.

[https://en.wikipedia.org/wiki/Jevons_paradox](https://en.wikipedia.org/wiki/Jevons_paradox)

Basically that improvements in efficiency leads paradoxically to more usage,
as new uses becomes feasible.

------
MC7447a
A economic blogger's retort from a few years ago:

[http://noahpinionblog.blogspot.nl/2012/11/murphys-
law.html](http://noahpinionblog.blogspot.nl/2012/11/murphys-law.html)

------
varjag
Sure there's a physical ceiling to energy generation but I feel like there's a
great degree of oversimplifcation in his argument.

Take for example solar: right now, pretty much all of that energy (sans the
work performed for propelling ocean currents and production of future fossil
fuels via photosynthesis of plants) is irradiated back into space anyway.
Using more of that energy to perform work on surface of Earth won't change a
thing from global thermodynamics perspective. That energy is already on the
books.

Or consider hydro (a consequence of solar itself): the moving water already
carries energy and performs work. Re-purposing that energy in the form of
electricity would have no impact on the overall energy budget.

Granted the energy growth is theoretically limited, but the limit might not be
as near if we consider that much of energy generation could be essentially
energy conversion.

~~~
hebdo
Consider this: a) at some point our energy budget will exceed total Sun
radiation reaching Earth, and b) indefinite "re-usage" of energy is impossible
(entropy).

~~~
varjag
I actually considered this, making a disclaimer at the beginning and the end
of the post :)

My point was that the timeframe would likely be quite different, e.g.
millennia instead of centuries. From theoretical perspective doesn't change
anything, but perhaps makes the argument a bit less dramatic.

~~~
digi_owl
What he did was to take the economists golden calf, the 3% growth pr annum,
and run with it in physical terms. Demonstrating how, if economists managed to
maintain that growth curve, the energy requirements would be staggering.

------
pzone
Don't waste your brain cells on this, people, move along.

To the author: you scoot off to /r/badeconomics. Sure. OK. Economic growth
cannot continue to look like it currently does forever. Gasp, some economists
may not have ever pondered that particular limit case, given the importance to
their everyday lives. I know that it was super thrilling experience for you
("That should not have happened!" as if the economist were a debate club
champion and superhuman?) but trapping a man in a word game over dinner is
does not mean you've shattered his profession - not even if he falls into your
clever trap. The whole discussion has no bearing on what economics is or what
economists do.

To be more concrete: what economists do involves more data, accepting that
there is a use to building mathematically tractable models with limited
domains of explanation even if it means some implausible assumptions in limit
cases, and it certainly involves less worrying about what the world will look
like 2500 years from now. I'm not saying we shouldn't care about the ultra-
long-horizon future of humanity. I'm sure there are some smart people working
on those issues, but econ departments are not where people do it. There are no
data, no way to establish causal links that far out, no arguments that could
make it into a respectable economics journal.

~~~
markvdb
Did you just say that research about our far out economic future is not
supposed to be a job of academic economists?

It doesn't have to be a main research area for all of them, but it _should_ be
for some. And all economists should know the basics (physical limitations,
...) about this area of economics.

P.S. Always interested in some decent reading material about this one!

~~~
pzone
I said there is very little that can be said scientifically using economic
methods about the distant future. You may as well be talking to Singularity
crowd, global warming scientists, asteroid impact researchers, or SETI. GDP
growth researchers should follow Wittgenstein's advice.

There's far too much that we don't know about the economy right now to include
wild speculation, even if it's mysterious and thrilling, in the category of
economic knowledge.

~~~
npunt
It sounds like just the type of thing that has no use until one day it
suddenly does. Ideas like these need a long time to gestate - better to do
that before they're needed rather than after.

------
maxander
Impracticality of physical economic analysis aside, I'm now curious about the
engineering problem of cooling down a planet overheating from sheer exothermal
industry. Can you pack enough waste heat into a canister that launching it
into space is a net decrease in energy? Can space elevator tethers be used for
evaporative cooling into the vacuum?

As I recall, in Niven's books an alien race moved their planet away from its
sun in order to deal with the problem, but I assume that wouldn't even buy us
an order of magnitude in planetary energy dissipation capacity.

------
zerstroyer
Those discussions always seem to miss the point. I think it is really obvious
that our economic system struggles with stagnation, but really seems to break
if an econmy (god forbid) shrinks for whatever reason.

If not for that constraint i guess economies in western countries would have
already shrunken quite a bit due to automatisation. For me the cause seems to
be to a fundamental bug in our intertemporal trade system.

------
larsga
This is very unlikely to be a real conversation. A real economist would note
that the economy can grow through provision of services that require very
little energy relative to the value they add. Consider Google, for example.
Sure, they use some electricity, but relative to their revenue that's
extremely limited compared to a factory.

So this whole "discussion" is totally wrong-headed.

~~~
kbenson
He goes through pains to explain why that doesn't really matter for the
argument. Punting the football a few decades down the line does not solve the
underlying issue he's trying to illustrate.

~~~
larsga
The dialogue is about energy sources, but that's irrelevant when there are
whole lines of economic activity that consume very little energy. A service
economy can deliver economic growth while energy consumption falls.

This whole dialogue is utterly wrong-headed, and I don't for a second believe
that that economist is a real economist.

------
p1mrx
If some technology analogous to a Mr. Fusion is ever developed, then perhaps
the economy could reach a point where energy is free, but heat pollution is
heavily taxed.

The outcome would be that people start migrating into space, where heat can be
rejected more freely.

~~~
njharman
Heat can only be radiated in space. Also, think about it, earth is in space.
Heat is only ever radiated or temporarily dumped into sinks such as planets,
which eventually radiate it.

~~~
dredmorbius
Note that for satellites, 100-200W /m² is about the peak radiation rate as
well. _Radiators_ for space-based power would be a massive cost alone.

