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Modeling the Economy As a Physics Problem 452

Posted by kdawson
from the gazintas-and-comezoutas dept.
University of Utah physicist Tim Garrett has published a study that approaches the economy and its relation to global warming as a physics problem — and comes to some controversial conclusions: that rising carbon dioxide emissions cannot be stabilized unless the world's economy collapses or society builds the equivalent of one new nuclear power plant each day. The study was panned by economists and was rejected by several journals before its acceptance in the journal Climatic Change. "[Garrett discovered that] Throughout history, a simple physical constant... links global energy use to the world's accumulated economic productivity, adjusted for inflation. So it isn't necessary to consider population growth and standard of living in predicting society's future energy consumption and resulting carbon dioxide emissions. ... 'I'm not an economist, and I am approaching the economy as a physics problem,' Garrett says. 'I end up with a global economic growth model different than they have.' Garrett treats civilization like a 'heat engine' that 'consumes energy and does "work" in the form of economic production, which then spurs it to consume more energy,' he says. That constant is 9.7 (plus or minus 0.3) milliwatts per inflation-adjusted 1990 dollar. So if you look at economic and energy production at any specific time in history, 'each inflation-adjusted 1990 dollar would be supported by 9.7 milliwatts of primary energy consumption,' Garrett says. ... Perhaps the most provocative implication of Garrett's theory is that conserving energy doesn't reduce energy use, but spurs economic growth and more energy use."
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Modeling the Economy As a Physics Problem

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  • by mangastudent (718064) on Saturday November 28, 2009 @06:46PM (#30257180)

    conserving energy doesn't reduce energy use, but spurs economic growth and more energy use

    This fits with an observation by insurance companies (or at least mine, USAA) that building safer cars results in people continuing to drive them to their preferred safety margin. We still end up with about as many crashes (but injuries are less).

  • by Puff_Of_Hot_Air (995689) on Saturday November 28, 2009 @06:56PM (#30257246)
    Kind of missing the point of the article. The population is a function of the energy consumption which directly correlates to the economy. Ergo; reducing the population will lead to decreased energy consumption, and a collapse in the economy. This is the fundemental problem here, economic growth is directly tied to energy usage. The only way out is a radical reform of the fundemental way our economy is _defined_. Sobering research indeed.
  • by lobiusmoop (305328) on Saturday November 28, 2009 @06:56PM (#30257250) Homepage

    "Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist." -Kenneth Boulding

    On a related note, the U.S. Census Bureau World Population Clock [census.gov] just ticked over to 6.8 billion a few minutes ago.

  • by Jay Maynard (54798) on Saturday November 28, 2009 @06:59PM (#30257268) Homepage

    There's another implication of that theory, and it's one that conservatives have been arguing for some time now: the end result of the current drive to cut back on carbon dioxide emissions is the destruction of the worlkd economy.

  • by Angst Badger (8636) on Saturday November 28, 2009 @06:59PM (#30257270)

    Perhaps the most provocative implication of Garrett's theory is that conserving energy doesn't reduce energy use, but spurs economic growth and more energy use.

    While I can't speak to the validity of the underlying theory as such, a conclusion like this doesn't really come as a shock. The 20th century saw an steady stream of "labor-saving" inventions that are now part of our daily lives, but we don't have more leisure time than our ancestors -- in many cases, we actually have less -- because all of that liberated time was promptly consumed by new forms of work.

    Sooner or later, we're going to have to come to terms with our now obsolete species-wide obsession with material acquisition. It made sense before we developed tools and civilization: grab all you can while it's abundant because scarcity is the norm. Now that we have all we actually need and then some, we're just killing ourselves with the byproducts of our superfluous production.

  • Gee wizz.. (Score:5, Interesting)

    by Sapphon (214287) on Saturday November 28, 2009 @07:09PM (#30257310) Journal
    Economists routinely use highly complicated mathematical models on stuff like this, and are just as routinely criticised for it because their simplifying assumptions aren't close enough to reality. Then along comes this bloke and uses a model that's not even based on human behaviour: the economy as a heat engine. No wonder he's been panned. Criticise economic models all you like, but at least the modern ones* have a foundation in human behaviour.

    I can see why this gets a run here – scientists are cool nerds; economists are not – but in the end it's a guy doing research outside of his field. Sometimes you get tremendous insights [wikipedia.org], but most of the time (as in this case) you don't.

    * I'm not talking about the physiocrats here, okay?

    Disclaimer: I am an economist.
  • by Geoffrey.landis (926948) on Saturday November 28, 2009 @07:21PM (#30257368) Homepage

    [Garrett discovered that] Throughout history, a simple physical constant... links global energy use to the world's accumulated economic productivity, adjusted for inflation.

    No.

    Data also shows that there is a correlation between the number of teddy bears that children own and how wealthy their parents are. Does owning teddy bears cause a child's parents to be wealthy?

    The more prosperous an economy is, the more things that the people buy. Including energy. This is not news. The correlation is that being wealthy means buying more energy, not vice versa!

    Correlation is not causation.

  • by martin-boundary (547041) on Saturday November 28, 2009 @07:35PM (#30257456)

    but we don't have more leisure time than our ancestors

    How far back are you talking about? If it's the 19th century, then you're definitely wrong. We have huge swaths of leisure time compared with our 19th century ancestors. If it's the first half of the 20th century, then the economies in the West were still fairly unregulated although better than previously, and a lot of people were still more overworked than most of us are now. If you mean by ancestors your parents or grandparents, then you'd probably be right. The post-WWII period was a golden economic age for a large percentage of the population in the West. Unfortunately, with deregulation from the 1980s onwards exploitation has increased again.

  • Re:Simple Solution (Score:4, Interesting)

    by Wonko the Sane (25252) * on Saturday November 28, 2009 @07:43PM (#30257504) Journal

    Which is why Eastern Europe and the former Soviet Union are environmental Garden of Edens.

    Don't forget China [chinahush.com]

  • Really? (Score:3, Interesting)

    by WindBourne (631190) on Saturday November 28, 2009 @07:43PM (#30257506) Journal
    What exactly do you base your statement that this is a bad model? Or do you object to something different and unique? Personally, I would like to see more about what this guy has before nuking it.

    One issue that I have seen in soft 'Sciences', is that they resist the idea of applying real math and other science to their models. As it is, you just got done saying that economics counts on human behavior, i.e. psych, an even weaker science.
  • by phantomcircuit (938963) on Saturday November 28, 2009 @08:06PM (#30257638) Homepage

    A rather large part of the big bad "world economy" is feeding people.

    The truth is that reducing energy consumption will almost certainly cause millions of people to die.

    The question is whether their deaths will be a sacrifice to save the rest of us.

  • by NoYob (1630681) on Saturday November 28, 2009 @08:26PM (#30257744)
    It depends on which conservatives you mean. Most conservatives I know, myself included I'm ashamed to say, think of economic activity in the mindset of capitalism, socialism, and the hybrid systems the exist around the World. I would think, that the younger and more creative generation would think of something a bit more useful and environmentaly favorable. In other words, if you expand economic activity beyond those limited paradigms, I think the World's economy, whatever it ends up to be, will do just fine.

    I'm too old and stuck with my brain washing to think of anything better myself, but I have faith in the younger folks to take us in a direction that will improve life here.

  • Yet more proof (Score:3, Interesting)

    by Murdoc (210079) on Saturday November 28, 2009 @08:31PM (#30257766) Homepage Journal
    This is exactly what Technocracy [technocracy.org] has been saying for over 80 years. They were the first to "treat the economy like a physics problem", the only difference is that they saw it coming and warned us way back when it was far easier to do something about it. Now, whether we can do something about it without too much pain is in question, but if we can then we have to do something about it now [technocracy.ca] while we still can. Like one commenter said here earlier, "The only way out is a radical reform of the fundemental way our economy is _defined_". Technocracy has provided a logical answer to this too that is worth checking out. It needs a bit of updating since the movement is so small right now, but the underlying basis for it all is still quite sound. If you want a good scientific way of looking at our economy, and how it relates to our environment, then this is the place to start. I'm glad to see more modern research being done that confirms this.
  • by Ironchew (1069966) on Saturday November 28, 2009 @08:32PM (#30257772)

    Unfortunately, with deregulation from the 1980s onwards exploitation has increased again.

    This.

    Slashdot is the wrong place to be advocating labor unions, though. Laissez-faire types will make a lot of noise simply to drown you out.

  • by hairyfeet (841228) <bassbeast1968@gm[ ].com ['ail' in gap]> on Saturday November 28, 2009 @08:58PM (#30257932) Journal

    Yeah the first time I saw the "Agent Smith Speech" in the Matrix I thought they had hit that nail a little to close to the head for comfort

    "I'd like to share a revelation that I've had during my time here. It came to me when I tried to classify your species and I realized that you're not actually mammals. Every mammal on this planet instinctively develops a natural equilibrium with the surrounding environment but you humans do not. You move to an area and you multiply and multiply until every natural resource is consumed and the only way you can survive is to spread to another area. There is another organism on this planet that follows the same pattern. Do you know what it is? A virus. Human beings are a disease, a cancer of this planet. You're a plague and we are the cure."

    Sadly he got one thing wrong, we do find an equilibrium, but only by mass slaughter or by having disease run rampant when we pack ourselves in too closely like rats. Just look at how much we "thinned the herd" with WW I and WW II. i think the only reason we haven't already had WW III is that the bomb makes such worldwide conflict too dangerous even for the truly vicious to seriously contemplate. But I have no doubt when the resources get really tight if we don't find a way to get off this rock and get more things will get REALLY nasty.

    Of course if you try to limit population growth you will get screams of racism and classism and the PC police will put an end to that. So you get what we have now, the march of the morons, where the stupid breed like bunnies while the smart have few kids if at all. I wonder if in 500 years Idiocracy will be looked upon as a prophetic documentary?

  • by plopez (54068) on Saturday November 28, 2009 @09:06PM (#30258000) Journal

    1) as people get wealthier they don't need as many children to "run the farm", so to speak. They in fact become an economic liability.

    2) As people get wealthier their access to health care, proper sanitation etc. becomes easier. This increases the survival rate of their children which reduces the number compensatory pregnancies. In other words, when a child dies a woman's friends, neighbors, relatives, coworkers etc. decide to "have just one more, just in case".

    Europe, the US and Japan are all examples of this.

  • by presidenteloco (659168) on Saturday November 28, 2009 @09:18PM (#30258064)

    Because it is the amount of work we are putting in to things we want to do or want to have happen.

    I predict that economic theory in general will move in this direction.

    There are other alternatives to the nuke method however. We could do massive wind and solar,
    supplemented by ocean wave and geothermal.

    Opponents with a vested interest in the status quo claim these are marginal and intermittent (not core)
    power sources, but they do not understand or are deliberately ignoring the power balancing you could do
    with a continent-wide superconducting smart-switching power grid.

    Another, complementary, alternative is that we can back off on our tendency to destroy natural eco-systems and
    replace them by our own systems,
    and let some of them (natural systems) thrive, and do some of the work for us. This only works if we support them
    and harvest them with humility and respect.

  • by martin-boundary (547041) on Saturday November 28, 2009 @09:22PM (#30258088)
    I wasn't advocating anything, just inserting some historical perspective. On average, people in the 60s did have more leisure time than people have today, and people today have more leisure time than in the bad days of the industrial revolution.

    It's true that unions have played a crucial role, but so has, for example, the material and demographic destruction caused by WWII, if we're talking about the 50s/60s. After the war, there was much to do, and a big chunk of people in Europe and the US who had been soldiers either died or needed to be trained/educated for civilian work. The middle class had more economic power then than it has now, and this translated into increased home ownership and leisure time for people and their children.

  • by benjamindees (441808) on Saturday November 28, 2009 @09:54PM (#30258202) Homepage

    Consumer goods are designed to self-destruct. Ergo, no one is willing to share them lest they be destroyed. Ergo, everyone needs his own and more total consumer goods are purchased.

  • by Anonymous Coward on Saturday November 28, 2009 @10:30PM (#30258388)

    yes production alone is just part of the problem of the desired result, feeding the people, while the amount of food increases due to intensive production and decrease in price, the amount of energy used to produce the food increse, to the point that today the cost of the energy to produce food is higher than the cost of food itself, the cost of transportation and distribution to the consumer also increases, its cheaper to destroy the extra surplus of milk produced in the west than give it for free to the thir world, given the extra surplus of food to the third world damage the economy of the producer and increase the problems that was intended to solve.
    Eventually due to the amount of fresh water required to agriculture and the damage to the land due to long term over intensive production the best land will became sterile, perhaps some bodi discover a way to manufacture protein in a more efficient way, but this doesnt get rid of the problem, only give us a little more time.

    The only solution I can see is if the world population was reduced to a manageable number, say a billion and that it was a way to keep it balanced through the age groups, to old or to young population create problems of its own

    The problem that I have with this solution is that I believe that an advance society is linked to population, in another words the technologivcal socety of the XX century could not be posible at the time of clasic greek or the middle ages because it wasnt enough people in the world,

    so to solve the world problems we need to keep the population low and balaced in earth and to conqer and populate space to keep complexity high enough to be able to mantain/increase the complexity of the system and technological level.

    fuck my spelling

  • Pure nonsense (Score:2, Interesting)

    by Anonymous Coward on Saturday November 28, 2009 @10:49PM (#30258522)

    "Starvation is a geopolitical problem, not a resource problem."

    That is so completely wrong, it's mind boggling. Fatally so. Currently, for each calorie you eat, 9/10ths of it came from oil.

    In short, we've become a planet which is eating oil. When the oil stops, the population shrinks. There is no easy substitute for oil, and no easy answer for our resource problem.

    Yes, there are finite limits to our resources. Get used to the idea. Unlimited resources were the hallmark of the 20th century. Finite resources are defining the 21st century.

    Oh, and oil production has been constantly dropping each quarter for the past 1.5 years.

  • by Puff_Of_Hot_Air (995689) on Saturday November 28, 2009 @10:51PM (#30258530)
    The issue is that our economy is geared around growth. Let's take real-estate as an example. What drives the increased prices in real-estate? Population growth. If the population stops growing, or begins to shrink, real-estate stops being a worthwhile investment. Worse, if the population appears to be going into a long term decline, the sooner you sell, the less money you will lose. This sort of thing leads to rapid colapse of economic sectors. The equations simply don't work unless growth > 0, but of course, growth cannot continue forever when resources are finite. In your example, having TV's that last longer and can be repaired, can only lead to a decrease in profits for the companies in question, and a decrease in share price. If there is no prospect of growth for the company, there is zero investor motivation to buy shares and every reason to sell now before the share price drops. Again perceived long term gradual decline would cause a rapid economic collapase. We are addicted to growth, and it seems to be a terminal problem.
  • by benjamindees (441808) on Saturday November 28, 2009 @10:51PM (#30258536) Homepage

    Starvation is a geopolitical problem, not a resource problem.

    I love people who say this. It's not a resource problem; it's a people problem. There are too many people and not enough resources.

    Okay, so what is the problem exactly? Hungry people just happen to materialize in areas with insufficient resources to feed them? They're being prevented from feeding themselves? They're being forced to procreate? Can you be more specific than "geopolitical problem"?

  • by Cyberllama (113628) on Saturday November 28, 2009 @11:29PM (#30258760)

    AFAIK, it's a relatively new idea. I'm unaware of any line of thought along these lines until Malthus [wikipedia.org]. But you are correct in the limited sense that it has been a common theme for the last couple hundred years, anyways.

  • by Monsuco (998964) on Sunday November 29, 2009 @12:10AM (#30258970) Homepage

    Consider the food supply. The population has now reached a size at which the current amount of food is not sufficient for everyone to eat well. So, scientists at ADM and other companies are trying to invent new ways to increase food production. Suppose that the scientists succeed and that we increase food production by 20%. The population, enjoying this additional food, now grows by an additonal 20%: we return to the original problem.

    That is in no way the problem. Where do you see starvation? Various parts of Africa, North Korea, and a few other locations. Many of these starving countries are not nearly as populated as the USA or Europe and have more fertile land. Why do they starve? Why does North Korea have a food shortage when South Korea is fine? In both these cases high population is a ridiculous excuse. In Africa, political instability and warfare results in the destruction of crops. In North Korea the socialist regime will not allow for people to grow crops. Some places like Hong Kong are extremely crowded, but still rarely suffer from starvation due to the ability to buy food from less crowded areas. Even poor countries such as India have managed to largely eliminate starvation through use of modernizing their agricultural system and liberalizing trade. Anywhere in the world you see mass starvation it is nearly always the result of either warfare or government intervention in the economy. A lack of places to grow food is a ridiculous explanation. Even poverty doesn't cause starvation. In the USA, arguably the biggest health risk faced by the poor is not starvation, but obesity. People living below the poverty line have abnormally high rates of obesity. Our only problem is too much food. Then again, someone below poverty line here lives a lifestyle that many in Africa would consider to be extremely luxurious.

    We have plenty of space to grow food, and with advancing crop production techniques this will be even less of a problem. Theoretically it would be possible to fit the entire population of the world inside the state of Texas and still have a lower population per square mile than New York City.

  • Re:Simple Solution (Score:2, Interesting)

    by LS (57954) on Sunday November 29, 2009 @01:38AM (#30259346) Homepage

    Uh, not to defend communism or anything, but China's pollution problems began precisely when it started moving to capitalism. It is arguable that China is more capitalistic that the US at this point. Any vestiges of communism are just imagery and tourist attractions.

  • by srussia (884021) on Sunday November 29, 2009 @05:34AM (#30259970)

    1) as people get wealthier they don't need as many children to "run the farm", so to speak. They in fact become an economic liability.

    Nonsense. Every additional person is productive over his lifetime on the average. Plus, there is ever increasing capital wealth, multiplying productivity per person. My siblings and I are not on the farm (but we did work in my father's construction firm at one point). But if may parents' pension goes kablooey, there's enough of us producing enough so that they'll have no problems.

  • by top_down (137496) on Sunday November 29, 2009 @06:59AM (#30260234)

    I love people who say this. It's not a resource problem; it's a people problem. There are too many people and not enough resources.

    You misunderstood. From the linked worldhunger site:

    The world produces enough food to feed everyone. World agriculture produces 17 percent more calories per person today than it did 30 years ago, despite a 70 percent population increase. This is enough to provide everyone in the world with at least 2,720 kilocalories (kcal) per person per day (FAO 2002, p.9). The principal problem is that many people in the world do not have sufficient land to grow, or income to purchase, enough food.

    Okay, so what is the problem exactly?

    The main problem is that some societies are badly organized which results in them either producing too little or makes them vulnerable to exploitation by insiders (invariably) and sometimes outsiders.

  • Re:Really? (Score:3, Interesting)

    by top_down (137496) on Sunday November 29, 2009 @07:47AM (#30260390)

    One issue that I have seen in soft 'Sciences', is that they resist the idea of applying real math and other science to their models.

    The problem is exactly the opposite: math is all over the place in social science. The problem is that the things you want to quantify like maybe 'power' or other concepts close to real human behaviour are very hard to quantify. But since you really, really want to do math or else it wouldn't be 'real science' you settle for 'hard facts', things that are easy to quantify like the GDP the author of the article is using (he really is a pretty typical economist as far as his methods go). There is even a name for this disease, it's called positivism.

    So how does the GDP quantify products with a marginal cost of (almost) zero like open source software? How does it quantify work done in a non-commercial setting like the family? These kind of numbers are just indicators which might sometimes be useful but as inputs for a model they are garbage. And so the GIGO principle applies.

  • by arethuza (737069) on Sunday November 29, 2009 @09:39AM (#30260942)
    I watched a fascinating documentary last night about the history of the UK over the last 700 thousands years (a special by Time Team on UK Channel 4) which had a lot of fascinating stuff in it. However, one thing that was pointed out was pretty grim: there have been eight separate waves of human habitation in the British Isles - all of the previous seven were completely wiped out by climate changes (glaciation rather than warming, although there have been some pretty dramatic warming events too - 7C in 15 years in one case).
  • by gnalle (125916) on Sunday November 29, 2009 @09:59AM (#30261038)
    In northern Europe we have a long history of using taxes on water and energy to guide the industry. We have a capitalist system, but we use taxes to punish polluting companies.

    This works well for a single country, but it is hard to make several countries align their tax systems, because each country has different interests.

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