I want a financial person to explain to me why we continue to expect exponential growth of companies’ revenue year after year, and why that makes any logical sense in a world with finite resources.
A trivial example is information distribution. Another one is how we turned sand into thinking machines. Myriad more examples exist.
2) We have vastly more resources than people think. Our deepest mines are ~5km. There’s a hell of a lot of planet below that, with increasing % valuable metals. There’s enough room on the planet - you can give everyone on earth a big house with a yard and we’ll all fit into a single Canadian province, or into Texas. We can generate 100% of our power needs with solar, nuclear, and batteries. And as we get richer, there are more and more people with the time and ability to make greener choices.
Our systems are proving to be flexible - look at the price of solar + battery over time; look at the deluge of funding for nuclear research. People are working on bio jet fuel. Other people are working on carbon capture tech and geo-engineering ideas for the worst case scenario.
3). We’re not stuck down here. There’s a whole universe out there. A tiny but growing % of our economy happens off-planet. A private company recently landed on the moon. SpaceX is dramatically lowering launch costs. In a few decades, we’ll be mining materials up there and manufacturing goods in space.
Exponential revenue is easy - you just need exponential inflation and it comes for free.
Increased productivity is maybe the goal - but how it's measured is up for discussion. If you do it in dollars, then do you adjust for inflation? If you do, what inflation? (inflation on the price of bread or super-yachts etc).
Or do you do it in value? What can you get for your work? In the 1990s a "machine in your pocket that can play any music ever recorded" would have been near-impossible/priceless. 25 years later it costs maybe a dollar a day and we can all have it.
If we can always get the same stuff for an ever-decreasing amount of effort, then that could be seen as exponential growth. You could argue that you could measure growth by technological advancement.
Conversely if your rent is going up 10% a year, then who cares that you're 5% more productive and making 5% more money every year. That doesn't feel like growth.
Unless you're not renting and you're the landlord and then you're experiencing sweet sweet growth.
The thing is, if more of the value produced by labor was directed back towards labor instead of equities, you're going to see far fewer people asking "how is this sustainable?", because they're on the gravy train too, but the equities holders have now gotten so used to being the special kid in the class that they can't fathom not trying to keep labor costs as low as possible.
Value growth isn't tied to physical resources anymore, it's increasingly ascribed to intangible things, such as intellectual property. I'm not saying that growth is guaranteed to continue, just that economies have already been growing based on more abstract values; it's not all about food and fuel anymore.
The biggest IP bubble now is AI, and the main bottleneck of AI is energy to power those datacenters. Doesn't google use as much energy as a few small countries now?
Biggest pharma IP now is Ozempic, which let's be honest here, is because westerners are addicted to processed corn and fried stuff. And hectares of monoculture corn sprayed with Roundup and sprinkled with just the right amount of laboratory-calibrated satiating salt is far easier to produce than a balanced diet. And what is needed to grow all that corn, soy, and alfafa feed? The tapped-out Colorado or the dwindling Ogallala...
I'm sure there are a couple of pure IP-value plays out there, but look deep enough and most everything is tied back to food, fuel, or the finite ability of the ecosystem to maintain infinitely-exponential growth.
>Biggest pharma IP now is Ozempic, which let's be honest here, is because westerners are addicted to processed corn and fried stuff. And hectares of monoculture corn sprayed with Roundup and sprinkled with just the right amount of laboratory-calibrated satiating salt is far easier to produce than a balanced diet. And what is needed to grow all that corn, soy, and alfafa feed? The tapped-out Colorado or the dwindling Ogallala...
Doesn't Ozempic make people eat less? If anything it's disproving your point. It's providing value, but at the same reducing the amount of "food and fuel" consumed.
To me it's more like slapping an expensive patch on an imperfect solution. Instead of encouraging healthier diets which have lots of follow-on nutritional and long-term medical benefits, we're paying pharma a huge monthly subscription price to keep doing something that's causing the problem in the first place. It's better than nothing, sure, but holistically it looks more like a rent-extraction trap to me.
It does work for a small minority of society. For the rest it does not.
Also, it's very hard to make something work which huge monied interests design products in a manner to ensure you fail. Are you just going to ask your grocery store to stop putting salt-fat-sugar in bright packages right by the checkout, packages and foods that are being developed by well paid groups to get you to consume as much as possible.
It's also very hard when your body is designed to do one thing. Consume as many calories as possible so you don't starve to death, because your genes are screaming at you "Starvation is coming, it always does".
So the only 'cool' statement is yours by completely not understanding the situation at all.
Junk food is convenient and more enjoyable, at least in the moment of eating. In the last 60 years there have been changes to the environment that reduce physical activity (more automobiles, less walking, less strenuous physical labor on the job) but I think that the most relevant change is the abundance of highly palatable calories. 60 years ago we largely didn't have "convenience foods" and the fastest snack you could make yourself (like a cold sandwich or a piece of fruit) didn't have the "craveability" of Doritos or microwaveable egg rolls. Back then the average American could afford to buy far more calories than needed, but those calories would take prep labor and/or not be highly palatable, so in practice many fewer Americans overate buttered popcorn the way that people overeat Doritos today.
America was on-average wealthier than most of the world and an early adopter of highly palatable convenience foods, so its obesity problem came on earlier. Global obesity rates are rising as more people globally can afford microwave ovens, frozen pizzas, drive-through restaurants serving french fries, and other such aids for high speed ingestion of delicious, calorie-dense foods.
Most people who need to lose weight cannot willfully maintain diet alterations in the long term. They go back to old habits. For 99.9% of human existence starvation was a much more common health threat than obesity and we're just not "wired" to experience excess food intake as a threat. The GLP-1 drugs like semaglutide reduce the desire to overeat, regardless of how palatable the food is, so people who could not lose weight before are able to eat less without having to consciously suppress desire every day.
Advice doesn't work that well in general, especially when it's vague and general advice like that. I would also guess that there are competing forces trying to make you eat their product and that they put a lot of money into that.
Because humans (like most animals) are optimized at a deep level to seek high-energy foods, and neither encouragement or shame are powerful enough to override that.
Yes, everything is ultimately dependent on physical resources, but the value creation is at a higher level, and you hopefully get more value out of less resource as things advance. I don't consider AI a positive example, it's a hype bubble for sure. But think how much computing power per watt you get compared to 30 years ago.
The Haber–Bosch process that powered the green revolution is merely a way of converting fuel into heat into fertilizer.
Calories per hectare is one way of measuring food systems, and a great way when we assume fuel inputs are infinite, inexhaustible, and cheap. Calories per unit of inputs is another way.
The green revolution was not only a result of the Haber-Bosch process, although that's an aspect I wasn't thinking about.
Hybridization of crop plants increased the calories per hectare per year produced. Again, I don't know if the plants were actually producing more edible nutrients per pound of fertilizer.
> And hectares of monoculture corn sprayed with Roundup and sprinkled with just the right amount of laboratory-calibrated satiating salt is far easier to produce than a balanced diet
Man, i wish Americans were just eating the corn with salt. Would be a lot healthier than corn starch+syrup whatever.
> Value growth isn't tied to physical resources anymore, it's increasingly ascribed to intangible things, such as intellectual property
No this isn’t accurate. No one values IP for its own sake; it is still responsible for generating revenue and being translated into profit. The process by which this happens is still resource extraction (raw materials into chips, energy into processors, etc etc etc).
And you are really only talking about tech. Every other industry has the same demand for infinite growth and can’t hide behind an IP abstraction layer.
Even so, the IP is used to make things which require resources. Disney IP is used to make toys, movies, books, etc, that all require electricity, paper, computers, employees sitting and eating, commuting into the office. Or a vaccine patent will be used to make a vaccine which requires a factory to be built and operated, the product produced, stored, shipped, used, and disposed into a landfill.
That's true, but more and more products are moving away from dependence on the physical resources. Kids don't buy toys much anymore, they play digital video games. You can see a doctor on Zoom instead of driving to their office. I'm not saying that's better, but it's happening.
The real problem I see is when people use wealth generated from intangibles to put the squeeze on physical resources, such as buying up land as an investment to drive up the price when people need a place to live.
Obviously physical limits will bind at some point; indefinite exponential growth implies at some point that each electron in the observable universe is outputting the entire current world GDP every year, which is pretty unlikely under our current understanding of physics. But it's for you to explain why the physical limits bind at the point we happen to be at right now. Why does the observed historical trend break now, rather than (say) in fifty years' time?
That's close but not quite. In older times, this economic profit is an accumulation of wealth, instead of having the apples just pay for the daily laborer's calories, it means, maybe they can take a few apples home to make apple sauce and that the farm owner can sell the extras in a market. You paid for the maintenance (ie. workers not starving, replacing machinery, ) and you had some left. Land is a whole other problem. The Wealth of Nations has a pretty good description of the interactions between labor, landowners, capital.
The recent problems is the disconnect between money and actual food/materials/energy production.
If your grandfather lived in a 100kw village with a 100 dollars circulating, and made 1 dollar, it is reasonable to think he could buy 1kW for his family.
If we live in a 100kw village (because no, we should reduce energy production) with 100,000 dollars circulating and you make 500, you can buy 500w.
Now do it for turkeys, or steel, or etc... Degrowth is impoverishment in most cases. Things haven't gotten much more productive, and we are more people
(But the total number of births per year fell throughout the 1990s ... mainly because of the birth rate falling in China? ... before rising to that global maximum in 2012.)
I always describe it as a range, as estimates differ and the true peak might have happened even outside it.
It's a historical milestone and I'm surprised there's so little awareness of it.
There will most likely never be this many people born in a year ever and we crossed this point without much fanfare.
Personally I think the predictions are overblown - as they assume that the generation "peak" will have 90% the children their parents had. Fertility rates in countries like Niger and Nigeria are already dropping at a faster rate than that and it's these places where the most people are currently born.
I think you need to take your comparison further back. As I understand it, before the Industrial Revolution, people had plenty of free time. For instance, looking at the Middle Ages, many spent the morning tending to their fields and then the rest of the day was theirs.
Yes but my point was not about a specific time in the past, it was about how that free time wasn’t captured by the market - in ways it is now and will continue to be in the future.
Yeah, but they were all illiterate and politically powerless, not to mention spiritually oppressed, so what were the actual, tangible options for things they could do with ‘their day’? They didn’t even own their own land.
Inflation (so numbers grow), different companies at different stages, etc? Also not exponential growth, but just significant growth and crashes every X years
>I want a financial person to explain to me why we continue to expect exponential growth of companies’ revenue year after year, and why that makes any logical sense in a world with finite resources.
Because entropy. When a living organism stops its exponential cell division, we call that death. In an economy, when things cease to grow, we call it recession. When that growth is in balance with the decay, we call it a healthy economy. When it outstrips it, we call that inflation, which the monetary system is designed to fight against.
>Adult living organisms don't have exponential cell division.
Sure they do. Your cells are dying and being replaced constantly. Cancer is just when the instructions for said division get messed up, i.e. runaway inflation in this analogy.
I think you missed the word "exponential". Adult living things don't have exponential cell division. If they did, they would continue to grow in size. But they don't. They have cell division at a constant rate, not an exponential rate.
