Excellent article Ronan. Two things I thought of while reading it.
1. I wonder what a no growth economy would be like. How would it become acceptable and what would politics turn into in it.
2. Maybe we’ll expand into space and if Carl Sagan is anything to go by, then we’ll have growth economy for a very very long time.
Brian Davey
,
I make no comments on the macro-economics of this comment – only on the argument that it is possible to “angelise growth” which can continue for ever in an “experiential form” that somehow does not have material and energy consequences. As an ecological economist (and member of Feasta) I do not accept this idea at all.
The idea that the expansion of the service sector is because of an expansion of experiential consumption is questionable. Much of the expansion of service has been an expansion of transaction activities which are about co-ordinating an increasingly complex society – they are about the management and servicing of institutions (services, government, public administration etc) – rather than some supposed increase in welfare – indeed the “experiential” reality of this kind of labour will often be experienced as stress, red tape, bureaucracy, obstacles to be got round, uncertainty precipitating anxious and over hurried researching. Nobel Prize winner Douglass North suggested that different socio-economic systems have two different kinds of activities (i) transformation activities, related to the effective handling of biophysical processes, and (ii) transaction activities, which are
related to the effective handling of information required to operate effective institutions. Transaction activities are required for the successful integration and amplification of production and consumption processes and for developing adaptability. ( North, D. C., (1990) Institutions, Institutional Change and Economic Performance Cambridge University Press . It is these that have been expanding and this is not a process that can go on indefinitely either – archeologist Joseph Tainter suggests that when societies become too complex in their governance arrangements the returns to complexity become negative and they collapse..
Secondly there’s a good deal of evidence that a large part of the expansion of service sector activities in some places is accompanied by relocating the heavy energy and materials intensive production processes to other places like China and the BRICS from which the material stuff… needed to have an experiential society (computers, electronic equipment) is imported. (e.g. the debate about imported “embedded CO2 emissions is about this
The idea that experiences do not need resources per se is also questionable – even internal mental experiences (meditation) involve energy consumption in the brain, albeit of a tiny amount – once more tangible things are going on outside the self then other energy and materials are involved. A theatre production will involve lighting, heating, transport, stage and scenery design and production, production of costume etc…experiences must be embodded and embedded in the world and if they are embodded and embedded in the world they use energy. Above all nowadays they use the energy of the internet – the internet is improving its energy efficiency at the pace of one order of magnitude (10 times) every 5 years (measured in energy per byte) but, because of that fact, and illustrating the rebound called Jevons effect, the energy consumption of the internet is also doubling every 5 years too. Thus, on current expansion rates it would take more than the current total world energy supply to feed the internet in less than half a lifetime given this exponential growth.
In addition, just to stay still we are going to be wanting to use more and more resources in the future, let alone if we grow. What I mean by this are the consequences of depletion dynamics. In the near future far more resources will need to be consumed in order to extract fuel and other raw materials. This is because of depletion dynamics. In 1910- 193o copper ores contained 1.5 to 2.0% metals now they are below 0.5% – so you have to shift 3 to 4 times the amount of rock, grind it up and then treat it and then you are left with mountains of tailings and a huge and rising energy bill…what’s a problem with copper is even more a problem with phosphorous needed as an input for agriculture..and the energy bill goes up as primary energy sources also deplete…
In regard to depletion dynamics in primary sources this is manifested through declining energy return on energy invested whereby, when the ratio gets very unfavourable, a huge and increasing investment has to be put into energy production before there is anything left over in the form of net energy return for use outside the energy sector itself.
With biofuels for example you must either devote a large proportion of the energy to power machinery to harvest the fields and power the distillation/process before you are left with a small net return – or you have to use such huge amount of labour that its no longer viable anyway…For example, for Italy to supply 30% of its transport fuel by biofuels, without fossil fuel inputs, would require 94% of the labour supply to work in agriculture and around 7 times the agricultural land in production. (Giampietro, Mario and Kozo Mayumi. 2010. The Biofuel Delusion. Earthscan )
Whatever…. the result is that in regards to national income statistics a greater proportion of national product has to go back into the energy sector and the energy sectors own suppliers and engineering companies – powering extraction, creating the infrastructure itself, creating the carbon sequestration because of the climate danger – so less is left over net for people use – and very much less for “experiential” resource use (except for the tiny elite if we let them get away with continued and increased inequality).
So, even if you got “growth” – it would be a growth like a tumour, a growth of the energy sector itself just to stand still, draining resources from the rest of the economy, including from “services”, experiential or not.
killygrogan
,
In the Irish Times Martin Wolf reports on a paper by Robert Gordon of Northwestern University, an expert on productivity. Coming form a very different perspective to the one above, he too asks if our past experience of economic growth, might remain in the past, not to be repeated.
Paul Mara ,
Excellent article Ronan. Two things I thought of while reading it.
1. I wonder what a no growth economy would be like. How would it become acceptable and what would politics turn into in it.
2. Maybe we’ll expand into space and if Carl Sagan is anything to go by, then we’ll have growth economy for a very very long time.
Brian Davey ,
I make no comments on the macro-economics of this comment – only on the argument that it is possible to “angelise growth” which can continue for ever in an “experiential form” that somehow does not have material and energy consequences. As an ecological economist (and member of Feasta) I do not accept this idea at all.
The idea that the expansion of the service sector is because of an expansion of experiential consumption is questionable. Much of the expansion of service has been an expansion of transaction activities which are about co-ordinating an increasingly complex society – they are about the management and servicing of institutions (services, government, public administration etc) – rather than some supposed increase in welfare – indeed the “experiential” reality of this kind of labour will often be experienced as stress, red tape, bureaucracy, obstacles to be got round, uncertainty precipitating anxious and over hurried researching. Nobel Prize winner Douglass North suggested that different socio-economic systems have two different kinds of activities (i) transformation activities, related to the effective handling of biophysical processes, and (ii) transaction activities, which are
related to the effective handling of information required to operate effective institutions. Transaction activities are required for the successful integration and amplification of production and consumption processes and for developing adaptability. ( North, D. C., (1990) Institutions, Institutional Change and Economic Performance Cambridge University Press . It is these that have been expanding and this is not a process that can go on indefinitely either – archeologist Joseph Tainter suggests that when societies become too complex in their governance arrangements the returns to complexity become negative and they collapse..
Secondly there’s a good deal of evidence that a large part of the expansion of service sector activities in some places is accompanied by relocating the heavy energy and materials intensive production processes to other places like China and the BRICS from which the material stuff… needed to have an experiential society (computers, electronic equipment) is imported. (e.g. the debate about imported “embedded CO2 emissions is about this
http://www.pnas.org/content/early/2011/04/19/1006388108
The idea that experiences do not need resources per se is also questionable – even internal mental experiences (meditation) involve energy consumption in the brain, albeit of a tiny amount – once more tangible things are going on outside the self then other energy and materials are involved. A theatre production will involve lighting, heating, transport, stage and scenery design and production, production of costume etc…experiences must be embodded and embedded in the world and if they are embodded and embedded in the world they use energy. Above all nowadays they use the energy of the internet – the internet is improving its energy efficiency at the pace of one order of magnitude (10 times) every 5 years (measured in energy per byte) but, because of that fact, and illustrating the rebound called Jevons effect, the energy consumption of the internet is also doubling every 5 years too. Thus, on current expansion rates it would take more than the current total world energy supply to feed the internet in less than half a lifetime given this exponential growth.
In addition, just to stay still we are going to be wanting to use more and more resources in the future, let alone if we grow. What I mean by this are the consequences of depletion dynamics. In the near future far more resources will need to be consumed in order to extract fuel and other raw materials. This is because of depletion dynamics. In 1910- 193o copper ores contained 1.5 to 2.0% metals now they are below 0.5% – so you have to shift 3 to 4 times the amount of rock, grind it up and then treat it and then you are left with mountains of tailings and a huge and rising energy bill…what’s a problem with copper is even more a problem with phosphorous needed as an input for agriculture..and the energy bill goes up as primary energy sources also deplete…
In regard to depletion dynamics in primary sources this is manifested through declining energy return on energy invested whereby, when the ratio gets very unfavourable, a huge and increasing investment has to be put into energy production before there is anything left over in the form of net energy return for use outside the energy sector itself.
With biofuels for example you must either devote a large proportion of the energy to power machinery to harvest the fields and power the distillation/process before you are left with a small net return – or you have to use such huge amount of labour that its no longer viable anyway…For example, for Italy to supply 30% of its transport fuel by biofuels, without fossil fuel inputs, would require 94% of the labour supply to work in agriculture and around 7 times the agricultural land in production. (Giampietro, Mario and Kozo Mayumi. 2010. The Biofuel Delusion. Earthscan )
Whatever…. the result is that in regards to national income statistics a greater proportion of national product has to go back into the energy sector and the energy sectors own suppliers and engineering companies – powering extraction, creating the infrastructure itself, creating the carbon sequestration because of the climate danger – so less is left over net for people use – and very much less for “experiential” resource use (except for the tiny elite if we let them get away with continued and increased inequality).
So, even if you got “growth” – it would be a growth like a tumour, a growth of the energy sector itself just to stand still, draining resources from the rest of the economy, including from “services”, experiential or not.
killygrogan ,
In the Irish Times Martin Wolf reports on a paper by Robert Gordon of Northwestern University, an expert on productivity. Coming form a very different perspective to the one above, he too asks if our past experience of economic growth, might remain in the past, not to be repeated.