Category: Uncategorized

Exponential economist meets Physicist

by  Tyler Cowen in

Here is an imaginary dialogue between a physicist and an economist who is not Georgescu-Roegen.  The physicist is skeptical about the prospect for continued exponential growth, excerpt:

Physicist: Well, we could (and do, somewhat) beam non-thermal radiation into space, like light, lasers, radio waves, etc. But the problem is that these “sources” are forms of high-grade, low-entropy energy. Instead, we’re talking about getting rid of the waste heat from all the processes by which we use energy. This energy is thermal in nature. We might be able to scoop up some of this to do useful “work,” but at very low thermodynamic efficiency. If you want to use high-grade energy in the first place, having high-entropy waste heat is pretty inescapable.

…we’re too close to an astounding point for me to leave it unspoken. At that 2.3% growth rate, we would be using energy at a rate corresponding to the total solar input striking Earth in a little over 400 years. We would consume something comparable to the entire sun in 1400 years from now. By 2500 years, we would use energy at the rate of the entire Milky Way galaxy—100 billion stars! I think you can see the absurdity of continued energy growth. 2500 years is not that long, from a historical perspective. We know what we were doing 2500 years ago. I think I know what we’re not going to be doing 2500 years hence.

For the pointer I thank Sam Penrose, Jim Nichols, Jason Ketola, and Mark Weaver.  It is interesting throughout, though I expect war to intervene at some point to break the exponential growth.

Addendum: Here is a related paper by Robin Hanson.

Mysteries of growth

by  Tyler Cowen in

Matt writes:

To me the most pointed contrast is between the Soviet Bloc and pre-reform China. Why was East Germany so much poorer than West Germany? That’s easy—Communism! And that’s why North Korea is poorer than South Korea. It’s also why Taiwan is richer than China. But Communism hardly explains why the Soviet Union was always much richer than China. But it was a lot richer despite broadly similar political systems and ideological commitments, and the human suffering involved in the PRC’s failure to implement Communism as successfully as the USSR was enormous.

I would say this: Stalin favored industrialization (albeit of a strange sort) more than did the Chinese communists, China had a more damaging heritage of conquest and civil war, Russia was far more urbanized, Russia had greater access to European ideas (some of them bad of course), and the Russian experience of nation-building was mostly behind them, whereas China is still going through this process.  For Russia/Soviet Union, the major structures of 20th century European growth were largely in place, though “liberal institutions” were rejected.  Russia had an advanced European educational system in place, albeit not for everyone.  If you look at the economic history of the more Asiatic “Stans,” which of course were part of the Soviet Union communist experience, the importance of already-industrializing and European connections looks all the more stronger.  The relative prosperity of Estonia also bears out this thesis, though it would be interesting to ponder Kaliningrad/Königsberg in this regard.

Assorted links

by  Tyler Cowen

1. Peter Boettke’s new paper on Henry Hazlitt.

2. Where do people go when they drop out of the labor force?

3. The sovereignty of American Indian tribes, interesting throughout.

4. Deregulation has lowered the prices of coffins.

5. Susan Sontag, an appreciation, and Doris Lessing, an appreciation.  They are both still underappreciated, especially on “the Right.”  It is easy to dismiss them for their worst utterances, but they both have been brilliant writers, albeit in very different ways.

6. Which entrepreneurs are benefiting from the violence in Syria?

Would I lie to you?

by  Tyler Cowen in

The subtitle is “The problem with buying sports “experiences”” and it is now up on Grantland.com.  Co-author Kevin pulled out this excerpt:

The biggest issue is that our own desire for thrills often works against our better judgment. As a species, we derive pleasure from thinking about what will come — how nice that powdery snow on the slopes is going to be. So we turn off our critical faculties at the worst possible moment in hopes of maximizing the value of the anticipation and getting a bigger buzz. This is particularly bad when it comes to sports experiences, which are rife with “asymmetric information” — when the seller knows something you don’t. Your best defense, of course, is to be aware of your vulnerability and maximize your information, as any smart shopper does when in the market for a used car. But when it comes to shopping for experiences, emotions all too often rule.

Read the whole thing.

Bloomberg Business Week

by  Tyler Cowen

I am learning that many people still do not know how good it has become.  Every issue has a remarkable amount of substance.  I am in the blogosphere and on Twitter quite frequently, and yet still a large number of the stories are news to me; that is hard to pull off these days.  Many people had grown disenchanted with the old Business Week, but odds are you should be reading the new incarnation.  It would make my list of the five essential periodicals/magazines.  Let’s hope it continues, just don’t ask me what is their business plan.  Make Bloomberg a more focal name to spur and maintain demand for the terminals?

The economics of cholera (water)

by  Tyler Cowen

From Haiti:

Recently, just behind the base’s barbed-wire periphery, Dieula Sénéchal squatted with her skirt hiked up, scrubbing exuberantly colored clothes while a naked 6-year-old girl, Magalie Louis, defecated by the bank, gnawed on a stalk of sugarcane and then splashed into the water to brush her teeth.

Approaching with a machete on his way to hack some cane, her gap-toothed father, Légénord Louis, said Magalie had contracted cholera late last year but after four days of “special IVs” was restored to health. He knew the river water was probably not safe, he said, but, while they brushed their teeth in it, they did not swallow.

For drinking water, Mr. Louis said, his family relies on a local well. But he lives from hand to mouth and cannot afford water purification tablets; the free supply he got in 2010 ran out long ago. So he gambles.

“If you make it to the hospital,” he said, “you survive the cholera.”

The NYT feature article is interesting throughout.