The two main questions I’m asked about regarding Uncharted Territories are: 1: “Some days you talk about remote work, others about geography, yet others about media consumption. What’s the common thread?”
You may have seriously neglected or at least underweighted a key variable in the flywheel: energy. There is a very direct relationship between increasing density of energy for work and GDP growth. Most work used to be done by human bodies, until we domesticated animals like horses and oxen, and then developed technologies to make animal power more efficient (yokes, carts, horseshoes, etc.), and then stalled for centuries after that. Which is why GDP only increased 0.01% per year and population growth was gradual and extremely variable. What changed in the 18th Century? Coal and then the steam engine, of course. But even before that, there was also the mini-revolution of wind and water-wheels, which created a boon in Europe in the late Middle Ages and were a contributing factor to the Renaissance.
Dense sources of energy for work continue to be key for the "technology eating the world," which you (incorrectly) assert a miraculous immateriality. At the far end of every Google search is ultimately organic matter that was densely compacted into energy-rich muck over the eons in a few choice locations on the planet.
Google, like the Internet itself, is a dense web of servers and fiber optic cables. It is material. It is also energy. The solar PVs that will "solve" the issue of freshwater's uneven distribution are energy embodied. They are created from silica, which is mined through an energy-dense process in places like Western China. Places are are desperate for the coal, diesel, and other energy-dense mediums that make technology and its cheap mass production possible.
Israel, Singapore, and the mega-region around London are fed be unimaginable amounts of energy, almost all of it imported in some manner. They do not exist in an energy vacuum. Where does their electricity come from? Where do all the computers come from? What is making the container ships and airplanes that deliver them go?
Silicon Valley is located in California, which was one of the first regions in the world to commercialize refined petroleum products at scale. To this day, California, though famous for its environmental regulations and "green industries" like Tesla, remains a significant source of "dead dinosaur juice." Silicon Valley is so-named because it used to be as Taiwan is today, the preeminent manufacturing hub for a very material thing: silicon chips. Mined from the earth and then manufactured into delicate instruments with exacting precision using massive amounts of energy from the oil wells down south. The legacy of this persists today: the sleek corporate campuses of Silicon Valley still sit atop some Superfund sites and are still reached by Stanford graduates in cars and Google Buses mostly powered by gasoline. Their world of bits and code is still a material one, built atop an empire of oil.
Energy isn't evenly distributed. The English industrial revolution was built on rich seams of coal, like the current Chinese one is. The United States has been blessed with the black rocks, as well as an even more valuable black liquid: petroleum. Other advanced economies (e.g. Germany and Japan) also lean heavily on coal, but have entirely outstripped their own indigenous supply and are perilously dependent on imports, oftentimes from potential adversaries or vulnerable supply lines.
Green generation technologies can be more evenly distributed, yes, but they are like batteries. They must be created with a massive infusion of energy, up front. Energy that, right now, is created by consuming other dense, material stores of energy. They are essentially energy that has been "stored" in a generation medium (PV, wind turbine, hydroelectric dam, or nuclear plant). They harvest energy from the sun, wind, water flow, or atomic bonds of atoms... but only after we expend massive amounts of energy from other sources creating, feeding, and maintaining them. Where does that initial energy come from?
And, unfortunately, current green energy technology doesn't create a perpetual energy flywheel. Nuclear power plants take decades to build and only last as long before decommissioning (again, another extremely energy-intensive process). Solarvoltaics last up to 30 years, but with decreasing performance. Turbines, subject to extreme forces, last much less long. Li-Ion batteries last mere years. So, again, green energy is more like a battery than a lump of coal. You fill it up with energy up front, use it for a while, and then must replace it. This is a tyranny of physics that isn't addressed in your model.
Yes, my label for tech is a very inclusive one. It means all productivity improvements.
You're right that it's not totally disembodied. My point was more that, over time, we do become more and more disembodied. Case in point, what will happen with fusion.
All of that doesn't take away from anything you say. I'd in fact expand on it. Energy is one of these core drivers of history. Some other include information mgmt (money, writing, printing press, capitalism, broadcasting, internet, mobile phone...), war, or transport.
I'm exploring these, and hope to publish on them soon! Do you have good sources that systematically cover the history of energy? Would love to read them.
Energy, I believe, is mostly covered by technology in Tomas Pueyo's model.
With regards to nuclear: Nuclear plants can run for a very long time, 70s light water reactors will most likely achieve 80 years if allowed to (and possibly more) with very good energy return on investment.
Another excellent piece… the study of network effects and the flywheel is something that is hard to understand as it requires systemic and cross discipline understanding. Have you given thought to how network modeling works for a variety of different Supply Chain, or Logistics, problems. This way of thinking may help connect Trade, Infrastructure, Technology, and Macro-policy trends forward.
Even networks of all kinds use these concepts. They would help to identify the “success factors” or to explain some of the “why did this/will this happen”.
Tomas, most of my reading would be more related to development of economic clusters (vs flywheel). in a company context the flywheel is the result of strategic clarity (simple set of key priorities) and focus on executing - the plan itself “morphs” with learning and adaptation. in a broader industry setting (applicable beyond current view of tech companies), the growth of successful companies lead to pooling of critical resources that accelerates growth of new and existing firms - clusters.
Porter did some interesting work on industry and cluster development (maybe a bit dated but relevant). Let me noodle it a bit, as there are some industry specific stories (my grey matter will need a refresher).
one possible bubble that comes to mind (triggered from comments of other readers) is “talent pool” more so than general population … the development of education/critical skills is a huge accelerator … you refer to this in that with remote work our pool may globally expand … i suspect this is probably one of the most important future drivers …
First thanks for your writings, I read them all. This statement caught my eye: "Sedentary life comes with huge benefits. For one thing, you may have much more time in your hands since you don’t have to search for food and move. More importantly, you can accumulate wealth." I am listening to an Ezra Klein podcast with James Suzman where he describes "hunter-gatherer societies like the Ju/’hoansi spent only about 15 hours a week meeting their material needs despite being deeply impoverished by modern standards." He goes on at some length but points out that settling down and farming is way more labor intensive and the concept of "wealth" is a cultural one. Interesting hearing both sides, I highly recommend the podcast.
I've looked into this for a reasonable amount of time. I will write on the topic soon, and will have a section on this in my upcoming premium article. The short is that I think that life has been portrayed as being much rosier than it is, and that the path taken is portrayed as being a choice rather than a result of local conditions.
I also think it's a projection of our own desires—which I believe are well founded. We should want a society that is more equitable, requires less work, and is willfully sustainable. Doesn't mean they were.
Indeed, the concept of wealth is mostly a human one, so logically will vary according to culture. I think Tomas is using the word wealth in this article to mean something along the lines of human and physical capital rather than financial wealth. Concepts of individual ownership and monetary systems developed later as societies became bigger and more specialised.
Yuval Harari makes a similar point in "Sapiens." Hunters-gatherers were leading healthier and happier lives than farmers-herders since the Agricultural Revolution 12,000 years ago. Sedentary life did not provide significant benefits for a long time. We are now reaping the benefits of their sacrifice: the Industrial Revolution 200 years ago and modern technologies would not be possible if we remained migratory.
When I was reading Harari I was struck by an obvious point that I have not thought of before. I used to associate the hunter-gatherers' food supply with fighting saber-tooth tigers. In fact, it was much simpler: they had easy food in the form of insects and small animals. And they could roast in fire carcasses of animals left after large animals had their pick. On the surface, this seems easier than tending fields.
Comparisons to modern hunter-gatherers can be misleading. Harari's points are that (1) there was a tremendous diversity in prehistoric hunter-gatherers' lives and (2) the surviving groups live in places that farmers-herders rejected.
I agree. The hunter gatherer lifestyle worked well and in general people don't change the way they do things unless there are strong incentives. I think the incentive wasn't saber-tooth tigers, it was a much more dangerous animal...
One of the main ingredients to economic growth and power is abundant energy. With the advent of nuclear power, the decisive factor for energy access finally becomes technology (and to a limited extent wealth and trade) since you can build them almost anywhere with the right technology. Dry cooling towers do not even need water and you can make NPPs very earthquake resistant. Uranium can be economically extracted from seawater if using breeder reactors, removing almost all resource access limitatons.
We are now almost 6 months on the in the UTers project so I think it worth a brief reflection on the mission statement in this article.
The goal is to understand the trends that will shape the future and hopefully influence these in positive way.
To this end I made a commitment to produce a problem list which should then lead on to potential solutions and a plan of action.
As Tomas has pointed out, the thing we can have the most certainty about in life is our self, so it seemed sensible to first ask my self what the problem list should be. The answer I got was "you already know the problems and most of the solutions you idiot, so why on earth don't you just get on with putting them into action?" This might work on a small scale and spread, but way too slowly to influence the majority of the world in any meaningful way. So there are 10 more days of Christmas after today and I'll do my best to scatter some ideas into this community.
Of course mine is only one opinion amongst that of the other 7 billion odd people in the world. I realised there wasn't much point asking people around me as they already tell me their problems anyway if I'm prepared to listen ( FWIW I did ask a few people more specifically what they thought were the world's biggest problems). It occurred to me that it would be better to get as big a sample size as possible and perhaps weight it by years of remaining life expectancy....that is more your line than mine Tomas.
I also asked the Universe, but it didn't answer so I think it's a reasonable assumption is that it doesn't give two hoots about humanity's problems.
I asked the Earth and she said she had a bit of a problem with one of her species getting overly dominant, but she didn't seem too worried about it. I have a feeling she thinks the situation will sort itself out one way of the other, but probably not in what we would consider a nice way.
Finally, I tried to imagine what an "outsider" would say was humanity's biggest problem. And the answer was that humanity has developed the power to destroy itself, but hasn't developed the collective wisdom not to.
PS I reread the article above and I must have been smoking something when I first read it. I can't believe I let the assertion "it is cheaper than ever to create wealth out of thin air" go unchallenged. There is a reason your Xmas present was gold, Frankenstein and mirth Tomas!
In your article you explain how after the 1800 world GDP started an exponential growth. And in your previous article about the S curves we learned that everything that grows at some point stops doing it. Is this right, will world economic growth stop at some point? Is there a way to predict when? And what will the consequence be for the economy?
Not quite what I said, but it's a fantastic point.
GDP has 2 components: population and GDP per capita.
The population, as of today, is clearly looking like an S curve. It appears to slow down in growth in the 21st C, and by the end it might start shrinking. So there's a clear S curve there.
As for GDP per capita, it's unclear. Since it's a proxy for productivity, the question is how productive can we get? Some economists say there's a limit. I'm not sure, because of automation. The one data point we have is the US has been increasing its GDP/capita for over 150y at a rate of ~2% per year. To me, if that's an S curve, we won't know during our lifetime. It's likely that the exponential section will last at least that, probably more. So for all intents and purposes, I'd act as if GDP/capita was not an S curve, and hence GDP might keep growing exponentially during our lifetime.
Hi Tomas. Very interesting article, I really enjoyed reading it! There is this concept called the Malthusian economy that basically says that for most of human history until 1800, the increase in population resulted in a reduction in living standards, and that the only way to improve living conditions was actually when population was reduced (due to a pandemic or natural disaster). This is very well explained in this article: https://ourworldindata.org/breaking-the-malthusian-trap
How do you think this fits in your thesis and flywheel?
I think an importance nuance is that most surplus translated into more population, leaving GDP per capita constant. Living standards didn't go down. They were mostly stagnant. If you suddenly reduced the population, GDP didn't go down by as much, and hence GDP per capita increased.
We reached in the 1800s an escape velocity in network effects that made growth in GDP faster than in population, and we've kept there ever since. I think it would be hard to get back to it.
As you allude to in the comments below, the bubble that is missing from the network is perhaps one labelled competition/conflict. It arises partly as a consequence of population growth and can be a strong driver of technological development and financial wealth accumulation.
The underlying reason that competition and conflict arise of course is a much more basic one that I'm sure all of you are aware of....
One comment: I'm not entirely sure that classic China's development (up to and including inventions and the development of a huge state) can really be traced back to trade with other population/development centers.
It surely didn't hurt, but as opposed to other parts of the world, China really wasn't learning and incorporating ideas, inventions and commercial items until much more recently in recorded history (I'm no expert on China, but you could argue that the 18th or 19th century).
Absolutely. Of all the Eurasian civilizations, it's the one that was alone the longest. But with such a huge population, and without unification early on, it had its own huge network effects.
(less about the content, and more about article structure… Nobody gives a speech and says, "At the end of my speech, I'll give you an extra sentence about the previous sentence."
I'm currently not reading footnotes because they're almost worthless out of context.
I'd value and would read the footnote content if you put them in-context.
Hahaha oh man, yes, it's a pet peeve of mine too. I like how https://waitbutwhy.com/ solves it. I would do it differently, but I don't control Substack's interface.
I do have good news for you: if you click on the footnote number, you will travel directly to it. Once you're there, if you click again on the footnote number, it will take you back to where you were.
Thank you, Tomas, for a well-researched and impactful article. In comment-3 you are asking for other trends. An important trend is the expansion of cyber crime, propelled by the advances in ransomware and cryptocurrency payments. This is similar to the proliferation of pirates when the valuable good were transported across oceans.
One trend that I'd like to see is the reduction in the world population. Just as the explosion of technology made the availability of natural resources irrelevant, it seems that technology should also make economies less dependent on the population growth. But this is not happening. Political and religious reasons aside, China has reversed its one-child policy and Europe is lamenting its low population growth rates.
In the U.S., we are discussing the looming shortage of workers not being able to support the growth in retirees--and, at the same time, we are bouncing ideas about universal basic income to support those who can't work.
Technology should be able to solve retiree care problems. I saw some articles about Japan developing home-care robots, but I wonder why it's not more widely spread, why I don't see it in the U.S.
Indeed! I mention changes in warfare in passing, without enough comments. The top ones in mind are cybercrime, drones (including miniature ones), and space.
You're adding something interesting: the types of upcoming warfare change geopolitics.
In the Middle Ages, war was defensive because of things like castles and stirrups, and so feudalism emerged. After the invention of gunpowder, every person could be lethal, so bigger countries had an advantage because they could rally more people. The world wars were the best example of that. Weapons where a small amount of people can lethally impact millions, what kind of polity do they produce?
World populations --> Don't worry, that's coming. And quite fast. But my question to you: why would you want that? If it's for sustainability, it can be achieved with more people and better resource mgmt.
UBI + Retirees: yes indeed. And yet automation is supposed to help us function without the need for humans. It requires massive redistribution that the wealthy might not agree with.
Cyber crime and cyber warfare use the same tools but have different principals. Cyber warfare targets enemies of the state. Military organizations are sanctioned by their governments to collect and use cyber tools for offense and defense.
Cyber crime is committed by criminals. Some of them develop malware, some of them sell malware as a service, and some of them buy off-the-shelf malware to use it against public, foreign or domestic. Until recently, cyber crime did not pay much. But ransomware provides criminals with good income and cryptocurrency helps them to hide this income. The easier and the more lucrative it becomes, the more criminals are motivated to develop new versions, to set up business operations, and to use packages to target public.
Cyber warfare can be controlled by government mutual threats and agreements. Cyber crime is more difficult to control.
As for my concern about the population growth, I am skeptical that the world will have the will to manage the resources for "the greatest amount of good for the greatest number." The global COVID vaccine distribution is an example of how it fails. Also, it does not matter how many problems we can solve with technology; it will take one intractable problem to make life on the Earth highly unpleasant.
Taleb promotes redundancy as the primary means of reducing fragility. Today's capacity of the Earth has some redundancy to accommodate the current population and its need to migrate away from locations that become unlivable. But the more people we have, the smaller this redundancy becomes. I'd prefer to maintain larger margins.
I was just wondering if you would be able to help me understand the reasons behind a couple of important observations:
1. A brief analysis of the gender of people posting on Uncharted Territories reveals a strong skew towards men. There are a multitude of possible reasons, but I would be fascinated to hear your take on the issue.
2. I haven't noticed you posting recently. Even the merest hint as to why would be very useful to me.
1. With respect to the gender, I can interpret your question in two ways: (a) Why are there so few women in this group? (b) Why am I (a woman) in a group skewed towards men?
(a) I think the reason is early social pressures that steer women towards typical female interests and behaviors, and men towards typical male interests and behaviors. History, politics, analysis, statistics, logic are more typical interests for men than for women. Of course, there are exceptions, such as Cynthia Fisher whose post I see below yours.
(b) I have acquired some typical male interests when I was attending a high school that specialized in mathematics and physics. My class was 70% male, and "male interests" guided both how our classes were taught and how we socialized after school.
2. I like Tomas's writing and this group, and I try to post only when I think I have something new to add to the discussion. Paradoxically, I like Uncharted Territories so much that I did not want to subscribe to it, knowing that I would be spending too much time here. But your question forced me to think it over, and I am going to subscribe after I post this message.
Your reply is much appreciated. My original plan was to offer you a year's free subscription to UT on Tomas' behalf then try to convince him it was a really good idea.
If you do subscribe you may see:
1. The reason for my question
2. That I can fully sympathise with your reason for hesitating to subscribe. I have to remind myself sometimes that I do have a real job!
Thanks Tomás. Great read. I've been telling my kids for 10 years that they will need to be the generation that solves equitably the tremendous imbalances these trends are implying, and I see you've simplified that challenge in the end into selecting whether you're left behind, participating or leading... Sad joke apart, I will be anxiously awaiting next steps, and I hope you'll dig deeper into the wealth factor (of trade, of infrastructure, of technology development and control). And obviously into inequalities and their threats, as you hint above. I believe the cost of inequality will rise to the point they will need to be smoothened significantly, and do not doubt technology (i.e., in fine, US human beings) will be up to the task, but who and how?...
As Geoffrey Greene noted, you overlooked energy. I argue that one does not know the history of the 20th Century without understanding the history of oil. I highly recommend reading the Pulitzer Prize winner, The Prize: The Epic Quest for Oil, Money & Power by Daniel Yergin.
As Geoffrey Greene noted, you overlooked energy. I argue that one does not know the history of the 20th Century without understanding the history of oil. I highly recommend reading the Pulitzer Prize winner, The Prize: The Epic Quest for Oil, Money & Power by Daniel Yergin.
You may have seriously neglected or at least underweighted a key variable in the flywheel: energy. There is a very direct relationship between increasing density of energy for work and GDP growth. Most work used to be done by human bodies, until we domesticated animals like horses and oxen, and then developed technologies to make animal power more efficient (yokes, carts, horseshoes, etc.), and then stalled for centuries after that. Which is why GDP only increased 0.01% per year and population growth was gradual and extremely variable. What changed in the 18th Century? Coal and then the steam engine, of course. But even before that, there was also the mini-revolution of wind and water-wheels, which created a boon in Europe in the late Middle Ages and were a contributing factor to the Renaissance.
Dense sources of energy for work continue to be key for the "technology eating the world," which you (incorrectly) assert a miraculous immateriality. At the far end of every Google search is ultimately organic matter that was densely compacted into energy-rich muck over the eons in a few choice locations on the planet.
Google, like the Internet itself, is a dense web of servers and fiber optic cables. It is material. It is also energy. The solar PVs that will "solve" the issue of freshwater's uneven distribution are energy embodied. They are created from silica, which is mined through an energy-dense process in places like Western China. Places are are desperate for the coal, diesel, and other energy-dense mediums that make technology and its cheap mass production possible.
Israel, Singapore, and the mega-region around London are fed be unimaginable amounts of energy, almost all of it imported in some manner. They do not exist in an energy vacuum. Where does their electricity come from? Where do all the computers come from? What is making the container ships and airplanes that deliver them go?
Silicon Valley is located in California, which was one of the first regions in the world to commercialize refined petroleum products at scale. To this day, California, though famous for its environmental regulations and "green industries" like Tesla, remains a significant source of "dead dinosaur juice." Silicon Valley is so-named because it used to be as Taiwan is today, the preeminent manufacturing hub for a very material thing: silicon chips. Mined from the earth and then manufactured into delicate instruments with exacting precision using massive amounts of energy from the oil wells down south. The legacy of this persists today: the sleek corporate campuses of Silicon Valley still sit atop some Superfund sites and are still reached by Stanford graduates in cars and Google Buses mostly powered by gasoline. Their world of bits and code is still a material one, built atop an empire of oil.
Energy isn't evenly distributed. The English industrial revolution was built on rich seams of coal, like the current Chinese one is. The United States has been blessed with the black rocks, as well as an even more valuable black liquid: petroleum. Other advanced economies (e.g. Germany and Japan) also lean heavily on coal, but have entirely outstripped their own indigenous supply and are perilously dependent on imports, oftentimes from potential adversaries or vulnerable supply lines.
Green generation technologies can be more evenly distributed, yes, but they are like batteries. They must be created with a massive infusion of energy, up front. Energy that, right now, is created by consuming other dense, material stores of energy. They are essentially energy that has been "stored" in a generation medium (PV, wind turbine, hydroelectric dam, or nuclear plant). They harvest energy from the sun, wind, water flow, or atomic bonds of atoms... but only after we expend massive amounts of energy from other sources creating, feeding, and maintaining them. Where does that initial energy come from?
And, unfortunately, current green energy technology doesn't create a perpetual energy flywheel. Nuclear power plants take decades to build and only last as long before decommissioning (again, another extremely energy-intensive process). Solarvoltaics last up to 30 years, but with decreasing performance. Turbines, subject to extreme forces, last much less long. Li-Ion batteries last mere years. So, again, green energy is more like a battery than a lump of coal. You fill it up with energy up front, use it for a while, and then must replace it. This is a tyranny of physics that isn't addressed in your model.
You are 100% on point. Thank you!
Yes, my label for tech is a very inclusive one. It means all productivity improvements.
You're right that it's not totally disembodied. My point was more that, over time, we do become more and more disembodied. Case in point, what will happen with fusion.
All of that doesn't take away from anything you say. I'd in fact expand on it. Energy is one of these core drivers of history. Some other include information mgmt (money, writing, printing press, capitalism, broadcasting, internet, mobile phone...), war, or transport.
I'm exploring these, and hope to publish on them soon! Do you have good sources that systematically cover the history of energy? Would love to read them.
Thx!
Energy, I believe, is mostly covered by technology in Tomas Pueyo's model.
With regards to nuclear: Nuclear plants can run for a very long time, 70s light water reactors will most likely achieve 80 years if allowed to (and possibly more) with very good energy return on investment.
I wonder when we will have our own home fusion reactors. And it is a when question.
This reminds me of this interactive simulation: https://ncase.me/loopy/
This is amazing. Super fun to play with
I am definitely going to use this. Thanks!
Another excellent piece… the study of network effects and the flywheel is something that is hard to understand as it requires systemic and cross discipline understanding. Have you given thought to how network modeling works for a variety of different Supply Chain, or Logistics, problems. This way of thinking may help connect Trade, Infrastructure, Technology, and Macro-policy trends forward.
Even networks of all kinds use these concepts. They would help to identify the “success factors” or to explain some of the “why did this/will this happen”.
Flywheels are at the root of the most successful tech companies. That's the context in which I've studied them.
Do you know good pieces about flywheels?
Tomas, most of my reading would be more related to development of economic clusters (vs flywheel). in a company context the flywheel is the result of strategic clarity (simple set of key priorities) and focus on executing - the plan itself “morphs” with learning and adaptation. in a broader industry setting (applicable beyond current view of tech companies), the growth of successful companies lead to pooling of critical resources that accelerates growth of new and existing firms - clusters.
Porter did some interesting work on industry and cluster development (maybe a bit dated but relevant). Let me noodle it a bit, as there are some industry specific stories (my grey matter will need a refresher).
one possible bubble that comes to mind (triggered from comments of other readers) is “talent pool” more so than general population … the development of education/critical skills is a huge accelerator … you refer to this in that with remote work our pool may globally expand … i suspect this is probably one of the most important future drivers …
we can’t do anything without people!!
Agreed. I would put talent pool under the general heading of human capital, though there are lots of other subsets under that general heading.
First thanks for your writings, I read them all. This statement caught my eye: "Sedentary life comes with huge benefits. For one thing, you may have much more time in your hands since you don’t have to search for food and move. More importantly, you can accumulate wealth." I am listening to an Ezra Klein podcast with James Suzman where he describes "hunter-gatherer societies like the Ju/’hoansi spent only about 15 hours a week meeting their material needs despite being deeply impoverished by modern standards." He goes on at some length but points out that settling down and farming is way more labor intensive and the concept of "wealth" is a cultural one. Interesting hearing both sides, I highly recommend the podcast.
Thanks for asking! Such a fascinating debate.
I've looked into this for a reasonable amount of time. I will write on the topic soon, and will have a section on this in my upcoming premium article. The short is that I think that life has been portrayed as being much rosier than it is, and that the path taken is portrayed as being a choice rather than a result of local conditions.
I also think it's a projection of our own desires—which I believe are well founded. We should want a society that is more equitable, requires less work, and is willfully sustainable. Doesn't mean they were.
Indeed, the concept of wealth is mostly a human one, so logically will vary according to culture. I think Tomas is using the word wealth in this article to mean something along the lines of human and physical capital rather than financial wealth. Concepts of individual ownership and monetary systems developed later as societies became bigger and more specialised.
Yes, thank you.
Yuval Harari makes a similar point in "Sapiens." Hunters-gatherers were leading healthier and happier lives than farmers-herders since the Agricultural Revolution 12,000 years ago. Sedentary life did not provide significant benefits for a long time. We are now reaping the benefits of their sacrifice: the Industrial Revolution 200 years ago and modern technologies would not be possible if we remained migratory.
Comment on this above. Yes, I love Harari, but I think he got that one wrong.
When I was reading Harari I was struck by an obvious point that I have not thought of before. I used to associate the hunter-gatherers' food supply with fighting saber-tooth tigers. In fact, it was much simpler: they had easy food in the form of insects and small animals. And they could roast in fire carcasses of animals left after large animals had their pick. On the surface, this seems easier than tending fields.
Comparisons to modern hunter-gatherers can be misleading. Harari's points are that (1) there was a tremendous diversity in prehistoric hunter-gatherers' lives and (2) the surviving groups live in places that farmers-herders rejected.
I agree. The hunter gatherer lifestyle worked well and in general people don't change the way they do things unless there are strong incentives. I think the incentive wasn't saber-tooth tigers, it was a much more dangerous animal...
One of the main ingredients to economic growth and power is abundant energy. With the advent of nuclear power, the decisive factor for energy access finally becomes technology (and to a limited extent wealth and trade) since you can build them almost anywhere with the right technology. Dry cooling towers do not even need water and you can make NPPs very earthquake resistant. Uranium can be economically extracted from seawater if using breeder reactors, removing almost all resource access limitatons.
Fits well with your model!
We are now almost 6 months on the in the UTers project so I think it worth a brief reflection on the mission statement in this article.
The goal is to understand the trends that will shape the future and hopefully influence these in positive way.
To this end I made a commitment to produce a problem list which should then lead on to potential solutions and a plan of action.
As Tomas has pointed out, the thing we can have the most certainty about in life is our self, so it seemed sensible to first ask my self what the problem list should be. The answer I got was "you already know the problems and most of the solutions you idiot, so why on earth don't you just get on with putting them into action?" This might work on a small scale and spread, but way too slowly to influence the majority of the world in any meaningful way. So there are 10 more days of Christmas after today and I'll do my best to scatter some ideas into this community.
Of course mine is only one opinion amongst that of the other 7 billion odd people in the world. I realised there wasn't much point asking people around me as they already tell me their problems anyway if I'm prepared to listen ( FWIW I did ask a few people more specifically what they thought were the world's biggest problems). It occurred to me that it would be better to get as big a sample size as possible and perhaps weight it by years of remaining life expectancy....that is more your line than mine Tomas.
I also asked the Universe, but it didn't answer so I think it's a reasonable assumption is that it doesn't give two hoots about humanity's problems.
I asked the Earth and she said she had a bit of a problem with one of her species getting overly dominant, but she didn't seem too worried about it. I have a feeling she thinks the situation will sort itself out one way of the other, but probably not in what we would consider a nice way.
Finally, I tried to imagine what an "outsider" would say was humanity's biggest problem. And the answer was that humanity has developed the power to destroy itself, but hasn't developed the collective wisdom not to.
PS I reread the article above and I must have been smoking something when I first read it. I can't believe I let the assertion "it is cheaper than ever to create wealth out of thin air" go unchallenged. There is a reason your Xmas present was gold, Frankenstein and mirth Tomas!
In your article you explain how after the 1800 world GDP started an exponential growth. And in your previous article about the S curves we learned that everything that grows at some point stops doing it. Is this right, will world economic growth stop at some point? Is there a way to predict when? And what will the consequence be for the economy?
Not quite what I said, but it's a fantastic point.
GDP has 2 components: population and GDP per capita.
The population, as of today, is clearly looking like an S curve. It appears to slow down in growth in the 21st C, and by the end it might start shrinking. So there's a clear S curve there.
As for GDP per capita, it's unclear. Since it's a proxy for productivity, the question is how productive can we get? Some economists say there's a limit. I'm not sure, because of automation. The one data point we have is the US has been increasing its GDP/capita for over 150y at a rate of ~2% per year. To me, if that's an S curve, we won't know during our lifetime. It's likely that the exponential section will last at least that, probably more. So for all intents and purposes, I'd act as if GDP/capita was not an S curve, and hence GDP might keep growing exponentially during our lifetime.
Makes sense?
Hi Tomas. Very interesting article, I really enjoyed reading it! There is this concept called the Malthusian economy that basically says that for most of human history until 1800, the increase in population resulted in a reduction in living standards, and that the only way to improve living conditions was actually when population was reduced (due to a pandemic or natural disaster). This is very well explained in this article: https://ourworldindata.org/breaking-the-malthusian-trap
How do you think this fits in your thesis and flywheel?
I think an importance nuance is that most surplus translated into more population, leaving GDP per capita constant. Living standards didn't go down. They were mostly stagnant. If you suddenly reduced the population, GDP didn't go down by as much, and hence GDP per capita increased.
We reached in the 1800s an escape velocity in network effects that made growth in GDP faster than in population, and we've kept there ever since. I think it would be hard to get back to it.
As you allude to in the comments below, the bubble that is missing from the network is perhaps one labelled competition/conflict. It arises partly as a consequence of population growth and can be a strong driver of technological development and financial wealth accumulation.
The underlying reason that competition and conflict arise of course is a much more basic one that I'm sure all of you are aware of....
...or comments above in chronological order.
One comment: I'm not entirely sure that classic China's development (up to and including inventions and the development of a huge state) can really be traced back to trade with other population/development centers.
It surely didn't hurt, but as opposed to other parts of the world, China really wasn't learning and incorporating ideas, inventions and commercial items until much more recently in recorded history (I'm no expert on China, but you could argue that the 18th or 19th century).
Absolutely. Of all the Eurasian civilizations, it's the one that was alone the longest. But with such a huge population, and without unification early on, it had its own huge network effects.
(less about the content, and more about article structure… Nobody gives a speech and says, "At the end of my speech, I'll give you an extra sentence about the previous sentence."
I'm currently not reading footnotes because they're almost worthless out of context.
I'd value and would read the footnote content if you put them in-context.
Hahaha oh man, yes, it's a pet peeve of mine too. I like how https://waitbutwhy.com/ solves it. I would do it differently, but I don't control Substack's interface.
I do have good news for you: if you click on the footnote number, you will travel directly to it. Once you're there, if you click again on the footnote number, it will take you back to where you were.
Thank you, Tomas, for a well-researched and impactful article. In comment-3 you are asking for other trends. An important trend is the expansion of cyber crime, propelled by the advances in ransomware and cryptocurrency payments. This is similar to the proliferation of pirates when the valuable good were transported across oceans.
One trend that I'd like to see is the reduction in the world population. Just as the explosion of technology made the availability of natural resources irrelevant, it seems that technology should also make economies less dependent on the population growth. But this is not happening. Political and religious reasons aside, China has reversed its one-child policy and Europe is lamenting its low population growth rates.
In the U.S., we are discussing the looming shortage of workers not being able to support the growth in retirees--and, at the same time, we are bouncing ideas about universal basic income to support those who can't work.
Technology should be able to solve retiree care problems. I saw some articles about Japan developing home-care robots, but I wonder why it's not more widely spread, why I don't see it in the U.S.
Victoria
Indeed! I mention changes in warfare in passing, without enough comments. The top ones in mind are cybercrime, drones (including miniature ones), and space.
You're adding something interesting: the types of upcoming warfare change geopolitics.
In the Middle Ages, war was defensive because of things like castles and stirrups, and so feudalism emerged. After the invention of gunpowder, every person could be lethal, so bigger countries had an advantage because they could rally more people. The world wars were the best example of that. Weapons where a small amount of people can lethally impact millions, what kind of polity do they produce?
World populations --> Don't worry, that's coming. And quite fast. But my question to you: why would you want that? If it's for sustainability, it can be achieved with more people and better resource mgmt.
UBI + Retirees: yes indeed. And yet automation is supposed to help us function without the need for humans. It requires massive redistribution that the wealthy might not agree with.
Cyber crime and cyber warfare use the same tools but have different principals. Cyber warfare targets enemies of the state. Military organizations are sanctioned by their governments to collect and use cyber tools for offense and defense.
Cyber crime is committed by criminals. Some of them develop malware, some of them sell malware as a service, and some of them buy off-the-shelf malware to use it against public, foreign or domestic. Until recently, cyber crime did not pay much. But ransomware provides criminals with good income and cryptocurrency helps them to hide this income. The easier and the more lucrative it becomes, the more criminals are motivated to develop new versions, to set up business operations, and to use packages to target public.
Cyber warfare can be controlled by government mutual threats and agreements. Cyber crime is more difficult to control.
As for my concern about the population growth, I am skeptical that the world will have the will to manage the resources for "the greatest amount of good for the greatest number." The global COVID vaccine distribution is an example of how it fails. Also, it does not matter how many problems we can solve with technology; it will take one intractable problem to make life on the Earth highly unpleasant.
Taleb promotes redundancy as the primary means of reducing fragility. Today's capacity of the Earth has some redundancy to accommodate the current population and its need to migrate away from locations that become unlivable. But the more people we have, the smaller this redundancy becomes. I'd prefer to maintain larger margins.
I was just wondering if you would be able to help me understand the reasons behind a couple of important observations:
1. A brief analysis of the gender of people posting on Uncharted Territories reveals a strong skew towards men. There are a multitude of possible reasons, but I would be fascinated to hear your take on the issue.
2. I haven't noticed you posting recently. Even the merest hint as to why would be very useful to me.
I hope things are going well for you,
Mark
Hi Mark,
1. With respect to the gender, I can interpret your question in two ways: (a) Why are there so few women in this group? (b) Why am I (a woman) in a group skewed towards men?
(a) I think the reason is early social pressures that steer women towards typical female interests and behaviors, and men towards typical male interests and behaviors. History, politics, analysis, statistics, logic are more typical interests for men than for women. Of course, there are exceptions, such as Cynthia Fisher whose post I see below yours.
(b) I have acquired some typical male interests when I was attending a high school that specialized in mathematics and physics. My class was 70% male, and "male interests" guided both how our classes were taught and how we socialized after school.
2. I like Tomas's writing and this group, and I try to post only when I think I have something new to add to the discussion. Paradoxically, I like Uncharted Territories so much that I did not want to subscribe to it, knowing that I would be spending too much time here. But your question forced me to think it over, and I am going to subscribe after I post this message.
Your reply is much appreciated. My original plan was to offer you a year's free subscription to UT on Tomas' behalf then try to convince him it was a really good idea.
If you do subscribe you may see:
1. The reason for my question
2. That I can fully sympathise with your reason for hesitating to subscribe. I have to remind myself sometimes that I do have a real job!
Thank you, Mark!
I subscribed as soon as I finished my response to you. As I have anticipated, I am now reading Tomas's articles instead of my planned activities.
I hope Tomas's productivity robs off on his readers.
Cheers,
Victoria
Warfare and technology are inextricably linked. The art of warfare used to be dependent on geography, but technology has "solved" that "problem".
Thanks Tomás. Great read. I've been telling my kids for 10 years that they will need to be the generation that solves equitably the tremendous imbalances these trends are implying, and I see you've simplified that challenge in the end into selecting whether you're left behind, participating or leading... Sad joke apart, I will be anxiously awaiting next steps, and I hope you'll dig deeper into the wealth factor (of trade, of infrastructure, of technology development and control). And obviously into inequalities and their threats, as you hint above. I believe the cost of inequality will rise to the point they will need to be smoothened significantly, and do not doubt technology (i.e., in fine, US human beings) will be up to the task, but who and how?...
I think inequality is the main problem our society will face, as we are in a vicious circle of inequality.
A situation of extreme inequality can lead to general discontent and even threaten democratic values, as said by Piketty.
Tax havens and cryptocurrencies do nothing to resolve the situation.
They worsen it.
As you point out, there's so much to cover, and I don't yet have all the answers. That's exactly why I'm writing this newsletter!
As Geoffrey Greene noted, you overlooked energy. I argue that one does not know the history of the 20th Century without understanding the history of oil. I highly recommend reading the Pulitzer Prize winner, The Prize: The Epic Quest for Oil, Money & Power by Daniel Yergin.
As Geoffrey Greene noted, you overlooked energy. I argue that one does not know the history of the 20th Century without understanding the history of oil. I highly recommend reading the Pulitzer Prize winner, The Prize: The Epic Quest for Oil, Money & Power by Daniel Yergin.