Monday, September 23, 2013

Energy or Innovation???

Last time we saw that your view of human progress rests on whether you believe that the defining factor in history has been energy, or whether it has been innovation.

The tricky part is that energy and innovation are fundamentally intertwined. You need to innovate to get at and use energy. Without the innovation, the energy is useless. Coal, oil and natural gas lay under the ground for all of human history before we gained the knowledge to extract them and put them to use through technology. Thus the union of both seems fundamentally central to the narrative.

The analogy of a car is often used. A can of gas by itself is pretty useless; even firewood would be more convenient to burn. At the same time, a car represents a massive investment in materials, technology and innovation. Yet even the most sophisticated car would sit there idle and useless without the energy from that can of gas poured into its tank. Take away either one, and you are left with nothing of much use to anybody. Put both together and you have a miracle. the Industrial Revolution represents a union of both.

It also acts as a self-reinforcing spiral. The first fossil fuels were easy to get at. They drove a frenzy of innovation that made it possible to get at the harder to find oil. The technology required to build a drilling platform and drill a mile under the ocean or break up rocks with high-pressure liquid and sand would not be possible were it not for the knowledge and innovations unleashed by the earlier, easier to find fuel.

Complicating this picture even further is that scientific revolution came along at roughly the same time. The signature achievement of the Second Industrial Revolution was the systematic application of the scientific method to technological development*. So “innovation” as we know it is mainly related this last event.

So where to unwind these things - The use of new technology and engines to do human work, the use of the scientific method to solve problems, the discovery and use of a massive, energy-dense fuel source, colonialism, and the institutional and economic arrangements that encouraged these developments and created capitalism, mass production, globalism, and the consumer society? Technological innovation, capitalism, the scientific method, the control over "undeveloped" parts of the world, and fossil fuel energy all joined to create the world as we know it today. But which way does the arrow of causality run?

Economists tend to ignore energy and resources entirely and focus solely on innovation. They believe that technology, capital and labor combine to produce living standards. Just as breaking the Malthusian trap allowed us to be free of the "limiting factor" of land, they also believe that technology freed us from the limitations of energy, paradoxically at the very time we use ever more of it than ever before. But in truth,  Isn't fossil fuel energy what liberated us from being dependant upon land (which was the principal method of harvesting solar energy for most our our history)? And if so, why do economists stubbornly ignore it? Shouldn't it be essential in the story of humanity since 1870?

For example, I posted this TED talk from Andrew McAfee before, where at one point he puts up a chart and declares that “The entire human story has been one of technology.” I pointed out at the time that the exponential growth seen at the chart also corresponded with the widespread use of fossil fuels. Someone else could put up the exact same chart and say that "the entire history of the human race has been the discovery of cheap, abundant, energy-dense, easily accessible energy sources," and seem to prove the exact same point as Mr. McAfee. Again, the intertwining is hard to separate.

A problem with the innovations story as the central driver of escaping the Malthusian trap is that innovation hardly started in 1870, 1776 or 1601. Humans have been innovating for our entire history as a species, since we started using stone tools and fire to procure food. Ancient Romans used concrete superior to today’s, “nanotechnology” to make glass, and water wheels at Barbegal to churn out enough loaves of bread to feed the urban masses. All these discoveries were eventually lost. Ancient cranes and lifting devices built the Pyramids and the Colosseum. The Middle Ages saw an agricultural revolution with horseshoes, the horse collar, nitrogen-fixing crops, three-field crop rotation and windmills. The Chinese were by far the most innovative society on the planet, inventing sophisticated water clocks, the compass, block printing, paper money, flight (airborne lanterns as far back as c.200 AD), crossbows and gunpowder. The Chinese drilled down hundreds of feet to harness natural gas as far back as the Han dynasty using bamboo pipelines to carry fuel and mix it with air to create burners for salt production from brine. Yet without unlocking the secret of large-scale fossil fuel use and industrialization, their society stagnated and went through periods of expansion and decline. Low Tech Magazine does a good job of documenting all the innovations that took place in power generation, transportation and communications prior to the First Industrial Revolution.

My instinct is that some of these things are backwards. I suspect the institutional reforms were as much brought about by our technical capabilities, as facilitating them. I also suspect that the the New World (and Australia, et. al.) provided the necessary "release valve" for the Industrial Revolution to occur, something China and Japan did not have. It was the New World that weakened the power of elites. After all, you can't compel people to give up their rights and the fruits of their labor if they can just pack up and go somewhere else with no king or extractive elites (cf. Carneiro's circumscription theory). It's also hard for elites to control resources when they are abundant relative to population (land, timber, mines, etc).

It is also well known that governments expanded due to wider trading regimes, not the other way around. Similarly, it was the energy allowed by harnessing fossil fuels that allowed a surplus, which allowed further and increasing innovation to occur. This surplus lead to innovation as much as innovation led to a surplus. The application of the scientific method came later in the game, and the scientific method itself was probably in large part a product of this surplus as well (lots of folks with time on their hands). At the same time, some technological changes, like the printing press, also facilitated the scientific revolution. And an awful lot of the critical scientific discoveries were made in order to facilitate trade (in geography, astronomy, mechanics, etc.) It's a series of feedback loops within feedback loops.

Gregory Clark points out that the conditions that preceded the Industrial Revolution were not unique given the vast range of human economic and social arrangements throughout history. Every "unique" development in 18th century England has some precedent since the rise of civilization. This is a blow to the "organizational" theory of the Industrial Revolution put forward by people like Joel Mokyr. Clark's  contention is that evolutionary pressures working over thousands of years took their time to transform people into cooperative, nonviolent, rational utility-maximizing, low time-preference savers rather than people just focused on basic survival in the here-and-now (i.e. changing grasshoppers into ants). But perhaps the critical factor wasn't so much the people, but the energy source.

That energy source was so large and so abundant, that we could "outrun" the Malthusian world. As Nate Hagens and Chris Martenson pointed out, the energy we have released was so abundant that our living standards soared so far ahead that we made the quantum leaps described. That is, we confused the effects for the cause.England had the three 'C's': capital, colonies and coal.

The question is, take away the energy, and will we still be able to live in the world as we have known it, or will we slide back to Malthusian limits?

It's not an academic question. The reason it seems so urgent is because we're seeing environmental destruction on a planetary scale. We're seeing a rise in the price of basic resources. We're seeing climate change, droughts and resource wars. And we're seeing a stagnation of incomes and a marked increase in income inequality. We're seeing the return of extractive hereditary elites, predatory institutions and debt peonage. Even scientific understanding seems to be on the wane among the "Jesus haunted masses." We seem to be regressing already. As this article poignantly puts it:
When I was growing up, it was assumed that America’s shared prosperity was the natural endpoint of our economy’s development, that capitalism had produced the workers paradise to which Communism unsuccessfully aspired. Now, with the perspective of 40 years, it’s obvious that the nonstop economic expansion that lasted from the end of World War II to the Arab oil embargo of 1973 was a historical fluke, made possible by the fact that the United States was the only country to emerge from that war with its industrial capacity intact. Unfortunately, the middle class – especially the blue-collar middle class – is also starting to look like a fluke, an interlude between Gilded Ages that more closely reflects the way most societies structure themselves economically. For the majority of human history – and in the majority of countries today – there have been only two classes: aristocracy and peasantry. It’s an order in which the many toil for subsistence wages to provide luxuries for the few. Twentieth century America temporarily escaped this stratification, but now, as statistics on economic inequality demonstrate, we’re slipping back in that direction. Between 1970 and today, the share of the nation’s income that went to the middle class – households earning two-thirds to double the national median – fell from 62 percent to 45 percent. Last year, the wealthiest 1 percent took in 19 percent of America’s income – their highest share since 1928. It’s as though the New Deal and the modern labor movement never happened.
R.I.P Middle Class (Salon)

As this post points out, wages aren't just stagnant, they're plummeting. As John Cassidy explains:
What these numbers show, or rather confirm, is that in economic terms much of middle America has experienced four lost decades. Since its founding, the United States has been a country based on enterprise, hard work, and material progress. But for forty years now, the engine that generates across-the-board rises in living standards has been stalled, with incomes stagnating at the bottom and in the middle while growing rapidly at the top.
And this trend has occurred around the world as wealth becomes more concentrated at the top. Some counties, particularly in the Eastern Mediterranean, are in a state of outright collapse. Others, from Spain through Iraq and Afghanistan and down into Africa, are very close. Is this a hiccup on the way to the Singularity? Or is this a terrifying new normal?

It almost seems like we're headed back to preindustrial social relations with all the technology of the modern world. We're at almost medieval levels of inequality, by some measures greater than in all of human history. This is masked, however, by the obscene levels of wealth and abundance procured by fossil fuels. We still have much more food, transportation, entertainment options and creature comforts than the distant past, even in a decreasing wealth situation. Yet we're still getting poorer compared to the very recent past.

Since 1870, the human population has exploded, to seven billion today, on course for ten billion.  Yet the energy available to use via fossil fuels has plateaued. We're innovating desperately to stay in place, but we're not increasing. Demand increase in Asia has been fueled by demand destruction in the developed economies. The rising middle classes in Asia are accompanied by much of the American heartland regressing to a third-world country of abandoned storefronts, foreclosed homes, broken windows, trailer parks, brothels and gangs in a brutal zero-sum game. But is this caused by a lack of energy, or something else? And will technology save us from this situation?

Technology is not some neutral force. Techno-optimists seem to think we have the will and social structure of army ants,  But we're not ants, we're small-group hierarchical primates whose minds were forged for survival on the savanna. If we were ants we could use we could use command-and-control top-down commands and turn on a dime. Instead, human societies have been vulnerable to dysfunction and collapse since the rise of civilization circa 10,000BC. If we look at a map of political boundaries from that time forward, the borders are constantly shifting. Even two hundred years ago the map looks completely different (no Germany and Italy, Austria-Hungary, Tibet is a separate country, the Middle East is the Ottoman empire, etc.)

For example, take the Hyperloop concept. No sooner was it proposed than people pointed out that not only was this proposal not new, but it would be nearly impossible to implement in practice thanks to all of the different parcels that would need to be bought, the governments that would need to cooperate, the funding that would need to be raised, etc. Even high-speed rail, an already existing technology present in Europe for decades, is unbuildable due to political corruption and dysfunction in the United States, much less a pneumatic tube train of the style proposed for decades. And what are the odds that the oil companies will let us tax carbon? Even the much-touted biofuels revolution is on the rails:
  By 2013, America was supposed to be burning nearly 3,800m litres a year of “cellulosic” biofuels made from woody plants.

 But instead of roaring into life, the biofuels industry stalled. Start-ups went bust, surviving companies scaled back their plans and, as prices of first-generation biofuels rose, consumer interest waned. [...] By 2012 America’s Environmental Protection Agency (EPA) had slashed the 2013 target for cellulosic biofuels to just 53m litres.
Making a second-generation biofuel means overcoming three challenges. The first is to break down woody cellulose and lignin polymers into simple plant sugars. The second is to convert those sugars into drop-in fuels to suit existing vehicles, via a thermochemical process (using catalysts, extreme temperatures and high pressures) or a biochemical process (using enzymes, natural or synthetic bacteria, or algae). The third and largest challenge is to find ways to do all this cheaply and on a large scale.
In 2008 Shell, an energy giant, was working on ten advanced biofuels projects. It has now shut most of them down, and none of those that remain is ready for commercialisation. “All the technologies we looked at worked,” says Matthew Tipper, Shell’s vice-president for alternative energy. “We could get each to produce fuels at a lab scale and a demonstration scale.” But bringing biofuels to market proved to be slower and more costly than expected.

Even if second-generation processes can be economically scaled up, however, that might in turn highlight a further problem. To make a significant dent in the 2,500m litres of conventional oil that American refineries churn through each day, biofuel factories would have to be able to get hold of a staggering quantity of feedstock. Mr Ghisolfi of Beta Renewables points out that a factory with an annual output of 140m litres needs 350,000 tonnes of biomass a year to operate. “There are only certain areas, in Brazil and some parts of the US and Asia, where you can locate this much biomass within a close radius,” says Mr Ghisolfi. “I am sceptical of scaling to ten times that size, because getting 3.5m tonnes of biomass to a single collection point is going to be a very big undertaking.”
What happened to biofuels? Do they have a future? (Treehugger)

This is probably best summed up by The Onion:
Citing the fragile economy and an exceedingly volatile political landscape, many Americans told reporters they are now fairly certain that the chances of the United States spearheading global advancements within the likes of biotechnology, health care, or manufacturing are pretty much zilch.

“I always hear politicians talk about America being at the forefront of technological achievement, and it’s just now hitting me how completely absurd that sounds,” said 37-year-old Seattle resident Daniel Townsend. “They’ve been saying that stuff for years as if it’s always right around the corner. If we’ve really been at a crossroads with the next wave of cutting-edge innovation at our fingertips, wouldn’t we have seen at least one huge breakthrough by now? Like something more important and life-changing than a new type of phone?”

This kind of world, sources agreed, is just not happening anytime soon.

“God, even hearing myself say the words ‘next wave of cutting-edge innovation’ out loud makes the whole thing sound even more ridiculous,” Townsend added. “Can anyone honestly say they feel like America is leading the rest of the world into a bold new tomorrow?”

Saying that the United States pioneering daring advancements in clean air technology ain’t gonna happen now, not 10 years from now, not ever, millions of citizens also confirmed they are now coming to terms with the fact that a grand era of sustained American prosperity just isn’t in the cards.

“During the last election, I admittedly got really excited when Obama proposed things like a high-speed rail system, a modernized and more efficient national power grid, and affordable college educations for every American,” said physical therapist Chris Donner, 42, of Wilmington, DE. “But now that I’ve had a chance to sort of step back and calmly assess where we are as a country, I can say with full confidence that we’re not taking any bold leaps into a bright future anytime soon.”

“I still drive a car that runs on expensive gasoline along dilapidated, crumbling roads, I put my kids through an education system that’s as broken as ever, and my sister died of cancer last year,” Donner continued. “So, unless every other part of America is experiencing a bold resurgence that just hasn’t gotten to Wilmington yet, I can safely say I’ll be long dead before any of that happens.”

Though they conceded that more tax incentives for startup businesses and a $100 million initiative to map the human brain “sound great on paper,” many citizens reportedly admitted that such endeavors are seeming less and less likely to fuel a powerful new engine of American enterprise. Residents of all 50 states also told reporters they are gradually learning that greater incomes, higher-quality jobs, and vastly improved standards of living are not headed their way anytime soon.
Nation Starting To Realize New Era Of American Innovation Never Gonna Happen (The Onion)

Innovation does not occur in a vacuum but in a society that enables innovation. You need a certain amount of population, a certain amount of surplus, a certain amount of stability, etc. Thus, a higher number of people and more effective communications technologies enable innovation to take place. For example, Europe probably became a hotbed of innovation after the potato and the printing press enabled rapid population growth and sharing of ideas. If society regresses, so too does innovation. Population drops via disease, political instability, governmental dysfunction, civil wars and infighting, natural disasters such as drought, and social conflict between haves and have-nots have caused innovative societies to falter throughout history, and thus innovation to cease. The Romans’ technological innovation across a wide range of disciplines did not prevent their collapse. The roads and aqueducts were still there, it’s just that nobody used them anymore as they fragmented and fell apart. Can we be certain we will not meet a similar fate?

It was the innovations that allowed us to use fossil fuels that really allowed things to take off. Without those fossil fuels, and limited by the earth’s annual solar energy income, it’s doubtful that all the innovation in the world would have created the extraordinary abundance of the modern exponential growth economy, no matter how hard we tried to innovate our way out of Malthusian limits.

So perhaps we can say that our modern “innovative” societies have been enabled by fossil fuel use, not the other way around. And just as money cannot compound forever, neither can innovation. The extent that growth has been driven by fossil fuel use is debated, but people looking at the topic have pointed out the tight correlations between economic growth, population, and fossil fuel use.

Innovation should not be entirely dismissed however. We do things today much more efficiently and with far fewer resources than we did fifty years ago. Our cars need less gas. Our buildings use less energy. Our industrial processes use less water. We can use things like harvesting waste heat and co-generation to conserve power. We also have a huge cushion of waste to feed off of. We’ve established that forty percent of our food is wasted between farm and table, as well as about 70 percent of our electricity from the station to its destination. Finding more efficient ways of doing things is smart, and might fend of disaster, but it won’t create the kind of growth in living standards we’ve come to expect. I don’t think economists consider the rebound effect enough when they talk about innovation. In fact, innovation all too often allows us to use up resources even faster.

Now, I’ve begun to think of the two as countervailing forces. Innovation is pushing back against declining energy resources. For example hydraulic fracturing, algae-based fuels, nanomaterials, and efficiency measures are making us better off, but these are merely offsetting a more rapid decline caused by energy shortages. Innovation pushes back against resource depletion, sometimes scoring a victory, but a Pyrrhic one that will eventually be turned into a defeat. This means that the simple story of collapse or utopia is too simple. Innovation will allow us to intensify.  I think we might innovate our way down the energy curve. But that will not fix our problems.

I guess you could call me a short-term stagnationist and a long-term doomer. I think we will see innovations in the future that will affect our lives for the better. But I do think that we're in for stagnation and decline for a long time, followed by a consumption of prior resources in a catabolic collapse as progress grinds to a halt in the far future. And I think it will unfold over long periods of time and around the world in ways that are impossible to comprehend over a single lifetime. I think it will be an inverse Seneca Effect - the way down will be much slower than the way up, as we use our technology to find temporary solutions and quick fixes while we undertake the necessary social reforms as all else fails. This process will unfold very differently across the world.

I wish after all this I had a more definitive conclusion. I think this fundamental question, energy or innovation, needs further study for a more definitive answer. I'll give the last word, then, to this post on the perils of large-scale predictions:
In general, I believe that large-scale predictions about the course of history are highly questionable. There are several important reasons for this.

One reason for the failure of large-scale predictions about social systems is the complexity of causal influences and interactions within the domain of social causation. We may be confident that X causes Z when it occurs in isolated circumstances. But it may be that when U, V, and W are present, the effect of X is unpredictable, because of the complex interactions and causal dynamics of these other influences. This is one of the central findings of complexity studies -- the unpredictability of the interactions of multiple causal powers whose effects are non-linear.

Another difficulty -- or perhaps a different aspect of the same difficulty -- is the typical fact of path dependency of social processes. Outcomes are importantly influenced by the particulars of the initial conditions, so simply having a good idea of the forces and influences the system will experience over time does not tell us where it will wind up.

Third, social processes are sensitive to occurrences that are singular and idiosyncratic and not themselves governed by systemic properties.

Fourth, social events and outcomes are influenced by the actions of purposive actors. So it is possible for a social group to undertake actions that avert the outcomes that are otherwise predicted.

For these and other reasons, it is difficult to have any substantial confidence in predictions of the large course of change that a society, cluster of institutions, or population will experience. And this is a reason in turn to be skeptical about the spate of recent books about the planet's future.
Large predictions in history (Understanding Society)


  1. One of the most interesting elements here is the narcissism of the "innovation" and techno-optimist argument.
    They overplay their hand.

    They underestimate how easy it would be to lose the accumulated intellectual capital that they claim will save us. In fact, it's being lost as we speak. Our atrocious educational system is losing it now, fast.
    I'm at work, but I may comment later.
    Your recent series was very though-provoking.
    I'm still a doomer. The negative-feedback loops are still working, due to the system cannibalizing the poor, and the periphery. That consumption of muscle tissue is soon going to reach its limits, however. The core is not as safe as it thinks it is. Once the rot and poverty and misery hit the "real" core, the middle-classes still voting for the mainstream parties, and who think they will sit out this process -well, then it's game over, as the political collapse starts in earnest.

  2. The Malthusian die off has been happening for eons if you count man has been killing off other large mammals by encroaching on their territory where we don't belong, the article, the ocean...


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