[Annotations] from Stuart Staniford’s Early Warning Blog

Posted: February 4, 2011 in Uncategorized

I’ve been following Stuart Staniford’s work for a while now and I’ve always found his quantitative & academic approach to “civilizational risks” to be well-reasoned and fairly easy to understand.

Below, I share some annotations from a recent post entitled “Long Term Trends in Economic Output.”

Basically, Staniford calls out Samuelson & Nordhaus (authors of a leading economics textbook) on some of the ridiculous premises upon which economics is built.  It irks me to no end the degree to which economics is flawed, and the extent to which politicians, business people, and other power brokers use this intellectual foundation to justify their errant policies & behaviours.

We need more people like Staniford who can see through the much of the fallacious thinking being taught by economists.

Early Warning: Long Term Trends in Economic Output

  • Samuelson and Nordhaus appear to believe that the main differences between pre-industrial economies and industrial economies were institutional improvements (i.e. medieval craft guilds that had prevented technological innovation were done away with, and people discovered the principle of division of labor, which improved productivity.)
  • The core difference between the pre-industrial era and the industrial era is the development of the steam engine, which allowed the economy to run at much higher EROEI, generating much larger surpluses, which in turn enabled all manner of other developments because most of the population could be freed up from directly working the land.
  • Note how the ups and downs of empires and dark ages before 1800 are barely visible, compared to what happened once you could power vehicles with fossil fuels.
  • It’s also striking how from the outset the book sets up a division into the major factors of production: “Labor”, “Land”, and “Capital”.  Then they explain hastily that these days, the “Land” factor is taken to include energy, minerals, etc.  Energy is a form of Land!
  • Economics is a very useful discipline and has developed many invaluable insights, but it has a blind spot a mile wide when it comes to energy.
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