2 ms·
In a labor-constrained setting, where the cost of labor is high, the cost of building the brick wall exceeds the recovery time period for most businesses. In a
by yourapostasy 11y ago
In a labor-constrained setting, where the cost of labor is high, the cost of building the brick wall exceeds the recovery time period for most businesses. In a capital-constrained setting, where the cost of capital is high, the interest rate is often too high to repay the loan soon enough for small businesses.
Unfortunately, in most urban settings, both labor and capital are priced at a premium, so you get hit on both sides. When/where this was used, capital might have been constrained, but labor was generally not.
Capital, when taking on the form of land inflation, inflates the cost of labor, and often beyond direct energy costs. You end up with perverse incentives where quickly burning energy in the short-term will temporarily (for a lifetime or so) put you ahead of the economic game but put you quite substantially behind on overall energy sustainability if you start discriminating energy sources on generational EROI. I am beginning to wonder if The Great Filter is simply that galaxy-wide, any spacefaring-capable species wiped themselves out by economically exhausting all their high-grade energy before getting into any position in space where transferring much higher capacity high-grade energy from their sun was feasible.