8 ms·

I agree that it's impossible for the rates of economic growth and lifestyle improvements we saw since the late 1800s to continue indefinitely, but the key to gr

I agree that it's impossible for the rates of economic growth and lifestyle improvements we saw since the late 1800s to continue indefinitely, but the key to growth is investment. And from the late-1800s till the mid-1900s, there were huge government investments made in building new and innovative infrastructure in the US--railroads, the phone network, state universities and K-12 public education, electricity generation and distribution, highways, airports. Those investments in common infrastructure allowed private investment to piggyback and provide the enormous success the US economy has had in the time detailed. But today, we've forgotten the formula. Education funding is falling, basic maintenance isn't being performed on much of the infrastructure, and we aren't investing enough in the new things that can provide growth for the next hundred years. High-speed and light rail could help address the limits of airport and highway capacity, and provide better mobility in and between cities. Investing in clean electricity generation, a national power network, and improved battery technology could revolutionize how our homes and cars get their power. Very-low cost higher education was a thing in mid-20th-century America--it was possible to attend your in-state university for a few thousand bucks in today's dollars. What happened? As long as we pretend these things are too expensive to invest in, then we're sure to enter a long slow decline.

marcoperaza 10y ago
>Very-low cost higher education was a thing in mid-20th-century America--it was possible to attend your in-state university for a few thousand bucks in today's dollars. What happened? As long as we pretend these things are too expensive to invest in, then we're sure to enter a long slow decline. I don't think your point about education makes sense. You want more investment, but then bemoan the fact that it costs more, as if that signifies low investment. People are investing in their education at record levels! Maybe you think student loans are a problem for other reasons, but they certainly aren't stopping people from going to college. Again, they're going in record numbers and spending record money to do so.
- internaut 10y ago
  > People are investing in their education at record levels! They are investing in formal qualifications. Certificates. As Thiel points out, a university degree has transmogrified from "investment" to "insurance" to "tournament". The reality is that the previous generation knows jack shit about the environment facing the current generation. Their 'common sense' can be thrown out nearly entirely with few exceptions. In today's environment most of them wouldn't stand a chance.
  - marcoperaza 10y ago
    I agree actually, but state funding of higher education, as the GP is suggesting, would probably only further cement the current broken system.
    - marcoperaza 10y ago
      Edit: Not "would probably". It already is serving to entrench the current system.
paganel 10y ago
> What happened? As long as we pretend these things are too expensive to invest in, then we're sure to enter a long slow decline. I'll go on the Marxist side of things and say that "quantitative differences have turned out into qualitative ones". What I want to say is that scale matters. Regarding investment in higher-education, it was relatively ok and feasible to give Government subsidies for all the students attending university when only 1%-2% of the students finishing high-school were going to university (I think that happened up until the mid-50s, but maybe I'm wrong), but once you've got 30-50% of the students finishing high-school going to university then the money just isn't there anymore. And to add to that, it always baffled me how Malthus's name has always had such a bad reputation. The economics for handling a planet inhabited by 1.5 billion people in the late 1800s (we only reached 2 billion people in 1927) are totally different from the economics of a planet inhabited by 7+ billion people, going on 10. Our resources are finite, no matter how much we try to hide it.
- TeMPOraL 10y ago
  > And to add to that, it always baffled me how Malthus's name has always had such a bad reputation. The economics for handling a planet inhabited by 1.5 billion people in the late 1800s (we only reached 2 billion people in 1927) are totally different from the economics of a planet inhabited by 7+ billion people, going on 10. Our resources are finite, no matter how much we try to hide it. I still don't get how Malthus's name got that bad rep in the first place. As for the difference between the late 1800s and now, it's smaller that one may think. Back then people were hitting the ceiling of Earth's capability to feed people. We got through that, and grew beyond 2 billion people, thanks to a series of scientific and technological flukes, like Haber–Bosch process[0]. We were lucky then, this doesn't imply we'll be lucky this time. [0] - https://en.wikipedia.org/wiki/Haber_process https://en.wikipedia.org/wiki/Haber_process
  - harshreality 10y ago
    The implication is that some sort of population control might be necessary, if psych/soc pressures don't stabilize the population by themselves. Population control is antithetical to western individualistic values, so people reject the premise because one of the potential policy consequences (population control) causes an emotional melt-down. If desire to believe in an abstract principle is strong enough, facts will be rejected.
deleted 10y ago
[deleted]
bluetomcat 10y ago
This, and the wasteful misallocation of resources to bloated and unproductive industries like finance, insurance, advertising and entertainment.
- taneq 10y ago
  coughmilitarycough
- davidivadavid 10y ago
  How are these industries unproductive?
objectivistbrit 10y ago
> And from the late-1800s till the mid-1900s, there were huge government investments made in building new and innovative infrastructure in the US--railroads, the phone network, state universities and K-12 public education, electricity generation and distribution, highways, airports. Excluding the world wars, US government spending was much lower during that period than it is today. It increased greatly with the New Deal in the 30s, and has continued to increase until the present day. http://3.bp.blogspot.com/-ccxOaz-W_p0/UsgZkuJp-jI/AAAAAAAAARM/UTNEklb75JA/s1600/USfederalspend.png http://3.bp.blogspot.com/-ccxOaz-W_p0/UsgZkuJp-jI/AAAAAAAAAR... In the late 19th and early 20th centuries, there was huge private investment in infrastructure and basic research (e.g., Edison's research lab).
- conjectures 10y ago
  These are two different measures. It's entirely possible for governments to spend more money without building more infrastructure. Either by spending it on different things, or badly. So in this sense you can both be correct.
- dv_dt 10y ago
  Can you really exclude the wars? Wasn't a huge amount industrial infrastructure built up during WWII, and then re-used at a lower capital cost basis by industry for future production?
yummyfajitas 10y ago
According to wikipedia, more people than ever before are getting educated. https://en.wikipedia.org/wiki/File:Educational_Attainment_in_the_United_States_2009.png https://en.wikipedia.org/wiki/File:Educational_Attainment_in... Spending on infrastructure is going up. https://www.economy.com/dismal/analysis/free/254109 https://www.economy.com/dismal/analysis/free/254109 The issue is not lack of investment, it's out of control costs.
- mrow84 10y ago
  The first bullet point in your second link is: "Public investment in infrastructure sits at its lowest level since records have been kept because of underfunding across all levels of government." And the lead into the second graph, which shows real-terms per-capita public investment is: "On a per capita basis, real government spending on structures is the lowest it has been since at least 1950." Given statements like that, I don't see how you can make the leap from "Spending on infrastructure is going up." to "The issue is not lack of investment, it's out of control costs."
  - yummyfajitas 10y ago
    That is the mood affiliation of the post - it is in fact the only position on infrastructure that is within the overton window. But I'm citing the graphs, not the mood affiliation. The graphs show a large increase in spending on transit/water infrastructure and a large increase in costs. There is also relatively flat per-capita government investment in structures (a broader category which includes buildings/similar things, and is not the typical power/transit/water cited by the parent).
    - jbooth 10y ago
      Hang on, are you really pointing to nominal spending increases while hand-waving away that real, per-capita spending is down?
      - yummyfajitas 10y ago
dominotw 10y ago
> Very-low cost higher education was a thing in mid-20th-century America--it was possible to attend your in-state university for a few thousand bucks in today's dollars. I went to a state school in mid 2000's and paid around $1700/sem in-state tuition for full-time course load. Is this still an option?
- quadrangle 10y ago
  For most cases, no. Tuition rates have skyrocketed since only 10 years ago. http://www.usnews.com/news/articles/2013/10/23/charts-just-how-fast-has-college-tuition-grown http://www.usnews.com/news/articles/2013/10/23/charts-just-h... https://www.bloomberg.com/news/articles/2014-08-18/college-tuition-costs-soar-chart-of-the-day https://www.bloomberg.com/news/articles/2014-08-18/college-t... http://www.huffingtonpost.com/2014/06/18/college-tuition-unaffordable-growth-median-income_n_5505653.html http://www.huffingtonpost.com/2014/06/18/college-tuition-una... Whether obscure deals or aid make things possible today, I don't know. Put simply: today's students are not looking at the same options as those just a few years ago.
  - wil421 10y ago
    I graduated 3 years ago and what the parent said is definitely still an option. Especially if you transfer in to a larger school after 2 years.
    - quadrangle 10y ago
      Thanks for the anecdotal data, glad to know there are still options. The overall stats in the chart may be skewed by the expensive institutions becoming that much more expensive, but still… my anecdote is that the regional state school I graduated from in 2004 (not a community college, but not a top-ranked place) is in the $5k-$6k range for 15-credit in-state semester today. And I checked that its below average for in-state tuition, all the state schools are in that range. If your "transfer…" comment refers to community college, that's a smart financial decision but not exactly the topic of the post I was replying to.
- 10y ago
dforrestwilson 10y ago
Railroads were privately funded for the most part, same story with phone networks, same story with electricity. Universities and public education are debatable as to whether they actually fuel growth.
bwanab 10y ago
All the things you mention are true and important, but they're all second derivative. The first derivative to growth between 1870 and 1970 was cheap energy - primarily oil. What happened in the 70s? The oil embargos and drastic increases in prices. Since the 1970s whenever growth gets started, oil prices rise given the new demand which triggers recession which lowers demand and on and on. Growth can continue when we develop new energy sources that are relatively inelastic to demand.

marcoperaza 10y ago

>Very-low cost higher education was a thing in mid-20th-century America--it was possible to attend your in-state university for a few thousand bucks in today's dollars. What happened? As long as we pretend these things are too expensive to invest in, then we're sure to enter a long slow decline. I don't think your point about education makes sense. You want more investment, but then bemoan the fact that it costs more, as if that signifies low investment. People are investing in their education at record levels! Maybe you think student loans are a problem for other reasons, but they certainly aren't stopping people from going to college. Again, they're going in record numbers and spending record money to do so.

internaut 10y ago
> People are investing in their education at record levels! They are investing in formal qualifications. Certificates. As Thiel points out, a university degree has transmogrified from "investment" to "insurance" to "tournament". The reality is that the previous generation knows jack shit about the environment facing the current generation. Their 'common sense' can be thrown out nearly entirely with few exceptions. In today's environment most of them wouldn't stand a chance.
- marcoperaza 10y ago
  I agree actually, but state funding of higher education, as the GP is suggesting, would probably only further cement the current broken system.
  - marcoperaza 10y ago
    Edit: Not "would probably". It already is serving to entrench the current system.

paganel 10y ago

> What happened? As long as we pretend these things are too expensive to invest in, then we're sure to enter a long slow decline. I'll go on the Marxist side of things and say that "quantitative differences have turned out into qualitative ones". What I want to say is that scale matters. Regarding investment in higher-education, it was relatively ok and feasible to give Government subsidies for all the students attending university when only 1%-2% of the students finishing high-school were going to university (I think that happened up until the mid-50s, but maybe I'm wrong), but once you've got 30-50% of the students finishing high-school going to university then the money just isn't there anymore. And to add to that, it always baffled me how Malthus's name has always had such a bad reputation. The economics for handling a planet inhabited by 1.5 billion people in the late 1800s (we only reached 2 billion people in 1927) are totally different from the economics of a planet inhabited by 7+ billion people, going on 10. Our resources are finite, no matter how much we try to hide it.

TeMPOraL 10y ago
> And to add to that, it always baffled me how Malthus's name has always had such a bad reputation. The economics for handling a planet inhabited by 1.5 billion people in the late 1800s (we only reached 2 billion people in 1927) are totally different from the economics of a planet inhabited by 7+ billion people, going on 10. Our resources are finite, no matter how much we try to hide it. I still don't get how Malthus's name got that bad rep in the first place. As for the difference between the late 1800s and now, it's smaller that one may think. Back then people were hitting the ceiling of Earth's capability to feed people. We got through that, and grew beyond 2 billion people, thanks to a series of scientific and technological flukes, like Haber–Bosch process[0]. We were lucky then, this doesn't imply we'll be lucky this time. [0] - https://en.wikipedia.org/wiki/Haber_process https://en.wikipedia.org/wiki/Haber_process
- harshreality 10y ago
  The implication is that some sort of population control might be necessary, if psych/soc pressures don't stabilize the population by themselves. Population control is antithetical to western individualistic values, so people reject the premise because one of the potential policy consequences (population control) causes an emotional melt-down. If desire to believe in an abstract principle is strong enough, facts will be rejected.

deleted 10y ago

[deleted]

bluetomcat 10y ago

This, and the wasteful misallocation of resources to bloated and unproductive industries like finance, insurance, advertising and entertainment.

taneq 10y ago
coughmilitarycough
davidivadavid 10y ago
How are these industries unproductive?

objectivistbrit 10y ago

> And from the late-1800s till the mid-1900s, there were huge government investments made in building new and innovative infrastructure in the US--railroads, the phone network, state universities and K-12 public education, electricity generation and distribution, highways, airports. Excluding the world wars, US government spending was much lower during that period than it is today. It increased greatly with the New Deal in the 30s, and has continued to increase until the present day. http://3.bp.blogspot.com/-ccxOaz-W_p0/UsgZkuJp-jI/AAAAAAAAARM/UTNEklb75JA/s1600/USfederalspend.png http://3.bp.blogspot.com/-ccxOaz-W_p0/UsgZkuJp-jI/AAAAAAAAAR... In the late 19th and early 20th centuries, there was huge private investment in infrastructure and basic research (e.g., Edison's research lab).

conjectures 10y ago
These are two different measures. It's entirely possible for governments to spend more money without building more infrastructure. Either by spending it on different things, or badly. So in this sense you can both be correct.
dv_dt 10y ago
Can you really exclude the wars? Wasn't a huge amount industrial infrastructure built up during WWII, and then re-used at a lower capital cost basis by industry for future production?

yummyfajitas 10y ago

According to wikipedia, more people than ever before are getting educated. https://en.wikipedia.org/wiki/File:Educational_Attainment_in_the_United_States_2009.png https://en.wikipedia.org/wiki/File:Educational_Attainment_in... Spending on infrastructure is going up. https://www.economy.com/dismal/analysis/free/254109 https://www.economy.com/dismal/analysis/free/254109 The issue is not lack of investment, it's out of control costs.

mrow84 10y ago
The first bullet point in your second link is: "Public investment in infrastructure sits at its lowest level since records have been kept because of underfunding across all levels of government." And the lead into the second graph, which shows real-terms per-capita public investment is: "On a per capita basis, real government spending on structures is the lowest it has been since at least 1950." Given statements like that, I don't see how you can make the leap from "Spending on infrastructure is going up." to "The issue is not lack of investment, it's out of control costs."
- yummyfajitas 10y ago
  That is the mood affiliation of the post - it is in fact the only position on infrastructure that is within the overton window. But I'm citing the graphs, not the mood affiliation. The graphs show a large increase in spending on transit/water infrastructure and a large increase in costs. There is also relatively flat per-capita government investment in structures (a broader category which includes buildings/similar things, and is not the typical power/transit/water cited by the parent).
  - jbooth 10y ago
    Hang on, are you really pointing to nominal spending increases while hand-waving away that real, per-capita spending is down?
    - yummyfajitas 10y ago

dominotw 10y ago

> Very-low cost higher education was a thing in mid-20th-century America--it was possible to attend your in-state university for a few thousand bucks in today's dollars. I went to a state school in mid 2000's and paid around $1700/sem in-state tuition for full-time course load. Is this still an option?

quadrangle 10y ago
For most cases, no. Tuition rates have skyrocketed since only 10 years ago. http://www.usnews.com/news/articles/2013/10/23/charts-just-how-fast-has-college-tuition-grown http://www.usnews.com/news/articles/2013/10/23/charts-just-h... https://www.bloomberg.com/news/articles/2014-08-18/college-tuition-costs-soar-chart-of-the-day https://www.bloomberg.com/news/articles/2014-08-18/college-t... http://www.huffingtonpost.com/2014/06/18/college-tuition-unaffordable-growth-median-income_n_5505653.html http://www.huffingtonpost.com/2014/06/18/college-tuition-una... Whether obscure deals or aid make things possible today, I don't know. Put simply: today's students are not looking at the same options as those just a few years ago.
- wil421 10y ago
  I graduated 3 years ago and what the parent said is definitely still an option. Especially if you transfer in to a larger school after 2 years.
  - quadrangle 10y ago
    Thanks for the anecdotal data, glad to know there are still options. The overall stats in the chart may be skewed by the expensive institutions becoming that much more expensive, but still… my anecdote is that the regional state school I graduated from in 2004 (not a community college, but not a top-ranked place) is in the $5k-$6k range for 15-credit in-state semester today. And I checked that its below average for in-state tuition, all the state schools are in that range. If your "transfer…" comment refers to community college, that's a smart financial decision but not exactly the topic of the post I was replying to.
10y ago

dforrestwilson 10y ago

Railroads were privately funded for the most part, same story with phone networks, same story with electricity. Universities and public education are debatable as to whether they actually fuel growth.

bwanab 10y ago

All the things you mention are true and important, but they're all second derivative. The first derivative to growth between 1870 and 1970 was cheap energy - primarily oil. What happened in the 70s? The oil embargos and drastic increases in prices. Since the 1970s whenever growth gets started, oil prices rise given the new demand which triggers recession which lowers demand and on and on. Growth can continue when we develop new energy sources that are relatively inelastic to demand.