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The U.S. economy is growing and using less and less stuff to do so
- Nasrudith 7y agoI am a bit surprised it took this long to show up really given so many other trends
- ehmish 7y agoThis seems like it's a natural result of the US economy being concentrated in the finance, insurance and real estate sectors, i.e just shuffling money around rather than production.
- perfunctory 7y agoIf only it was just shuffling money around. From another post today: > in the three years since the signing of the Paris climate accord, which was designed to help the world shift away from fossil fuels, the banks’ lending to the [fossil fuels] industry has increased every year, and much of the money goes toward the most extreme forms of energy development. [0] Also I wonder how much of that "dematerialization" is due to outsourcing manufacturing to other countries. [0] https://www.newyorker.com/news/daily-comment/money-is-the-oxygen-on-which-the-fire-of-global-warming-burns https://www.newyorker.com/news/daily-comment/money-is-the-ox...
- RyanAF7 7y agoThe Paris Accord was just another UN attempt to strangle the autonomy from the US via Article 6 of the Constitution. Let it go.
- sanxiyn 7y agoSurely some of it is US outsourcing relatively material-heavy manufacturing and concentrating on relatively material-light manufacturing (US manufacturing is up, it's not total outsourcing of manufacturing), but that doesn't explain the case of global dematerialization of paper for example. For the case of, say, substitution of paper book with ebook, dematerialization does seem to be happening.
- wallace_f 7y agoThat's nice virtue signalling, but at what point would finance's share of US GDP be alarming to you? Should 1 in 10 people really be working to allocate resources? In another industry, healthcare, people complain passionately about the costs but never about the fact that while technology, efficiencies have improved there has been a 100-fold increase in the number of healthcare administrators per capita. A lot of our economy is just shuffling people and money around -- not actually efficiently allocating resources to produce useful goods and services--oh about that abnormal growth in the people who are supposed to be responsible for that?
- perfunctory 7y agoThe finance's share of US GDP, as well as the number of BS administrative jobs, IS alarming to me. I am not sure how my comment implied otherwise.
- golemiprague 7y agoYeah, and one of those industries, fracking to be precise, is responsible for most of the decrease in emissions because electric companies moved to use is instead of coal. Much more than renewable energies and much more than whatever the Paris accord was preaching for.
- WalterBright 7y agoOr computer sectors, where the product is information.
- omegaworks 7y agoOr entertainment sectors, where the product is [most frequently digitized] art.
- sanxiyn 7y agoThis is not the case. Overall production is not down, and dematerialization can be seen even if you restrict to particular sector that is not finance. OP discusses the case of agriculture for example.
- mntmoss 7y agoOne of the topics that comes up in article praise for cap & trade, pointing to the success of existing pollution laws. In practice - last I checked, and I admit to not having followed them closely - I don't think carbon credit schemes have had a big payout just yet. I'm not ready to dismiss them, on the other hand. This might just be because more of the CO2 emissions get exported to the developing world, and so a true ROI has to wait until global economic goals start aligning.
- ac29 7y agoUS manufacturing output is at a ~30 year high (perhaps an all time high, the data only goes back to 1987): https://fred.stlouisfed.org/series/OUTMS https://fred.stlouisfed.org/series/OUTMS
- squidlogic 7y agoAccording to this site [0], there actually has been a dip. Here's an excerpt, draw your own conclusions: "Essentially, with access to a more granular data set than had been publicly available, the economists could see that growth in manufacturing over the decades was almost entirely a result of statistical adjustments for improvement in semiconductor performance." [0] https://www.cassandracapital.net/post/manufacturing-job-losses-are-from-trade-not-automation https://www.cassandracapital.net/post/manufacturing-job-loss...
- Gibbon1 7y agoSteel production in the US is a third of what it was 45 years ago. While the population increased by 60%. Notable: Bullshit jobs still contribute to GDP.
- jjoonathan 7y agoNot really. https://qz.com/1269172/the-epic-mistake-about-manufacturing-thats-cost-americans-millions-of-jobs/ https://qz.com/1269172/the-epic-mistake-about-manufacturing-...
- anm89 7y agoI think this is misleading to some degree. The world produces and consumes vastly more than it did at other points in that period and as a percentage Im guessing the percentage of what we produce to what we consume (ie our self reliance and share of the global production pie) has been steadily decreasing. Id be interested to see numbers which prove or disprove this.
- deleted 7y ago[deleted]
- refurb 7y agoThose are called services and important part of the economy.
- glbrew 7y agoThe vast majority of the "FIRE" economic sector is not an important part of the economy. Before neoliberal economic policies and the government handing $10 Trillion + handouts to the FIRE sector, yes, it was important and efficient. Not now though, unfortunately.
- DeonPenny 7y agoUS Manufacturing is still the second biggest in the world. Theres just a lot more robots and less people. Also tech moves more than anything as far as tech is a category which it really shouldn't be anymore.
- IfOnlyYouKnew 7y agoPart of that is wrong (fertilizer/agriculture is a particular salient example). And part of it is the article's point: there are now industries that produce information or services that can fully replace some physical goods: If Google Maps saves you from getting lost, you burn less fuel. If financial markets "shuffle around" smartly enough, those 50 metric tons of pork go into McRibs instead of spoiling, etc.
- phkahler 7y agoI'm seeing a lot of inflation. Maybe not in the things used to measure it?
- collias 7y agoWhere are you seeing "a lot of inflation"? The inflation rate in the US has been pretty low for the past decade or so, relative to history. Source: https://www.thebalance.com/u-s-inflation-rate-history-by-year-and-forecast-3306093 https://www.thebalance.com/u-s-inflation-rate-history-by-yea...
- OrgNet 7y agoHealth costs have increased a lot since the "Affordable" Care Act came into action... that must count for something.
- 1121redblackgo 7y agoCosts were rising dramatically before the act. The act passed, and they continued to rise, albeit a tiny bit slower.
- OrgNet 7y agobefore the act, I could get insurance that would cover only catastrophic events.... it was MUCH cheaper.
- lotsofpulp 7y agoHealthcare, education, real estate in desirable areas, and taxes. I can also see that I spend more on hotel room nights, restaurant meals, groceries, supplies for my businesses. I don’t know where the inflation stats are coming from, but I’m certainly spending more every year for the same quantity.
- taurath 7y agoI wonder how much the averages bring that down. Healthcare is up across the board, but real estate may not be up much if at all in non-growing areas. Wages just aren't growing I think.
- legitster 7y agoThere was a big moment this decade where metrics like life expectancy and quality of life decoupled from energy consumption. Which is a capitalized Big Deal in economics. If you actually believe that software has the ability to change the world, this is it in action.
- api 7y agoDid that actually happen or did we just outsource all the dirty stuff?
- coldtea 7y agoWe just outsourced all the dirty stuff.
- devnulloverflow 7y agoGlobally, the energy used per unit of GDP has dropped, although the energy used in total has increased. https://yearbook.enerdata.net/total-energy/world-energy-intensity-gdp-data.html https://yearbook.enerdata.net/total-energy/world-energy-inte...
- yourbandsucks 7y agoThat seems to imply a shift of GDP towards non-productive financial/tech products as much as it implies productive environments being more green. Do 5 big-$ bank transactions and you contribute to GDP. What was the energy usage? What was the productive output?
- Retric 7y agoThat’s not a major factor. Winglet’s and other aerodynamic improvements are just one example where energy efficiency directly reduces energy usage per GDP. Improving car MPG averages has real impact. Compare say a CRT from 1999 with an LED TV from 2019 and the vastly larger sizes are more than offset via increased efficiency.
- gniv 7y agoInteresting quote from the (long) transcript: "The USGS tracks, I believe, 72 different materials. I think all, but six-ish of them are now on a downward trend. The biggest exception is actually plastics, but there’s something interesting going on there as well. Overall plastics consumption used to grow even more quickly than the economy did. Plastics are super useful. We use them all over the place. Now, plastics use is still increasing, but it’s increasing more slowly than the overall economy is."
- zeofig 7y agoI wonder how long pretending literally nothing is a "growing economy" can continue before something bad happens. I have a feeling I won't have to wonder for long.
- thrower123 7y agoIf we were really producing nothing, I'd be worried. We produce a shit load of stuff; we just don't use many people to do it. What to do with all the people is the more pressing problem.
- why_only_15 7y agoThe point of the economy growing is so that the society as a whole can do more things that it wants, not about using more natural resources. If we can do more things that we want and also use less natural resources, that's what we want, not an omen of something bad.
- randyrand 7y agoCould this also be indicative of a bubble?
- DeonPenny 7y agoQuite the opposite. Money is getting more efficient not less
- Gibbon1 7y agoIf money is getting more efficient why have interest rates been heading into the toilet for 35 years?
- DeonPenny 7y agoMassive misallocation of resource mainly from the financial crisis into bad financial products. But if you look around the rate of technological development and the amount of money to start one of those ventures it's only been failing
- sanxiyn 7y agoYou can't actually substitute something with nothing, and conservation laws (of mass, energy, etc) do hold. But in practice, substituting with, say, atmosphere, is almost as good. OP discussed the case of substituting copper network with atmospheric spectrum. Consider guano: guano use for manufacturing fertilizer is down, because Harber-Bosch process substituted guano nitrogen with atmospheric nitrogen. Atmospheric nitrogen is still a material thing, but it sure does look like dematerialization.
- why_only_15 7y agoYou can also shift the structure of the things people care about to be things that are easier to make. If people buy less cars and spend more time backpacking across Mexico, that also substitutes something with nothing (or at least less).
- teabee89 7y agoDematerialization is the biggest fallacy in the industry. Data centers need energy to run. Buying the latest servers, network equipments, iPhones and more every year or two, requires an enormous amount of energy. GDP is directly correlated with energy, so there is no sign of change: an economy cannot grow without energy. I wish more people understood the economy from a physics standpoint.
- dev_dull 7y agoAlso why I believe nuclear power must play a vital role in carbon neutral power generation. Wind and solar is great for homes, but what else can power the steel industry? The duty cycle is enormous.
- hasbroslasher 7y agoIn theory battery tech can fuel Industry, though the ironic chicken-and-egg of the situation should be clear. Obviously we should invest in updated, safer, more efficient nuclear tech, but the public image is so bad that we might as well use coal and spend extra money on carbon capture
- IfOnlyYouKnew 7y agoSteel and aluminium manufacturing actually are somewhat well-situated to make use of solar and wind power. The energy-intensive processes (i. e. heating metal until it melts) has somewhat flexible timing. So you can heat it up when energy supply is plenty or other demand is low and smooth out the grid. And nuclear energy is simply too expensive. I know it hurts that some people were maybe too afraid of it in the past, but that's no longer the argument. It loses not just to un-subsidised wind and solar now, but even to natural gas + planting trees to offset carbon.
- unnouinceput 7y agoBut the point McAfee is trying to do is that it requires less materials to do so. Yeah, energy consumption is on the rise, but instead of burning xx tons of coals to generate 1GWh like it did 50 years ago, it does so by using 10% of that coal. Advances in technologies allowed us to do that. In plus you cannot deny we do have a momentum to use more and more technologies involved in renewable then in fossils. I agree we are not quite there yet, but is way better then it was in the late 80's, beginning of 90's when the ozone layer hole was at its biggest.
- Ancalagon 7y agoI believe in the power of software, but also wonder how much of this growth is due to financial engineering (specifically debt being bought and sold at varying interest rates)?
- skybrian 7y agoI'm wondering if this has anything to do with Bernanke's "global savings glut" or Larry Summer's "secular stagnation?" It seems you may not need as much money to make money? I tried asking about this on /r/AskEconomics and it seems that some still believe that more savings is better, based on the Solow model.
- m463 7y agoThere's a theory that "the solution to pollution is economic growth" https://en.wikipedia.org/wiki/Kuznets_curve#Environmental_Kuznets_curve https://en.wikipedia.org/wiki/Kuznets_curve#Environmental_Ku... It is controversial (and I'm uncertain about it personally)
- goldenkey 7y agoAre we just exporting the pollution?
- spodek 7y agoIncreasing efficiency is different than lowering total waste. People push for efficiency thinking it will lower total waste, but you can easily increase efficiency and increase total waste. In the physical environment, total waste is our biggest concern. Our economies are more efficient than ever, but we're also producing more total waste than ever. We have to focus on lowering total waste. I talked about this in my podcast episode 183: "Reusing and recycling are tactical. Reducing is strategic." https://shows.pippa.io/leadership-and-the-environment/episodes/183-reusing-and-recycling-are-tactical-reducing-is-strategic https://shows.pippa.io/leadership-and-the-environment/episod...
- glbrew 7y ago"Jevon's Paradox"
- lioeters 7y agoThanks for the reference, today I learned: https://en.wikipedia.org/wiki/Jevons_paradox https://en.wikipedia.org/wiki/Jevons_paradox
- deleted 7y ago[deleted]
- icebraining 7y agoThey work well side-by-side. If recycling made the overall per-item cost lower, businesses would have been implementing it by themselves a long time ago; paying for the recycling of every piece of plastic is more expensive than creating a new piece and then dumping it, which is why they haven't. So you can get a reduction by mandating full recycling for all plastic (new or previously recycled, of course). The important thing is making sure the producers are paying, rather than getting subsided.
- dkural 7y agoThis does not take into account materials use in other countries that is in direct relation to the US economy. US is not primarily a resource-extraction economy, and many of its firms do most of their manufacturing overseas. Rarely will a high-tech company buy natural resources directly / from a US source. It won't show up in any of the studies' metrics of 'stuff used'. This objection came up recently in a panel discussion about this study as well.
- vannevar 7y agoYes, it's either disingenuous or incredibly naive to ignore the outsourcing of materials-intensive activities to other countries, the most obvious example being manufacturing. Would our rate of material use look so low if we included the materials used for every retail good sold, regardless of where it was manufactured? I doubt it.
- deleted 7y ago[deleted]
- roenxi 7y agoThis can easily be reversed. What exactly is being measured as growth if it does not result in more stuff being consumed and produced? Growth measures aren't usually linked to soft outcomes (eg, happiness, moral fulfilment, access to basic needs, etc) because they are too hard to measure. Growth measures aren't linked to stuff produced (thesis of article). We're measuring something. Probably some sort of technological advancement. Does it make sense to call it growth? If resources Energy per capita is dropping; I would call that contraction rather than growth. I like having access to stuff.
- esoterica 7y agoIf your car gets twice the mpg and you’re consuming half as much gas do you consider that a bad thing? You’re deriving the same amount of utility at half the resource cost.
- roenxi 7y agoYeah, but that isn't growth. Growth is my car gets twice the mpg and I now have a petrol heater on cold nights. Or I drive twice as far. My lifestyle staying the same from one week to the next is stagnation even if I'm using less resources. This is an appeal to Jeveron's paradox. If efficiencies increase, growth looks like getting much more output. Getting the same output when efficiencies increase doesn't signal growth. I suspect the disconnect is people think that "good" and "growth" mean the same thing. That isn't a real link. The situation doesn't look like it is growing, even if it is good.
- daxfohl 7y agoYour savings on gasoline would be put in banks which would create growth by reinventment. Also while your car getting twice the mpg may not open up new possibilities for you, it could make a huge difference for people and businesses and nations where cost of transportation is significant.
- rdiddly 7y agoSo I read the Jesse Ausubel essay that apparently inspired this, and while I'm tempted to dismiss it all as utter unsupported horseshit, that would be unsupported as well. The most I can say that is defensible is that I'm suspicious of it, and here are some random thoughts about reasons why, in no particular order: It could be clearer throughout, whether he's talking per capita or overall. Data is selective and ignores resource utilization shifts. Example: In the 1940s crop acreage decoupled from crop yield, he says. Great! Instead it coupled to petroleum and energy, he doesn't say. American farms today are in the business of converting fossil fuels to food. For example, the 1940s are when when cheap internal-combustion tractors started being mass-produced, thanks to all that spare manufacturing capacity left over after the war. There's also a graph where he looks at "every input" into growing corn, even down to the phosphates, while scrupulously avoiding any talk of fuel or energy. A resource shift of a different kind: efficiency gains in chicken production are due mostly to inhumane factory farm conditions. (Ones to which pork & beef are less amenable, hence chicken outdoes them.) Wood is no longer used for railroad ties, because we use concrete. Which has its own problems! The point in most of this kind of example is that we stop using A because B comes along to fill the void. Nobody uses paper anymore, but they sure use a lot more lithium than they used to. And so on. Finally, and speaking of stepping in to fill the void: ctrl-F - "China" - 1 match. The single mention is to refer to it as a developing country, not to acknowledge it as the present-day location of much of the USA's manufacturing.
- thedudeabides5 7y agoRe concrete, I’ve been hearing a lot that we are running out of sand (the kind we make glass out of and the kind we make concrete out of). Is that true? Anyone have numbers/research on sand that’s good?
- mdorazio 7y agoDepends who you mean by "we". Seems there are regional shortages [1], but the US only hits supply constraints occasionally. [1] https://www.smithsonianmag.com/science-nature/world-facing-global-sand-crisis-180964815/ https://www.smithsonianmag.com/science-nature/world-facing-g...
- exabrial 7y agoGlad to hear this merely because is has positive downstream effects. No need to beat one's chest, just maybe a moment to reflect on humility and figure out how to continue the trend.
- deleted 7y ago[deleted]
- systematical 7y agoThe article cites low-tech raw resources like timber, paper, nickel, and gold (okay this can be hiigh-tech) being used less in advanced economies. What about ones like rare earth minerals used in high-tech? It would have been nice for the article to touch on that. I would love if someone could find that information. A quick Google search didn't yield much. The author does mention the energy usage rate is leveling out. Not believing this, I did a basic search on electricity usage and it does appear to be true: https://www.statista.com/statistics/201794/us-electricity-consumption-since-1975/ https://www.statista.com/statistics/201794/us-electricity-co.... I did not check total energy usage though (petrol, natural gas, etc.) This confirms my belief that has been derided a bit here on HN. That is, I believe Capitalism one-day, in the far distant future, will end or at the least mitigate resource scarcity. When Capitalism achieves that, it in effect nearly goes away or is at least greatly reduced. Humanity will then reap the benefits of abundance. Hopefully moving beyond Capitalism, thanks to Capitalism.
- EGreg 7y agoThe point is that it keeps adding up year after year. Sure we could use less plastic and still the series of partial sums converges to a really large number. This is not sustainable. Elephants in Africa. Insects and birds. Desertification. Deforestation. Brazil chopped down the size of Hong Kong in a few weeks. Plastic in the oceans. CO2 PPM is on a steady rise. Permafrost is melting. And we are saying what?
- oyebenny 7y agoIs this some shill HN implant article? lol
- pteredactyl 7y agoWait, things are not as bad as has been crammed down our throats for years? Imagine my surprise. But, yet many armchair doomsayers will still only find the negative. Yes, this isn't perfect. But neither am I. Or you. Peace
- TheBobinator 7y agoThis story is an example of why "mainstream media" (The big 4 outlets) need to have all of their major and minor publications banned from this site going forward or be reduced to being allowed to post 1 or 2 articles per week, tops. When I come to HN, I come here to learn about some cool doohickey someone is working on or a study that someone published about a different approach to security. I come here to learn about a bitcoin heist or something novel and new and most importantly, to learn from the comments. Lots of interesting people here with interesting views to contribute. I don't come here to read about MIT flamebait; there's no in-depth study to read, no conclusions to draw, just a re-hash of CPI numbers which are at best horribly inaccurate, aside from the name, this might as well be a short novel. Worse, we're re-hashing something that's already there; CPI Numbers. This article is utter trite and a total and complete waste of time. Then, the entire community begins discussing this Trite, which lets be honest, there's some interesting studies and observations in the comments but at the end of the day, the discussion has no direction or conclusion and that is dangerous because it invites an scopeless conversation. We should be talking about how this professors study is or is not accurate or interesting sidebars, which is useful to the professor for feedback and to the reader for coming to a conclusion, not talking in generalities and in circles because someone at a Big 4 wants to stay "relevant" and thinks getting the geeks talking to each other about their topic is a good way to do that. Leave the trite where it belongs; on CNN or NYT or on any big 4 publication.
- nabla9 7y ago"Dematerialization" is a term that is not very commonly used. Economists usually talk the resource intensity of production and consumption. You can divide the concept into material intensity and energy intensity. If you use them as a start of your search you find more Resource productivity is also more commonly used term. There is evidence of a relative decoupling in resource extraction from global economic growth. In developed economies this is clearly happening. Resource Productivity in the G8 and the OECD https://www.oecd.org/env/waste/47944428.pdf https://www.oecd.org/env/waste/47944428.pdf >Global extraction of material resources continues to grow, but there are signs of decoupling from global economic growth. G8 countries‘ resource productivity has been improving , their material intensity decreased by more than 47% between 1980 and 2008 and their annual per capita material consumption declined from nearly 20 tonnes to less than 18 tonnes. Over the same period, OECD economies have reduced their material intensity by 42% and their per capita consumption declined by 1.5% to 17.6 t. OECD library has "Green Growth Indicators 2017" https://www.oecd.org/environment/green-growth-indicators-2017-9789264268586-en.htm https://www.oecd.org/environment/green-growth-indicators-201... OECD "Global Material Resources Outlook to 2060" https://www.oecd.org/environment/waste/highlights-global-material-resources-outlook-to-2060.pdf https://www.oecd.org/environment/waste/highlights-global-mat... There is negative relation between total factor productivity and material and energy intensity per unit of GDP. When productivity increases, most of the value is created buy other means than using materials and energy. The catch is "per GDP". Per capita material consumption in OECD countries remains unsustainable. Developed nations produce their high living standard more efficiently but the living standard is so high that resource usage in absolute terms per capita extremely high.
- jhoechtl 7y agoWhich in turn means that more and more of the benefit gets accumulated at the top.
- ozim 7y agoThis is the thing that those doomsday prophets talking about next economic downturn don't take into account. Whole virtual goods economy that is not visible.
- carapace 7y agohttps://en.wikipedia.org/wiki/Ephemeralization https://en.wikipedia.org/wiki/Ephemeralization > Ephemeralization, a term coined by R. Buckminster Fuller, is the ability of technological advancement to do "more and more with less and less until eventually you can do everything with nothing," that is, an accelerating increase in the efficiency of achieving the same or more output (products, services, information, etc.) while requiring less input (effort, time, resources, etc.).[1] Fuller's vision was that ephemeralization will result in ever-increasing standards of living for an ever-growing population despite finite resources.