5 ms·

One thing this argument misses is that much of economic growth comes not from increasing consumption, but from making that consumption more efficient.

TeMPOraL 6y ago
The problem isn't solved while consumption of matter and energy grows exponentially.
mromanuk 6y ago
When efficiency is achieved, the economic growth is later converted to "everybody should use this new efficiency". And more importantly, efficiency in the consumption is not translated in efficiency in the use of resources (which is the important one): transporting goods by horse vs faster transportation with combustion engines.
A12-B 6y ago
But the result is more consumption, because you spend the money saved on inefficiency on more consumption. If coca cola produces 1m bottles of coke in 1 year and finds a way to produce that many in half a year, they're not going to produce 1m bottles a year anymore, they're going to produce 2m bottles a year.
- AnIdiotOnTheNet 6y ago
  I know it is besides the point, but just to illustrate the scale of Coca-Cola, they produce 108 billion bottles per year.
- Matticus_Rex 6y ago
  Probably not, no. They're already selling as many as they can at the current price -- there's no shortage of Coke out there. They might lower the price and thereby sell more (though they're unlikely to sell twice as much without more than halving the price), but that's not necessarily a bad thing; it means people are having to do less to get the same amount of Coke.
titzer 6y ago
Do you have any data to back this claim? Because Jevon's Paradox is a real, observed phenomenon. In reality, the only thing our economies optimize for is profit. Sometimes profit comes from reducing costs or increasing efficiency. Other times it comes from manipulating consumer psychology. Or did you think that Red Bull cans are tall and skinny because that's somehow an efficient use of aluminum? [1] https://en.wikipedia.org/wiki/Jevons_paradox https://en.wikipedia.org/wiki/Jevons_paradox
- fuzzfactor 6y ago
  I think in a Jevon situation where there is a game-changing technology jump in a consumable commodity, there will be pent-up demand being expressed at the same time better efficiency means prices can decline and profits can rise simultaneously. This can be more sustainable if these factors are better in balance to begin with and stay that way. The improved efficiency is then enjoyed and absorbed into the regular operation of everyone involved and soon or eventually becomes the new normal. Ideally the companies never need to go back to the old normal which may likely not be very economically viable any more so that becomes completely forgotten. But with growth beyond a certain point, cash flow becomes so significant and so many fewer people are handling it that the room for misguided actions, not just unforseen but often hidden or obscured, can quickly overcome the profits from much earlier technology milestones which took much longer for the entire org to implement. Which can not be replaced unless more technology breakthroughs are forthcoming, but even when a steady stream of excellent new technology keeps coming down the pipeline it could still be a sinking ship. Then if only the top people think it's not seaworthy, or know what they've done that might make it so, they're going to completely deceive the rest of the crew as effectively as possible or all the lifeboats could be used up. When it comes to building cash flow, profits, shareholder value, and overall company valuation not every economically sensible executive is going to pursue or achieve the same balance among these, regardless of motivation. When a company originally thrives because the early talent can make profits that are good, it can be the firm foundation for what could be long-term, even exponential growth. Later leadership which does not always have equal talent for profits will often have more experience utilizing cash flow itself to substitute as a resource for bonuses, dividends, and things like that when much needed technology boosts are not the windfall they once were. The net effect is people make money for a while then the technology is wasted. Because profits actually weren't pursued enough, and cash flow too much instead Like when a huge company acquires a rapidly-progressing technology group but no more progress occurs after that, or progress becomes intentionally discontinued or even reversed. Like a gravitational field so massive that it draws in other planets and absorbs their potential for continued growth, rather than leveraging progress using the overwhelming resources. A smallco that made excellent profits primarily from innovation itself, looks excellent on paper because it is actually a good acquisition target. When absorbed into a bigco their impressive profits no longer add up to more than a drop in the huge bucket so focus ends up being placed elsewhere besides the profit-making innovation that was supposed to be so promising.

TeMPOraL 6y ago

The problem isn't solved while consumption of matter and energy grows exponentially.

mromanuk 6y ago

When efficiency is achieved, the economic growth is later converted to "everybody should use this new efficiency". And more importantly, efficiency in the consumption is not translated in efficiency in the use of resources (which is the important one): transporting goods by horse vs faster transportation with combustion engines.

A12-B 6y ago

But the result is more consumption, because you spend the money saved on inefficiency on more consumption. If coca cola produces 1m bottles of coke in 1 year and finds a way to produce that many in half a year, they're not going to produce 1m bottles a year anymore, they're going to produce 2m bottles a year.

AnIdiotOnTheNet 6y ago
I know it is besides the point, but just to illustrate the scale of Coca-Cola, they produce 108 billion bottles per year.
Matticus_Rex 6y ago
Probably not, no. They're already selling as many as they can at the current price -- there's no shortage of Coke out there. They might lower the price and thereby sell more (though they're unlikely to sell twice as much without more than halving the price), but that's not necessarily a bad thing; it means people are having to do less to get the same amount of Coke.

titzer 6y ago

Do you have any data to back this claim? Because Jevon's Paradox is a real, observed phenomenon. In reality, the only thing our economies optimize for is profit. Sometimes profit comes from reducing costs or increasing efficiency. Other times it comes from manipulating consumer psychology. Or did you think that Red Bull cans are tall and skinny because that's somehow an efficient use of aluminum? [1] https://en.wikipedia.org/wiki/Jevons_paradox https://en.wikipedia.org/wiki/Jevons_paradox

fuzzfactor 6y ago
I think in a Jevon situation where there is a game-changing technology jump in a consumable commodity, there will be pent-up demand being expressed at the same time better efficiency means prices can decline and profits can rise simultaneously. This can be more sustainable if these factors are better in balance to begin with and stay that way. The improved efficiency is then enjoyed and absorbed into the regular operation of everyone involved and soon or eventually becomes the new normal. Ideally the companies never need to go back to the old normal which may likely not be very economically viable any more so that becomes completely forgotten. But with growth beyond a certain point, cash flow becomes so significant and so many fewer people are handling it that the room for misguided actions, not just unforseen but often hidden or obscured, can quickly overcome the profits from much earlier technology milestones which took much longer for the entire org to implement. Which can not be replaced unless more technology breakthroughs are forthcoming, but even when a steady stream of excellent new technology keeps coming down the pipeline it could still be a sinking ship. Then if only the top people think it's not seaworthy, or know what they've done that might make it so, they're going to completely deceive the rest of the crew as effectively as possible or all the lifeboats could be used up. When it comes to building cash flow, profits, shareholder value, and overall company valuation not every economically sensible executive is going to pursue or achieve the same balance among these, regardless of motivation. When a company originally thrives because the early talent can make profits that are good, it can be the firm foundation for what could be long-term, even exponential growth. Later leadership which does not always have equal talent for profits will often have more experience utilizing cash flow itself to substitute as a resource for bonuses, dividends, and things like that when much needed technology boosts are not the windfall they once were. The net effect is people make money for a while then the technology is wasted. Because profits actually weren't pursued enough, and cash flow too much instead Like when a huge company acquires a rapidly-progressing technology group but no more progress occurs after that, or progress becomes intentionally discontinued or even reversed. Like a gravitational field so massive that it draws in other planets and absorbs their potential for continued growth, rather than leveraging progress using the overwhelming resources. A smallco that made excellent profits primarily from innovation itself, looks excellent on paper because it is actually a good acquisition target. When absorbed into a bigco their impressive profits no longer add up to more than a drop in the huge bucket so focus ends up being placed elsewhere besides the profit-making innovation that was supposed to be so promising.