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Isn't the primary reason to worry becuase our global economy is founded on debt? Debt only works if the future is more valuable than the present by at least the

Isn't the primary reason to worry becuase our global economy is founded on debt? Debt only works if the future is more valuable than the present by at least the interest rate on the loan writ large across the global economy. The easiest way to make sure the future is more valuable than the present is to have more people than we have now, more people working, more people generating value, more people consuming etc. If there are less people then we need to find a different way to make the future more valuable than the present to pay off that debt.

itsoktocry 3y ago
>the future more valuable than the present to pay off that debt. Your comment seems to imply something negative about debt, when in fact it's exactly the answer you're looking for. Debt allows people to build things now at the expense of future earnings; it pulls forward technological advances. Surely there are better ways to organize society, but easy debt is not inherently terrible.
- Beijinger 3y ago
  "Your comment seems to imply something negative about debt, when in fact it's exactly the answer you're looking for. Debt allows people to build things now at the expense of future earnings; it pulls forward technological advances." Yes, but wealth and energy are linked. And debt can only be paid off with more debt. This is no problem, as long as the future is getting better and richer. In a finite world, this must come to an end at one point. "Surely there are better ways to organize society, but easy debt is not inherently terrible" Nobody has been able to come up with a better way. And there is some inherent danger in this. https://ourfiniteworld.com/2011/02/21/there-is-no-steady-state-economy-except-at-a-very-basic-level/ https://ourfiniteworld.com/2011/02/21/there-is-no-steady-sta...
  - ForHackernews 3y ago
    Theoretically if AI, fusion power, asteroid mining etc. come to pass, many resources we think of as finite might become functionally unlimited. A post-scarcity society could optimise for human happiness, rather than optimising for workers to keep the machines turning.
    - abeppu 3y ago
      This only works if we all change our attitudes and values. But if we changed our values, we could optimize for human happiness today.
      - abeppu 3y ago
        Also, reframing only slightly, to a preindustrial person who spent all their time producing calories or spinning/weaving fiber for clothes, we're a post-scarcity society. We have so many calories it's making us sick and so much clothing we have to export discarded unused clothes. That hasn't meant we stopped chasing ever greater wealth just bc we can more than supply our needs. We just find more and more extravagant things to want. Once we have asteroid mining, a generation of wealthy people will want their own space stations, or fusion-driven space craft or something.
    - Beijinger 3y ago
      Nope https://dothemath.ucsd.edu/2011/07/galactic-scale-energy/ https://dothemath.ucsd.edu/2011/07/galactic-scale-energy/ "But let’s not overlook the key point: continued growth in energy use becomes physically impossible within conceivable timeframes. " And Wealth And Energy Consumption Are Inseparable https://www.declineoftheempire.com/2012/01/wealth-and-energy-consumption-are-inseparable.html https://www.declineoftheempire.com/2012/01/wealth-and-energy...
      - Retric 3y ago
        Track the total energy used by humanity and it’s almost all sunlight used to grow plants the same way it’s been used for thousands of years. It looks nothing like the 2.3% exponential curve pulled out of a hat by that article. There’s little reason to suspect future advanced societies will even vaguely approach a 0.1% increase in total energy demand per year when human population stalls out. Nobody wants to heat their house to 10,000f or cool to cryogenic temperatures. Energy demand is therefore simply a question of technological progress and rates of growth in energy use is surprisingly slow for the top economies.
      - cscurmudgeon 3y ago
  - JumpCrisscross 3y ago
    > debt can only be paid off with more debt This is totally untrue. Debt can be paid with new debt or growth.
    - pavlov 3y ago
      Debt can also be simply written off. There is a long practice of mass debt relief called a jubilee: https://en.wikipedia.org/wiki/Debt_jubilee https://en.wikipedia.org/wiki/Debt_jubilee In the Bible, references are made to a Hebrew jubilee every 49 years when “slaves and prisoners would be freed, debts would be forgiven, and the mercies of God would be particularly manifest.” The permanence of debt is an illusion created by our current political and economical system.
      - JumpCrisscross 3y ago
        > long practice of mass debt relief called a jubilee The concept has long heritage. In reality, very few actual debt forgivenesses are documented. Note, too, that in a Malthusian economy, debt has a tendency to be wealth transferring: the capital capacity of the system is limited. In a growing economy, that need not be the case. > permanence of debt is an illusion created by our current political and economical system We continuously poof debt. It’s called bankruptcy.
        pavlov 3y ago
        Not just bankruptcy, as there are other, less drastic kinds of write-offs that commonly occur.
        JumpCrisscross 3y ago
        You’re right, I should have said restructuring. Jubilees are a crude predecessor to lawful restructuring.
      - api 3y ago
        We write off debt via two methods: bankruptcy and inflation. The latter effectively writes down the principal of all outstanding debt. If we hit hard limits to growth it might actually look like a boom for a while, a very inflationary one where number go up a lot. In reality a lot of debt is being vaporized and prices are going up.
- Ekaros 3y ago
  There is at least two ways to use debt. One is to build a machine, a road or whatever that increase productivity. So invest a million and you manufacture 10% more a year with same labour or even material input. This is great. And then there is getting debt to pay your daily expenses or something not productive, see credit cards when used when there is no excess. It seems that lot of debt on global level even with nations is in second category... This might have worked with growing population and productivity from first kind, but without that population growth it might become bad...
  - johnnymorgan 3y ago
    People are really missing this point within this whole issue. Falling demographics is also more than a single total number, the age ranges matter as well.
- meheleventyone 3y ago
  I think you miss the point there as it relates to the article.
- simonbarker87 3y ago
  No intentionally implied negativity towards debt at all, it’s a great tool. Just a statement.
- johnnymorgan 3y ago
  if it's used for productivity increases only. We are well past that point.
Beijinger 3y ago
"Isn't the primary reason to worry becuase our global economy is founded on debt? Debt only works if the future is more valuable than the present by at least the interest rate on the loan writ large across the global economy." Yes, but very few people know this. https://ourfiniteworld.com/2011/02/21/there-is-no-steady-state-economy-except-at-a-very-basic-level/ https://ourfiniteworld.com/2011/02/21/there-is-no-steady-sta...
- gruez 3y ago
  >https://ourfiniteworld.com/2011/02/21/there-is-no-steady-sta https://ourfiniteworld.com/2011/02/21/there-is-no-steady-sta... That article is so riddled with issues it's hard to take it seriously even if you believe the underlying conclusion. >But overall, there is no evidence that fossil fuel use, or even oil use, can be divorced from economic growth. If there is a big decline in fossil fuel use, it will translate to a decline in economic growth. Yes there is: https://ourworldindata.org/co2-emissions#many-countries-have-decoupled-economic-growth-from-co2-emissions-even-if-we-take-offshored-production-into-account https://ourworldindata.org/co2-emissions#many-countries-have... >The need for economic growth in order to pay back debt even applies to our money supply itself. Money is loaned into existence. This happens when a commercial bank makes a loan and deposit at the same time. The problem is that when the money is created, not enough money is loaned into existence to pay back the interest as well. So economic growth is needed to create the additional money so that the debt can be paid back with interest. This ignores the existence of a central bank, which can print money at will. >The problem with going to a system without fossil fuels and with much less debt than we have today is the fact that the world supported fewer than one billion people in 1750. There are now nearly 7 billion people in the world. The world supported less than 1 billion people in 1750 because the industrial revolution and the green revolution wasn't a thing yet. Both vastly increased productivity and thereby the amount of people the world could support. >If governments were to take away fossil fuels, or even reduce their use significantly, it would likely cause a crash of the financial system "In a recent poll of climate economists conducted by Reuters, most agreed that getting to net zero would cost only 2% to 3% of annual global GDP. Other estimates put the cost of decarbonizing the economy a bit lower or a bit higher, but they are all in the low single digits of annual global GDP." https://time.com/6132395/two-percent-climate-solution/ https://time.com/6132395/two-percent-climate-solution/
nine_zeros 3y ago
You are exactly right. The only reason these articles pop up is because the current economic system is founded on debt and relies on future generations paying up for current assets. It is merely accounting. The planet would prefer fewer people or a different economic system.
- lotsofpulp 3y ago
  Assuming old people get less and less capable to do things for their own survival, and old people are owed help from non old/able bodied people, then the debt exists whether or not it is recorded on a ledger. Hence if the population pyramid turns upside down, then that assumption needs to be revisited. Or automation needs to be invented to offset it.
thefz 3y ago
> The easiest way to make sure the future is more valuable than the present is to have more people than we have now, more people working Or the same people generating more work, value.
- psychoslave 3y ago
  Or tune most people to value more things that needs less work/energy.
  - JumpCrisscross 3y ago
    > tune most people to value more things that needs less work/energy They will be outcompeted and eventually replaced by those who value growth. (Plenty of the world has similar living standards to a hundred years ago.)
    - nemo 3y ago
      Making progress on sustainability doesn't mean regression to the past, but progress towards a globally sustainable future. Hard to say if it's possible, but it if isn't humanity's days are numbered.
      - JumpCrisscross 3y ago
        > if isn't humanity's days are numbered This is hyperbole. (As a causative line. Of course, everything’s days are numbered in the long term.)
        nemo 3y ago
        >> if isn't humanity's days are numbered >This is hyperbole. Not at all.
- Bancakes 3y ago
  Work 80 hour weeks because people aren’t making kids. Got it
opportune 3y ago
As long as we continue to either produce more value than before, or the same amount of value with less costs, it’s not a big deal. Population growth makes things easier but it’s not strictly necessary. The biggest problem is dealing with the “transition” of the population pyramid. Public pensions and such usually don’t account for the shape - namely the ratio of economically productive people to economically unproductive (dependents and retirees) - changing. Most likely, whichever generation gets to be retirees along the demographic transition from positive population growth to neutral population growth will get a free ride in the form of lower taxes/contributions in their productive years relative to what they consume in their retirement years. This is kinda sorta happening with Boomers in many developed countries although it’s greatly mitigated in eg the US by immigration.
- deleted 3y ago
  [deleted]
hinkley 3y ago
Investing in restoration of the natural world would be a convenient and prudent way to continue those dividends through the peak. By then some changes to the social order will start to kick in and we cannot predict how those will play out. That's for them to navigate.
- johnnymorgan 3y ago
  It will be war, it's always war that changes the social order. Changing the financial network cannot be solved by planting a few more trees, you need to have a solution that values labor over rents again.
naveen99 3y ago
Debt has two sides. It’s a trade like any other. it should be arbitrage neutral, and both parties should be better off after the trade, or it doesn’t happen.
ivalm 3y ago
I don’t think so. Debt it fundamentally a human construct, while growth is, mostly, a manifestation of physical reality. Debt is simply used to guide human collective action. If we find this construct no longer works, we can at will change it and use something else to guide collective action. We currently use debt because, in conjunction with other property rights (such as those enabling market economy), it seems to align everyone’s incentives in a way that is beneficial (eg when people tried central planning it was much worse). The benefit of debt is that it helps collective action whose benefits are reaped in the future while stratifying risk/benefit (vs just equity investment).
creer 3y ago
I don't know that debt is the main problem. I can see more "valuable" (tricky word - for a different thread) economics run by fewer people. That happens all the time when you compare businesses: some are manpower intensive (sometimes for reasons hard to understand) while others are super lean. I had the impression that harder issues are conventional retirement being paid for by the people working for the people retired. Even in an era of more valuable work, shrinking the working population while growing the retired population compounds the difficulty. The second is one of manpower outright: where do all the people come from who are supposed to provide services or living assistance to the older population? This is again an issue of compounding: several effects going in the same direction at the same time when any one might be easy to handle.
deleted 3y ago
[deleted]

itsoktocry 3y ago

>the future more valuable than the present to pay off that debt. Your comment seems to imply something negative about debt, when in fact it's exactly the answer you're looking for. Debt allows people to build things now at the expense of future earnings; it pulls forward technological advances. Surely there are better ways to organize society, but easy debt is not inherently terrible.

Beijinger 3y ago
"Your comment seems to imply something negative about debt, when in fact it's exactly the answer you're looking for. Debt allows people to build things now at the expense of future earnings; it pulls forward technological advances." Yes, but wealth and energy are linked. And debt can only be paid off with more debt. This is no problem, as long as the future is getting better and richer. In a finite world, this must come to an end at one point. "Surely there are better ways to organize society, but easy debt is not inherently terrible" Nobody has been able to come up with a better way. And there is some inherent danger in this. https://ourfiniteworld.com/2011/02/21/there-is-no-steady-state-economy-except-at-a-very-basic-level/ https://ourfiniteworld.com/2011/02/21/there-is-no-steady-sta...
- ForHackernews 3y ago
  Theoretically if AI, fusion power, asteroid mining etc. come to pass, many resources we think of as finite might become functionally unlimited. A post-scarcity society could optimise for human happiness, rather than optimising for workers to keep the machines turning.
  - abeppu 3y ago
    This only works if we all change our attitudes and values. But if we changed our values, we could optimize for human happiness today.
    - abeppu 3y ago
      Also, reframing only slightly, to a preindustrial person who spent all their time producing calories or spinning/weaving fiber for clothes, we're a post-scarcity society. We have so many calories it's making us sick and so much clothing we have to export discarded unused clothes. That hasn't meant we stopped chasing ever greater wealth just bc we can more than supply our needs. We just find more and more extravagant things to want. Once we have asteroid mining, a generation of wealthy people will want their own space stations, or fusion-driven space craft or something.
  - Beijinger 3y ago
    Nope https://dothemath.ucsd.edu/2011/07/galactic-scale-energy/ https://dothemath.ucsd.edu/2011/07/galactic-scale-energy/ "But let’s not overlook the key point: continued growth in energy use becomes physically impossible within conceivable timeframes. " And Wealth And Energy Consumption Are Inseparable https://www.declineoftheempire.com/2012/01/wealth-and-energy-consumption-are-inseparable.html https://www.declineoftheempire.com/2012/01/wealth-and-energy...
    - Retric 3y ago
      Track the total energy used by humanity and it’s almost all sunlight used to grow plants the same way it’s been used for thousands of years. It looks nothing like the 2.3% exponential curve pulled out of a hat by that article. There’s little reason to suspect future advanced societies will even vaguely approach a 0.1% increase in total energy demand per year when human population stalls out. Nobody wants to heat their house to 10,000f or cool to cryogenic temperatures. Energy demand is therefore simply a question of technological progress and rates of growth in energy use is surprisingly slow for the top economies.
    - cscurmudgeon 3y ago
- JumpCrisscross 3y ago
  > debt can only be paid off with more debt This is totally untrue. Debt can be paid with new debt or growth.
  - pavlov 3y ago
    Debt can also be simply written off. There is a long practice of mass debt relief called a jubilee: https://en.wikipedia.org/wiki/Debt_jubilee https://en.wikipedia.org/wiki/Debt_jubilee In the Bible, references are made to a Hebrew jubilee every 49 years when “slaves and prisoners would be freed, debts would be forgiven, and the mercies of God would be particularly manifest.” The permanence of debt is an illusion created by our current political and economical system.
    - JumpCrisscross 3y ago
      > long practice of mass debt relief called a jubilee The concept has long heritage. In reality, very few actual debt forgivenesses are documented. Note, too, that in a Malthusian economy, debt has a tendency to be wealth transferring: the capital capacity of the system is limited. In a growing economy, that need not be the case. > permanence of debt is an illusion created by our current political and economical system We continuously poof debt. It’s called bankruptcy.
      - pavlov 3y ago
        Not just bankruptcy, as there are other, less drastic kinds of write-offs that commonly occur.
        JumpCrisscross 3y ago
        You’re right, I should have said restructuring. Jubilees are a crude predecessor to lawful restructuring.
    - api 3y ago
      We write off debt via two methods: bankruptcy and inflation. The latter effectively writes down the principal of all outstanding debt. If we hit hard limits to growth it might actually look like a boom for a while, a very inflationary one where number go up a lot. In reality a lot of debt is being vaporized and prices are going up.
Ekaros 3y ago
There is at least two ways to use debt. One is to build a machine, a road or whatever that increase productivity. So invest a million and you manufacture 10% more a year with same labour or even material input. This is great. And then there is getting debt to pay your daily expenses or something not productive, see credit cards when used when there is no excess. It seems that lot of debt on global level even with nations is in second category... This might have worked with growing population and productivity from first kind, but without that population growth it might become bad...
- johnnymorgan 3y ago
  People are really missing this point within this whole issue. Falling demographics is also more than a single total number, the age ranges matter as well.
meheleventyone 3y ago
I think you miss the point there as it relates to the article.
simonbarker87 3y ago
No intentionally implied negativity towards debt at all, it’s a great tool. Just a statement.
johnnymorgan 3y ago
if it's used for productivity increases only. We are well past that point.

Beijinger 3y ago

"Isn't the primary reason to worry becuase our global economy is founded on debt? Debt only works if the future is more valuable than the present by at least the interest rate on the loan writ large across the global economy." Yes, but very few people know this. https://ourfiniteworld.com/2011/02/21/there-is-no-steady-state-economy-except-at-a-very-basic-level/ https://ourfiniteworld.com/2011/02/21/there-is-no-steady-sta...

gruez 3y ago
>https://ourfiniteworld.com/2011/02/21/there-is-no-steady-sta https://ourfiniteworld.com/2011/02/21/there-is-no-steady-sta... That article is so riddled with issues it's hard to take it seriously even if you believe the underlying conclusion. >But overall, there is no evidence that fossil fuel use, or even oil use, can be divorced from economic growth. If there is a big decline in fossil fuel use, it will translate to a decline in economic growth. Yes there is: https://ourworldindata.org/co2-emissions#many-countries-have-decoupled-economic-growth-from-co2-emissions-even-if-we-take-offshored-production-into-account https://ourworldindata.org/co2-emissions#many-countries-have... >The need for economic growth in order to pay back debt even applies to our money supply itself. Money is loaned into existence. This happens when a commercial bank makes a loan and deposit at the same time. The problem is that when the money is created, not enough money is loaned into existence to pay back the interest as well. So economic growth is needed to create the additional money so that the debt can be paid back with interest. This ignores the existence of a central bank, which can print money at will. >The problem with going to a system without fossil fuels and with much less debt than we have today is the fact that the world supported fewer than one billion people in 1750. There are now nearly 7 billion people in the world. The world supported less than 1 billion people in 1750 because the industrial revolution and the green revolution wasn't a thing yet. Both vastly increased productivity and thereby the amount of people the world could support. >If governments were to take away fossil fuels, or even reduce their use significantly, it would likely cause a crash of the financial system "In a recent poll of climate economists conducted by Reuters, most agreed that getting to net zero would cost only 2% to 3% of annual global GDP. Other estimates put the cost of decarbonizing the economy a bit lower or a bit higher, but they are all in the low single digits of annual global GDP." https://time.com/6132395/two-percent-climate-solution/ https://time.com/6132395/two-percent-climate-solution/

nine_zeros 3y ago

You are exactly right. The only reason these articles pop up is because the current economic system is founded on debt and relies on future generations paying up for current assets. It is merely accounting. The planet would prefer fewer people or a different economic system.

lotsofpulp 3y ago
Assuming old people get less and less capable to do things for their own survival, and old people are owed help from non old/able bodied people, then the debt exists whether or not it is recorded on a ledger. Hence if the population pyramid turns upside down, then that assumption needs to be revisited. Or automation needs to be invented to offset it.

thefz 3y ago

> The easiest way to make sure the future is more valuable than the present is to have more people than we have now, more people working Or the same people generating more work, value.

psychoslave 3y ago
Or tune most people to value more things that needs less work/energy.
- JumpCrisscross 3y ago
  > tune most people to value more things that needs less work/energy They will be outcompeted and eventually replaced by those who value growth. (Plenty of the world has similar living standards to a hundred years ago.)
  - nemo 3y ago
    Making progress on sustainability doesn't mean regression to the past, but progress towards a globally sustainable future. Hard to say if it's possible, but it if isn't humanity's days are numbered.
    - JumpCrisscross 3y ago
      > if isn't humanity's days are numbered This is hyperbole. (As a causative line. Of course, everything’s days are numbered in the long term.)
      - nemo 3y ago
        >> if isn't humanity's days are numbered >This is hyperbole. Not at all.
Bancakes 3y ago
Work 80 hour weeks because people aren’t making kids. Got it

opportune 3y ago

As long as we continue to either produce more value than before, or the same amount of value with less costs, it’s not a big deal. Population growth makes things easier but it’s not strictly necessary. The biggest problem is dealing with the “transition” of the population pyramid. Public pensions and such usually don’t account for the shape - namely the ratio of economically productive people to economically unproductive (dependents and retirees) - changing. Most likely, whichever generation gets to be retirees along the demographic transition from positive population growth to neutral population growth will get a free ride in the form of lower taxes/contributions in their productive years relative to what they consume in their retirement years. This is kinda sorta happening with Boomers in many developed countries although it’s greatly mitigated in eg the US by immigration.

deleted 3y ago
[deleted]

hinkley 3y ago

Investing in restoration of the natural world would be a convenient and prudent way to continue those dividends through the peak. By then some changes to the social order will start to kick in and we cannot predict how those will play out. That's for them to navigate.

johnnymorgan 3y ago
It will be war, it's always war that changes the social order. Changing the financial network cannot be solved by planting a few more trees, you need to have a solution that values labor over rents again.

naveen99 3y ago

Debt has two sides. It’s a trade like any other. it should be arbitrage neutral, and both parties should be better off after the trade, or it doesn’t happen.

ivalm 3y ago

I don’t think so. Debt it fundamentally a human construct, while growth is, mostly, a manifestation of physical reality. Debt is simply used to guide human collective action. If we find this construct no longer works, we can at will change it and use something else to guide collective action. We currently use debt because, in conjunction with other property rights (such as those enabling market economy), it seems to align everyone’s incentives in a way that is beneficial (eg when people tried central planning it was much worse). The benefit of debt is that it helps collective action whose benefits are reaped in the future while stratifying risk/benefit (vs just equity investment).

creer 3y ago

I don't know that debt is the main problem. I can see more "valuable" (tricky word - for a different thread) economics run by fewer people. That happens all the time when you compare businesses: some are manpower intensive (sometimes for reasons hard to understand) while others are super lean. I had the impression that harder issues are conventional retirement being paid for by the people working for the people retired. Even in an era of more valuable work, shrinking the working population while growing the retired population compounds the difficulty. The second is one of manpower outright: where do all the people come from who are supposed to provide services or living assistance to the older population? This is again an issue of compounding: several effects going in the same direction at the same time when any one might be easy to handle.

deleted 3y ago

[deleted]