The End of Growth: Adapting to Our New Economic Reality (31 page)

Moore’s or Murphy’s Law?

It is a truism in most people’s minds that the most important driver of economic growth is new technology. Important innovations, from the railroad and the telegraph up through the satellite and the cell phone, have generated fortunes while creating markets and jobs. It may seem downright cynical to suggest that we won’t see more of the same, leading to an abundant, technotopian future in which humanity has colonized space and all our needs are taken care of by obedient robots. But once again, there may be limits.

The idea that technology will continue to improve dramatically is often supported by reference to Moore’s law. Over the past three decades, the number of transistors that can be placed inexpensively on an integrated circuit has doubled approximately every two years. Computer processing speed, memory capacity, and the number of pixels per dollar in digital cameras have all followed the same trajectory. This “law” is actually better thought of as a trend — but it is a trend that has continued for over a generation and is not expected to stop until 2015 or later. According to technology boosters, if the same innovative acumen that has led to Moore’s law were applied to solving our energy, water, climate, and food problems, those problems would disappear in short order.

My first computer was an early laptop, circa 1986. It cost $1600 and had no hard disk — just two floppy drives — plus a small non-backlit, black-and-white LCD screen. It boasted 640K RAM internal memory and a processing speed of 9.54 MH. I thought it was wonderful! Its capabilities dwarfed those of the Moon-landing Apollo 11 spacecraft on-board computer, developed by NASA over a decade earlier.

My most recent laptop cost $1200 (that’s a lot to pay these days, but it’s a deluxe model), has a 250 gigabyte hard drive (holding about 200,000 times as much data as you could cram onto an old 3.5 inch floppy disk), 4 Gigs of internal memory, and a processing speed of 2.4 gigahertz. Its color LCD screen is stunning, and it does all sorts of things I could never have dreamed of doing with my first computer: it has a built-in camera so I can take still or moving pictures, it has sound, it plays movies — and, of course, it connects to the Internet! Many of those features are now standard even on machines selling for $300.

From 1986 to today, in just 25 years, the typical consumer-grade personal computer has increased in performance thousands of times over while dropping in price — noticeably so if inflation is factored in.
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So why hasn’t the same thing happened with energy, transportation, and food production during this period? If it had, by now a new car would cost $750 and get 2000 miles to the gallon. But of course that’s not the case. Is the problem simply that engineers in non-computer industries are lazy?

Of course not. It’s because microprocessors are a special case. Moving electrons takes a lot less energy than moving tons of steel or grain. Making a two-ton automobile requires a heap of resources, no matter how you arrange and rearrange them. In many of the technologies that are critically important in our lives, recent decades have seen only minor improvements — and many or most of those have come about through the application of computer technology.
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Take the field of ground transportation (the example I’m about to use is also relevant to the energy efficiency and substitution discussions earlier in this chapter). We could make getting to and from stores and offices far more efficient by installing personal rapid transit (PRT) systems in every city in the world. PRT consists of small, automated vehicles operating on a network of specially built guide-ways (a pilot system has been built at Heathrow airport in London). The energy-per-passenger-mile efficiency of PRT promises to be much greater than that for personal automobiles, even electric ones, and greater even than for trolleys, streetcars, buses, subways, and other widely deployed forms of public transit. According to some estimates, a PRT system should attain an energy efficiency of 839 Btu per passenger mile (0.55 MJ per passenger km), as compared to the 3,496 Btu per passenger mile average for automobiles and 4,329 Btu for personal trucks.
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By the time we have shifted all local human transport to PRT, we may be approaching the limits of what is possible to achieve in terms of motorized, relatively high-speed transport energy efficiency. But to do this we will need massive investment, policy support, and the development of consumer demand. PRT may be an excellent idea, but its implementation is moving at a glacial pace — there’s nothing “rapid” about it.

Far from already having implemented the most efficient transit systems imaginable, we find ourselves today even more dependent on cars and trucks than we were a half-century ago. Moreover, the typical automobile of 2011 is essentially similar to one from 1960: both are mostly made from steel, glass, aluminum, and rubber; both run on gasoline; both have similar basic parts (engine, transmission, gas tank, wheels, seats, body panels, etc.). Granted, today’s car is more energy-efficient and sophisticated — largely because of the incorporation of computerized controls over its various systems. Much the same could be said for modern aircraft, as well as for the electricity grid system, water treatment and delivery systems, farming operations, and heating and cooling systems. Each of these is essentially a computer-assisted, somewhat more efficient version of what was already common two generations ago.

True, the field of home entertainment has seen some amazing technical advances over the past five decades — digital audio and video; the use of lasers to read from and record on CDs and DVDs; flat-screen, HD, and now 3D television; and the move from physical recorded media to distribution of MP3 and other digital recording formats over the Internet. Yet when it comes to how we get our food, water, and power, and how we transport ourselves and our goods, relatively little has changed in any truly fundamental way.

The nearly miraculous developments in semiconductor technologies that have revolutionized computing, communications, and home entertainment during the past few decades have led us to think we’re making much more “progress” than we really are, and that more potential for development in some fields exists than really does. The slowest-moving areas of technology are, understandably, the ones that involve massive infrastructure that is expensive to build and replace. But these are the technologies on which the functioning of our civilization depends.

In fact, rather than showing evidence of great technological advance, our basic energy, water, and transport infrastructure shows signs of senescence, and of vulnerability to Murphy’s law — the maxim that anything that can go wrong, will go wrong. In city after city, water and sewer pipes are aging and need replacement. The same is true of our electricity grids, natural gas pipes, roads, bridges, dams, airport runways, and railroads.

I live in Sonoma County, California, where officials declared last year that 90 percent of county roads will be allowed to deteriorate and gradually return to gravel, simply because there’s no money in the budget to pay for continued repairs. Perhaps someone who lives on one of these Sonoma County roads will mail-order the latest MacBook Air (a shining aluminum-clad example of Moore’s law) for delivery by UPS — only to be disappointed by the long wait because a delivery truck has broken its axle in a pothole (a dusty example of Murphy’s law).

According to Ken Kirk, executive director of the National Association of Clean Water Agencies, more than 1,000 aging water and sewer systems around the US need urgent upgrades.
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“Urgent” in this instance means that if infrastructure projects aren’t undertaken now, the ability of many cities to supply drinking water in the years ahead will be threatened. The cost of renovating all these systems is likely to amount to between $500 billion and $1 trillion.

The failure of innovation and new investment to keep up with the decay of existing infrastructure is exemplified also in the fact that the world’s global positioning system (GPS) is headed for disaster. Last year, the US Government Accountability Office (GAO) published a report noting that GPS satellites are wearing down and, if no new investments are made, the accuracy of the positioning system will gradually decline.
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At some point during the next few decades, the whole system may crash. The GPS system happens to be one of the glowing highlights of recent technological progress. We depend on it not just for piloting Lincoln Navigators across the suburbs, but for guiding tractors through giant cornfields; for mapping, construction, and surveying; for scientific research; for moving troops in battle; and for dispatching emergency response vehicles to their appointed emergencies. How could we have allowed such an important piece of infrastructure to become so vulnerable?

There is one more reason to be skeptical about the capability of technological innovation across a broad range of fields to maintain economic growth, and though I have saved it to the end it is by no means a minor point. As verified in the research of the late Professor Vernon W. –Ruttan of the University of Minnesota in his book
Is War Necessary for Economic
Growth?: Military Procurement and Technology Development
, many large-scale technological developments of the past century depended on government support during early stages of research and development (computers, satellites, the Internet) or build-out of infrastructure (highways, airports, and railroads).
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Ruttan studied six important technologies (the American mass production system, the airplane, space exploration and satellites, computer technology, the Internet, and nuclear power) and found that strategic, large-scale, military-related investments across decades on the part of government significantly helped speed up their development. Rut-tan concluded that nuclear technology could not have been developed at all in the absence of large-scale and long-term government investments.

If, in the years ahead, government remains hamstrung by overwhelming levels of debt and declining tax revenues, investment that might lead to major technological innovation and infrastructure build-out is likely to be highly constrained. Which is to say,
it probably won’t happen
— absent a wartime mobilization of virtually the entire economy.

We’re counting on Moore’s law while setting the stage for Murphy’s.

Specialization and Globalization: Genies at Our Command

Economic efficiency doesn’t flow from energy efficiency alone; it can also be achieved by increasing specialization or by expanding the scope of trade so as to exploit cheaper resources or labor. Both of these strategies have deep and ancient roots in human history.
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Division of labor increases economic efficiency by optimizing the use of people’s unique talents, proclivities, and skills. If all people had to grow or gather all of their own food and fuel, the effort might require most of their working hours. By leaving food production to skilled farmers, we enable others to spend their days weaving cloth, playing the oboe, or screening hand-carried luggage at airports.
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Prior to the agricultural revolution several millennia ago, division of labor was mostly along gender lines, and was otherwise part-time and informal; with farming and the settling of the first towns and cities, full-time division of labor appeared, along with social classes. Since the Industrial Revolution, the number of full-time occupations has soared.

If economists often underestimate the contribution of energy to economic growth, it would be just as wrong to disregard the role of specialization. Adam Smith, who was writing when Britain was still burning relatively trivial amounts of coal, believed that economic expansion would come about entirely because of division of labor. His paradigm of progress was the pin-making factory:

I have seen a small manufactory of this kind where ten men only were employed.... But though they were very poor, and therefore but indifferently accommodated with the necessary machinery, they could, when they exerted themselves, make among them about twelve pounds of pins in a day. There are in a pound upwards of four thousand pins of a middling size. Those ten persons, therefore, could make among them upwards of forty-eight thousand pins in a day. Each person, therefore, making a tenth part of forty-eight thousand pins, might be considered as making four thousand eight hundred pins in a day. But if they had all wrought separately and independently, and without any of them having been educated to this peculiar business, they certainly could not each of them have made twenty, perhaps not one pin in a day....
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Later in
The Wealth of Nations
, Smith criticizes the division of labor, saying it leads to a “mental mutilation” in workers as they become ignorant and insular — so it’s hard to know whether he thought the trend toward specialization was good or just inevitable. It’s important to note, however, that it was under way
before
the fossil fuel revolution, and was already contributing to economic growth.

Standard economic theory tells us that trade is good. If one town has apple orchards but no wheat fields, while another town has wheat but no apples, trade can make everyone’s diet more interesting. Enlarging the scope of trade can also reduce costs, if resources or products are scarce and expensive in one place but abundant and cheap elsewhere, or if people in one place are willing to accept less payment for their work than in another.

As mentioned in Chapter 1, trade has a long history and a somewhat controversial one, given that empires typically used military power to enforce trade rules that kept peripheral societies in a condition of relative poverty and dependency. The worldwide colonial efforts of European powers from the late 15th century through the mid-20th century exemplify this pattern; since then, enlargement of the scope of trade has assumed a somewhat different character and is now referred to as
globalization
.