Wednesday, September 12, 2012

Importance of fossil fuels

This is a short bit from The Atlantic Monthly website showing the proportional share of the world economy held by different regions of the world.  The author deftly indicates that before the industrial age, a country's wealth was basically determined by its population.  More people meant more wealth (despite the author's slightly off-the-subject digression about per-capita GDP, which has nothing to do with the graph).  After the industrial age, total quantity of wealth created had mostly to do with the harnessing of fossil fuels.  This is why European countries and the US, which got a jump on the use of these fuels, saw their share of world wealth skyrocket after 1800 with respect to Asia.

I think this is important to point out, because I'm not so sure of how much Adam Smith's division of labor had to with the post-industrial wealth explosion.  I mean, even if you have a very advanced business organization, without using energy sources other than humans and animals you're never going to be very productive in industry.  If I'm right, then we have less reason to congratulate ourselves for our world's recent spell of a few centuries of prosperity.  It's simply linked to greater availability of energy, which is quickly running out.  And despite everyone's enthusiasm about how the knowledge and technology economy is now creating wealth on an extraordinary scale, the fact is that technology and the knowledge economy depend on a physical infrastructure based on the use of fossil fuels.  It may be that the energy used to cool a mainframe is very little compared to the amount of ostensible value created by that mainframe, but that value is still 100% dependent on that fossil fuel.

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