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I- The Historical Increase in the Amount of Energy Available
This is a continuation of my last post, where I examined different explanations for the way a bunch of things all seemed to simultaneously go off the rails in 1971. In simpler terms in the last post I attempted to answer, as the eponymous website asks, WTF happened in 1971? But I left one explanation out. I saved my favorite for this post. But before we can get to that I need to go much farther back, all the way to 1650.
It was in about 1650, a century before the Industrial Revolution, that the United States (or what would become the United States) started growing and from then until (almost) now it grew at a steady average of 2.9% per year. Despite the passage of decades and centuries this growth was basically constant. Though recently there are signs that it’s started to slow. (Average growth since 2001 has only been 1.7%, 2% if we don’t include last year.) After hearing this one is immediately prompted to ask: What was the long term average growth rate before 1650? Or in any case before the industrial revolution? As it turns out it was all but zero, perhaps a long term average of 0.1%? Based on this one might just as reasonably ask, WTF happened in 1650?
It was presumably a combination of a lot of things. The mother country was at the tail end of 300 years of fighting the black death with the associated drop in population. (The last great outbreak, the Great Plague of London, ended in 1666.) Such plagues, while being vast, unimaginable tragedies, also end up being great for innovation. Additionally, the U.S. is a vast continent, full of resources, and in 1650 it had been emptied by its own set of plagues, the black death being only one of many. And then of course there was the scientific revolution, which got the ball rolling on all of the inventions that would come to define the later industrial revolution.
This last element was what really made the difference. There had been temporary surges in growth before. Rome experienced one every time they conquered a new territory. But the scientific revolution changed a short-term surge into a long term trend. Growth that continued decade after decade and year after year as the scientific revolution gave way to the industrial revolution. When people think of the industrial revolution they picture the associated inventions: the cotton gin, the telegraph and most of all the steam engine. And while these inventions were all important, what really enabled the ongoing growth was the additional energy our improved ingenuity allowed us to extract. First in the form of coal and then in the form of oil.
In other words, lot’s of things may have gotten the growth going, but it was the extraction and use of millions of years worth of accumulated energy in the space of a few centuries, that really kept it going. The engine of growth has always been energy, and the big difference between the pre-1650 0.1% growth and the post-1650 2.9% growth was the amount of energy available. And between 1650 and 1950 or 1971 (depending on how you slice it) economic growth and the amount of energy available went up at basically the same rate. In some respects this connection is almost tautological. If you want to make more stuff you need more energy to do it. Economic growth implies a similar growth in the amount of available energy.
To be fair, having more energy isn’t the only way to increase economic output. You could become more efficient in using the energy you already have. You could also increase output by increasing the number of people — though in essence this is just another form of energy, just not in the way we normally think of it.
II- The Henry Adams Curve
These three things, growth in population, efficiency and the amount of energy being produced in turn created the 2.9% economic growth we’ve been experiencing since the mid 1600s. By predictable I mean that we can fit it to a curve, in this case it’s the “Henry Adams Curve”, a concept introduced in Where Is My Flying Car? by J. Storrs Hall (which I reviewed here, and also reference here and here). From the book:
Henry Adams, scion of the house of the two eponymous presidents, wrote in his autobiography about a century ago: “The coal-output of the world, speaking roughly, doubled every ten years between 1840 and 1900, in the form of utilized power…”
In other words, we have a had a very long term trend in history going back at least to the Newcomen and Savery engines of 300 years ago, a steady trend of about 7% per year growth in usable energy available to our civilization. Let us call it the “Henry Adams Curve.” The optimism and constant improvement of life in the 19th and first half of the 20th centuries can quite readily be seen as predicated on it. To a first approximation, it can be factored into a 3% population growth rate, a 2% energy efficiency growth rate and a 2% growth in the actual energy consumed per capita.
Here is the Henry Adams Curve, the centuries-long historical trend, as the smooth red line. Since the scale is power per capita, this is only the 2% component. The blue curve is the actual energy use in the US, which up to the 70s matched the trend quite well. But then energy consumption flatlined.
The 1970s were famously the time of the OPEC oil embargo and the “energy crisis.” But major shortages preceded the embargo by a year or two. They were caused by Nixon’s energy price controls, instituted in 1971. The embargo wasn’t until 1973. [emphasis mine]
III- What Happened in 1971? Energy Decoupled from Growth
In 1971 (or thereabouts) energy decoupled from economic growth. Okay, fair enough, but a lot of other things also happened in 1971. Why is this a better explanation than the end of Bretton Woods, or the peak of American power? Why do I think this is the true disease rather than just another symptom? Why is it my favorite explanation?
First off, one of the points I brought up in the last post was the lack of data for so many of the phenomena that were being highlighted. Half of the graphs didn’t go back farther than World War II, making it impossible to know if 1971 was the beginning of something exceptional or a return to normality. But this is a trend that has been going on since before America was even a country. Making this change, potentially, far more consequential. This isn’t a reversion to the 1920s, as was the case with inequality, this is completely new territory: Modern technology without the associated growth in energy which made the world modern in the first place.
This gets us to the second reason I prefer this explanation. It illustrates the fact that this is completely uncharted territory. Modern society is built on the idea that the amount of energy available on a per capita basis will just keep growing. Perhaps you’ve seen the meme where there’s a picture of the Wright Brothers on one side and on the other side is a picture of Neil Armstrong, and the caption points out that only 66 years separate the Wright Brothers first flight from the moon landing. I don’t know about you, but that fact blows my mind. It’s also the perfect illustration of what it looks like for the amount of available energy to grow at a compounding rate. In the mid-1900s we had been experiencing this sort of growth in available energy for centuries, and in those years, when science fiction was at its height, it’s vision of the future was based on it continuing. Which is how they arrived at the idea of flying cars, moon bases and manned missions to Jupiter. But in 1971, shortly after the moon landing, per capita energy flatlined.
One of the biggest revelations to come out of Flying Car, for me at least, was the fact that had growth in energy continued at the pre-1971 rate we would have had flying cars and moon bases and probably much else besides. The science fiction writers would have been right. The reason they were wrong had nothing to do with their understanding the dangers, difficulties and desires of and for flying cars. They were wrong because they didn’t foresee that the growth in energy which had so dominated the previous two hundred and fifty years, going all the way back to Newcomen’s steam engine at least, was only a few years away from coming to an abrupt end.
It’s now been 52 years since that legendary first walk on the moon and 50 since 1971. Not quite the 66 years between that and the Wright Brothers flight, but getting pretty close. Can we point to any comparable achievement? And does anyone imagine that waiting an additional 14 years will change that?
Despite all of the foregoing, the economy is still growing even if it’s doing so in a slightly slower fashion than it was for most of the country’s history (2% vs. 2.9% as mentioned previously). What does it mean for the economy to grow without a corresponding growth in the amount of energy? What does it mean to increase output in a way that doesn’t require any energy? What does that output look like? These questions take us to my third reason for preferring this explanation: energyless output is a credible cause for most of the things people have been complaining about.
But before we get to that it is necessary to make sure we’re not barking up the wrong tree. There were three components to the curve, growth in available energy, growth in population and gains in efficiency. Before we focus on that first one we need to make sure it’s not one of the other two. As I pointed out in a recent book review, it’s definitely not growth in population. The US population is only growing at 0.3%. But might we be using the same amount of energy more efficiently?
The math here gets a little complicated, but if we keep it simple, energy output and efficiency were both growing at 2% a year. If energy output stops growing then for efficiency to “take over”, for there not to be an increase in the amount of “energy-less output”, efficiency would have had to double from 2% to 4%. I have not come across anything that leads me to believe this is what happened, nor does it seem very plausible for something like that to suddenly double. Though given the timing — the 1970s was the first big energy crisis, and we’ve been emphasizing efficiency since then — it wouldn’t surprise me to find that it went from 2% to 2.5% or something like that. But it seems very implausible for it to have suddenly doubled, and if you look at the graph,energy per capita hasn’t just flatlined it’s gone down, so efficiency would really have to more than double, at the same time that the other factor, population growth, was also flatlining.
If you’re with me this far and you agree that there has been an increase in the amount of economic output that doesn’t require any energy, or at least far less energy, what would that look like? For me this whole process was put into stark relief in the process of writing my last newsletter. In particular this fact:
Here we can clearly see the difference between productivity which is tightly coupled to energy use, and productivity that is not. During World War II the money we spent went into ships and planes and tanks, and the salaries of the 16 million people in the armed forces plus all of the people working on the home front. I would imagine that World War II is as efficient as we’ve ever been at turning “energy” into “stuff”. But at the time of the Trump Presidency when he was increasing the debt by twice the cost of World War II, most of our economy had nothing to do with stuff. Nor is this a recent phenomenon. In 2007-2008 you had Wall Street investors moving around billions of dollars which had no connection to anything tangible. And as early as the 80s, the finances of Wall Street were only tenuously connected to tangible outputs, as illustrated by books like Liar’s Poker and movies like Wall Street. In more general terms the financial sector is growing to be an ever larger slice of GDP (output) but requires very little in the way of energy. And beyond that a huge slice of the economy has moved on to the internet. Which suffers from much the same problem of disconnecting the economy from energy.
One of my readers pointed out that you probably couldn’t literally compare the $8.3 trillion increase in the national debt under Trump with the money spent fighting World War II. That you needed to do more than just adjust for inflation, you also had to account for the mass mobilization factor and the other extraordinary circumstances associated with World War II. I’m sure that he has a point. If nothing else, a peacetime economy is very different from a total war economy. But even so the difference is stark. We’re not talking about the same amount of money, we’re talking about twice the money, so even if a peacetime economy is only half as efficient we still should be able to point to some accomplishment as impressive as beating Nazi Germany and Imperial Japan, instead it was swallowed without much to show for.
As one example, look at employment. At the start of the pandemic there 6 million people unemployed, within two months that had surged to 23 million. So an additional 17 million, which is very close to the 16 million under arms during World War II to say nothing of all the civilian workers essentially being paid by the government. Back then we were able to use the money we spent to pay them for years plus provide them with everything necessary to fight a war. Today there’s still 10 million people unemployed and of the 13 million who re-entered the workforce very few were directly employed by the government. In fact if anything the consensus seems to be that government money is keeping people from seeking employment. Meanwhile the stock market has nearly doubled from it’s pandemic low-point. A lot of money has gone into financial instruments and very little into stuff. Near the beginning of the pandemic Marc Andreessen, the famous venture capitalist, made this same point in his much shared post, It’s Time to Build. But building is precisely what you’re not doing if your economy has become disentangled from energy usage.
IV- Nuclear Power
In the past I’ve mentioned the idea of a religion of progress, an almost mystical belief that progress will continue essentially forever — that humanity is on a permanent upward trajectory. Some people believe this is happening with morality, and offer up the ongoing decline of bigotry and racism as evidence of its continuing impact. Or as Dr. King put it, “the arc of the moral universe is long but it bends toward justice.” Some people believe that this is happening with technology, that scientific innovations have lifted people out of poverty, cured diseases and otherwise improved the lot of man. That if we just get out of the way human ingenuity will lead us to the promised land. Some people believe that both things are happening. Beyond the division between moral progress and technological progress, a further division can be made between those who have a primarily humanist interpretation of this progress, and those who think the process is primarily spiritual. With people like Steven Pinker on the first side of the divide and new age spiritualists on the other side.
I don’t fall into either camp, at least not in any recognizable fashion. But reading about what happened with nuclear power almost changed my mind. Here we are, it’s the early 70s, OPEC has just imposed a petroleum embargo. Things in general are not going well in the Middle East (and will continue not going well down to the present day). Fracking, and the vast supplies of domestic oil and gas it will make available, is still 30 years in the future. We didn’t know it at the time but energy production per capita has already started to stagnate. But it’s at this exact moment, when it seems that we’ve run out of road, when it looks like progress has been derailed, that nuclear power is finally ready for prime time. The way that just as one door has closed that another one opens is almost mystical.
But it was also at this moment, that for the first time since 1650, we hesitated. We had no problems moving from wood to coal, and from coal to oil, but when it came time to make the transition from oil to nuclear we dropped the baton. And nuclear power, which had been getting continually cheaper, suddenly started getting more expensive. The universe had provided us with the next step in the long march of progress and we refused to take it.
As we get near the end of things, I want to make it clear that I’m not claiming that the world fundamentally changed precisely in 1971. (I fundamentally changed in 1971, but the world didn’t.) But I do think things are different now than they have been. That the 52 years since the moon landing have been very different than the 52 years preceding it. And that the primary (though certainly not the only) cause of this difference was the stagnation in per capita energy availability.
V- Final Thoughts
Many years ago one of my close friends (we had been roommates in college) died because his liver failed. The question was why did it fail? The doctor’s decided it was alcoholic hepatitis, but I had my doubts. Yes my friend did drink, but I didn’t think he was that heavy of a drinker. But what he did do, more than anybody I’ve known, is take lortab. For those unfamiliar with lortab it’s a pain reliever which is a combination of hydrocodone (an opioid) and acetaminophen. I don’t think the alcohol destroyed his liver, I think it was the acetaminophen. As I was preparing to wrap up I was reminded of this story. We’ve identified the underlying disease, the available energy has stopped going up, but just like with me and my friends doctors, we may not agree on the behavior that’s causing the disease.
Alcohol is generally considered to be a bad thing, while medicine is generally considered to be a good thing, so it was easy for the doctors to blame the former rather than the latter, regardless of what was actually at fault. And as we move from identifying our malady to identifying behavior causing that malady I think we need to be careful to consider all possibilities. Even things we thought were beneficial. And here I am reminded of my newsletter from April. I would argue that this disease stems from the entirely understandable desire to maximize safety.
Clearly in the wake of Hiroshima and Nagasaki, it’s understandable that people would be biased against a form of power that used the same mechanism as that used by the bombs. From this an understandable caution developed, but eventually some caution became an abundance of caution which became a super abundance. The chief example of this being the linear no-threshold doctrine of radiation, which holds that there is no safe level of radiation. That in tandem with trying to achieve perfect safety we decided to designate radiation as being perfectly dangerous. That zero is the only safe amount.
But it turns out that, just like with my friend, it’s actually the medicine that’s killing us, because once this ideology is widespread it’s only natural that the cost of nuclear power would go up, and as the cost rises it becomes even more difficult to take this next step. Accordingly, the amount of available energy stagnated. And economic growth without a corresponding growth in energy is a strange thing — we have yet to appreciate all of the consequences.
In pointing out the fact that available energy stopped growing, I am not going beyond that to claim that it’s a bad thing. In fact, in another post I pointed out that it was inevitable. Further, I am not convinced that if we had smoothly switched to nuclear we would now be living in a technological utopia. I am sure it would be a very different world, but I’m not sure it would be any better. And as available energy usage had to plateau eventually this is a transition that was coming one way or the other, but just because the transition was inevitable doesn’t mean it’s easy. This is in fact a massive shift from how things have worked for centuries — a shift that hasn’t received nearly enough attention.
Obviously this is a complicated problem, not only is there the disease itself, there’s also the matter of the behavior that got us there: our overwhelming timidity. Things are changing in ways we don’t understand and we’re not prepared for. We’re in a world that’s superficially similar to the one we’ve had since 1650, but under the surface it’s vastly different. Perhaps the best answer to “WTF happened in 1971?” Is that we entered uncharted territory, and it’s going to take all of our skill and wisdom, and yes, our courage as well, to avoid catastrophe.
One of my readers thought that I spent too much time on my own connection to 1971 in the last post. But clearly blogging is inherently a narcissistic activity, so I’m not sure what they expected. Going beyond that to ask for money to engage in this activity may be the most narcissistic thing of all. And yet, here I am, once again asking you to consider donating.