Happy New Year.
I mean it. 2011 will see horrible things, no doubt, but it will
also see a continuing incremental reduction in poverty, hunger,
illness and suffering, plus a continuing incremental rise in most
measures of human and planetary wellbeing.
Here's a fine blast of optimism from John Tierney in the New
York Times. He took a bet with a peak-oiler and won hands down.
It's true that the real price of oil is
slightly higher now than it was in 2005, and it's always possible
that oil prices will spike again in the future. But the overall
energy situation today looks a lot like a Cornucopian feast, as my
colleagues
Matt Wald and
Cliff Krauss have recently reported. Giant new oil fields have
been discovered off the coasts of Africa and Brazil. The
new oil sands projects in
Canada now supply more oil to the United States than Saudi Arabia
does. Oil production in the United States increased last year, and
the Department of Energy projects further increases over the next
two decades.
The really good news is the discovery of vast
quantities of natural gas. It's now selling for less than half of
what it was five years ago. There's so much available that the
Energy Department is predicting low prices for gas and electricity
for the next quarter-century. Lobbyists for wind farms, once
again, have been telling Washington that the "sustainable energy"
industry can't sustain itself without further subsidies.
As gas replaces dirtier fossil fuels, the
rise in greenhouse gas emissions will be tempered, according to the
Department of Energy. It projects that no new coal power plants
will be built, and that the level of carbon dioxide emissions in
the United States will remain below the rate of 2005 for the next
15 years even if no new restrictions are imposed.
Maybe something unexpected will change these
happy trends, but for now I'd say that Julian Simon's advice
remains as good as ever. You can always make news with doomsday
predictions, but you can usually make money betting against
them.
I give some reasons for optimism in a Times article last week.
Here is a slightly expanded version of it.
With one tenth - well, 11% -- of the
twenty-first century now consigned to history, what is the verdict
so far? A terrorist mass murder, two long wars, a financial crisis
and a deep recession: not great. So perhaps it would surprise you
to learn that, according to respectively Steven Pinker of Harvard
University and Xavier Sala-i-Martin of Columbia University, the
last decade saw the lowest number of global deaths in war since
records began in 1945 and the fastest ever reduction in global
income inequality.
Britons, who have spent most of this century
at war, and the last two years getting poorer, may find these
global numbers cold comfort. But they are actually good news for us
too. The fact that the world economy grew by more than 5% in 2010
(nearly ten times as fast as it shrank in 2009) means more
customers for our exports and more investment elsewhere in things
that can improve our lives too - like cancer cures or self-clearing
runways.
According to the IMF, away from Europe and
North America, the world was booming this year. Asia has grown by
7.9%, South America by 6.3%, Africa by 5% and the Middle-east and
North Africa by 4.1%. China and India, with 40% of the world's
population, achieved roughly 10% growth between them. Moreover,
this boom, because it is happening in poor countries, is rapidly
reducing both poverty and inequality.
Despite the Great Recession, the per capita
GDP of the average human being - that is to say, the value of goods
and services that she consumes in a year - is now just over
$11,000, up from about $8,500 (in today's dollars) at the start of
the century. If it continues to increase at this rate of just under
3% a year - as it has more than done for 60 years - then by the
year 2050 the average citizen of Earth will be earning and spending
over $30,000 a year in today's money, roughly the same as the
average American spends today. By 2100 she will be spending nearly
$150,000 a year, or five times what an American now consumes.
This is almost unimaginable. Try to get your
heads round the prospect of Africans and Afghans having the
disposable income of today's Americans within the lifetime of your
own children, let alone grandchildren. If it seems fanciful,
consider this. If my great grandfather had made a similar forecast
in 1910, based on the then growth rate of the world economy, then
even assuming he would not have predicted two world wars and a
Great Depression, he would still have hugely underestimated the
average income of today.
What is growth? It means fulfilling more
needs and more wants with a smaller amount of work. A kilowatt-hour
of electricity cost an hour of work in 1900 for somebody on the
average wage; it costs five minutes of work today.
The economic growth of the past decade took a
century to achieve in 1810 and took a millennium to achieve in 810.
That acceleration shows no signs of stopping, indeed it may be
about to redouble. The root cause of economic growth is the mixing
of ideas: ideas on how to recombine the atoms and electrons of the
world in such a way as to supply people's needs and wants more
efficiently. Bring down barriers to the mixing of ideas (barriers
in trade, energy, communication and education) and you will cause
faster growth whether you want to or not. Nothing has brought down
barriers to the mixing of ideas faster than the internet. Today a
man in Shanghai and a woman in San Francisco can spark each other's
thoughts in seconds, where two decades ago they needed books or
aeroplanes to have such mental sex.
Economic growth has a strange and telling
feature. While it jumps up and down in individual countries, in the
world as a whole it shows an inexorable steadiness. Suppress it in
one place and it surges elsewhere. Just as the mandarins who served
the Ming emperors once sent prosperity into European exile, by
erecting barriers to enterprise, so the Eurocrats who serve Emperor
Herman van Rompuy are now returning the favour.
Another symptom of this inexorability is
simultaneous discovery. As Kevin Kelly reveals in his remarkable
book What Technology Wants, every invention is plagued with
disputes between people who perfected rival versions of it at the
same moment: from telephones to lightbulbs, from natural selection
to Neptune, from vaccines to transistors -synchronous discovery is
the rule rather than the exception. That is because each innovation
makes the next one `ripe'. And since it is these inventions that
raise living standards, the inevitability of discovery means
inevitable economic growth.
What is more, this process generates virtue.
The essence of virtue is co-operation: pro-social rather than
anti-social behaviour. Study after study confirms that
immersing people in commerce makes them nicer: le doux
commerce, Montesquieu called it. Growth comes about through
people working for each other. Self sufficiency is poverty;
prosperity is mutual exchange and specialisation. The more you
specialise in doing one thing for strangers and they each
specialise in doing one thing for you, the better your productivity
and the greater your standard of living. Millions of people you
will never meet contributed to making for you each of the objects
you use in your everyday life. Far from being a selfish creed,
economic growth spreads collaboration.
Moreover, with growth come other non-material
benefits. As people get richer so they demand that more money and
attention be paid to what were once luxuries like clean water,
clean air, clean energy and biodiversity. So it is not just child
mortality and family size that fall rapidly with wealth; pollution
and habitat destruction come tumbling down once incomes pass a
level of about $8,000 a head. More and more countries are passing
that threshold right now. Watch as India and China get interested
in saving tigers and pandas - hopefully just in time. Watch as
genetic engineers eventually revive the dodo and the thylacine:
that is the kind of luxury great wealth can buy.
Not everything will go right. Because we are
human, there will be wars, bubbles, recessions, disasters and
superstitions, but just as the recent crisis failed to derail world
growth, so it is unlikely that the great existential threats that
each generation so warmly clutches to its pessimistic bosom will
blow away this inexorable boom. Doom after doom, from eugenic
deterioration of the race to the collapse of computers at the
millennium, has turned out to be a mirage. Population growth is
slowing, and will halt altogether around 2070. Both theoretically
and empirically, climate change looks set to continue to happen too
slowly to reach a dangerous pace, absent some implausible feedback
or tipping point mechanism. Fossil fuels, especially gas, far from
running out, will prove sufficiently abundant to fuel even the
super-prosperity of this century, before giving way to cheaper
forms of energy as scarcity eventually drives up their price. Great
plagues, mega-volcanoes, asteroids and vengeful superintelligent
computers are all possible, but improbable.
At this dark, cold, austere moment, take a
little cheer from the question: what could go right?
