Compounding, exponential function

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Nudlaug's picture
Nudlaug
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Compounding, exponential function

Having watched the Crash course and being intimately familiar with the concept of compounding and the exponential function due to my mechanical engineering education I now start to wonder how on earth there is any other possibility than hyperinflation. Or am I missing something else here that could possibly counteract this huge force when the curve gets onto the last stretch as it seems to be right now......

And also having watched Dr. Albert Bartletts series about exponential growth, realizing 1 minute before 12 that the bottle is 1/2 full, what does that say for the earths population? What are the real implications? Any opinions? Without holding back? As far as I am concerned it is a mathematical certainty that this train is going to crash. Just on the one fact of overpopulation alone. Does anyone have an argument against Dr. Bartlett?
The only remedy I can see is that nature will self regulate, which bluntly means the death of billions. Does anyone disagree? Does anyone think that human reasoning will be able to stop the growth of the human population? Or that nature will put a forceful end to it.
I mean I don't know myself, I just find scenario 1 a bit hard to believe, humanity does not have a great track record of responsible behaviour......

Any thoughts?

 

Chris

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RoseHip
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Population growth

Has human kind ever been in control of population growth in a meaninful way? I would argue that this reasoning function has always been dictated by the relationship we share with the natural world and all its forces. To find our where we are today is just a product of our technologies (Growth) and the seperation away from this relationship with our natural world we find today (Fraking or Fukishema as examples). To think that we might reason ourselves into controlling population with sole ownership and responsibility, isn't that just another step in the direction of this seperation mentality that Charles Eisenstein referes to as the "Ascent of Humanity"? 

So what do we do about the knowledge well meaning people can see and the conclusion it is leading us toward creating this gap between what we should be doing and what we see happening.

Rose

MarkBahner's picture
MarkBahner
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I have arguments against Albert Bartlett

And also having watched Dr. Albert Bartletts series about exponential growth, realizing 1 minute before 12 that the bottle is 1/2 full, what does that say for the earths population? What are the real implications? Any opinions? Without holding back? As far as I am concerned it is a mathematical certainty that this train is going to crash. Just on the one fact of overpopulation alone. Does anyone have an argument against Dr. Bartlett?

Yes, I have several arguments against Dr. Bartlett:

1) He says human population can't grow exponentially forever. That's true, but what he doesn't tell you is that the world human population has *not* been growing exponentially since approximately 1964...so almost 50 years!

Here is a graph of the annual percentage growth in human population. In order for the growth to be exponential, the percentage must be constant. The percentage has been declining since approximately 1964. So growth has not been exponential since approximately 1964.

http://en.wikipedia.org/wiki/File:World_population_growth_rate_1950%E2%80%932050.svg

2) He says the economy can't grow exponentially forever. This is a misunderstanding of what the economy is. Wealth is not a material thing, and therefore can grow forever. In fact, it is likely that economic growth in the 21st century will be much faster than economic growth in the 20th century...even though the 20th century had the fastest economic growth since the rise of human civilization.

http://markbahner.typepad.com/random_thoughts/2004/10/3rd_thoughts_on.html

P.S. Regarding hyperinflation...the trend of governments to print more and more money is being counteracted significantly by the ability of people to make more and more valuable things faster and faster.

 

 

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HughK
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Mark, how do you reconcile peak oil with continuing growth?

Hi Chris, Mark and all,

First, Chris, thanks for starting this thread.  For me, it`s helpful when people ask questions like this, regarding basic aspects of the Crash Course, because then I am forced to reconsider things I think I`ve learned, and therefore can understand big shifts in our civilization more deeply.

Mark, I took a brief look at your blog and I`ve thought about your post above.  It seems that you have a cornocopian outlook, by which I mean that you believe that technology and other aspects of material progress will provide humanity with a higher material standard of living in the future.  That is obviously not what most people who are here at PeakProsperity believe, as most of us think that there are several limits to material growth, the most important of which is probably passing the point of conventional peak oil production, somewhere around 2006.   

But, the cornucopian view is what our society generally believes and/or takes for granted, and our fractional reserve, debt based banking system is predicated on future economic growth.  

So, my question to you is, how do you reconcile your predictions of wildly higher economic growth in the 21st century with high depletion rates of fossil fuels, especially conventional oil.

Cheers,

Hugh

 

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HughK
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Mark, how do you reconcile peak oil with continuing growth?

Hi Chris, Mark and all,

First, Chris, thanks for starting this thread.  For me, it`s helpful when people ask questions like this, regarding basic aspects of the Crash Course, because then I am forced to reconsider things I think I`ve learned, and therefore can understand big shifts in our civilization more deeply.

Mark, I took a brief look at your blog and I`ve thought about your post above.  It seems that you have a cornocopian outlook, by which I mean that you believe that technology and other aspects of material progress will provide humanity with a higher material standard of living in the future.  That is obviously not what most people who are here at PeakProsperity believe, as most of us think that there are several limits to material growth, the most important of which is probably passing the point of conventional peak oil production, somewhere around 2006.   

But, the cornucopian view is what our society generally believes and/or takes for granted, and our fractional reserve, debt based banking system is predicated on future economic growth.  

So, my question to you is, how do you reconcile your predictions of wildly higher economic growth in the 21st century with high depletion rates of fossil fuels, especially conventional oil.

Cheers,

Hugh

 

MarkBahner's picture
MarkBahner
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How the economy can grow beyond peak (conventional) oil

"Mark, I took a brief look at your blog and I`ve thought about your post above.  It seems that you have a cornocopian outlook,..."

I prefer, "Informed and realistic outlook." smiley

Seriously...I think in 20-30 years machines will be able to do virtually everything a human being can do. So that will potentially mean tremendous amounts of unemployment for human beings. (The robot employment picture looks rosy.wink)

"...by which I mean that you believe that technology and other aspects of material progress will provide humanity with a higher material standard of living in the future.  That is obviously not what most people who are here at PeakProsperity believe,"

Perhaps most people here are wrong? smiley (Or perhaps I'm wrong...it's happened before.wink)

Again, seriously, I agree with many people here at PeakProsperity about many things...e.g., future employment for human beings is uncertain, huge government debts are problematic, and other issues.

"...as most of us think that there are several limits to material growth,..."

I agree there are limits to material growth. I don't agree there are limits to economic growth. Case in point that I was thinking about just today. I recently had cardiac surgery involving angioplasty and stents put in a coronary artery. (Google "Widow maker" or "Tim Russert.") The artery was (according to the doctors...I saw the pictures but don't have the expertise to say more than something appeared wrong) 95% blocked, but my symptoms prior to surgery were incredibly mild (e.g., a bit of chest pain when I jogged). Probably 50 years ago, I would have simply had a heart attack or stroke and died, or been severely disabled.

So that balloon angioplasty and those stents are very valuable. But the amount of material involved involved is grams. So the bottom line is that materials don't mean wealth. Wealth is the ability to satisfy one's desires. One can see a similar thing in cell phones. The total amount of material involved is less than a pound. But it can do voice calls, Internet connections, GPS travel instructions, photos, videos, music playing, etc. etc. 

"So, my question to you is, how do you reconcile your predictions of wildly higher economic growth in the 21st century with high depletion rates of fossil fuels, especially conventional oil."

I don't view the cost of conventional oil as being terribly important to economic growth. There are many substitutes or potential substitutes (natural gas, electricity, unconventional oil, including renewable oil such as oil from algae).

Just look at the total cost of conventional oil versus the total size of the economy. It's a small fraction.

I've commented about this issue before, and can do so again, but the key determinant of economic growth is (in my "informed and realistic" opinion wink) the supply of (free) human brains.

Mark Cochrane's picture
Mark Cochrane
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Posts: 1227
Boom then bust

Nice thread with a difficult subject.

First, Chris, I unfortunately believe that you are likely to be right. Boom then bust. Could we potentially avoid such carnage, yes, but only if we actively tried. I think Lester Brown has the only plan that I've seen to tackle the sum of our global problems (link) and put us on the path to actual sustainability which would require dealing with poverty issues as well as population, energy, climate, resource use etc. We do not seem to be following that path though. In the end, it will likely not be either as rosy as Brown hopes or as grim as we fear but there is a large reckoning coming. As much as we would like to believe that we exist outside of nature that is a fantasy. No amount of economic chicanery is going to magically make resource, energy or population issues disappear. Economic theory posits infinite substitutability for resource needs but what is the substitute for water?

Mark, though I like your optimism you are working under a misconception. Human population is indeed growing exponentially. The link you provide shows that the rate of growth of the human population is decreasing but as long as populations growth is happening at a rate that is a percentage of the current population then the growth is exponential. This is just like your bank account. As long as you are getting compounding interest then your account will eventually skyrocket in size (being alive until then at current rates is unlikely though). The time until that occurs depends on the interest rate. In terms of human population, the doubling time used to be about 35 year back in 1970 when we were growing at 2%. Nowadays we are growing at about 1% which means we will double the population in 70 years. Now that rate may keep dropping so it could take longer than 70 years but as long as the growth rate is greater than zero the total population will grow exponentially.

Wealth may not be a material thing (ask the Dalai Lama) but maintenance costs to support human life are very material things called food, water and oxygen. 'Wealth' means nothing to you if you cannot eat, drink or breathe; Hence the fables of King Midas and his golden touch. It doesn't matter how small your cell phone is if the water doesn't flow or the food isn't there.

The crash course makes a very convincing case that economic 'growth' is very dependent on the energy return on energy invested which translates in the economy to the cost of energy. Just because we (human beings) can make something does not mean that we can make it cost effectively. Comparing the fractional cost of energy to the total economy does not equate to its relative importance. Just look at oxygen, we do not pay anything for it but I'd sure hate to try to live without it. Like you, I am here today because of the wonders of modern medicine but those wonders are the product of social complexity that can only exist in a very energy rich system. Less usable energy means either simpler social systems with the same population or a reduced population at current levels of energy demand.

Lest this sound too depressing let me just say that there is a lot of room between all is well and despair. Yes, human populations will drop dramatically but this will not have to be in the zombie apocalypse. Human beings can and have lived quite happily on a lot less energy than we are using today. Anything you do towards reducing your energy usage and increasing your resiliency for food, water and other needs will make the adjustments in the future easier. Neither complacency nor fatalism will help you or your family though.

Mark

 

MarkBahner's picture
MarkBahner
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Posts: 67
No, human population growth has been less than linear since '88

Mark, though I like your optimism you are working under a misconception. Human population is indeed growing exponentially. The link you provide shows that the rate of growth of the human population is decreasing but as long as populations growth is happening at a rate that is a percentage of the current population then the growth is exponential.

No, that's simply not correct. Exponential growth must be a constant percentage growth (at least averaged over some time...it need not be the exact same percentage every year, but it can not be declining to zero).

This can be seen by the graph I previously provided:

http://en.wikipedia.org/wiki/File:World_population_growth_rate_1950%E2%80%932050.svg

...plus this graph that shows the *absolute number* of people added each year:

http://www.census.gov/population/international/data/idb/worldpopchggraph.php

One can see that the absolute number people added peaked in about 1988 at about 88 million added in that year. Since the number added per year has gone down, the growth since 1988 has actually been less than linear.

And it has not been exponential growth since about the mid-1960s (see the first graph).

Mark

 

MarkBahner's picture
MarkBahner
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Posts: 67
Food, water, and oxygen

Wealth may not be a material thing (ask the Dalai Lama) but maintenance costs to support human life are very material things called food, water and oxygen.

The world average calorie intake has increased dramatically in the last 50 years. There's every reason (barring takeover by Terminators) to expect it to hit current OECD/developed/rich country levels sometime in the next 50 years. After that, there's no need for it to increase. (In fact, in many rich countries, obesity is a much larger problem than hunger.)

More than 2/3rds of earth is covered with water. Desalination costs have fallen dramatically and will likely continue to do so. Since a large portion of the human population is near the coasts, water should be available at a lower cost than today, 50 years from now (adjusted for inflation).

Oxygen is free and essentially unlimited on earth.

 

MarkBahner's picture
MarkBahner
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Posts: 67
Energy Return on Investment

The crash course makes a very convincing case that economic 'growth' is very dependent on the energy return on energy invested which translates in the economy to the cost of energy.

Energy return on energy invested is hugely important if the energy source is the same as the energy product (i.e. using more oil than is gained in the process of producing it). The energy return on energy invested is virtually irrelevant if an essentially inexhaustible source of energy of one form can be used to produce another form. For example, if liquid fluoride thorium reactors were used to produce gasoline (or methanol, or any other liquid used for transportation) then it would not really matter whether is took 1.5 or 2 or 3 or 5 units of energy from thorium to produce one unit of energy in liquid transportation fuel.

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