How might tech-enhanced production best help to reduce material consumption? How might an increased human population actually help reduce our collective ecological footprint? When I want to ask such questions, I pose them to Andrew McAfee. This present conversation focuses on McAfee’s book More from Less: The Surprising Story of How We Learned to Prosper Using Fewer Resources — and What Happens Next. McAfee, a Principal Research Scientist (and Co-Founder and Co-Director of the Initiative on the Digital Economy) at the MIT Sloan School of Management, studies how digital technologies are changing business, the economy, and society. His recent books coauthored with Erik Brynjolfsson include The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies (2014), and Machine, Platform, Crowd: Harnessing our Digital Future (2017). McAfee has written for publications including Foreign Affairs, Harvard Business Review, The Economist, The Wall Street Journal, and The New York Times. He also hosts the popular podcast Minds and Machines with Andrew McAfee.
ANDY FITCH: Could we start with William Jevons’s claim that efficiency gains just “enlarge the field” in which we seek to exploit a given natural resource, and Alfred Marshall’s conception of ever-expanding human desires, and questions of whether we are, “with all…the extraordinarily powerful technologies of the Industrial Era, just setting ourselves up for the greatest Malthusian crash of all time?” And could we move towards your own Marshall-affirming formulation that we do in fact want more all the time, but don’t want to keep consuming more resources — especially in a capitalist economy?
ANDREW MCAFEE: William Stanley Jevons, who published The Coal Question in the 1860s, essentially says: “We use a lot of coal in Great Britain. It powers our economy. We have a lot of it right now. But we will eventually run out.” But then, even more disturbingly, Jevons argues that Great Britain has no way to fix this problem because, for example, if it builds more efficient steam engines, providing more energy per bushel of coal, then these engines themselves will start spreading ever further across the economy, increasing coal usage and coal dependence. Modern economists would say that Jevons here has described the price elasticity of demand for coal — how much demand changes as price changes. Most basically, Jevons says: “Look, if efficiency makes the price go down, then demand itself will go up. And total demand will keep going up until we exhaust our coal supply.” So let’s consider that gloomy prediction number one.
Gloomy prediction number two comes from Alfred Marshall, a giant in the field, who published Principles of Economics in 1890. It still shapes how we teach economics today. In this book, Marshall argues that we as humans never reach satisfaction at any level of prosperity, at any given size of the economy. In this lyrical passage, Marshall says: ”Human wants and desires are countless in number and very various in kind.… The uncivilized man indeed has not many more than the brute animal; but every step in his progress upwards increases the variety of his needs together with the variety in his methods of satisfying them. He desires not merely larger quantities of the things he has been accustomed to consume, but better qualities of those things; he desires a greater choice of things, and things that will satisfy new wants growing up in him.” Marshall offers this deep statement about human wants and needs. He says our current level of consumption doesn’t matter. We inevitably want more prosperity. We inevitably want to consume more next year.
So we can combine these two gloomy arguments, and see a huge problem coming. We can’t rely on the British, before they run out of coal, somehow acquiring everything they need from it, somehow getting so wealthy that they overcome this desire to consume even more. So the greatest Malthusian crash of all time seems soon to follow. And by extension, you can imagine this same dynamic playing out with any other resource.
Then skipping ahead to the mid-20th century, your book first presents political leaders and everyday citizens treating a burgeoning pollution crisis as a minor (perhaps inevitable) nuisance — more like noise pollution in some lively city today. And then we encounter escalating pre-Earth Day anxieties, “dispatches from a society in panic attack” sounding more emotionally familiar (though with slightly different imminent concerns, and prophetic claims) to our own. Where might you see some of those mid-60’s Population Bomb-style predictions (or even MIT’s own “Limits to Growth” study of the 70s) exemplifying the best possible math and scientific applications for their time? Where might you detect something more like impulsive reactivity or insular academic overthinking or charismatic public grandstanding?
I do detect some public grandstanding, and some academic insularity, because we always have those. But in general I sense a pretty respectable alignment of serious scientific research and mainstream opinion starting to coalesce around concerns about resource use, pollution, ecological exploitation. By the time of the first Earth Day, in 1970, both many experts and many ordinary citizens start sounding very, very scared. This sense of pessimism and increasing alarmism leads to quite explicit claims that we will face this giant Malthusian crash (usually predicted for some time before or during the mid-21st century).
One of the most famous quantitative exercises came from my home institution of MIT, leading to the 1972 book Limits to Growth, for which the research team built a very ambitious computer simulation of the world economy, and then ran it forward taking into account population growth, industrialization, pollution, resource use, and related developments. They ran various scenarios for how the global economy could progress in the coming years, and they couldn’t run a simulation that didn’t arrive at a dire end, with society running out of resources, with pollution becoming an even more serious problem. All of their simulations basically ended in this resounding 21st-century Malthusian collapse. So I don’t see much bad faith or fame-seeking in this type of modeling taking place back around the time of Earth Day. I see an honest and earnest effort, both in the academic research and in the public discourse, to recognize our exponential increases in resource use, in animal hunting, in species extinction, in pollution, in exploitations of the environment — and to make the case that these things can’t continue.
So now progressing towards the mid-70s, your book tracks the emergence of “comparative optimists” starting from the premise that many (argumentatively sound) predictions of ecological and/or civilizational collapse have not panned out, that many trendlines predicted to get much worse both for us and for other species have in fact gotten better. Could you sketch how this comparative-optimist mode might inform your own sense that, though we definitely shouldn’t feel complacent about our present ecological footprint (and definitely should assume climate change will continue making aspects of everyday life much more precarious for a long time to come), we also should take confidence from the existing record of human ingenuity helping us meet our most pressing challenges?
You described it well. In the years after Earth Day, alongside these dire scientific and mainstream discussions, a very small tribe of comparative optimists started appearing. I at least think of them as led by Julian Simon, working in the 1960s as an economist at the University of Maryland. Simon had written books about this horrible population-explosion crisis coming for humanity. But then, to his eternal credit, he continued carefully examining the evidence, and kept failing to see these predicted global famines caused by resource scarcity. We did have localized famines caused by war, and by ruthless or incompetent governance. But we didn’t reach any Malthusian limits where the planet just couldn’t provide any further increase to the food supply.
So Simon started questioning his earlier beliefs, and eventually walked away from them altogether. He started to say: “Look, when we forecast all of this human population growth, we have to keep two related developments in mind. We have to realize that many of these people themselves will become problem-solvers. And we have to keep in mind that all of these additional mouths to feed will expand our markets, which will encourage other entrepreneurs and innovators to figure out creative and efficient ways to get food to everybody. We can’t just predict huge new numbers of passive resource consumers.”
And Simon kept on pointing out when these predicted resource catastrophes didn’t end up happening. We definitely did have more people, but their diets tended to keep improving, and their longevity tended to keep increasing. And most controversially, Simon kept denying that resource scarcity (one of our principal worries at the time) really existed. Other economists would ask: “Have you not read Alfred Marshall? Have you not seen how quickly we’ll exhaust our resource utilization? How can you possibly say this?” Simon would respond: “Essentially, because of prices.” Simon and other economists who took related positions kept stressing the centrality of prices, which almost didn’t appear in the environmental movement’s public discourse — except in claims that increasingly unaffordable prices for food would soon make many people starve.
So how does Simon’s pricing/consumption model compare to what Jevons predicted with coal?
Simon noted that prices often do rise on foodstuffs and equivalent resources. But Simon would add that these price increases cause two very important things to happen. First, people look around for an alternative resource. If tin gets expensive, then people feel incentivized to search with great vigor for a substitute for tin, because companies want to cut costs and save money. And second, if tin’s cost rises dramatically, tin prospectors emerge and scour the world for additional tin deposits. So Simon concluded that this combination of new searches for alternative resources, and new searches for more of this same resource, will increase the availability of this resource, and its price will go down because the shortage will ease.
Now, as you can imagine, for a long time this remained a minority view. It didn’t make Simon a super-popular figure. But he kept making his point. And eventually, Simon and Paul Ehrlich (one of the Earth Day era’s great Malthusian voices), after ongoing criticism of each other’s claims, decided to make a bet. In this 1980 bet, Simon offered what I consider quite generous terms to Ehrlich. Simon said: “You can pick your bundle of resources, and you can pick your time frame. If, at the end of your time frame, the cost for this bundle has gone up, then I will pay you the difference. If the bundle gets less expensive, then you will pay me the difference.” Ehrlich said: “You’re on.” Ehrlich picked a 10-year time frame for five resources. Over the next decade, for every single one of these resources, prices dropped. To me, that provides a compelling vindication of Simon’s view of the Earth’s cornucopia, and of humanity’s impressive ability to solve its own problems.
By extension (but also to some extent by contrast), much of your own comparative optimism at present seems to come from your detection of an emergent “sustainable dematerialization,” an economic vision (and now more tangible reality) that can push beyond any presumed tradeoff between techno-civilizational development and accelerated resource consumption. So here, for a bit of quite recent historical context, could you offer a couple examples of how certain capitalist drives to slim, swap, optimize, and evaporate have worked even better than Earth Day-era calls to CRIB (consume less, recycle, impose limits, go back to the land) for taking us into a post-peak-material era?
Yes, I would start again from Simon’s claim that when resources become more expensive, we search for alternatives. But, as you suggested, Simon probably had in mind plentiful alternate material resources, whereas I wanted to write this book largely to make the case that today our alternative to consuming expensive resources is to consume nothing — or at least to minimize material consumption. And I don’t argue here that we all have become (or should become) Buddhist monks, or have Marie Kondo-ed our lives until we no longer need any possessions. Instead I argue that in the digital era, and as we progress deeper into what Erik Brynjolfsson and I have called the second machine age, you can substitute a computer bit for an atom. You have all these amazing opportunities not to consume a different resource, but just to use less overall (or none in certain cases).
Earlier I mentioned tin. Tin cans eventually got replaced by much lighter aluminum cans. We’ve used aluminum cans for decades now. And the aluminum beer can that we drink out of today weighs about 20 percent of what the first generation of aluminum cans weighed. So we’ve learned to save 80 percent of this material mostly because we now have really, really good computer systems letting us model the strength of different kinds of aluminum cans — so that we still can protect the beverage and meet our performance requirements. And with increasingly powerful computers, we can keep figuring out ways to shave off a little bit more material year after year. And you could ask: “Why would anyone put time into this?” Well, when you sell hundreds of millions of cans each year, and your consumer doesn’t value the can, and only values the beer, then, as the beverage company, you enthusiastically pursue any related cost savings that you can think of.
If you only need to invest in a bit of software and a big computer and a couple engineers’ salaries to make these massive savings, you will absolutely take that deal. As a result, we have saved, I believe, hundreds of thousands of tons of aluminum, simply by designing thinner-walled cans. And that example illustrates the broader phenomenon of dematerialization at the heart of this book. Instead of always searching for additional resources, we systematically keep using fewer resources while still satisfying everybody’s desire to consume.
I personally consider my smartphone the world champion of dematerialization. Instead of a bedside alarm clock, a camcorder, a tape recorder, a camera, an answering machine, a fax machine, a computer in many cases, I have this tiny phone. If you put all those devices on a scale, they’d weigh a lot. But now, for the rest of my life and almost everybody’s lives, all of those devices have vanished into the smartphone. Similarly, I don’t print out maps anymore. I haven’t used photograph film in years. Those activities and related expenditures have just collapsed down into this smartphone. And we should not overlook the fact that this smartphone uses a heck of a lot less energy than that armada of devices I used to have. Could I give one more of my favorite examples?
In the early days of researching this book, a friend described getting hired in 1968 by the conglomerate that owned Chicago & North Western Railway. He said: “For my first assignment, I had to find our boxcars all across the country.” I asked: “What do you mean?” He said: “We often didn’t know where most boxcars were. We owned thousands of miles of track. Our cars would get hitched to a train and could end up anywhere. We didn’t have RFID tags to track them. Back in the late-60s, the lore in the railroad industry was that you had about five percent of your company’s boxcars moving on any given day.” Of course the other 95 percent of cars didn’t need to rest. Their owners just couldn’t immediately find them, and couldn’t deploy these very expensive assets — and, I should add, very material-intensive assets, weighing about 30 tons each.
So, my friend said: “We knew that if we could track just 10 percent rather than five percent of these cars on any given day, we could reduce by half our total stock of boxcars, and with these material savings, we could make a killing. So we took a number of steps. We hired people to wait at railroad crossings and watch if any of our boxcars went by, and then contact our head office by telegraph or telephone. We tried out paying people to walk around freight yards to do the same thing. But eventually we started to use these things called computers and sensors and networks. And now I’d assume that every American railroad knows precisely where every single 30-ton boxcar it owns happens to be at any point in time. As a result, we need a lot fewer boxcars to move all the freight around the country.”
So both the smartphone and the boxcar examples evoke for me your broader celebration of the “four horsemen of the optimist” (capitalism, technological progress, public awareness, responsive government) galloping across the globe. But I’d still call you a comparative optimist, since I do detect some concern about these horsemen sometimes getting spread a bit thin on their march — with, for instance, the relative merits of capitalist economics and innovative tech development increasingly coming under question in the most industrially advanced societies. Here could you start speaking to More from Less’s animating impulse to document the underrecognized successes of (and benefits provided from) these four well-traveled horsemen: to “tell us something critically important… what we’re doing is working and therefore we should keep doing it instead of contemplating huge course changes”?
The examples I just gave combine the first two horsemen of the optimist, capitalism and tech progress. And an important part of this capitalist component does involve really vicious competition. So, for me, a monopolist by no means exemplifies capitalism. If we only had one beer company in the world, that company wouldn’t need to cut costs by saving money on aluminum cans. They could just pass those costs onto customers. So we actually need really nasty competition to provide the motive for saving money and reducing resource consumption through tech progress. And digital tech especially provides such opportunities.
Abraham Lincoln, the only US president to hold a patent, described the capitalist patent system as adding the fuel of interest to the fire of genius. I still consider that a fantastic description — with tech progress serving as today’s fire of genius, and with capitalism fueling our interest. Just having these two horsemen riding together makes me confident that our aggregate resource use will drop pretty quickly. But, as big of a fan as I remain of these first two horsemen, of course we also need the other two. Most obviously, these first two horsemen don’t deal with pollution.
And more broadly, big tech’s reputation has suffered over the past couple years. People talk about breaking up big tech. They consider these corporations too powerful, Orwellian, without our best interests at heart. Both our elite and our mainstream conversations around technology have turned pretty grim and negative. And I certainly acknowledge that the rise of some of the big tech companies, especially some of the social-media platforms, demands great public vigilance. But at the same time, I do want the public to grasp some of the important improvements we see today — and where these improvements come from. If we want to tread more lightly on the Earth, I don’t see a way forward that doesn’t involve a whole lot of new technology. So I don’t want to cheerlead for individual companies. But I certainly do want to champion the broader tech industry and its own attachments to this selfish economic system called capitalism. I think of capitalism how Winston Churchill thought about democracy: as the worst possible system, apart from all the others we’ve tried.
More from Less describes in further detail how your own advocacy for capitalist competition in fact makes you an active opponent of crony capitalism, corporatism, regulatory capture, triumphant post-Cold War market fundamentalism. But here could we also address how you see not just greedy would-be monopolists, but dynamic tech innovation itself today “changing the nature of competition,” with a small number of superstar firms successfully integrating powerful new technologies — provoking winner-take-all or winner-take-most scenarios, and leaving potential rivals, by comparison, seeming stuck in some idled or sidelined or zombied state?
Right, in my community of people studying economics and the business world, trying to understand causes and consequences of important trends, you see a lot of vibrant research right now about the phenomenon you just described, which we can call concentration. More and more of the total revenue and profits in many industries keep going to fewer and fewer companies. You see this not just in big tech, but all across the American economy, and across just about every economy for which we have good data. So everybody wants to find a comprehensive explanation for what’s going on. And a lot of people, including many who I respect a great deal, will tell you that our economy has been hijacked by…fill in the blank: by plutocrats, by the elite, by incumbents who just keep grabbing more and more for themselves.
But I consider this phenomenon much too broad and diverse and complex for that kind of generalizing explanation. I think we have these tectonic forces of globalization and of very powerful technologies bumping up against each other. And we know quite clearly that when a powerful new technology comes along, all companies don’t adopt it or internalize it with equal success. So in almost every industry today, we see highly sophisticated new technologies come in, and a small set of companies successfully harnessing these technologies, and making big gains in revenue and profits — with everybody else kind of fighting over the scraps left behind.
Returning then to gloomier aspects of capitalist tech-driven innovation, More from Less does address capitalism’s relative inadequacy at staving off negative externalities (costs imposed on humans, other species, whole ecosystems receiving no benefit from the profit-making enterprises in which they somehow get caught up). Greenhouse gases, you note, epitomize negative-externality concerns: with emissions’ destructive impacts often manifesting far in place and time from the emitters, with the chemistry of carbon emissions making them distinctly hard to capture, and with would-be green societies reluctant to minimize their own footprint just to enable self-serving bad actors. So could you offer your most persuasive case (to both left- and right-leaning audiences, to industrialists and environmentalists) for establishing a carbon tax and/or cap-and-trade regime — not just as a reasonable compromise approach, but as in fact the best means we have to harness capitalist innovation to the most broadly beneficial ends, here by coaxing polluting companies themselves to figure out the most efficient methods for further dematerializing production?
I don’t know any economist who believes that markets magically by themselves solve pollution. Economists might strongly endorse markets for producing goods and services. But any decent ECON 101 textbook has a chapter or two on this concept of externalities — for the broader (and often unintended) consequences that come about through our market transactions. Pollution provides the classic case of a negative externality, because the market does not automatically price in pollution. If I buy a quart of milk from the corner store, I don’t necessarily have to pay for the cleanup of the cows, if they create a stench in the neighborhood. All of the dairy’s neighbors experience this stench, whether or not they buy or sell milk. So then the question becomes: what do we do here collectively, if we don’t want to live in a polluted community? And as a first tool, many economists would say: “Put a price on that pollution within the market system — so that companies try very hard to reduce their pollution costs, just like they persistently try to reduce their costs on land and resources and anything else.”
Still carbon-pricing did start off as a weird and counterintuitive idea. It often gets attributed to one legendary economist named Ronald Coase, who received the Nobel Prize for any number of contributions. Coase proposed, for example, a way to deal with this societal problem of pollution. Researching More from Less brought me to this wild early 1980s moment when the environmental movement found common cause with a bunch of conservative libertarian economists, specifically as we put in place a cap-and-trade system for reducing various kinds of pollution, including the sulfur-dioxide pollution causing acid rain and making industrial communities really quite miserable. This cap-and-trade approach put a limit on the total amount of pollution that an industry could generate. But within that cap, industry players could trade for the right to pollute. Of course this already sounds wrong or immoral. Who “deserves” the option to sell their “right” to pollute? But this arrangement works because companies quickly train themselves to minimize their total spend on pollution. Cap-and-trade in the US actually has been a huge success. The particulate-pollution levels addressed in that 1980s plan have cratered in America. This has only cost affected industries about 20 percent of our initial projections.
The more contemporary variant on these approaches to incentivizing reduced emissions comes in the form of a carbon dividend, as proposed by William Nordhaus, among others. Nordhaus won the Nobel Prize just last year in large part for this idea. He says: “Look, we won’t forbid carbon pollution. We can’t. Our whole economy would grind to a halt. So we’ll put a tax on emissions, which will incentivize reductions. But instead of the government keeping this tax revenue for whatever sending projects it chooses, we’ll immediately filter all (or almost all) of this money back to taxpayers, particularly lower-income taxpayers, and households whose budgets will be most affected by higher carbon prices.” That proposal for taxpayers receiving a carbon dividend offers just this unbelievably elegant, simple, but powerful idea.
And I say with great confidence that it will work if put in place. Thousands of economists (progressive, conservative, libertarian, doesn’t matter) have now signed on to an open letter in The Wall Street Journal early this year presenting this carbon-dividend proposal as the biggest no-brainer in economists’ toolkit for dealing with pollution. Like you said, greenhouse gases pose distinct problems because they last so long in the atmosphere, because they diffuse globally. They have all of these terrible characteristics. But we still have to remember that greenhouse gases are just pollution. We know how to deal with pollution. Sufficiently reducing greenhouse gases will not be easy, but neither is it mysterious. It would terrify me if we had no toolkit for stopping global warming. We do. We just haven’t decided yet to use those tools.
For one other particularly regrettable externality of today’s capitalist tech innovations, you note significant dangers posed by corroded social cohesion. Here especially with participatory citizenship so crucial to the United States’ economic rise, could you address what felt like an implicit undercurrent in this book’s largely celebratory account of dematerialization: that we might also have reached a decisive point on a post-peak-jobs (or at least certain types of mid-skilled, well-paying jobs) trajectory, as well as on a post-peak-social-capital trajectory — both for specific (occupationally displaced) communities and across society (as our increasingly dematerialized lives take place more onscreen, less person-to-person)?
Well again, I do consider dematerialization quite beneficial to us all in various ways. For example, since the early 1980s, America has given back to nature an amount of former farmland equal in size to the state of Washington. This huge piece of land now can provide space for forests, which certainly sounds like an improvement for the planet and the biosphere. But, as you suggested, we should recognize the fact that working people still farmed this land in 1980, and whatever they’re doing today, they no longer cultivate that land. The number of factories in America likewise has declined, even though America’s total manufacturing output still increases in almost every non-recession year. We remain a manufacturing powerhouse, but we do it with fewer and smaller production plants, and with fewer workers — especially workers without a college degree but earning a solid middle-class income, and expecting their kids at least to maintain this same standard of living. For decades after World War Two, millions of Americans signed up for this basic bargain to acquire skills, to show up, to work diligently, and to get a good life in exchange. We see that bargain put under significant threat today.
As a result, we hear a lot of overlapping explanations about how the ruthless capitalists or cultural elites have hijacked our economy and turned their back on working people. Maybe some truth exists in these complaints. We should welcome all this farmland returning to nature, and all these old industrial parks repurposed for new types of development. But we never should forget or neglect the whole communities built up around those farms and factories disappearing in recent decades. We see our society’s most receptive audiences for authoritarians and demagogues and populists concentrated in these areas. And more broadly, we see trust in both political and social institutions dropping fast. Of course economic concentration by itself doesn’t account for all of these complex societal developments. But we do need to include economic concentration in our account.
Climate change poses this very tough challenge we definitely know how to meet if we can just find the political will — but I don’t see any equivalent proven toolkit for addressing the individual and social dislocations brought about through economic concentration. Throughout most of American history, the geographic footprint of our economy kept expanding. We always needed more farms, more factories, more acres, more more more. Though now, if my more-from-less model holds up, our economy will just keep needing less of a lot of these material and geographical and in some cases human-labor resources. And for a whole host of reasons, we obviously cannot (and should not) recommend that everybody just move to the Bay Area and work for Google. So I do see some of our most important homework today involving answering those questions you just asked.
And here, alas, we arrive at my most pessimistic question, stemming from your broader reflections on whether and when our society should “step on the accelerator” or “yank the steering wheel in a different direction.” To what extent would it be fair to take the story of pragmatic human progress that you tell (“We learn about the world via science, invent new tools and technologies, create institutions such as democracy and the rule of law, and do many other things that let us solve problems and create a better future”), and instead describe this book’s account of apparent capitalist/technological successes as really just a record of us cleaning up our own ever-escalating, ever-more disastrous messes? I mean, who cares whether Simon or Ehrlich won their bet on the future availability of resources when, in any case, we now face this much more frightening prospect of runaway climate change? Or what newly destructive (yet to be detected) environmental impacts do we have to assume we’re having today? Which contemporary stats supposedly worth celebrating might in fact provide our own equivalent to how generals sometimes fight the previous war, only “winning” on paper, according to old and now obsolete metrics?
Yeah, that’s a lovely way to frame the arc of this book’s concerns, though I actually believe that pessimists are the ones fighting the last war. I still hear far too many people worry about our coming population crises and resource crises. I still hear far too many people say we need to start moving towards some combination of rationing and of centrally planned economies to deal with global warming. No. First of all, we’ve tried those approaches before, and those experiments failed miserably. Nothing will make them work better this time around. Just to take one quick example, China’s one-child policy proved a humanitarian disaster — and countries with no such policy also ended up lowering their birth rate. So persistent fondness for these top-down draconian solutions seems incredibly harmful. And I do often sense that fondness lingering on the pessimists’ side.
Now, on the optimists’ side, I first would acknowledge that our march forward as a species, our march across this whole planet, our exponentially increased prosperity absolutely has brought problems — some of them irreversible, at least until geneticists figure out how to bring back the countless species we have driven to extinction. I desperately hope to see a woolly mammoth before I die.
So we have committed countless mistakes. But we do also keep getting better at solving our problems. Our technologies keep improving. I would say that our moral sense (who we let inside our circle of concern) keeps expanding. I would say that when all four horsemen of the optimist gallop together (bringing economic freedom, technological innovation, an empowered populace, accountable government), then we have all the tools and all the momentum we need. That combination of skills at identifying problems, identifying solutions, and then energetically pursuing these solutions offers our best hope over time for making things better, not worse.
So having given voice to that perhaps perennial rant of the pessimist, could we now point to your Paul Romer-infused account of how and why cultivating human capital does in fact provide this best means for overcoming the dangers of global overdevelopment — with ever-accelerating idea-generation providing the clear moral path (in terms of addressing persistent global disparities) and green path (in terms of prompting societies to consume much more efficiently) forward? And could you outline how the right socio-economic-legal framework blending non-rivalrous innovations and partially excludable conditions can help to take us there?
Good question. We started off by discussing two 19th-century economists. And we’ve made our way to 21st-century economists. William Nordhaus actually shared his Nobel Prize last year with Paul Romer, another legendary economist (and a complete mensch, just a wonderful guy). The cornerstone of Romer’s research leading to his 2018 Nobel Prize actually came out of a 1990 paper, where he tries to articulate which new technologies make economies grow faster. He looks at how, with our patent process, companies can develop something useful and file a patent and get 17 years (in 1990, 20 years now) of protection from anybody else using their invention. And he finds even more important those technologies which you can’t quite patent. Maybe you can patent part, and to that extent temporarily exclude people from using your innovation. James Watt filed all kinds of patents on the steam engine, and you had to get a license from Watt if you wanted to use these innovations that he had patented. So Romer describes this particular patent process as “partially excludable.” You can kind of keep other people from using your innovation. But you do have to disclose your innovation. You have to describe quite clearly what other people can’t use. Potential rivals and potential extenders of your innovation get to examine these materials. Patents do eventually expire, and then the innovation becomes available to everybody. And trade secrets often leak out.
So Romer argues that certain less excludable technologies have become especially important for economic development. Think of the open-source software movement. Think of the brilliance in the Linux and Android operating systems for smartphones. By design, companies have created these one-hundred-percent non-excludable technologies so that they can propagate and spread around the world super quickly. And the number of powerful technologies that won’t even pass through patent protection, so that they can become freely available, seems likely to climb really, really quickly in the digital age.
Then Romer also emphasizes what he calls non-rivalries. When I use the same idea that you just used, neither of us uses up this idea. If you eat a chocolate-chip cookie, I can’t have that cookie. But if you use a recipe and make delicious chocolate-chip cookies, I can use that same recipe. So we have a whole class of non-rivalrous innovations: from the Pythagorean theorem, to the blueprint for the steam engine, to the best chocolate-chip cookie recipes.
Romer argues that this one-two punch of partially excludable technologies and non-rivalrous ideas provides much of our broader economic growth. And think about what we don’t need for that especially potent one-two punch. We don’t need more resources. We don’t need more energy. We don’t need more land. We don’t need an endless number of patents filed. We need most of all human capital and human talent to take advantage of technologies, to keep generating even more from our best partially excludable and non-rivalrous innovations. The limiting factor on economic growth in fact here becomes ideas, creativity. And I find in that economic framework of Romer’s just this wonderfully powerful, hopeful, optimistic way to spin Malthusian worry on its head. The increasing number of people won’t doom us. Actually, the increasing number of people (and of good ideas) will save us. Sign me up for that school of thought.
And then even amid this enthusiastic welcoming of more and more people, your short concluding statement eloquently reformulates an off-cited passage from the book of Genesis (supposedly endorsing unchecked human dominance), as today providing the basis for an impassioned call to re-wilding: “We now have the opportunity to atone…. We have the tools, the ideas, and the institutions we need to withdraw from most of the world…. To get all the food we need from a small amount of land, and to give the rest back to nature…. To stop pumping fast and slow poisons into the sky and oceans…. To dig fewer mines, clear fewer forests, and decapitate fewer mountains.” What have we not yet covered about how the (relatively level-headed) four horsemen of the optimist, rather than more idealistic calls for CRIBing, can best help to facilitate this quite lyrical vision of a new human/biospheric flourishing?
Well here I first should note that big population reductions worry me almost as much right now as prospects of new extinctions. I think of the important research that just came out on many bird populations in the US declining by a third or more since the first Earth Day. I find those numbers just terrifying. And one approach we’ll need to keep developing in the face of these disturbing trends really does involve us getting out of the way. We’ll need to give much more land back to nature. We’ll need to create space in which other species can flourish, and to leave much larger portions of the planet unmolested by human economic activity.
Thankfully, it does seem pretty clear to me that over the course of the 21st century we’ll hit our peak human footprint on planet Earth. We’ll hit peak population. We’ll hit peak agricultural cultivation. We’ll hit peak factories. And after that: man, something really wonderful will happen. Our physical footprint on this planet finally will start reversing its industrial-era trends, and will start getting smaller. We’ll start giving more and more of this planet back to all of the other life on this planet. I’ll take a bet from now to 2100 on that. My book describes this bet I will happily make with anybody. I’m ready to bet on us finding a much smaller and healthier and more satisfying place on this Earth than we’ve ever had.