DISCLAIMER: I am probably the last person you should listen to for advice about major investments. Please do lots and lots of your own research before buying anything big. Please take this post in the entertaining thought experiment style it is intended.
I’d like to start with an interesting story about Poland’s most famous daughter, Marie Curie, and her family:
Marie was born in 1867 in what was then the Russian part of partitioned Poland. (Russia, Prussia, and Austria had carved up Poland into pieces back in the 1700s.) Her mother, father and grandfather were teachers–unsurprisingly, her father taught math and science. When the Russians decided to shut down science laboratories in Polish highschools, her father simply brought all of his equipment home and taught his kids how to use it instead.
Because of the Russian occupation and interference in the local schools, the Poles began operating their own, underground university known as the Flying University (there’s a name for you). As a woman, Marie couldn’t attend the official colleges in Warsaw, but was accepted to Flying U.
Marie’s sister wanted to study medicine in Paris, but unfortunately their parents and grandparents had lost all their money supporting Polish nationalist uprisings, and the girls were left to support themselves. So Marie and her sister had an agreement: Marie would work and send money to Paris while her sister studied, and then her sister would work and send Marie money while she finished her education.
Marie went to work as a governess for some distant relatives, and fell in love with one of the young men of the family, Kazimierz Żorawski, future mathematician. Unfortunately for the starry-eyed couple, his parents rejected the match on the grounds that Marie was penniless.
Żorawski went on to become a professor of mathematics at Krakow University and later Warsaw Polytecnic. Marie went to Paris, married Pierre Curie, won two Nobel prizes, and founded the Radium Institute at Warsaw Polytecnic. A statue of Marie was erected here, and as an old man, Żorawski would come and sit before the image of his young love.
Poland has had a rough couple of centuries. According to Wikipedia:
Poland was unfortunately situated for both WWI and WWII, losing 1/5th of its population in the latter. The aftermath–occupation by the Soviets–wasn’t much better, as Ian Frazier recounts in his book, Travels in Siberia:
As Russia retook Poland, many Poles once again wound up in the gulag. Some who had lived through the Nazi occupation said Hitler was nothing compared to this, and they now wished they had fought on Hitler’s side. A prisoner who had survived Dachau hanged himself when he was shipped to Kolyma. Gulag prisoners who knew the novel Uncle Tom’s Cabin regretted that fate had put them in thsi time and place, and not in slavery in the American South, a hundred years before. As Negro slaves, they reasoned, at least they would have lived someplace warm, and would have been whipped and branded but not worked to death outright. In 1945, news reached the camps that the United States now possessed the atomic bomb. According to Solzhenitsyn, this unexpected development gave hope to many prisoners, who began to pray for atomic war.
But despite all of these troubles, Poland remains one of the world’s better countries–it’s ranked 36th out of 188 nations on the Human Development Index, and has an average IQ of 99, the same as its neighbors, Germany and Finland.
Despite this, Poland is ranked only 68th in per capita GDP ($27,700, lower than Puerto Rico, which isn’t even a country,) and has had a net negative migration rate (that is, more people have left than arrived) for most of the past 60 years. (Poland lost a net of almost 74,000 in 2015, most of them to other EU countries.)
In sum, Poland is a country with high human capital whose economy was probably artificially depressed by Communism, but has been steadily improving since 1990.
Net immigration increases the number of people in a country*, putting pressure on the local housing market and raising land prices. Net emigration decreases pressure on housing, leading to lower prices.
Poles have emigrated to countries like Germany and the UK because of their stronger economies, but if Poland’s economy continues to improve relative to the rest of Europe, Brexit goes forward, etc., Poland may become a more attractive employment destination, attracting back its migrant diaspora.
All of which leads me to suspect that Polish land is probably undervalued relative to places with similar long-term potential.
I’ve finally come up with a good definition for the Lizard People:
People who prioritize order above human utility–including their own.
It’s easy to understand why people harm others if they benefit personally in the process. We might not like it, but at least we understand it, and self-interested people can be reasoned with.
Lizard people look like people, but they seem to lack the ability to reason like people. They make other people’s lives worse, but for no discernible personal benefit. They use words like “progress” or “improvement,” “rational” or “modern,” “rules” or “policies,” to justify their policies, while ignoring complaints from the people involved that the new policies actually break more than they fix.
Or to put it another way: lizard people are the folks who thought Cabrini Green looked nice and built it that way on purpose.
After all, housing projects don’t simply appear out of thin air. Hundreds if not thousands of people were substantially involved in the process of creating some of the ugliest monuments to poverty the nation has ever bulldozed.
And as Slate Star Codex recently discussed in his review of James Scott’s Seeing Like a State, this didn’t happen by accident or because ugly buildings were somehow cheaper than regular ones. It happened because there was a whole school of thought, the Modernists, who thought it would be grand to redesign whole cities to be “modern” and “rational”. As Scott Alexander notes:
The worst of the worst was Le Corbusier, the French artist/intellectual/architect. The Soviets asked him to come up with a plan to redesign Moscow. He came up with one: kick out everyone, bulldoze the entire city, and redesign it from scratch upon rational principles….
The Soviets decided to pass: the plan was too extreme and destructive of existing institutions even for Stalin. Undeterred, Le Corbusier changed the word “Moscow” on the diagram to “Paris”, then presented it to the French government (who also passed). Some aspects of his design eventually ended up as Chandigarh, India. …
the Modernists rarely got their hands on entire cities at once. They did build a number of suburbs, neighborhoods, and apartment buildings. There was, however, a disconnect. Most people did not want to buy a High Modernist house or live in a High Modernist neighborhood. Most governments did want to fund High Modernist houses and neighborhoods, because the academics influencing them said it was the modern scientific rational thing to do. So in the end, one of High Modernists’ main contributions to the United States was the projects – ie government-funded public housing for poor people who didn’t get to choose where to live.
I recommend Alexander’s entire post, because by the end you will have a much better idea of what I mean by “Lizard People” than I can possibly explain myself.
Or to give a much more mundane, local example:
After a couple of the local teenagers got drivers’ licenses and a large family moved in down the block, our neighborhood developed a parking problem: more cars than spaces. Residents complained, so the HOA handed down a ruling: no one can park in the spare spaces. Problem solved!
My personal experience with HOAs is that they are run by lizard people, overly concerned with having a “rule” and a “policy” for everything, and rarely with actually maximizing the property values of the HOAs members.
It’s kind of odd that people don’t discuss HOAs more often, because they’re a level of government that millions of people are exposed to, voting is restricted to property owners, and they’re small enough that individuals could have an effect on them.
To be clear, it’s not that order is itself inherently bad. For example, Alexander posted a map of Chicago (laid out in a grid) next to a map of a traditional, twisty-windy-street city. But Chicago’s sewers are a true engineering marvel:
During the 1850s and 1860s engineers carried out a piecemeal raising of the level of central Chicago. Streets, sidewalks and buildings were physically raised on hydraulic jacks or jackscrews. The work was funded by private property owners and public funds. …
During the 19th century, the elevation of the Chicago area was not much higher than the shorelines of Lake Michigan, so for many years there was little or no naturally occurring drainage from the city surface. The lack of drainage caused unpleasant living conditions, and standing water harbored pathogens that caused numerous epidemics. Epidemics including typhoid fever and dysentery blighted Chicago six years in a row culminating in the 1854 outbreak of cholera that killed six percent of the city’s population. …
In January 1858, the first masonry building in Chicago to be thus raised—a four story, 70-foot (21 m) long, 750-ton brick structure situated at the north-east corner of Randolph Street and Dearborn Street—was lifted on two hundred jackscrews to its new grade, which was 6 feet 2 inches (1.88 m) higher than the old one, “without the slightest injury to the building.” It was the first of more than fifty comparably large masonry buildings to be raised that year. …
By 1860, confidence was sufficiently high that a consortium … took on one of the most impressive locations in the city and hoisted it up complete and in one go. They lifted half a city block on Lake Street, between Clark Street and LaSalle Street; a solid masonry row of shops, offices, printeries, etc., 320 feet (98 m) long, comprising brick and stone buildings, some four stories high, some five, having a footprint taking up almost one acre (4,000 m2) of space, and an estimated all in weight including hanging sidewalks of thirty five thousand tons. Businesses operating out of these premises were not closed down for the lifting; as the buildings were being raised, people came, went, shopped and worked in them as if nothing out of the ordinary were happening. In five days the entire assembly was elevated 4 feet 8 inches (1.42 m) in the air by a team consisting of six hundred men using six thousand jackscrews, ready for new foundation walls to be built underneath. The spectacle drew crowds of thousands, who were on the final day permitted to walk at the old ground level, among the jacks. …
Many of central Chicago’s hurriedly erected wooden frame buildings were now considered wholly inappropriate to the burgeoning and increasingly wealthy city. Rather than raise them several feet, proprietors often preferred to relocate these old frame buildings, replacing them with new masonry blocks built to the latest grade. Consequently, the practice of putting the old multi-story, intact and furnished wooden buildings—sometimes entire rows of them en bloc—on rollers and moving them to the outskirts of town or to the suburbs was so common as to be considered nothing more than routine traffic. Traveller David Macrae wrote incredulously, “Never a day passed during my stay in the city that I did not meet one or more houses shifting their quarters. One day I met nine. Going out Great Madison Street in the horse cars we had to stop twice to let houses get across.” As discussed above, business did not suffer; shop owners would keep their shops open, even as people had to climb in through a moving front door.
In other words, Chicago was too low and flat to drain properly, (which probably has a lot to do with it being laid out so neatly in the first place,) much less build underground sewers, and as a result, people kept getting sick. So they just used a bunch of jacks to lift the city and built the sewers at ground level, then filled in the open space with dirt and rubble.
So, yes, I am in favor of sewers, and even major, city-altering projects in order to install sewers. Sewers are good. Not dying of cholera is awesome. Nothing here should be interpreted as “let’s go die of terrible, preventable diseases in a muddy peasant hovel.”
But too often the imposition of order doesn’t prevent cholera; too often it just makes everything worse. “I have a solution!” doesn’t mean you have a good solution.
The biggest projects ever undertaken to improve human welfare, organized entirely along scientific, “rational” principles, resulted in the deaths of over 35 million people. No one is sure exactly how many people starved to death in the process of collectivization–Wikipedia lists estimates between 5.5 and 8 million for the Soviet famine of 1932-33, 23-55 million for China’s Great Leap Forward, and goodness knows how many we should count for North Korea, Cambodia, Ethiopia, etc.
It’s one thing to raise a city, one block at a time, on hydraulic jacks. It’s quite another matter to redesign an society from the ground up. Even if people’s current systems aren’t functioning perfectly, like the parking situation in my my neighborhood, systems tend to exist as they are because they are serving some purpose and you can’t just step in and sweep them aside without understanding what that purpose was. Moreover, whatever imperfect system you have, people are used to it and most of them have already adapted their lives around it. Before the French Revolution, there were thousands of people who made their livings producing lace, candles, and other luxury goods for the French Nobility. Chop off the king’s head, and some poor hatter will be out of a job.
Or as they say, if you come across a fence in the woods that doesn’t have any obvious purpose, it’s a good idea to figure out why it’s there before you go tearing it down.
But back to the Lizard People: the Lizard People are folks who, as everyone around them is transformed into skeletal corpses, keep insisting that everything is fine and we just need to stick with the plan–maybe even stick to the plan even harder.
And the strangest thing is that these people exist at all, and moreover, that instead of being shunned by society at large, they are often promoted–to manager, overseer, or government office.
Humans have been around for about 200,000 years–longer if we include other members of our genus, such as Homo Erectus–and it took us about 199,800 of those years just to make one billion of us. It took about 120 years to make the second billion of us, and 100 years to make the next six billion.
When will we stop? Will our population stabilize, keep climbing, slowly decline, or suddenly crash? I have no idea. I do know, however, that humanity’s growth–and industrialization–shows no sign of slowing in the short term, putting increasing pressure on the other species we share our planet with.
I like animals. I don’t want elephants or panda bears to go extinct. But how much good can conservation efforts do in a world of increasing numbers of hungry people who also want to use the animals’ habitats?
Since there is nothing I can do about the number of people in the world, I propose a different solution: mass domestication.
Wikipedia estimates that there were about 60 million buffalo (American bison) in the US in 1800. Today, there are about 90 million cattle. Domesticated cattle far outnumber their ancestral species, the auroch. Dogs outnumber wolves. Corn has gone from a dinky little plant growing in Mexico to one of the world’s most common plants. Even rats and pigeons have benefited from their association with man.
How many species could be preserved by mutually-beneficial domestication?
Many species of deer or other large herbivorous herd animals could be raised for meat, such as the Pere David’s deer, virtually extinct in the wild:
In the late 19th century, the world’s only herd belonged to Tongzhi, the Emperor of China. The herd was maintained in the Nanyuan Royal Hunting Garden in Nan Haizi, near Peking. In 1895, one of the walls of the hunting garden was destroyed by a heavy flood of the Yongding River, and most of the deer escaped and were killed and eaten by starving peasants. Fewer than thirty Père David’s Deer remained in the garden. Then in 1900, during the Boxer Rebellion, the garden was occupied by troops and the remaining deer were shot and eaten, leaving the Père David’s deer extinct in its native China.
I hear it’s difficult to farm or raise cattle in marshlands, so why not raise marsh-adapted deer?
The scimitar oryx, similarly extinct in the wild, has lovely horns and lives comfortably in large herds in dry areas.
The Axolotl is an incredible “amphibian” that never develops lungs and spends its entire life underwater:
As of 2010, wild axolotls were near extinction due to urbanization in Mexico City and consequent water pollution. They are currently listed by CITES as an endangered species and by IUCN as critically endangered in the wild, with a decreasing population. Axolotls are used extensively in scientific research due to their ability to regenerate limbs. Axolotls were also sold as food in Mexican markets and were a staple in the Aztec diet.
Axolotls come in a variety of lovely colors and range in appearance from the cute to the intimidating.
And if you want an axolotl in your aquarium, perhaps you’d also be interested in an Alabama cave fish.
Governments, in order to symbolize their long, peaceful rule, could adopt tortoise mascots, sheltering them on official grounds (there’s plenty of space around the White House for a herd of turtles.)
Imagine a future in which tortoise races are an official function of government. Or diplomats engage in slow-motion jousting matches.
Since turtles and tortoises are temperature sensitive, each government would want to highlight a local species, not an imported one (unless no local species were available.)
I’ve eaten duck eggs. They’re tasty–a lot like chicken eggs, actually.
Pygmy elephants, rhinos (if you could breed a non-grumpy variety) and giraffes–imagine delicately proportioned miniature giraffes being taken for a walk through Central Park by their gliteratti owners.
Flightless birds like the kakapo have been decimated by the introduction of invasive hunters like cats. Since they cannot fly, they seem already better suited to being pets than flying birds like cockatoos.
Most primates seem too intelligent for domestication–they’d use their thumbs and smarts to get into trouble–but maybe a few, like lemurs, could make good companions.
Pangolins, seals, and otters are obviously high on my list:
Obviously this post has been somewhat lighthearted, and there are probably good reasons why some of these animals actually aren’t well-suited to domestication.
But I am also serious; I would far rather live in a world with miniature pet pandas and giraffes than a world where these animals have gone extinct.
If we’re stuck on this planet–and it looks like we are–let’s make it a pleasant place to live.
So I was recently reading the Wikipedia page on Pablo Escobar, which I am going to quote pretty liberally, because it’s fascinating:
Pablo Emilio Escobar Gaviria …(December 1, 1949 – December 2, 1993) was a Colombiandrug lord, drug trafficker and narco-terrorist. His cartel, at the height of his career, supplied an estimated 80% of the cocaine smuggled into the United States, turning over US $21.9 billion a year in personal income. Often called “The King of Cocaine”, he was the wealthiest criminal in history, with an estimated known net worth of US $30 billion by the early 1990s (equivalent to about $55 billion as of 2016), making him one of the richest men in the world at his prime. …
In the 1970s he began to work for various contraband smugglers, often kidnapping and holding people for ransom before beginning to distribute powder cocaine himself, as well as establishing the first smuggling routes into the United States, in 1975. His infiltration to the drug market of the U.S. expanded exponentially due to the rising demand for cocaine and, by the 1980s, it was estimated that 70 to 80 tons of cocaine were being shipped from Colombia to the U.S. on a monthly basis. His drug network was commonly known as the Medellín Cartel, which often competed with rival cartels domestically and abroad, resulting in high-rate massacres and the deaths of police officers, judges, locals and prominent politicians.
In 1982, Escobar was elected as an alternate member of the Chamber of Representatives of Colombia as part of the Colombian Liberal Party. Through this, he was responsible for the construction of many hospitals, schools, and churches in western Colombia, which gained him popularity inside the local Roman Catholic Church, as well as with the locals of the towns he frequented. However, Escobar was vilified by the Colombian and American governments, due to the exploits of his political power, which resulted in Colombia becoming the murder capital of the world. In 1993, Escobar was shot and killed by Colombian National Police, in his hometown, 24 hours after his 44th birthday. …
At one point it was estimated[by whom?] that 70 to 80 tons of cocaine were being shipped from Colombia to the United States every month. In the mid-1980s, at the height of its power, the Medellín Cartel was shipping as much as 11 tons per flight in jetliners to the United States (the biggest load shipped by Escobar was 51,000 pounds (23,000 kg) mixed with fish paste and shipped via boat…
He worked to implement an effective, inescapable policy for dealing with law enforcement and the government, referred to as “plata o plomo” (literally “silver or lead”, colloquially “[accept] money or [face] bullets”). Its execution resulted in the deaths of hundreds of individuals, including civilians, policemen, and state officials. … He was allegedly responsible for the 1989 murder of Colombian presidential candidate Luis Carlos Galán, … as well as for the bombing of Avianca Flight 203 and the 1989 DAS Building bombing in Bogotá…
It is alleged that Escobar backed the 1985 storming of the Colombian Supreme Court by left-wing guerrillas from the 19th of April Movement, also known as M-19. The siege, which was done in retaliation for the Supreme Court studying the constitutionality of Colombia’s extradition treaty with the U.S., resulted in the murders of half the judges on the court …
During the height of its operations, the Medellín Cartel brought in more than US $70 million per day (roughly $22 billion in a year). Smuggling 15 tons of cocaine per day, worth more than half a billion dollars, into the United States, the cartel spent over US $1000 per week purchasing rubber bands to wrap the stacks of cash, storing most of it in their warehouses….
Escobar was a hero to many in Medellín (especially the poor people). … A lifelong sports fan, he was credited with building football fields and multi-sports courts, as well as sponsoring children’s football teams. Escobar was also responsible for the construction of many hospitals, schools, and churches in western Colombia, …The population of Medellín often helped Escobar avoid police capture by serving as lookouts, hiding information from authorities, or doing whatever else they could to protect him. …
The Colombian cartels’ continuing struggles to maintain supremacy resulted in Colombia quickly becoming the world’s murder capital with 25,100 violent deaths in 1991 and 27,100 in 1992. This increased murder rate was fueled by Escobar’s giving money to his hitmen as a reward for killing police officers, over 600 of whom died as a result. …
Following Escobar’s escape, the United States Joint Special Operations Command (consisting of members of DEVGRU, Delta Force and Centra Spike) joined the manhunt for Escobar. They trained and advised a special Colombian police task force known as the Search Bloc, which had been created to locate Escobar. Later, as the conflict between Escobar and the governments of the United States and Colombia dragged on, and as the numbers of Escobar’s enemies grew, a vigilante group known as Los Pepes (Los Perseguidos por Pablo Escobar, “People Persecuted by Pablo Escobar”) was formed. The group was financed by his rivals and former associates, including the Cali Cartel and right-wing paramilitaries led by Carlos Castaño, who would later fund the Peasant Self-Defense Forces of Córdoba and Urabá. Los Pepes carried out a bloody campaign, fueled by vengeance, in which more than 300 of Escobar’s associates and relatives were slain, and a large amount of the Medellín cartel’s property was destroyed.
Members of the Search Bloc, and Colombian and United States intelligence agencies, in their efforts to find Escobar, either colluded with Los Pepes or moonlighted as both Search Bloc and Los Pepes simultaneously. …
Soon after Escobar’s death and the subsequent fragmentation of the Medellín Cartel, the cocaine market became dominated by the rival Cali Cartel until the mid-1990s when its leaders were either killed or captured by the Colombian government. The Robin Hood image that Escobar had cultivated maintained a lasting influence in Medellín. Many there, especially many of the city’s poor whom Escobar had aided while he was alive, mourned his death, with over 25,000 people present for his funeral. …
According to her son, [Escobar’s wife] fell in love with Escobar “because of his naughty smile [and] the way he looked at [her]. [He] was affectionate and sweet. A great lover. I fell in love with his desire to help people and his compassion for their hardship. We [would] drive to places where he dreamed of building schools for the poor. From [the] beginning, he was always a gentleman.”
I don’t think building hospitals excuses murdering hundreds of people, but I can understand how the people who benefited from those hospitals might disagree.
So, on the one hand, I have some pretty strong moral opinions about drugs: Don’t do drugs. On the other hand, I acknowledge that the world doesn’t always work the way I want it to. If there is so much money in selling drugs that sellers can build schools and hospitals, buy large swathes of land, and hire small armies that can actually give real militaries a run for their money… then I am open to the idea that people might be better off if we decriminalized drugs and just regulated/taxed them.
You know, it’s funny, you don’t hear all that much about Latin America these days, but there’s a whole continent+ down south of us with its own cultures and concerns. How much better off would Colombia be today if they had harnessed the power of the drug trade instead of fighting it (assuming the US would have gone along with that)?
One of the crack dealers in Bourgois’s ethnography has amassed a small fortune (for the ghetto, at least,) and wants to “go honest.” So he uses his money to open a convenience store, but gets shut down by the authorities (state or local, I don’t recall which,) because his bathroom isn’t disabled-accessible. So he went back to selling crack.
Salatin also complains about ADA compliance, particularly in the matter of parking lots (if he pours a few concrete spaces in his yard so customers can park at his farm and buy a few chickens, does he need to make a handicapped spot?) and bathrooms.
Now that I think of it, back at one of my former jobs, we had a changing room that was officially a “supply closet” because it wasn’t large enough to meet ADA standards. (Obviously I was not in charge of this business and had no control over the closet.)
Salatin’s principle complains, though, focused on food-regulation laws–What counts as organic? What is an approved butchering facility? What if you are only butchering five chickens and want to sell them to your neighbors? What, exactly, is “organic”?
The amount of paperwork and legal compliance required to add a few organic potatoes or locally slaughtered chickens to such an operation are enormous.
In chemistry, activation energy is a term introduced in 1889 by the Swedish scientist Svante Arrhenius to describe the minimum energy which must be available to a chemical system with potential reactants to result in a chemical reaction. Activation energy may also be defined as the minimum energy required to start a chemical reaction.
Some chemical reactions basically happen instantly, like if you throw sodium into water (NOTE: Don’t throw sodium into water. It will explode.) Others, like starting a fire in your fireplace, require the input of some amount of energy to get the reaction going. (Typically we supply this energy by hand, by striking matches, rubbing sticks together, or striking flint on steel.)
We can also think of activation energy in economic terms as the inputs necessary to start a business. Beyond the obvious physical requirements–if you want to produce shoes, you will need material for making shoes–we also have legal requirements. You cannot simply bake a bunch of cookies at home, walk outside, and start selling them. There are some serious food safety laws on the subject.
Now to be clear, I value clean water, food, and medicines. I appreciate that my doctors are skilled. I don’t want to end up with brain-damage just because a local entrepreneur decided it was a good idea to dump old batteries into the drinking water, and I understand that disabled people need to pee just as much as everyone else.
But at the same time, we need to make sure we are not putting in so much regulation that small-scale entrepreneurs are effectively shut out of the market, because the costs of compliance either make the economic activity completely unprofitable, or are just too high for someone trying to start a business to bear.
(Large, already-established corporations, by contrast, tend to be less impacted by such regulations both because they hire armies of lobbyists to ensure that regulatory legislation favors them and also because their profits are high enough that they have money to spare for compliance. Still, they, too, are probably impacted in significant ways.)
“When I fed the poor, they called me a saint. When I asked why the poor were poor, they called me a communist.” —Dom Hélder Pessoa Câmara, Brazilian Roman Catholic Archbishop, 1909 – 1999
In Bishop Camara’s case, they might have been calling him a communist because he was an open socialist who advocated Liberation Theology. But leaving the specific case aside, let’s speak more generally: the problem isn’t that people think it’s inherently communist to wonder why there are poor people; the problem is that you are asking the wrong question.
The state that we now call “poor” was the default condition of the vast, overwhelming majority of humans for the entirety of our existence on this planet. Agriculture has only existed for 10,000 of humanity’s 200,000 years; the vast majority of your ancestors were hunter-gatherers with no more wealth to their names than what they could comfortably carry on their backs or construct in a few hours’ time out of grass and sticks. A modern guy living out of his car has more wealth than our ancestors did.
The important question is not why most of the world’s people are still poor. The question is why some of the world’s people (or groups of people) have become fabulously wealthy, and if whatever they did can work for everyone else.
Why are people poor?
Why shouldn’t they be poor?
You want to be rich? Figure out how the rich did it.
Quality of life and human well-being have increased tremendously around the world in the past 30 years. The number of people suffering starvation has dropped precipitously. Why? Did Ethiopia and China introduce some fabulous new welfare program to provide for their poorest citizens? No. Capitalism and technological advances in food production happened. (Caveat: Russia post-USSR had collapsing well-being due to, AFAIK, terribly managed and opportunistic transition to capitalism. As always, don’t be stupid.)
Before you can make solve problems, you have to understand what the problems actually are–and that requires asking the correct questions in the first place.
Based on a few of comments from readers, I’ve been thinking about the importance of three different rhetorical zones: the echo chamber, the forge, and the fire.
Echo chambers get a lot of criticism, as well they should. But they are not all bad. Sometimes you’re tired after a long day, and you just want to be around people you know and like, people who already share your beliefs and interests. Friends are largely an echo chamber; hobbiest societies (eg, bowling, gardening, gaming,) are devoted to enjoying an activity together, not arguing; church is definitely an echo chamber (hence the phrase, “preaching to the choir.”)
And this is fine and even good. No one needs to get into a debate while gardening nor do they envision being called to give a spirited defense of their faith in debate with an atheist when they set out for church on Sunday morning. There is a time and a place for everything.
The Forge is where you go to discuss and debate ideas with people who are generally sympathetic to them/you. These are people who will call you on your bullshit and hold you to high standards, challenge flaws in your thinking or point out problems with your methodologies or ideas, but do so to be helpful. Writers’ critique groups, debate societies, sports practice, the general practice of science, and feedback from your boss/coworkers are all generally supposed to fall into this category.
Where the echo chamber is supposed to be fun and comforting, the purpose of the forge is to make you (or your ideas, or products, or whathaveyou) stronger.
The Fire is where the products of the forge go to battle against each other. The fire is the blind taste test, the open market, capitalism, the place where no one cares about you, only whether your ideas/talents/products are good enough to out-compete everyone else’s.
The fire is where Coke outsells Pepsi, where Obama defeated Romney, where the Allies defeated the Axis, where Harry Potter outsold whatever else was published that year.
Most of us are not cut out for the fire. Perhaps we could be big fish in the context of a a small pond, but in a big pond, we’re small fish. Very few of us are going to be truly successful–not only are you vanishingly unlikely to write the next Harry Potter, you’re vanishingly unlikely to get get published by a real publisher at all. Not only are you highly unlikely to win the Super bowl, you’re probably not even going to be a professional athlete.
Luckily, society doesn’t need everyone to be big fish. Society needs most people to be supportive, to work in the Echo Chambers and Forges. After all, behind ever successful person who makes it in the Fire, there are hundreds if not thousands of people toiling away to help them refine their ideas/products/skills before they set out. Professional athletes spend thousands of hours honing their skills in practice with their own team members, family, friends, neighborhood leagues, highschool teams, etc. Popular products spend thousands of hours in brainstorming, testing, development, etc.
Big fish or little fish, we all have our roles to play.
And a special thanks to everyone who has helped make this blog, well, if not great, then a lot of fun
This is Part Three of a series on how incentives affect the distribution of energy/resources throughout a society and the destructive effects of social systems like communism. (Part One and Part Two are here)
But before we criticize these programs too much, let’s understand where they came from:
The Industrial Revolution, which began around 1760 in Britain, created mass economic and social dislocation as millions of workers were forced off their farms and flooded into the cities.
The booms and busts of the unregulated (and regulated) industrial economy caused sudden, unpredictable unemployment and, without a social safety net of some kind, starvation. This suffering unleashed Marxism, which soon transformed into an anti-capitalist, anti-Western ideology and tore across the planet, demolishing regimes and killing millions of people.
Reason.com attributes 94 million deaths to communism. The Black Book of Communism places the total between 85 and 100 million people. Historian on the Warpath totals almost 150 million people killed or murdered by communist governments, not including war deaths. (Wikipedia estimates that WWII killed, between battle deaths in Europe and the Pacific, disease, starvation, and genocide, 50-80 million people–and there were communists involved in WWII, also.)
The US and Europe, while not explicitly communist, have adopted many of socialism’s suggestions: Social Security, Welfare, Medicaid, etc., many in direct response to the Great Depression.
These solutions are, at best, a stop-gap measures to deal with the massive changes new technologies are still causing. Remember, humans were hunter-gatherers for 190,000 years. We had a long time to get used to being hunter gatherers. 10,000 years ago, a few of us started farming, and developed whole new cultures. A mere 200 years ago, the Industrial Revolution began spreading through Europe. Today, the “post industrial information economy” (or “robot economy,” as I call it,) is upon us, and we have barely even begun to adapt.
We are in an age that is–out of our 200,000 years of existence–entirely novel and the speed of change is increasing. We have not yet figured out how to cope, how to structure society for the long-term so that we don’t accidentally break it.
We have gotten very good, however, at creative accounting to make it look like we are producing more than we are.
By the mid-1950s, the Industrial Revolution had brought levels of prosperity never before seen in human history to the US (and soon to Europe, Japan, Korea, etc.) But since the ’70s, things seem to have gone off-track.
People fault outsourcing and trade for the death of the great American job market, but technical progress and automation also deserve much of the blame. As the Daily Caller reports:
McDonald’s has announced plans to roll out automated kiosks and mobile pay options at all of its U.S. locations, raising questions about the future of its 1.5 million employees in the country and around the globe.
Roughly 500 restaurants in Florida, New York and California now have the automated ordering stations, and restaurants in Chicago, Boston, San Francisco, Seattle and Washington, D.C., will be outfitted in 2017, according to CNNMoney.
The locations that are seeing the first automated kiosks closely correlate with the fight for a $15 minimum wage. Gov. Andrew Cuomo signed into law a new $15 minimum wage for New York state in 2016, and the University of California has proposed to pay its low-wage employees $15.
There is an obvious trade-off between robots and employees: where wages are low enough, there is little incentive to invest capital in developing and purchasing robots. Where wages are high, there is more incentive to build robots.
The Robot Economy will continue to replace low-skilled, low-wage jobs blue collar workers and young people used to do. No longer will teenagers get summer jobs at McDonald’s. Many if not most of these workers are simply extraneous in the modern economy and cannot be “retrained” to do more information-dependent work. The expansion of the Welfare State, education (also paid for with tax dollars,) and make-work administrative positions can keep these displaced workers fed and maybe even “employed” for the foreseeable future, but they are not a long-term solution, and it is obvious that people in such degraded positions, unable to work, often lose the will to keep going.
But people do not appreciate the recommendation that they should just fuck off and die already. That’s how you get communist revolutions in the first place.
Mass immigration of unskilled labor into a market already shrinking due to automation / technological progress is a terrible idea. This is Basic Econ 101: Supply and Demand. If the supply of labor keeps increasing while the demand for labor keeps decreasing, the cost of labor (wages) will plummet. Likewise, corporations quite explicitly state that they want immigrants–including illegal ones–because they can pay them less.
In an economy with more demand than supply for labor, labor can organize (unions) and advocate in behalf of its common interests, demanding a higher share of profits, health insurance, pensions, cigarette breaks, etc. When the supply of labor outstrips demand, labor cannot advocate on its own behalf, because any uppity worker can simply be replaced by some desperate, unemployed person willing to work for less and not make a fuss.
Note two professions in the US that are essentially protected by union-like organizations: doctors and lawyers. Both professions require years of expensive training at exclusive schools and high scores on difficult tests. Lawyers must also be members of their local Bar Associations, and doctors must endure residency. These requirements keep out the majority of people who would like to join these professions, and ensure high salaries for most who do.
While Residency sounds abjectly awful, the situation for doctors in Britain and Ireland sounds much worse. Slate Star Codex goes into great detail about the problems:
Many of the junior doctors I worked with in Ireland were working a hundred hours a week. It’s hard to describe what working 100 hours a week is like. Saying “it means you work from 7 AM to 9 PM every day including weekends” doesn’t really cut it. Imagine the hobbies you enjoy and the people you love. Now imagine you can’t spend time on any of them, because you are being yelled at as people die all around you for fourteen hours a day, and when you get home you have just enough time to eat dinner, brush your teeth, possibly pay a bill or two, and curl up in a ball before you have to go do it all again, and your next day off is in two weeks.
And this is the best case scenario, where everything is spaced out nice and even. The junior doctors I knew frequently worked thirty-six hour shifts at a time (the European Court of Human Rights has since declined to fine Ireland for this illegal practice). …
The psychological consequences are predictable: after one year, 55% of junior doctors describe themselves as burned out, 30% meet criteria for moderate depression, and 12% report considering suicide.
A lot of American junior doctors are able to bear this by reminding themselves that it’s only temporary. The worst part, internship, is only one year; junior doctorness as a whole only lasts three or four. After that you become a full doctor and a free agent – probably still pretty stressed, but at least making a lot of money and enjoying a modicum of control over your life.
In Britain, this consolation is denied most junior doctors. Everyone works for the government, and the government has a strict hierarchy of ranks, only the top of which – “consultant” – has anything like the freedom and salary that most American doctors enjoy. It can take ten to twenty years for junior doctors in Britain to become consultants, and some never do.
I don’t know about you, but I really don’t want my doctor to be suicidal.
Now, you may notice that Scott doesn’t live in Ireland anymore, and similarly, many British doctors to take their credentials and move abroad as quickly as possible. The British medical system would be forced to reform if not for the influx of foreign doctors willing to put up with hell in exchange for not living in the third world.
From the outside, many of these systems, from underfunded pensions to British medicine, look just fine. Indeed, an underfunded pension will operate just fine until the day it runs out of money. Until that day, everyone who clams the pension is in deep trouble looks like Chicken Little, running around claiming that the sky is falling.
There’s a saying in finance: The market can stay irrational longer than you can stay solvent.
BTW, the entire state of California is in deep trouble, from budget problems to insane property tax laws. They already consume far more water than they receive, (and are set for massive forest fires,) but vote for increased population via immigration with Mexico. California’s economy is being propped up by–among other things–masses of cash flowing into Silicon Valley. This is Dot.Com Bubble 2.0, and like the first, it will pop–the only question is when. As Reuters reported last February:
LinkedIn Corp’s (LNKD.N) shares closed down 43.6 percent on Friday, wiping out nearly $11 billion of market value, after the social network for professionals shocked Wall Street with a revenue forecast that fell far short of expectations. …
As of Thursday, LinkedIn shares were trading at 50 times forward 12-month earnings, making it one of the most expensive stocks in the tech sector.
Twitter Inc (TWTR.N) trades at 29.5 times forward earnings, Facebook Inc (FB.O) at 33.8 times and Alphabet Inc (GOOGL.O) at 20.9 times.
Even after the selloff, LinkedIn’s shares may still be overvalued, according to Thomson Reuters StarMine data.
LinkedIn should be trading at $71.79, a 30 percent discount to the stock’s Friday’s low, according to StarMine’s Intrinsic Valuation model, which takes analysts’ five-year estimates and models the growth trajectory over a longer period.
“Ebitda” stands for Earnings Before Interest, Tax, Depreciation and Amortisation. There is absolutely no way that LinkedIn, a social network that barely turns a profit, is worth more than Sun, EMC, Compaq, and Time Warner.
Shares normally trade around 20x a company’s previous year’s earnings, though right now the S & P’s P/E ratio is around 25. In 2016, LinkedIn’s P/E ratio has been around 180. (Even crazier, their ratio in 2015 was -1,220, because they lost money.)
Ever wonder where all of that money from QE is going? It’s turning into Ferraris cruising around San Francisco, and LinkedIn is not the only offender.
But these companies will not maintain fantasy valuations forever.
When the deal was announced on Jan. 10, 2000, Stephen M. Case, a co-founder of AOL, said, “This is a historic moment in which new media has truly come of age.” His counterpart at Time Warner, the philosopher chief executive Gerald M. Levin, who was fond of quoting the Bible and Camus, said the Internet had begun to “create unprecedented and instantaneous access to every form of media and to unleash immense possibilities for economic growth, human understanding and creative expression.”
The trail of despair in subsequent years included countless job losses, the decimation of retirement accounts, investigations by the Securities and Exchange Commission and the Justice Department, and countless executive upheavals. Today, the combined values of the companies, which have been separated, is about one-seventh of their worth on the day of the merger.)
So, that was a bit of a long diversion into the sheer artificiality of much of our economy, and how sooner or later, the Piper must be paid.
When I try to talk to liberal friends about the problems of increasing automation and immigration on the incomes of the American working class, their response is that “We just need more regulation.”
In this cheerful fantasy, we can help my friend who cannot afford health insurance by requiring his employer to provide health insurance–when in reality, my friend now cannot find a job that lasts for more than a month because employers just fire him before the health insurance requirement kicks in. In fantasy land, you can protect poor people by making it harder for landlords to evict them, but in the real world, this makes it even harder for the poorest to get long-term housing because no landlord wants to take the chance of getting stuck with them. In fantasy land, immigration doesn’t hurt wages because you can just legislate a higher minimum wage, but the idea that you can legislate a wage that the market does not support is an absurdity worthy only of the USSR. In the real world, your job gets replaced with a robot.
This is not to say that we can’t have some form of welfare or social safety net to deal with the dislocations and difficulties of our new economy. Indeed, some form of social welfare may, in the long run, make the economic system more robust by allowing people to change jobs or weather temporary unemployment without dying. Nor does it mean that any inefficiency is going to break the system. But long-term, using legislation to create a problem and then using more legislation to prevent the market from correcting it increases inefficiency, and you are now spending resources to enforce both laws.
Just like Enron’s “creative accounting,” you cannot keep hiding losses indefinitely.
Or you can have a Japanese or Swedish-style welfare state, but no open borders, (because the system will collapse if you let in just anyone who wants free money [hint: everyone.])
But you cannot just smash two different systems together, heap more laws on top of them to try to prevent the market from responding, and expect it to carry on indefinitely producing the same levels of wealth and well-being as it always has.
Complex systems, because they must be homeostatic to exist at all, can absorb and disguise the symptoms of a great deal of internal stress.
The collapse of the Soviet Union remains one of the great mysteries of Political Science, not because it happened (that is easy enough to understand,) but because Political Scientists did not predict it.
The big problem with planned economies is that their incentive structures make self-correction almost impossible. For example, when the law allowed Soviet officials to confiscate unlimited quantities of grain in 1932, about 7 million people died. The people who could see the famine happening were not the ones with the power to change tax laws nor the incentives pressuring officials to confiscate so much grain in the first place. As Wikipedia relates:
From the 1932 harvest, Soviet authorities were able to procure only 4.3 million tons as compared with 7.2 million tons obtained from the 1931 harvest. Rations in town were drastically cut back, and in the winter of 1932–33 and spring of 1933 people in many urban areas were starved. The urban workers were supplied by a rationing system (and therefore could occasionally assist their starving relatives of the countryside), but rations were gradually cut; and by the spring of 1933, the urban residents also faced starvation. At the same time, workers were shown agitprop movies, where all peasants were portrayed as counterrevolutionaries hiding grain and potatoes at a time when workers, who were constructing the “bright future” of socialism, were starving.
Excuse me. I need a moment.
Say what you will for libertarianism, it has at least the basic ingredients for a self-correcting system. A farmer, left to his own devices, will not sell so much of his own grain that he starves. A factory owner will not order incorrect parts for his own factory because his profits would suffer. But in a planned economy, the person doing the ordering or deciding how much grain to sell does not personally benefit (or suffer) from these transactions, and so has no interest in their efficiency. Their incentives are totally different–they have a boss higher up in the party to please; they are required to increase the efficiency of Sector G; they are supposed to hire more people people from underrepresented groups; etc.
Most information in the Soviet economy flowed from the top down. There were several mechanisms in place for producers and consumers to provide input and information that would help in the drafting of economic plans (as detailed below), but the political climate was such that few people ever provided negative input or criticism of the plan. Thus, Soviet planners had very little reliable feedback that they could use to determine the success of their plans. This meant that economic planning was often done based on faulty or outdated information, particularly in sectors with large numbers of consumers. As a result, some goods tended to be underproduced, leading to shortages, while other goods were overproduced and accumulated in storage. Low-level managers often did not report such problems to their superiors, relying instead on each other for support. Some factories developed a system of barter and either exchanged or shared raw materials and parts without the knowledge of the authorities and outside the parameters of the economic plan. …
The cumbersome procedures for bureaucratic administration foreclosed the free communication and flexible response required at the enterprise level for dealing with worker alienation, innovation, customers, and suppliers. During 1975–85, corruption and data fiddling became common practice among bureaucracy to report satisfied targets and quotas thus entrenching the crisis.
Around 1975, the Soviet Union entered a period of economic stagnation from which it would never emerge. Increasingly, the USSR looked to Europe, primarily West Germany, to provide hard currency financing through massive loans, while the U.S. became a major supplier of grain. Despite moments of anti-Communist grandstanding, the Americans and Western Europeans maintained trade relations with the cash-strapped Soviet Union, which dipped into its Stalin-era gold reserves to increase availability of consumer goods.
Foreign trade and mild economic reforms were not enough to overcome the inefficiencies of the Soviet command economy, which remained technologically backward and full of corruption. Economic planners were frequently unable to diagnose and remedy problems, since they were given false reports by officials who only pretended to be productive. Soviet living standards remained poor by Western standards. By 1980, only 9 percent of Soviets had automobiles, which was actually a vast improvement under Brezhnev.
Back to Wikipedia:
One of the greatest strengths of Soviet economy was its vast supplies of oil and gas; world oil prices quadrupled in the 1973-74, and rose again in 1979-1981, making the energy sector the chief driver of the Soviet economy, and was used to cover multiple weaknesses. During this period, USSR had the lowest per-capita incomes among the other socialist countries. At one point, Soviet Premier Alexei Kosygin told the head of oil and gas production, “things are bad with bread. Give me 3 million tons [of oil] over the plan.”  Former prime minister Yegor Gaidar, an economist looking back three decades, in 2007 wrote:
The hard currency from oil exports stopped the growing food supply crisis, increased the import of equipment and consumer goods, ensured a financial base for the arms race and the achievement of nuclear parity with the United States, and permitted the realization of such risky foreign-policy actions as the war in Afghanistan.
Awareness of the growing crisis arose initially within the KGB which with its extensive network of informants in every region and institution had its finger on the pulse of the nation. Yuri Andropov, director of the KGB, created a secret department during the 1970s within the KGB devoted to economic analysis, and when he succeeded Brezhnev in 1982 sounded the alarm forcefully to the Soviet leadership. Andropov’s remedy of increased discipline, however, proved ineffective. It was only when Andropov’s protege Gorbachev assumed power that a determined, but ultimately unsuccessful, assault on the economic crisis was undertaken.
And back to Castellano:
By 1988, private ownership was permitted in certain manufacturing industries. Ironically, these reforms actually caused the Soviet economy to deteriorate further, as unprofitable private enterprises were now subsidized by the state, and the lack of state oversight of supply lines resulted in shortages of food and clothing, which were unknown even under Brezhnev. …
By the mid-1980s, the Warsaw Pact satellites had ceased to be an economic asset to the Soviet Union, and in fact Gorbachev’s withdrawal had been motivated in part by economic considerations. There was no longer a real danger of war with Western Europe, so the bloc had lost its strategic significance as well.
You know how this story ends. The Wall comes down, communism crumbles in all but Cuba and North Korea, and Russia is further assaulted by “shock therapy,” which it is in no position to cope with.
And yet, even in the months just before the Wall fell, no one predicted that it was about to happen. It was very easy to see, from an economic position, that the USSR couldn’t just keep limping on–even the KGB knew that. But “Communism is broken” is information we’d had for six decades already, and the USSR looked like it was in no hurry to finally go ahead and kick the bucket.
Socialism fails because it prevents economic feedback from directing the flow of resources to the places where they’re needed, but even a terrible system like the USSR’s can keep limping along like it’s going to last forever right until the day it falls.
There are reports now coming out of socialist Venezuela of people eating pets, rats, and worse, each other (I am not quoting the cannibalism article, you can read it yourself. This is from the one about eating cats, dogs, and garbage):
Ramón Muchacho, Mayor of Chacao in Caracas, said the streets of the capital of Venezuela are filled with people killing animals for food.
Through Twitter, Muchacho reported that in Venezuela, it is a “painful reality” that people “hunt cats, dogs and pigeons” to ease their hunger. … People are also reportedly gathering vegetables from the ground and trash to eat as well. … The week before, various regions of the country saw widespread looting of shopping malls, pharmacies, supermarkets and food trucks, all while people chanted “we are hungry.”
We Americans have our own reasons why we should be concerned, from the death of manufacturing to the increasing national debt. The Federal Budget is about 20% of total GDP. The government periodically threatens to default on its debts while funding wars against non-enemies like Iraq. Obligations like pensions and Social Security are often ridiculously under-funded (to the tune of billions of dollars that investments simply haven’t produced) or depend on infinite population growth–which, of course, no nation can ever maintain. As CNBC reports:
Weak investment performance and insufficient contributions will cause total unfunded liabilities for U.S. state public pensions to balloon by 40 percent to $1.75 trillion through fiscal 2017, Moody’s Investors Service said in a report on Thursday. …
It has been a tough year for the funds, which earned a median 0.52 percent on investments in fiscal 2016 versus their average assumed return rate of 7.5 percent, Moody’s said.
Assumptions. The sheer gall of it is flabbergasting.
Steve Bannon gave this rather insightful speech about our deteriorating economic situation several years ago:
All living things are basically just homeostatic entropy reduction machines. The most basic cell, floating in the ocean, uses energy from sunlight to order its individual molecules, creating, repairing, and building copies of itself, which continue the cycle. As Jeremy England of MIT demonstrates:
From the standpoint of physics, there is one essential difference between living things and inanimate clumps of carbon atoms: The former tend to be much better at capturing energy from their environment and dissipating that energy as heat. Jeremy England … has derived a mathematical formula that he believes explains this capacity. The formula, based on established physics, indicates that when a group of atoms is driven by an external source of energy (like the sun or chemical fuel) and surrounded by a heat bath (like the ocean or atmosphere), it will often gradually restructure itself in order to dissipate increasingly more energy. …
This class of systems includes all living things. England then determined how such systems tend to evolve over time as they increase their irreversibility. “We can show very simply from the formula that the more likely evolutionary outcomes are going to be the ones that absorbed and dissipated more energy from the environment’s external drives on the way to getting there,” he said. …
“This means clumps of atoms surrounded by a bath at some temperature, like the atmosphere or the ocean, should tend over time to arrange themselves to resonate better and better with the sources of mechanical, electromagnetic or chemical work in their environments,” England explained.
Self-replication (or reproduction, in biological terms), the process that drives the evolution of life on Earth, is one such mechanism by which a system might dissipate an increasing amount of energy over time. As England put it, “A great way of dissipating more is to make more copies of yourself.” In a September paper in the Journal of Chemical Physics, he reported the theoretical minimum amount of dissipation that can occur during the self-replication of RNA molecules and bacterial cells, and showed that it is very close to the actual amounts these systems dissipate when replicating.
Energy isn’t just important to plants, animals, and mitochondria. Everything from molecules to sand dunes, cities and even countries absorb and dissipate energy. And like living things, cities and countries use energy to grow, construct buildings, roads, water systems, and even sewers to dispose of waste. Just as finding food and not being eaten are an animal’s first priority, so are energy policy and not being conquered are vital to a nation’s well-being.
Hunter-gatherer societies are, in most environments, the most energy-efficient–hunter gatherers expend relatively little energy to obtain food and build almost no infrastructure, resulting in a fair amount of time left over for leisure activities like singing, dancing, and visiting with friends.
But as the number of people in a group increases, hunter-gathering cannot scale. Putting in more hours hunting or gathering can only increase the food supply so much before you simply run out.
Horticulture and animal herding require more energy inputs–hoeing the soil, planting, harvesting, building fences, managing large animals–but create enough food output to support more people per square mile than hunter-gathering.
Agriculture requires still more energy, and modern industrial agriculture more energy still, but support billions of people. Agricultural societies produced history’s first cities–civilizations–and (as far as I know) its first major collapses. Where the land is over-fished, over-farmed, or otherwise over-extracted, it stops producing and complex systems dependent on that production collapse.
I’ve made a graph to illustrate the relationship between energy input (work put into food production) and energy output (food, which of course translates into more people.) Note how changes in energy sources have driven our major “revolutions”–the first, not in the graph, was the taming and use of fire to cook our food, releasing more nutrients than mere chewing ever could. Switching from jaw power to fire power unlocked the calories necessary to fund the jump in brain size that differentiates humans from our primate cousins, chimps and gorillas.
That said, hunter gatherers (and horticulturalists) still rely primarily on their own power–foot power–to obtain their food.
The Agricultural Revolution harnessed the power of animals–mainly horses and oxen–to drag plows and grind grain. The Industrial Revolution created engines and machines that released the power of falling water, wind, steam, coal, and oil, replacing draft animals with grist mills, tractors, combines, and trains.
Modern industrial societies have achieved their amazing energy outputs–allowing us to put a man on the moon and light up highways at night–via a massive infusion of energy, principally fossil fuels, vital to the production of synthetic fertilizers:
Nitrogen fertilizers are made from ammonia (NH3), which is sometimes injected into the ground directly. The ammonia is produced by the Haber-Bosch process. In this energy-intensive process, natural gas (CH4) supplies the hydrogen, and the nitrogen (N2) is derived from the air. …
In 2014, average yield in the United States was 171 bushels per acre. (And the world record is an astonishing 503 bushels, set by a farmer in Valdosta, Ga.) Each bushel weighs 56 pounds and each pound of corn yields about 1,566 calories. That means corn averages roughly 15 million calories per acre. (Again, I’m talking about field corn, a.k.a. dent corn, which is dried before processing. Sweet corn and popcorn are different varieties, grown for much more limited uses, and have lower yields.)
As anyone who has grown corn will tell you, corn is a nutrient hog; all of those calories aren’t free. Corn must be heavily fertilized or the soil will run out and your farm will be worthless.
We currently have enough energy sources that the specific source–fossil fuels, hydroelectric, wind, solar, even animal–is not particularly important, at least for this discussion. Much more important is how society uses and distributes its resources. For, like all living things, a society that misuses its resources will collapse.