MIT’s superstar Daron Acemoglu is producing children and new ideas.  As he thinks ahead about his grandchildren’s future quailty of life, he has released this “big think” NBER Working Paper.   He returns to some of the big themes of his recent book; “Why Nations Fail” . The abstract of his paper highlights his ambitious agenda;
“Following on Keynes’s Economic Possibilities for Our Grandchildren, this paper develops conjectures about the world we will leave to our grandchildren. It starts by outlining the 10 most important trends that have defined our economic, social, and political lives over the last 100 years. It then provides a framework for interpreting these trends, emphasizing the role of the expansion of political and civil rights and institutional changes in this process. It then uses this framework for extrapolating these 10 trends into the next 100 years.”
Have we discovered the new Hari Seldon?
Have we discovered the new Hari Seldon?
Nah. Krugman is Seldon. He subsumes all of Acemoglu. And he is more of a believer in honest capitalism and markets than the goofs, monopolists, and oligarchs on the right care to acknowledge. Krugman is actually trying to influence the future, limit pain, and grow the American empire by tweaking economic policy today. He has been doing that for a long time. And Krugman is neither a doomster or a boomster. He believes in continuity. That growth can continue apace, and that closing the “output gap” today is a reasonable thing to strive after.
The real question is: Is Asimov’s trilogy, Ecotopia, or In Dubious Battle the greatest American liberal fiction?
Can’t download the link. Any chance of getting a copy without a subscription?
Tom:
Go to the MIT website: http://economics.mit.edu/files/7742
I read the article. (Thanks to David for the link.)
Daron Acemoglu tries very hard to be a techno-optimist, but when I read all his cautions and hedging about, it makes me very pessimistic. He’s kind of a Cassandra-in-reverse: his optimism raises fears.
I also wonder when economists seem so incapable of doing the math on any of these things. He doesn’t seem to want to calculate anything — its all straightedge on graph paper.
What a crock. This could only be the product of an economist, a believer in infinite growth on a finite planet.
The x factor that he overlooks is the key determinant and essential ingredient for economic growth, a rising energy return on energy invested. Wealth is, to a high degree, nothing but the integrated sum of all the excess energy harvested through time. Now that we’ve almost certainly peaked in actual world oil production and have definitely plateaued, seems like an economagician would be the first to notice that we are constantly having to invest more and more energy to produce an inexorably lower yield of usable surplus energy. Where once a barrel of oil energy could yield 100 barrels worth in return in many places, now we are fast approaching the break point where the size of the reserve is irrelevant, because when the return on energy invested reaches unity, the game is over.
Even setting aside the catastrophic consequence on climate, our energy dilemma is that we’ve bred a huge overshoot in global population during times of energy surplus, and now that global energy availability per capita is trending down rapidly (because our energy profit on each new play is relentlessly diminishing), we are soon going to find ourselves envying the Red Queen, who at least is able to keep up. We are not going to keep up, especially if we read ignorant essays like this and take them seriously as having anything to do with the future as its likely to unfold.
See Energy and the Wealth of Nations: Understanding the Biophysical Economy [Hardcover]
http://www.amazon.com/Energy-Wealth-Nations-Understanding-Biophysical/dp/1441993975
Not enough extrapolation in 10. about man’s degradation of earth’s ecosystems and what living in overshoot actually means. Wasting space on the Simon-Ehrlich wager was all I needed to see to stop reading right there.
But, but, but…this is an MIT Superstarâ„¢ you are talking about! He can’t be wrong. Or wrongheaded. That would be unpossible.