Over the long run, the world’s economy has grown,…

…on average, a fractional percent per year. During the last couple of centuries it averaged about 1% per year, reaching about 2% annually this century, when the bulk of what we see on earth today was built. That means that each year, on average, the economic system produces 2% more stuff than was produced in the previous 12 months. Beneath the frantic ups and downs of daily commerce, a persistent, invisible swell pushes the entire econosphere forward, slowly thickening the surface of the earth with more things, more interactions, and more opportunities. And that tide is accelerating, expanding a little faster each year.

At the genesis of civilization, the earth was mostly Darwin’s realm–all biosphere, no economy. Today the econosphere is huge beyond comprehension. If we add up the total replacement costs of all the roads in every country in the world, all the railways, vehicles, telephone lines, power plants, schools, houses, airports, bridges, shopping centers (and everything inside them), factories, docks, harbors–if we add up all the gizmos and things humans have made all over the planet, and calculate how much it is all worth, as if it were owned by a company, we come up with a huge amount of wealth accumulated over centuries by this slow growth. In 1998 dollars, the global infrastructure is worth approximately 4 quadrillion dollars. That’s a 4 with 15 zeros. That’s a lot of pennies from nothing.

What is the origin of this wealth? Ten thousand years ago there was almost none. Now there is 4 quadrillion dollars worth. Where did all of it come from? And how? The expenditure of energy needed to create this fluorescence is not sufficient to explain it since animals expend vast quantities of energy without the same result. Something else is at work. “Humans on average build a bit more than they destroy, and create a bit more than they use up,” writes economist Julian Simon. That’s about right, but what enables humans, on average, to ratchet up such significant accumulations?



Comments are closed.


Archives - This site operates under a Creative Commons License.

This is a blog version of a book of mine first published in 1998. I am re-issuing it (two posts per week) unaltered on its 10th anniversary. Comments welcomed. More details here.
-- KK

© 2023