The role of energy and technology in economics has been grossly misunderstood and/or misstated for decades -- it's largely a product of post-WWII economics, though there are of course older precursors.
A contemporary economist who's demostrated the role of energy in economic production, and whose work would (and IMO should) revolutionise the study, is Steve Keen. His 25 minute presentation "The Role of Energy in Production" adds an additional term, energy, to the standard Cobb-Douglas function, and explains virtually all of the residual.
The idea that "technology" is responsible for "efficiency gains" comes from the work of Robert Solow, and is called the "Solow Residual". It is quite literally a mathematical (or statistical) artefact: if you study the behaviour of a dependent variable on the basis of one or more independent (or explanatory) variables, whatever change is not explained is the "residual", or residual variance.
The residual is real. Its attribution to "technology" is wholly arbitrary. Solow's independent variables were Capital and Labour, using what's called the Cobb-Douglas production function. They collectively explain only about TK% of all increase in net productivity.
Solow himself has more modestly described the residual as "the measure of our ignorance".
The soundness of the Cobb-Douglas function has been questioned by numerous other economists, though their views have remained outside the mainstream. A particular challenge has been meeting the economic fashion of the past 75 years or so of "mathiness" -- being able to express relationships in a concise mathematical function, which is what Keen's work above does.
This is strongly bolstered by other work, e.g., in Robert J. Gordon's The Rise and Fall of American Growth[1], US economic output per worker from 1920 - 1970 (and possibly beyond) grew linearaly with additional horsepower or kilowatts per worker. Growth since roughly 1970 has slowed.
Keen isn't the first to come up with this understanding. If one reads Adam Smith with the understanding that in his time, labour was power, then Smith's measure of wealth, "the annual produce and labour of the nation", is in large part based on energy input.[2] Leslie White formulated an eponymous law that the level of a civilisation is proportional to its net power throughput, similar to the Lotka-Darwin power law, that the evolutionary advantage goes to organisms which maximise energy flow.[3]
Others include Henry Adams[4], Kenneth Boulding[5], Nicholas Georgescu-Roegen,[6], Herman Daly[7], R.U. Ayres[8], and Charles A.H. Hall[9], as well as ecologists Howard T. Odum and Eugene Odum[10].
There are also several histories seen through the lens of energy, most especially Vaclav Smil's Energy and Civilization (2017) and Energy and World History (1994)[11], and Manfred Weisenbacher's two-volume epic Sources of Power[12]. Both Smil and Weissenbacher divide human history into the eras of hunter-gatherer, agriculture, coal, oil, and post-oil. It's a novel and highly illuminating historical framework.
I suspect the Solow residual comes mainly from gains through minimizing inventories and reducing the amount of idleness workers have.
The value of energy and technology is important for societies designed around nation states which occasionally require the energy and technology to be repurposed for war. It could be said the history of modern warfare is using energy and metallurgy to shoot projectiles further and further.
It’s obviously unsustainable, but leaving the arms race requires multilateral agreements to do so.
With a causal mechanism -- "labour without energy is a corpse, capital without energy is a sculpture" -- and an r value approaching or above 0.9, I suspect you're wrong.
If by "brains" you mean "technology", in the economic sense of "increasing total factor productivity" or more concisely, efficiency, then the best that brains are is an efficiency factor applied to energy input. That is, brains are still a factor multiplier on energy, and not an independent input.
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[ 3.1 ms ] story [ 27.1 ms ] threadGalaxy-scale energy consumption in 2400 years seems improbable due to the speed of light limit (Milky Way is 150,000 light-years in diameter).
Exponential, like say 1% yearly growth, must eventually end.
Stein's Law.
A contemporary economist who's demostrated the role of energy in economic production, and whose work would (and IMO should) revolutionise the study, is Steve Keen. His 25 minute presentation "The Role of Energy in Production" adds an additional term, energy, to the standard Cobb-Douglas function, and explains virtually all of the residual.
https://invidio.us/watch?v=BAjN6bG7XzM
Audio quality is poor, but I cannot recommend this video highly enough.
For those who prefer text, much of the material is in this post:
http://www.debtdeflation.com/blogs/2016/08/19/incorporating-...
The idea that "technology" is responsible for "efficiency gains" comes from the work of Robert Solow, and is called the "Solow Residual". It is quite literally a mathematical (or statistical) artefact: if you study the behaviour of a dependent variable on the basis of one or more independent (or explanatory) variables, whatever change is not explained is the "residual", or residual variance.
The residual is real. Its attribution to "technology" is wholly arbitrary. Solow's independent variables were Capital and Labour, using what's called the Cobb-Douglas production function. They collectively explain only about TK% of all increase in net productivity.
Solow himself has more modestly described the residual as "the measure of our ignorance".
https://en.wikipedia.org/wiki/Solow_residual
The soundness of the Cobb-Douglas function has been questioned by numerous other economists, though their views have remained outside the mainstream. A particular challenge has been meeting the economic fashion of the past 75 years or so of "mathiness" -- being able to express relationships in a concise mathematical function, which is what Keen's work above does.
This is strongly bolstered by other work, e.g., in Robert J. Gordon's The Rise and Fall of American Growth[1], US economic output per worker from 1920 - 1970 (and possibly beyond) grew linearaly with additional horsepower or kilowatts per worker. Growth since roughly 1970 has slowed.
Keen isn't the first to come up with this understanding. If one reads Adam Smith with the understanding that in his time, labour was power, then Smith's measure of wealth, "the annual produce and labour of the nation", is in large part based on energy input.[2] Leslie White formulated an eponymous law that the level of a civilisation is proportional to its net power throughput, similar to the Lotka-Darwin power law, that the evolutionary advantage goes to organisms which maximise energy flow.[3]
Others include Henry Adams[4], Kenneth Boulding[5], Nicholas Georgescu-Roegen,[6], Herman Daly[7], R.U. Ayres[8], and Charles A.H. Hall[9], as well as ecologists Howard T. Odum and Eugene Odum[10].
There are also several histories seen through the lens of energy, most especially Vaclav Smil's Energy and Civilization (2017) and Energy and World History (1994)[11], and Manfred Weisenbacher's two-volume epic Sources of Power[12]. Both Smil and Weissenbacher divide human history into the eras of hunter-gatherer, agriculture, coal, oil, and post-oil. It's a novel and highly illuminating historical framework.
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Notes:
1. ryacko ↗ I suspect the Solow residual comes mainly from gains through minimizing inventories and reducing the amount of idleness workers have. dredmorbius ↗ With a causal mechanism -- "labour without energy is a corpse, capital without energy is a sculpture" -- and an r value approaching or above 0.9, I suspect you're wrong. ryacko ↗ Labor without brains is a horse meant for the fields; in times of trouble, hammers will forge weapons of war. dredmorbius ↗ What is brains without energy?
The value of energy and technology is important for societies designed around nation states which occasionally require the energy and technology to be repurposed for war. It could be said the history of modern warfare is using energy and metallurgy to shoot projectiles further and further.
It’s obviously unsustainable, but leaving the arms race requires multilateral agreements to do so.
Economic statistics fail to account for immeasurable and uncountable things, the immeasurable can only be guessed.
What is brains' relationship to energy?
If by "brains" you mean "technology", in the economic sense of "increasing total factor productivity" or more concisely, efficiency, then the best that brains are is an efficiency factor applied to energy input. That is, brains are still a factor multiplier on energy, and not an independent input.