You might think of Andrew McAfee as an arch-pessimist. His books (written with Erik Brynjolfsson), Race Against The Machine and The Second Machine Age, scared the bejeezus out of us all by making us think about the possibility of a future with no work and no jobs, all living on Universal Basic Income.
Remarkably, he now comes out with an analysis that is so optimistic as to be politically incorrect: the more we grow economically, the more outputs we produce, the higher we drive per capita income and consumption, the lighter our footprint on the planet. We use fewer resources including rain forests and other living things, we kill fewer animals and exterminate fewer species, and we pollute less.
He captures all this in his newest book, More From Less: The Surprising Story Of How We Learned To Prosper Using Fewer Resources – And What Happens Next.
He states:
In America—a large, rich country that accounts for about 25 percent of the global economy—we’re now generally using less of most resources year after year, even as our economy and population continue to grow. What’s more, we’re also polluting the air and water less, emitting fewer greenhouse gases, and seeing population increases in many animals that had almost vanished. America, in short, is post-peak in its exploitation of the earth.
How? Capitalism.
Oh! Oh! That’s not going to please the gloom-and-doomers and the climate change crowd.
McAfee is clear in stating that technological progress operating in a capitalist economy brings about this result of More From Less.
In particular, we got better at combining technological progress with capitalism to satisfy human wants and needs.
He is careful to underline the dual role of technological advances and a capitalist framework. He traces the current trends all the way back to the Industrial Revolution to make his point about the role of capitalism.
The new power-generating machines didn’t create the Industrial Revolution entirely on their own—this also required many other kinds of innovations including joint-stock companies, patents and other types of intellectual property, and the diffusion throughout society of scientific and technical knowledge that had previously largely been reserved for elites
In the beginning, the new industrialism made many mistakes. McAfee includes in these colonialism, child labor and slavery, pollution and smog, and exploitation of animal species, among others. But error led to improvement.
When we look at this era’s great mistakes this way, an interesting pattern emerges. As industrialized countries advanced and became more prosperous, they first started treating humans better. They stopped enslaving people or making children work and eventually gave up claims to foreigners’ lands. Better treatment of animals was slower to come and in some cases arrived too late to save a species. And better treatment of our planet came last of all. We kept heedlessly plundering and polluting it for almost two centuries after the Industrial Revolution started.
Pessimists also consistently predicted that we would run out of resources because we were using them up too quickly. In 1972, a book from his own alma mater of MIT called The Limits To Growth found that global reserves of aluminum, copper, natural gas, petroleum and gold would be exhausted in 55 years if population and the economy were “allowed” to grow without constraint.
What changed? Prophets of doom always fail to predict the future, so that never changes. In fact, nothing changed. What happened is that the capitalist process worked the way it is supposed to, and consumer sovereignty kicked in. Consumer sovereignty is the principle that the consumer gets what they want. McAfee quotes economist Alfred Marshall;
“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.”
The ”new wants” growing up inside consumers included the desire to breathe free from smog, to enjoy unpolluted water, and generally to enjoy the fruit of capitalism without some of the drawbacks. It is this kind of unstated unease or dissatisfaction that drives innovators and creative entrepreneurs to try to make life better for consumers (and to enjoy the rewards of the market for doing so).
The innovation they came up with was Dematerialization. McAfee defines this term to mean the phenomenon of consuming more and more while taking less and less from the planet. Digital technologies offer the cost savings that come from substituting bits for atoms, and the intense competitive improvement mechanism of capitalism caused more and more companies to seize the opportunity.
As a result, “…..economic growth in a mature economy does not necessarily increase the pressure on the world’s reserves of natural resources and on its physical environment. An advanced country may be able to decouple economic growth and increasing volumes of material goods consumed. A sustainable economy does not necessarily have to be a no-growth economy.”
McAfee provides charts based on detailed and comprehensive USGS data sources to demonstrate the “great reversal” of transitioning from growth that uses more resources to growth that uses less. Absolute consumption levels of metals, agricultural inputs (like fertilizer), building and wood products, and energy, among other resources, are now declining.
This result is not only a reversal, it is completely counter-intuitive. But that’s what happens to the doom-and-gloomers who predict a bleak future. It’s what happens to “peak oil” forecasters who did not anticipate fracking, and the famine predictors who could not anticipate the technological revolution in agriculture, and the global warming alarmists wedded to their hockey stick charts.
More growth by using fewer resources. More from less. Who would have thought it?
