Economic Abundance, Real and Imagined
2012年12月18日“American companies,” reports The Wall Street Journal, “have led the world in discovering how to coax gas and oil from shale rock formations from Ohio to Texas, sending U.S. natural-gas production up 28% between 2005 and 2011.” These U.S. energy firms “are racing to export natural gas from the U.S. as they search for more-profitable markets amid a continent-wide gas glut that has depressed prices to the lowest levels in a decade.”
Abundance is often a surprise — especially in the dismal science of economics, which gets its nickname from its ostensible definition: the study of the distribution of scarce resources.
“During the 1970s,” energy expert Mark Mills reminds us, “policymakers assumed that North American natural gas resources were so scarce that the Carter administration and Congress passed the 1978 Fuel Use Act to ban the use of natural gas for electric generation, preserving it for heating and industrial applications.”
These hydrocarbons of course lay in the earth for millions of years. To find and retrieve them and to conceive creative ways to use them has required know-how, investment, and technology. Indeed, the new energy boom is largely the result of yet another abundance — information technology — which is key to managing complex energy exploration and extraction processes.
In 2012, the world will produce around 200 quintillion (1018) transistors, the basic logic devices of computer chips. As recently as 1968, the world produced a couple billion transistors in a full year. Today, a single chip may boast that many. More importantly, today’s transistors consume 5,000 times less power and have dropped in price by a factor of 50,000.
The results of transistor abundance are all around us: mobile broadband networks, iPhones, and Kindles; DNA sequencing and protein folding tools; automobile navigation systems and back-up cameras; automated assembly lines, efficient supply chains, and high-frequency trading; 3D modeling of under-earth energy pockets and horizontal drilling mechanisms; sonic toothbrushes; annual U.S. Internet traffic of 100 exabytes; and, most importantly, high-definition tennis replays, GPS golf caddies, and realtime fantasy football updates.
Abundance makes possible the piddly and the profound. It lavishes us with superfluous toys and life saving medicines. And yet our understanding of abundance is paradoxically complicated. We take these fruits for granted, but we aren’t very good at extrapolating exponential change. Policymakers’ spending habits presume limitless resources, yet they craft tax and regulatory policies that are both based upon, and cause, scarcity.
Yale economist William Nordhaus examined the history of lighting technologies, from open fires and stone animal fat lamps in ancient times to modern incandescent and fluorescent bulbs. He found that the conventionally measured nominal price of light, metered in dollars per lumen per watt, rose by a factor of three to five between 1800 and 1992. That was a good bargain compared to an overall consumer price index that rose tenfold. Nordhaus, however, concluded that the conventional measure didn’t remotely capture the technological pace of advance, nor the dramatic impact on living standards. The “true price” of light in 1992, Nordhaus estimated, was perhaps one-sixteen-hundredth (1/1,600) the conventionally measured price.
Abundance is often a surprise — especially in the dismal science of economics, which gets its nickname from its ostensible definition: the study of the distribution of scarce resources.
“During the 1970s,” energy expert Mark Mills reminds us, “policymakers assumed that North American natural gas resources were so scarce that the Carter administration and Congress passed the 1978 Fuel Use Act to ban the use of natural gas for electric generation, preserving it for heating and industrial applications.”
These hydrocarbons of course lay in the earth for millions of years. To find and retrieve them and to conceive creative ways to use them has required know-how, investment, and technology. Indeed, the new energy boom is largely the result of yet another abundance — information technology — which is key to managing complex energy exploration and extraction processes.
In 2012, the world will produce around 200 quintillion (1018) transistors, the basic logic devices of computer chips. As recently as 1968, the world produced a couple billion transistors in a full year. Today, a single chip may boast that many. More importantly, today’s transistors consume 5,000 times less power and have dropped in price by a factor of 50,000.
The results of transistor abundance are all around us: mobile broadband networks, iPhones, and Kindles; DNA sequencing and protein folding tools; automobile navigation systems and back-up cameras; automated assembly lines, efficient supply chains, and high-frequency trading; 3D modeling of under-earth energy pockets and horizontal drilling mechanisms; sonic toothbrushes; annual U.S. Internet traffic of 100 exabytes; and, most importantly, high-definition tennis replays, GPS golf caddies, and realtime fantasy football updates.
Abundance makes possible the piddly and the profound. It lavishes us with superfluous toys and life saving medicines. And yet our understanding of abundance is paradoxically complicated. We take these fruits for granted, but we aren’t very good at extrapolating exponential change. Policymakers’ spending habits presume limitless resources, yet they craft tax and regulatory policies that are both based upon, and cause, scarcity.
Yale economist William Nordhaus examined the history of lighting technologies, from open fires and stone animal fat lamps in ancient times to modern incandescent and fluorescent bulbs. He found that the conventionally measured nominal price of light, metered in dollars per lumen per watt, rose by a factor of three to five between 1800 and 1992. That was a good bargain compared to an overall consumer price index that rose tenfold. Nordhaus, however, concluded that the conventional measure didn’t remotely capture the technological pace of advance, nor the dramatic impact on living standards. The “true price” of light in 1992, Nordhaus estimated, was perhaps one-sixteen-hundredth (1/1,600) the conventionally measured price.
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