Last week, the World Bank updated its commodity database, which tracks the price of commodities going back to 1960. Over the last 55 years, the world’s population has increased by 143 percent. Over the same time period, real average annual per capita income in the world rose by 163 percent. What happened to the price of commodities?
Out of the 15 indexes measured by the World Bank, 10 fell below their 1960 levels. The indexes that experienced absolute decline included the entire non-energy commodity group (-20 percent), agricultural index (-26 percent), beverages (-32 percent), food (-22 percent), oils and minerals (-32 percent), grains or cereals (-32 percent), raw materials (-32 percent), “other” raw materials (-56 percent), metals and minerals (-4 percent) and base metals (-3 percent).
Five indexes rose in price between 1960 and 2015. However, only two indexes, energy and precious metals, increased more than income, appreciating 451 percent and 402 percent respectively. Three indexes increased less than income. They included “other” food (7 percent), timber (7 percent) and fertilizers (38 percent).
Taken together, commodities rose by 43 percent. If energy and precious metals are excluded, they declined by 16 percent. Assuming that an average inhabitant of the world spent exactly the same fraction of her income on the World Bank’s list of commodities in 1960 and in 2015, she would be better off under either scenario, since her income rose by 163 percent over the same time period.
This course of events was predicted by the contrarian economist Julian Simon some 35 years ago. In The Ultimate Resource, Simon noted that humans are intelligent animals, who innovate their way out of scarcity. In some cases, we have become more parsimonious in using natural resources. An aluminum can, for example, weighed about 3 ounces in 1959. Today, it weighs less than half an ounce. In other cases, we have replaced scarce resources with others. Instead of killing whales for lamp oil, for instance, we burn coal, oil and gas.
I will have a paper on this subject soon. In the meantime, please visit www.humanprogress.org.
(P.S.: I have used the World Bank’s original terminology, but changed the Bank’s base year from 2010 to 1960.)
marmico on Wed, 13th Jan 2016 9:21 am
Where are all of the rebuttals of the Cro-Magnon Limits to Growthers?
forbin on Wed, 13th Jan 2016 9:31 am
Humans Innovate Their Way Out of Scarcity
by dying
Forbin
paulo1 on Wed, 13th Jan 2016 9:50 am
No job, or part-time only, rising prices, and decline in mobility means doing without, pure and simple.
Oh wait, doing without and losing optimism = innovation. I get it now.
penury on Wed, 13th Jan 2016 9:58 am
Too soon in the morning for this this type of dreaming. Some people have too much time and not enough intelligence to do useful things.
Davy on Wed, 13th Jan 2016 10:01 am
I will agree with this status quo blather once we inovate our way into a new planet. Please define innovate. I see innovation as nothing more than an out of control growth impulse with population and consumption. We are embracing anything and everything that contributes to growth through unrestrained efficiency and technological applications.
There is no innovation of the human spirit of humility to say no or to critically reflect. We are now just getting to a humility and self reflection because of climate change. Soon we will do the same with capitalism because the economy is all but broken. We are at the end of the road so idiots like the author can only use the past to make people feel better in a horrible present.
dave thompson on Wed, 13th Jan 2016 10:47 am
The free marketeers blather of infinite growth on a finite planet continues until it stops, abruptly.
Cloud9 on Wed, 13th Jan 2016 11:56 am
A trend line that goes back half a century is not a good measure for this hypothesis. I submit a better position would be to assert that over the last half of century, during the fossil fuel boom, we have been able to mitigate certain shortages with the use of cheap energy. Over a longer time line, with the depletion of cheap energy, shortages may become more difficult to mitigate. Consider the great famine.
“The Great Famine of 1315–1317 (occasionally dated 1315–1322) was the first of a series of large-scale crises that struck Europe early in the fourteenth century. Most of continental Europe (extending east to Russia and south to Italy) and Great Britain were affected.[1] The famine caused millions of deaths over an extended number of years and marked a clear end to the period of growth and prosperity from the eleventh to thirteenth centuries.
The Great Famine started with bad weather in spring 1315. Universal crop failures lasted through 1316 until the summer harvest in 1317, and Europe did not fully recover until 1322. The period was marked by extreme levels of crime, disease, mass death, and even cannibalism and infanticide. The crisis had consequences for the Church, state, European society, and for future calamities to follow in the fourteenth century.”
https://en.wikipedia.org/wiki/Great_Famine_of_1315%E2%80%9317
peakyeast on Wed, 13th Jan 2016 12:01 pm
And in about 16000 years when there are as many humans as atoms in the known universe – then we will have not only innovated how to make humans from 1 atom, but also how to travel to every corner of the universe and do this.. Without using any of the atoms for that purpose.
And at that point it will be easy to innovate another couple of universes…
Just as we right now are so close to innovating ourselves to a new planet because we innovated the one we have into a toxic pile filled with mad apes whose leadership amounts to less than the leadership in a 25gram pack of yeast.
GregT on Wed, 13th Jan 2016 12:21 pm
“And in about 16000 years when there are as many humans as atoms in the known universe – then we will have not only innovated how to make humans from 1 atom, but also how to travel to every corner of the universe and do this.. Without using any of the atoms for that purpose.
And at that point it will be easy to innovate another couple of universes…”
What we have here folks, is management material. Heck peaky, find yourself a tall enough soapbox, and you could easily win the presidential nomination with this stuff. It’s that good.
You’re going to need to be bit hush on the reality part of your message that follows though. It’s a real buzz killer.
Apneaman on Wed, 13th Jan 2016 12:44 pm
“The Cato Institute is an American libertarian think tank headquartered in Washington, D.C. It was founded as the Charles Koch Foundation in 1974 by Ed Crane, Murray Rothbard, and Charles Koch”
steveo on Wed, 13th Jan 2016 12:53 pm
The Cato Institute is a monument to BAU and neo-liberal economics, I wouldn’t expect anything else from one of their “researchers”.
Apneaman on Wed, 13th Jan 2016 1:36 pm
The Cato Institute has been such a complete success in it’s mission to further enrich it’s 1%er funders at the expense of the working/middle class, that they no longer have enough customers to stay in business. It was a suicide mission. Scarcity has been rendered moot by their greed and corruption. No one has any fucking money to buy the goodies now. The global super elite are like Smaug sitting on the pile of treasure. Mine, mine, mine.
World Trade is Coming to a Halt
“Right after we yell, “D’oh!” and slap our foreheads, it’s obvious not only that we were wrong, but how. Having moved Hell and Earth to make sure the banks are okay, and General Motors is okay, and the stock market is okay, having stacked up debt that can never be paid off and diluted the money supply until it can never work right again, now we hear the alarm on the monitor and look around and realize: while we’ve been administering medicines and doing surgeries, the patient has been starving to death. We forgot to feed him.
It’s a point that has been stunningly obvious at least since Henry Ford started making cars. Heavily criticized by the then-Masters of the Universe for paying his workers the unheard-of wage of five dollars a day, Ford simply pointed out that if he did not pay his workers well enough that they could afford one of his cars, he wouldn’t be in business long.
How soon we forget. After decades of moving jobs offshore, automating jobs, downsizing, streamlining and otherwise destroying the middle class (even in China, which only created a middle class a few years ago), we can now see what has always been true: everything depends on the middle class.
When there are no consumers left in a consumer economy there is no economy left either. Code Blue has been called, we have a flatline. Is anybody coming?”
http://www.dailyimpact.net/2016/01/12/world-trade-is-coming-to-a-halt/
Apneaman on Wed, 13th Jan 2016 1:39 pm
Rent and Ramen – The new economy.
Wolf Street: Rail Shipments Indicate US Heading for Recession
http://www.newsmax.com/Finance/StreetTalk/rail-shipments-economic-recession-transportation/2016/01/10/id/708930/
Apneaman on Wed, 13th Jan 2016 2:48 pm
MEGACANCER ~ Exploring the pathology of industrial civilization.
It’s All About the Cheese
“So why take survival so seriously? Aren’t you just being a dupe in continuing the madness? Why not put an end to life, the competitive madness that leads nowhere but to more competitive madness, once and for all? Perhaps it’s because of the reward system. We don’t have time to think about what we’re doing and our concerns are focused upon getting the next rewards. We must or die. If there’s anything that gets the dopamine flowing it’s the chance at a big reward, an opioid brain cocktail, and that’s what we think about mostly (and the obstacles between ourselves and our happy destinies). Organisms rarely have time to consider what they’re doing, but must continuously have in mind their next reward lest some other greedy organism take the opportunity from them and win in the survival of the fittest.”
http://megacancer.com/2016/01/13/its-all-about-the-cheese/
jjhman on Wed, 13th Jan 2016 3:37 pm
In context but only obliquely I’ve been reading about the Plantagenet kings of England in the 11th thru the 14th century. These past few days it’s been about the peasant revolt starring John Ball and Wat the Tyler. Here’s the grusome conclusions that I draw:
-Everyone has a sense of entitlement.
-The very rich (the barons) simply don’t understand that the peasants need to eat in order for the barons to have enough wealth to fight each other for land and luxuries.
-If you let the peasants understand that they outnumber everyone and joined together they can take over the result will be rape, murder and wanton distruction.
-An educated middle class is the best moderating factor in society but so fragile that over most of history, apparently past and present, human society will consist of brutal rule by the barons punctuated by peasant revolts.
I suspect that Trump and Cruz as well as all of the right wing parties gaining power in Europe and the frantic stabilizing efforts of the Chinese politburo are the leading edge of yet another bloody peasant rebellion. Eventually to be resolved by the rise of yet another, or rather more, baronages.
Apneaman on Wed, 13th Jan 2016 4:02 pm
jjhman, the ape cycle repeats, same as it ever was.
“Here is a synopsis of the behavioral loop described above:
Step 1. Individuals and groups evolved a bias to maximize fitness by maximizing power, which requires over-reproduction and/or over-consumption of natural resources (overshoot), whenever systemic constraints allow it. Differential power generation and accumulation result in a hierarchical group structure.
Step 2. Energy is always limited, so overshoot eventually leads to decreasing power available to the group, with lower-ranking members suffering first.
Step 3. Diminishing power availability creates divisive subgroups within the original group. Low-rank members will form subgroups and coalitions to demand a greater share of power from higher-ranking individuals, who will resist by forming their own coalitions to maintain power.
Step 4. Violent social strife eventually occurs among subgroups who demand a greater share of the remaining power.
Step 5. The weakest subgroups (high or low rank) are either forced to disperse to a new territory, are killed, enslaved, or imprisoned.
Step 6. Go back to step 1.
The above loop was repeated countless thousands of times during the millions of years that we were evolving[9]. This behavior is inherent in the architecture of our minds — is entrained in our biological material — and will be repeated until we go extinct. Carrying capacity will decline[10] with each future iteration of the overshoot loop, and this will cause human numbers to decline until they reach levels not seen since the Pleistocene.”
http://www.dieoff.org/
yoananda on Wed, 13th Jan 2016 4:03 pm
“human innovate their way out of scarcity”
yes ! but sometimes it takes a few generation of pain to get to the gain !
it’s not garanted that we always innovate in time.
civilisation have collapsed because they didn’t innovate where it matter.
Apneaman on Wed, 13th Jan 2016 4:52 pm
The French in the late 1700’s were great innovators. The 99% managed to innovate their way out of scarcity with the implementation of one simple invention. Maybe the world will go retro? Everything old is new again so they say.
The richer the 1% get, the more miserable you get
Rising income inequality makes the 99% less happy
https://finance.yahoo.com/news/richer-1-more-miserable-141809912.html
penury on Wed, 13th Jan 2016 5:12 pm
“The humans who survive may be the humans who innovate their way out of scarcity” however the days of innovation have drawn to a close.
makati1 on Wed, 13th Jan 2016 7:35 pm
Read the headline and stopped. More techie bullshit from the pushers of BAU.
Harm on Thu, 14th Jan 2016 12:37 am
Apneaman, don’t forget that modern westerners also have our own singular invention that could help us quickly “innovate” our way out of overshoot. Hint: Robert Oppenheimer and Edward Teller had a lot to do with it.
makati1 on Thu, 14th Jan 2016 12:47 am
Harm, but then the US would be a radioactive glass desert, wouldn’t it? About 12,000 innovations from Russia and China would guarantee it. LOL
Dubya on Thu, 14th Jan 2016 1:05 am
There is actually a machine out there that can produce drinking water from diesel eg
CH + O2—> H2O + CO2
I think the theory is it condenses water from the air but most output is water from combustion.
Therefore this innovative device is capable of substituting plentiful diesel for scarce water.
QED
Harm on Thu, 14th Jan 2016 1:11 am
@makati1,
Actually I was not advocating (or rooting for) any particular western powers to use it against any particular “enemy”. Just stating its existence and the increasing likelihood it will be used sooner or later when BAU falls apart.
Apneaman on Thu, 14th Jan 2016 1:29 am
Harm I too believe it is likly. Someone must be blamed and punished for the mess.
New book Mistakes Were Made (But Not By Me) explains how self-deception dooms marriages, starts wars, and promotes a culture of unaccountability
“Right up there with hunger, sex, and greed, one of the most powerful forces shaping human behavior is cognitive dissonance, the discomfort we experience when we make mistakes that jar our feelings of self-worth.
As with hunger, when we experience cognitive dissonance, we hasten to reduce it–in this case, by attempting to justify the mistake. Because our brains are hard-wired to reassure us, most of the time we don’t even realize the psychological gymnastics that are taking place.”
http://news.ucsc.edu/2007/05/1341.html
makati1 on Thu, 14th Jan 2016 5:55 am
Harm, it is more likely that a failing empire will resort to war (history says they always do), and in this case nuclear, as a last gasp attempt to retain power. The US has already changed it’s stance and decided that nukes can be used as a preemptive weapon, not a defensive weapon. That the US has used them before, and also nuclear munitions in Iraq, etc., only reinforces my contention that it will use them first.
However, if Russia feels that it could lose it’s sovereignty and freedom, it may just decide to push the button first. I guess we will have to wait and see what happens.
China and Russia are trying to defang the Empire by killing the USD. I hope it works and soon. The alternative is much worse.
Kenz300 on Thu, 14th Jan 2016 7:47 am
Safer, cleaner and cheaper……….
The Inevitability of Solar
http://www.renewableenergyworld.com/rea/news/article/2014/09/the-inevitability-of-solar
Apneaman on Thu, 14th Jan 2016 5:57 pm
A Terrifying Jump in Global Temperatures — December of 2015 at 1.4 C Above 1890
“A monster El Nino firing off in the Pacific. A massive fossil fuel driven accumulation of greenhouse gasses in the atmosphere pushing CO2 levels well above 400 parts per million. The contribution of other greenhouse gasses pushing the total global heat forcing into the range of 485 parts per million CO2e. Given this stark context, we knew the numbers were probably going to be bad. We just didn’t know how bad. And, looking at the initial measures coming in, we can definitely say that this is serious.”
http://robertscribbler.com/2016/01/14/december-of-2015-at-1-4-c-above-1890-is-a-terrifying-new-jump-in-global-temperatures/