Economics Since Jesus

By James Nye: “Viewed as a whole, the graph shows the creeping restoration of Asian economic supremacy as the rest-of-the-world catches up to the West and surpasses its levels of industrialisation. Charting the globe’s 10 major powers since the time of Jesus, the graph can be broken down by simply applying a cut off point at around the 1800 AD mark.”

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  • I love this little chart. It’s informative (and has really cool colors. 😉 )

    This chart points to the reason I dislike the frequent characterization that the US has only 5% of the worlds population but consumes X% (22%?) of the world’s resources, as though there is a fixed-sum game where the US must be stealing from someone else to have such a disproportionate share of the world GDP. What is happening is that across the world peoples are finding the right mix of public policy, political structures, scientific-rationalism, technology, food production and health measures that allow them to become just as productive. The US economy grew 6.5 fold from 1950-2008 but the world economy grew almost 10 fold. The US’s shrinking share of world GDP is not happening because of redistribution but because of unprecedented explosion in productivity.

  • Tom F.

    Kruse- I was just about to comment about the chart, and you had already said what I thought! I think it will really limit addressing true inequality if we take a fixed-wealth idea. I wonder if the chart doesn’t reinforce just a bit of the “fixed-wealth” idea though, because it makes it look like China “stole” some of the US’s % of GDP.

    So I really appreciate your basic point.

    On the other hand, when it comes to specific finite resources, I think concerns about American using relatively more are more on target, no? For example, the fact that American’s use more oil than other parts of the world is a big deal, as oil usage leads to carbon emissions, and carbon emissions lead to global warming, something that will mean economic costs to many parts of the world that did not consume that oil.

    Anyway, probably a minor point, and I don’t say this because I think you necessarily disagree, just thought it might be worth clarifying.

  • Thanks Tom. I agree with separating the questions. The first one being, is the US growing at the expense of others? As said above, I think the answer is no. The second question is much more complex. Can global growth be even more radically expanded to bring everyone into something similar to Western style prosperity? A couple of thoughts.

    First, lets say we project we will run out of copper in 100 years. People living after 2112 will have no copper. In response, we begin a conservation campaign to reduce the use of copper and we successfully cut annual global copper usage in half. All that means is that we bought another hundred years. Now, no one living after 2212 will have copper. That’s great for the folks living in that additional century but you still have the same ethical question that after some future date, future generations will be deprived of copper at our expense. And following this logic to its ultimate extreme, the only way we can preserve finite resources for future generations is to stop using them at all and return to a primitive hunter/gather or agricultural state.

    I would suggest that we will never run out of copper or any of these natural resources. Here is why. As we use more of a natural resource that is being extracted at a constant rate, the price goes up. That leads to two responses. First, producers are given the incentive to locate more of the resource and to be more efficient in their extraction of the resource, possibly devising technologies to extract from deposits that were previously considered cost-prohibitive to access. Second, consumers begin to economize on their use. Maybe they begin to recycle. If the price becomes very high, they may develop substitutes for the now expensive resource.

    What we have seen over the past 150 years is a steady decline in the real cost of raw materials across the board. There are the occasional spikes for this our that resource but, in real dollars, nearly all natural resources sell for 1/3 or less of what they did a few decades ago and in many cases it is less than a tenth. The resources are becoming more plentiful not less so. There is no real threat of resource depletion for generations, even centuries, for most resources we use.

    As we use a resource, we don’t just keep using it and then one day drop off a cliff when it is gone. If and when we reach the point that production can no longer be expanded the cost of that resource will begin to creep up decades (more likely centuries) in advance of complete exhaustion. (Cost of resources calculates known and anticipated deposits of resources.) As the price increases, there will more economizing and pursuit of substitute products until use of the resource is abandoned (thus, we never run out).

    Virtually everything we use today can eventually be made of renewable resources. We have only scratched the surface of energy sources available to us in creation. But as yet we don’t have the technological sophistication to do all this. I think the use of nonrenewable resources is a transitional phase in human development that will continue to be with us in a significant way for at least a few more centuries but we can’t get to “the other side” without the iterations of learning we are living through today.

    I’ve gone on too long, but those are just a few thoughts.

  • Tom F.

    Hmm, no that’s true. There’s definitely a few things you mention that I hadn’t considered. I don’t substantially disagree when it comes to most commodities/natural resources, either. As someone who tends to move in “progressive” Christian circles, I get frustrated with the zero-sum model of economic growth I sometimes hear in them, even as I appreciate a lot of the other perspectives they bring.

    I do wonder what happens if you consider “available carbon emissions left until the planet crashes” a resource? That seems like a finite amount, and although there are certainly many unknowns, it does seem like American’s use up this “resource” much more per person than do people in other parts of the world.

    On the other hand, this is really somewhat off-topic, and I don’t mean to hijack the thread towards talk about global warming. (Although, not like anyone else was jumping to comment apparently.)

    Anyway, thanks for your thoughts!