A New Look at Economic Growth
The last two hundred years have been phenomenal if it comes to development in all possible dimensions (except the spiritual and several others, some may contend). Economic growth has been spectacular and started with (albeit not caused by) the use of machines. The obsolete ideas about the economic value being determined by the amount of land were abandoned and modern ideas regarding the role of capital and labor began to reign.
With the access to seemingly unlimited supply of coal in Great Britain and then tapping into huge resources of oil in the US, the Middle East and other regions there was a prevailing understanding that what really mattered was the division of labor only. And in terms of production what was important boiled down to labor and capital (with an auxiliary role of land added to the equation).
It is time we reconsidered the role of energy in our economy. Of course machines still carry weight, actually even to a larger extent than before. However, because of depletion of fossil fuels, difficulties involved in building uranium reactors, inefficiency of solar and wind energy sources, and deterioration of the global climate and environment (e.g. lack of water, humans and human related animals (like cows) constitute 95% of mammal biological mass on the planet, forests are increasingly disappearing, arable land gets shrined) we have to start paying a much greater attention to energy and try to come up with new ways of obtaining it (e.g. thorium reactors, hydrogen, tides).
We send electric energy through wires and we generate it mostly through burning coal and oil. The technological progress unfolding around us has been amazing, however it has hardly altered our reliance on fossil fuels.
Steve Keen, one of the few economists who actually predicted the 2008 crisis, has long been critical of the mainstream economic models. Recently, he has directed his attention from finance to climate change. For instance, he has argued that the analysis of climate change influence on economy conducted by William Hordhaus (laureate of the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel) is incorrect. To learn more about the damage to the world economy caused by global warming please click here.