Wow, I've wanted to write about about these episodes since hearing them for the first time, but since they have come up again, I'll try to summarize my thoughts now:
I see several problems with Galor's thesis:
1.) Galor claims that better technology has always historically resulted in people collectively having more children, cancelling out the gains from innovation (the Malthusian trap). Then, for some reason not well explained, he suggests that people started having fewer children about 150 years ago so that technology raced *ahead* of population growth for the first time ever, raising living standards. That's my understanding of his thesis.
The problem with this is that the human population has increased *exponentially* since the Industrial Revolution, from about 1 billion people in 1800 to over eight billion today. That is, the Industrial Revolution *turbocharged* population growth, not arrested it. The world's population has *doubled* since 1975 alone!
How are we to square this with his idea that humanity supposedly got rich by investing in *fewer* children per capita? Even if we confine ourselves to Great Britain--ground zero for the Industrial Revolution--we see that population increased continually throughout this period much *faster* than the preceding agrarian era, and, on top of that, this was during an era of mass emigration from Great Britain to other parts of the world. This can be seen from this chart and this map:
When you put this question to Galor, it seems like he backpeddles: instead of people having fewer children; now he tells us that, yes, population was in fact *growing* throughout the Industrial Revolution, but technological innovation was growing *faster*. This seems to be a totally different theory than the one he was expounding earlier in the interview. So having fewer children wasn't the cause after all? To me, it seems obvious that the demographic transition is a *result* of industrialism, not a cause of it (as Brad DeLong argues).
(As a sidenote: if lower population growth really is the key to economic prosperity, as Galor argues, then it is hard to justify the current panic over declining birth rates among the media and certain billionaires.)
When you posit the harnessing of fossil fuel energy to Galor, he never tells us why his thesis is a better explanation for these developments--he merely restates it. Do you find his answer convincing? DeLong, at least, mentions England's coal deposits in his interview but neglects it otherwise (I've not yet read his whole book, but I've looked at the index and there doesn't seem to be much mention of steam engines, fossil fuels, oil, etc.).
To me, all of these explanations violate Occam's Razor: you should not multiply causes beyond necessity. In my view, the real story is quite simple and plainly obvious: humans have been getting increasingly better at harnessing energy. First it was the energy in organic materials using fire. Then we captured more and more solar energy in the form of plants with the Agricultural Revolution and turned it into food, fuel and fodder. Along the way, we captured some of the energy in prime movers like wind and water, along with harnessing animal power. But increasing population ate up the gains in the long run.
Then, starting about two hundred years ago, we started accessing the billions of years of fossil sunlight stored in hydrocarbons by inventing the first heat engines. Then we harnessed petroleum with the internal combustion engine. Then we harnessed electricity in the Third Industrial Revolution which is still ongoing (e.g. computers and telecommunication). This is the story told by Vaclav Smil in "Energy and Civilization", and by Nate Hagens, among others. Hagens has a series of videos describing how we are "energy blind." From one of the transcripts:
"We increasingly replaced manual human tasks with machines, at a tiny fraction of the cost. The result: higher profits, higher wages and cheaper goods. Sudden access to this bank account of stored carbon energy turbocharged our populations, access to goods, services, and technology and quadrupled our economic growth rate."
"Yet humanity’s great acceleration was still ahead. In the latter half of the 20th century, with this new power source, and an upgrade from coal to higher quality liquid oil, the human economy’s average growth rate doubled yet again, to now over 30x what it had averaged during the last few thousand years."
"Compared to a global labor force of around 5 billion real humans, the machines and work powered by access to buried carbon energy added the equivalent power of 500 billion human workers. Access to these fossil energies and materials brought billions more humans into existence and brought billions more out of poverty..."
This explains why people have fewer children per capita in industrial societies: there are hundreds of "energy slaves" per person doing our work for us. A barrel of oil is equivalent to roughly four years of human labor, so large populations are no longer necessary for growth. I would suggest having Hagens on to present this alternative thesis more fully.
To me, this explanation is a lot more satisfying and makes far more sense than any of the explanations provided by economists who I think neglect the role of energy for ideological reasons. If economic growth is fundamentally enabled by energy, then growth is finite and the fundamental assumptions of economics are not viable, therefore, the role of energy must be deliberately suppressed and obfuscated.
I've not yet seen anything that convinces me that this thesis is not correct, and that every other explanation is merely trying to conceal what is apparent. It's like an absurdist Monty Python sketch where everyone has to deny the presence of an elephant in the room and come up with alternate explanations for the mayhem around them besides the bleeding obvious.
Finally, as for the timing of 1870, I think that's exactly right, and the timing fits remarkably well with the discovery and exploitation of petroleum fuels, which I wrote about here: https://hipcrime.substack.com/p/the-lost-golden-age. It's worth noting that it was petroleum which turbocharged world food production (combine harvesters, seed drills, cultivators, artificial fertilizers, water pumps, long-distance transport, refrigeration, etc.) and freed up the vast majority of humans from food production for the first time, which may be why the previous industrial revolution (pre-1870) had less of an effect on living standards. This freeing of humanity was the source of the increasing innovation throughout the twentieth century that DeLong describes, as well as the fact that land was no longer needed to produce energy which could be mined from underground instead. And globalized trade was supercharged since it no longer had to rely exclusively on wind power.
Hi Chad, thanks for this comment -- very thoughtful. And very thought-provoking! I think you are raising two important issues: 1. problems with Galor's approach and 2. the importance of the energy-approach. (As I understand it, you see DeLong's approach being reasonable as such, but missing the big picture.)
Brief comments:
1. I personally agree that Galor focuses too much on population. But to be fair, I should highlight one crucial point in our conversation. When I asked about population growth after Industrial Revolution, Galor answered:
“This [early industrial growth] is not sustained economic growth because much of it is consumed by the increase in the size of the human population. And it is the demographic transition that occurs a in western Europe in the 1870s that frees the growth from the counterbalancing fact of population.”
In other words: you are right about the population boom after the Industrial Revolution. But according to Galor, this was why Industrial Revolution was not the linchpin of history. The linchpin was the Demographic Transition. Indeed, all rich countries have gone through it. (Graph: https://ourworldindata.org/grapher/children-per-woman-fertility-rate-vs-level-of-prosperity). You are also right that the overall wealth of the world cannot be explained by a decrease in population. But Galor would probably focus on the wealth of individual countries. (This is why the UK-India comparison is key.)
You also worry that the demographic transition occurs for mysterious reasons. I would agree. But Galor does offer an explanation. Here is DeLong paraphrasing it:
“In 1870s, it makes more sense for you to invest in having one or having two children and feeding them extremely well .. and sending them to school, because having one child able to work in the industrial economy of 1880 is worth more to you in terms of support in your old age than is having six three of whom will then die.”
But anyway, the demographic transition did happen. Galor might be wrong to over-emphasise it. I think he is. But we should acknowledge its reality. (Btw, it is easy to miss when looking at big graphs like the one you shared. After all, the absolute size of British population keeps growing. But the growth rate turns down, dramatically so. Going from c. 30 to c. 60 million in the 20th Century is a tiny growth rate when compared to 19th Century speed of 7 to 30.)
2. When it comes to energy, you raising a really, really important topic. I've been more and more interested in "energy blindness" myself. Hagen is a great recommendation. I might reach out to Smil, too. I'm actually working on a separate podcast project on energy history. It's in an early stage. But I have very, very knowledgable collaborator on it! (Send me a message if you want chat more one-on-one!)
Thanks again for such a thought-provoking comment! I'll keep thinking about this.
Wow, I've wanted to write about about these episodes since hearing them for the first time, but since they have come up again, I'll try to summarize my thoughts now:
I see several problems with Galor's thesis:
1.) Galor claims that better technology has always historically resulted in people collectively having more children, cancelling out the gains from innovation (the Malthusian trap). Then, for some reason not well explained, he suggests that people started having fewer children about 150 years ago so that technology raced *ahead* of population growth for the first time ever, raising living standards. That's my understanding of his thesis.
The problem with this is that the human population has increased *exponentially* since the Industrial Revolution, from about 1 billion people in 1800 to over eight billion today. That is, the Industrial Revolution *turbocharged* population growth, not arrested it. The world's population has *doubled* since 1975 alone!
https://www.statista.com/statistics/1303469/time-taken-for-global-pop-double/
https://www.worldometers.info/world-population/#pastfuture
How are we to square this with his idea that humanity supposedly got rich by investing in *fewer* children per capita? Even if we confine ourselves to Great Britain--ground zero for the Industrial Revolution--we see that population increased continually throughout this period much *faster* than the preceding agrarian era, and, on top of that, this was during an era of mass emigration from Great Britain to other parts of the world. This can be seen from this chart and this map:
https://ourworldindata.org/grapher/population-of-england-millennium
https://www.reddit.com/media?url=https%3A%2F%2Fi.redd.it%2F932om7marj4d1.jpeg
When you put this question to Galor, it seems like he backpeddles: instead of people having fewer children; now he tells us that, yes, population was in fact *growing* throughout the Industrial Revolution, but technological innovation was growing *faster*. This seems to be a totally different theory than the one he was expounding earlier in the interview. So having fewer children wasn't the cause after all? To me, it seems obvious that the demographic transition is a *result* of industrialism, not a cause of it (as Brad DeLong argues).
(As a sidenote: if lower population growth really is the key to economic prosperity, as Galor argues, then it is hard to justify the current panic over declining birth rates among the media and certain billionaires.)
When you posit the harnessing of fossil fuel energy to Galor, he never tells us why his thesis is a better explanation for these developments--he merely restates it. Do you find his answer convincing? DeLong, at least, mentions England's coal deposits in his interview but neglects it otherwise (I've not yet read his whole book, but I've looked at the index and there doesn't seem to be much mention of steam engines, fossil fuels, oil, etc.).
To me, all of these explanations violate Occam's Razor: you should not multiply causes beyond necessity. In my view, the real story is quite simple and plainly obvious: humans have been getting increasingly better at harnessing energy. First it was the energy in organic materials using fire. Then we captured more and more solar energy in the form of plants with the Agricultural Revolution and turned it into food, fuel and fodder. Along the way, we captured some of the energy in prime movers like wind and water, along with harnessing animal power. But increasing population ate up the gains in the long run.
Then, starting about two hundred years ago, we started accessing the billions of years of fossil sunlight stored in hydrocarbons by inventing the first heat engines. Then we harnessed petroleum with the internal combustion engine. Then we harnessed electricity in the Third Industrial Revolution which is still ongoing (e.g. computers and telecommunication). This is the story told by Vaclav Smil in "Energy and Civilization", and by Nate Hagens, among others. Hagens has a series of videos describing how we are "energy blind." From one of the transcripts:
"We increasingly replaced manual human tasks with machines, at a tiny fraction of the cost. The result: higher profits, higher wages and cheaper goods. Sudden access to this bank account of stored carbon energy turbocharged our populations, access to goods, services, and technology and quadrupled our economic growth rate."
"Yet humanity’s great acceleration was still ahead. In the latter half of the 20th century, with this new power source, and an upgrade from coal to higher quality liquid oil, the human economy’s average growth rate doubled yet again, to now over 30x what it had averaged during the last few thousand years."
"Compared to a global labor force of around 5 billion real humans, the machines and work powered by access to buried carbon energy added the equivalent power of 500 billion human workers. Access to these fossil energies and materials brought billions more humans into existence and brought billions more out of poverty..."
https://www.thegreatsimplification.com/animations
This explains why people have fewer children per capita in industrial societies: there are hundreds of "energy slaves" per person doing our work for us. A barrel of oil is equivalent to roughly four years of human labor, so large populations are no longer necessary for growth. I would suggest having Hagens on to present this alternative thesis more fully.
To me, this explanation is a lot more satisfying and makes far more sense than any of the explanations provided by economists who I think neglect the role of energy for ideological reasons. If economic growth is fundamentally enabled by energy, then growth is finite and the fundamental assumptions of economics are not viable, therefore, the role of energy must be deliberately suppressed and obfuscated.
I've not yet seen anything that convinces me that this thesis is not correct, and that every other explanation is merely trying to conceal what is apparent. It's like an absurdist Monty Python sketch where everyone has to deny the presence of an elephant in the room and come up with alternate explanations for the mayhem around them besides the bleeding obvious.
Finally, as for the timing of 1870, I think that's exactly right, and the timing fits remarkably well with the discovery and exploitation of petroleum fuels, which I wrote about here: https://hipcrime.substack.com/p/the-lost-golden-age. It's worth noting that it was petroleum which turbocharged world food production (combine harvesters, seed drills, cultivators, artificial fertilizers, water pumps, long-distance transport, refrigeration, etc.) and freed up the vast majority of humans from food production for the first time, which may be why the previous industrial revolution (pre-1870) had less of an effect on living standards. This freeing of humanity was the source of the increasing innovation throughout the twentieth century that DeLong describes, as well as the fact that land was no longer needed to produce energy which could be mined from underground instead. And globalized trade was supercharged since it no longer had to rely exclusively on wind power.
Hi Chad, thanks for this comment -- very thoughtful. And very thought-provoking! I think you are raising two important issues: 1. problems with Galor's approach and 2. the importance of the energy-approach. (As I understand it, you see DeLong's approach being reasonable as such, but missing the big picture.)
Brief comments:
1. I personally agree that Galor focuses too much on population. But to be fair, I should highlight one crucial point in our conversation. When I asked about population growth after Industrial Revolution, Galor answered:
“This [early industrial growth] is not sustained economic growth because much of it is consumed by the increase in the size of the human population. And it is the demographic transition that occurs a in western Europe in the 1870s that frees the growth from the counterbalancing fact of population.”
In other words: you are right about the population boom after the Industrial Revolution. But according to Galor, this was why Industrial Revolution was not the linchpin of history. The linchpin was the Demographic Transition. Indeed, all rich countries have gone through it. (Graph: https://ourworldindata.org/grapher/children-per-woman-fertility-rate-vs-level-of-prosperity). You are also right that the overall wealth of the world cannot be explained by a decrease in population. But Galor would probably focus on the wealth of individual countries. (This is why the UK-India comparison is key.)
You also worry that the demographic transition occurs for mysterious reasons. I would agree. But Galor does offer an explanation. Here is DeLong paraphrasing it:
“In 1870s, it makes more sense for you to invest in having one or having two children and feeding them extremely well .. and sending them to school, because having one child able to work in the industrial economy of 1880 is worth more to you in terms of support in your old age than is having six three of whom will then die.”
(DeLong himself focused more on the reduction in child mortality. Graph: https://ourworldindata.org/grapher/fertility-vs-child-mortality)
But anyway, the demographic transition did happen. Galor might be wrong to over-emphasise it. I think he is. But we should acknowledge its reality. (Btw, it is easy to miss when looking at big graphs like the one you shared. After all, the absolute size of British population keeps growing. But the growth rate turns down, dramatically so. Going from c. 30 to c. 60 million in the 20th Century is a tiny growth rate when compared to 19th Century speed of 7 to 30.)
2. When it comes to energy, you raising a really, really important topic. I've been more and more interested in "energy blindness" myself. Hagen is a great recommendation. I might reach out to Smil, too. I'm actually working on a separate podcast project on energy history. It's in an early stage. But I have very, very knowledgable collaborator on it! (Send me a message if you want chat more one-on-one!)
Thanks again for such a thought-provoking comment! I'll keep thinking about this.