Ok, as of today I try to contribute some text, so that we move from experimenting to something self-contained and somehow publishable.
What we need:
Upon further reflections, I have decided to start an Overleaf project. You can view it here. If you want editing privileges, let me know and we will coordinate.
@mstn FYI today I am doing some more work on the paper (in Overleaf). In general I do writing and reading on Fridays 
Now I show the production output in graphs. It is the dumbest way to show that growth is zero on an interval. Basically, in the standard model output grows boundlessly while in the Jackpot it oscillates (so it is bounded). So, we can grow for a while and then we can stop in order to allow Nature to recreate resources bla bla…
I am working on a picture to show the different bifurcations for the Goodwin model we have relaxing some constraints.
This is an important point. Making a note to myself to remember to address it in the paper.
Actually, @petussing, would you like to be a co-author? We need backup, especially in section 2 on the literature review and section 5 on the conclusions… but we need backup everywhere, really!
Sure, Alberto-
Sign me up!
What do I do?
Best wishes,
Phillip Tussing
-Lem (after Spinoza)
Could you have a go at section 2 on the paper? Here is an edit link – if you have an Overleaf account, even better.
Also, I propose a co-authors call between @mstn, you and myself next week.
Hi, Albert-
I’d be glad to talk next week, so long as it fits into my schedule (which is not particularly onerous).
I have looked at the paper. Obviously you are considering a zero-growth model. But I think zero-growth models are untenable – they would require that technology not advance. For a simple well-known example, it is a truism that since the 70s the quantity of oil used per dollar of output in the US has fallen by 50%. If you are inclined to argue (and I usually am), you could say that a lot of this is because we have off-shored manufacturing to China & such and moved to services, which are much less energy-intensive. And that is true. But it would be exaggerating to say that this covers all of the reduction. In practice we develop technologies that conserve scarce resources; the more resources are used, the more expensive they become – this leads either to technology that enables us to exploit more of the same resources (as with oil sands technology and fracking), or technology that enables us to use less of those resources (as with more efficient internal combustion engines).
Of course this doesn’t explain the many extinctions of animals such as the dodo and passenger pigeon, the looming pangolin and many many other species extinctions, etc. If anything, these come about as a result of bad economics – a failure of rationality. Many key people refuse to believe the evidence of their eyes and ears in the service of their interests until it is too late. But this is irrational – they would be much better served AS CAPITALISTS by conserving those resources and maintaining supply.
The other piece is that technology of production would never be adopted unless and until it enables the manufacturer to supply the product at a lower cost. The cost reduction could be from any aspect of production – lower cost labor or capital or natural resources – but the highest-cost and scarcest item would be the one to focus on – if you run out of a resource, and that prevents you from producing the product, that is again bad economics.
I end up coming around to the conclusion that people propose steady-state economies for fundamentally moral reasons – not really economic reasons. And the science fiction stories you reference are morality tales in the guise of stories about technology and economics. And I don’t mind morality tales at all (I’m a major Tolkien fan), but I don’t want to confuse them with sound economics.
So I don’t know about “exponential” growth – that sounds too deterministic to me – but I would sign up for “continuous” growth, again because we wouldn’t adopt the technology unless it enables growth. And by growth of course I mean an improvement in life by however means we define it – because after all, it isn’t “growth” unless it is an improvement. And that means per capita, not necessarily for the economy as a whole. Population growth is only positive in poor countries at this stage in history – rich countries have negative population growth, and that is perfectly fine. And I would greatly resist the idea that those poor countries are “slaves” or similar to rich ones – just look at China, which has become rich by making and selling stuff to rich countries – and which is on the brink of pretty severe negative population growth.
There is a very insightful book I have been reading lately by W. Brian Arthur (https://en.wikipedia.org/wiki/W._Brian_Arthur), called The Nature of Technology (http://tuvalu.santafe.edu/~wbarthur/thenatureoftechnology.htm). It posits a model of the economy as an evolving technological organism. I’ve been toying with the idea that this should be a new theory of how economies operate, and might make a great scifi novel (in the hands of a better writer than I). He points out that technology evolves because an intractable problem emerges, and it is then ultimately solved with a new technology, which then causes its own set of problems, ad infinitum.
Best wishes,
Phillip Tussing
-Lem (after Spinoza)
Philip! Are you really making a “not realistic” argument? We are the Sci-Fi Economics Lab! Our job is to push the boundaries; to study fictional economies. “Hmm, but what would a zero-growth modern world look like?” is an interesting question. And the debate on zero growth has quite some lineage in economics, dating back at least to the 1970s. In the introduction I already quoted some of the founding fathers (and mothers, in the case of Donella Meadows).
In the paper (based on @mstn’s notebook – have you seen it?), Marco takes a simple model where technical progress is represented by an exogenous rate of growth; imposes the zero-growth (of output) condition; studies its mathematical consequences; and tries to imagine what the real world would look like, if the underlying math would be like that of the model.
Specifically, in the zero-growth Goodwin model, you can still have ongoing technical progress as long as the working population decreases. This allows us to build several scenarios, and render them through sci-fi:
etc.
With that said, I completely understand if you feel uneasy about going out on a limb with this stuff, and maybe brushing up on the limits to growth-degrowth literature is not of interest to you. 
Hey, I forgot to answer. Ok for a call when you want. I cannot go out anyway 
Alberto-
Mostly I want to get a better feel for what we’re trying to achieve.
Yes, it is possible to have a zero-growth economy along with falling population, even accounting for technological improvement. But that is not “steady state”, because if the population continuously decreases you run out of people. This applies to a declining “active” population as well.
Are you seriously proposing the zombie apocalypse as a desirable economy? The real-world example that comes to mind is the nuclear blow-up at Chernobyl; it killed or drove away the local population and nature is mostly thriving although with an increased cancer and mutation rate. Chernobyl is expected to be habitable again in 20 to several hundred years – Hiroshima is already habitable. The zombie apocalypse is also temporary. In I Am Legend, Will Smith developed a vaccine, which was the beginning of the road back to civilization – what would stop people from doing the same things all over again?
It seems to me there are reasonable issues with much of what passes as “zero growth”.
When you first proposed zero growth, I was supposing that you had in mind something like a “steady-state” economy, as proposed by Herman Daly, or the European “degrowth”. Daly looks at the human economy as continuously drawing down natural resources, especially metals, without being able to completely renew them via recycling – consequently we must develop an economy which extracts as little resources as possible – a possible version of this is the idea that they economy must simply shrink.
Sure, economic production as currently designed draws on natural resources, which are scarce. If you consider the earth below the crust as pretty much inaccessible, that is a set of limited resources. That is a problem in the long run. But I don’t see why existing products cannot be “mined” for metals. Daly follows Nicholas Georgescu-Roegen in invoking the principle of entropy: there is only so much energy available from the sun, once fossil fuels run out our only source will be the sun, and that is limited, thus limiting growth.
But this does not take into account nuclear sources. This also at the moment depends on mined resources. Once uranium is used up, there is thorium, which is a much larger source of energy. Once that is used, there is fusion, which uses deuterium distilled from seawater (or potentially created in a reactor) and tritium, “bred” in the reactor itself. The energy created by fusion is very large, and would sustain a long period of economic expansion. Finally (so far in current physics) there is matter/antimatter annihilation, which has an even greater density of energy. Although theoretically this could become a future source of energy, work in producing a practical matter/antimatter energy generator has a very long way to go.
It seems to me that ecological economists have taken a set of engineering problems associated with overuse of natural resources and turned them into unsolvable existential questions about the continuation of humans (or any other large species) on this planet. This is why I call it a “moral” approach – it does not seem to me based in a rational understanding of the physics or economics.
Moreover, although there is a positive relationship between economic growth and natural resource use, there is a diminishing use of natural resources per unit of value as the society becomes more advanced. The largest uptake of natural resources is no longer the US & Europe – it is large developing countries such as China and India. Once these advance, then it will be African countries – Latin America is of course also in there. Once this has happened, as is already beginning in China, a majority of economic growth will be in services, which use less natural resources – a financial or educational transaction takes less resources per unit of value than a car or an iPhone.
But look at what Daly wants to do. (From the Wikipdia article on “Steady-state economy”): "Daly wants to create the steady-state politically by establishing three institutions of the state as a superstructure on top of the present market economy:
That seems like a recipe for dystopia to me.
Yes, I support redistribution in some form, but any reading of history at all demonstrates that if someone in government is responsible for confiscating and redistributing wealth, the opportunity for corruption is irresistable.
You remember that rich societies are already limiting reproduction by virtue of being well off. So Daly’s “reproduction licenses” would inevitably fall disproportionately on the poor, with the result: corruption.
Same thing – reducing capital would fall proportionately heavily on manufacturing, which in a globally differentiated economy means poor (low labor cost) countries, which would hold them back to the benefit of the rich…
Best wishes,
Phillip Tussing
-Lem (after Spinoza)
Great post! I will give you a proper response tomorrow.
As far as I understand, the main goal here is to back up some sci-fi novels, which are not academic essays, with some formal reasoning.
We do not want to prove anything, but only to sharp our intuition about how things might work.
The Goodwin model is oversimplified and unrealistic from the words of its own author. However, it is surprising how many sci-fi (= not real) scenarios can be explained. In my opinion, it is a good teaching tool, at least.
So far, we have been able to back up at least six novels. The approach we followed has been: “let’s see what happens if we relax some mathematical constraints”. The approach is imo sound because it is the way to make the model less unrealistic, in the long term.
Yes, it is possible to have a zero-growth economy along with falling population, even accounting for technological improvement. But that is not “steady state”, because if the population continuously decreases you run out of people.
Of course. As you said later, the Apocalypse is temporary as in the Jackpot, in the historical Black Death and in I Am Legend.
What we can see from the model is that, in this sort of scenario, the standard of living could be higher after the Apocalypse.
We can see also that growth is not necessarily zero in a Jackpot scenario: growth can be bounded, it does not blow up as in the standard model, which is good in ecological terms.
what would stop people from doing the same things all over again
Nothing. But it could take time to reach the pre-Apocalypse state.
Are you seriously proposing the zombie apocalypse as a desirable economy?
Nobody said that. Only chainsaw manufactures might desire that.
It seems to me there are reasonable issues with much of what passes as “zero growth”.
Agreed.
Here, we made an assumption “economical growth = ecologically bad”. I think that today there is a correlation economical growth/ecologically bad (at least because the economy depends so heavily on fossil fuels). Here, some serious references could be useful, though.
However, we do not rule out the possibility of a perpetual eco-friendly growth. One of the proposals we discussed at the beginning was to decouple growth from bad growth.
a possible version of this is the idea that they economy must simply shrink.
This was the first thing we wanted to show with the help of the model. If it shrinks, it is bad, economically.
But look at what Daly wants to do. (From the Wikipdia article on “Steady-state economy”): "Daly wants to create the steady-state politically by establishing three institutions of the state as a superstructure on top of the present market economy:
Sounds like our Cyberpunk model. From Cyberpunk / Marco | Observable
We do not know if the unsustainability hypothesis is true in the real world, we assume that it is true (or believed to be true) in our fictional world.
The Cyberpunk model is a though experiment to see what could happen if Daly’s ideas became mainstream.
You are right, we should probably not use the steady state language. I looked up the definition again, and it turns out that Daly was not concerned with output growth, but with physical stocks and, yes, population.
Not at all. This is just a tongue-in-cheek name for that specific partition of the model’s parameter space.
I completely agree. However, the model is simply saying: “Ok, assuming the eco-econs are right, and assuming their ideas become mainstream and are incorporated in policy, what are the consequences for income distribution? Hmm, pretty bad. What happens varying parameters?” That’s all. It is not an endorsement for the eco-econs, nor is is an attack to them. It is simply looking at the issue from yet another angle.
… and who better than a Sci-Fi Economics Lab to point that out?
So, having said all this, do I still sign you up or do you remain unconvinced? Don’t worry, I will not be taking it personally either way! I completely understand that this stuff might feel a bit off center Let me know if you are up for an authors conference call, @mstn and I will likely talk today/tomorrow.
Alberto-
Thank you very much for your response.
Yes, I am absolutely up for a conference call. These are great, real, important, meaty issues.
Best wishes,
Phillip Tussing
-Lem (after Spinoza)
Alberto-
Google kindly sent me this article by a degrowth website attacking my point of view, making very valid points all of which should be properly addressed if this approach is valid.
That’s the trouble with following evidence: there is so damn much of it. It is so much easier to be an ideologue and just defend one POV to your dying breath.
https://www.degrowth.info/en/2019/07/decoupling-is-dead-long-live-degrowth/
Best,
Phillip
Very, very true. The best we can do is look at things with clear eyes, and help each other not to fall in love too much with our own ideas.
This week both @mstn and I took some time off this project to deal with COVID-19. How are you doing, @petussing? And what does your schedule look like?
Alberto-
Came across this today. This is the kind of thing I think might be an interesting basis for considering a next step forward for economics. These guys are Microeconomists in Brazil (one got a degree at INSEAD). They are looking at Kondratieff’s K-waves and technological drivers of change – kind of a Schumpeterian outlook.
If you don’t mind, tell me what you think.
Best wishes,
Phillip Tussing
-Lem (after Spinoza)
PS: I have bought Doctorow’s “Walkaway” and Rebecca Solnit’s “A Paradise Built in Hell” that inspired it. Alves & Salum think the next wave is AI & medical tech – these obviously require a high level of social infrastructure to build from, unlike Walkaway. I’m still inclined to think that a supportive society comes from well-supported, reasonably well-adjusted people who have a crisis that creates solidarity, not from brutalized people. The best example to my mind is still WWII – that’s why you can get kibbutzim in Israel – in both cases you get a commitment to the common good that continues for a couple of generations, but it still runs out of steam when the society gets too rich because the belief in the ideal of the community fades. Mao was right – “continuous revolution” is the only way – but it has so far proven impossible to sustain. The sole possible exception may be religious orders – monasteries – think about “A Canticle for Liebowitz” – but even there it is a commune to preserve something of society to rebuild in future, and then is no longer necessary… the problem is to preserve for all foreseeable time the commitment to the community by the great majority of individuals in society. It is The Hard Social Problem.
Salum_Alves_insead-knowledge-the-next-cycle-of-capitalism.pdf (608 KB)
What a coincidence, Philip! I started it yesterday. I bought it a month ago, but I decided to re-read Mazzucato’s The value of everything before starting out on Paradise. And that went very slowly, because I spend most of my lockdown reading time on shorter-form stuff (the Wolfram thing came up!) and trying to learn Dutch.
What do you think of The Value of Everything?
I suppose the reason why most economists stopped talking about value in the social or moral sense is because we tend to think that it’s a topic better addressed by moral philosophers or sociologists or possibly anthropologists. Speaking of which, relevant to this is David Graeber’s An Anthropological Theory of Value from 2002. The big exception is Amartya Sen: I have on my list the 1987 “On Ethics and Economics” and 2009’s “The Idea of Justice”. And this is related to John Rawls’ “A Theory of Justice” from 1971. I have e-books of all these (except Graeber) if you’d like.
Obviously Smith was a moral philosopher, and even as late as Albert Marshall, he became an economist to help people. At this stage there are still those folks, mostly in development economics, which is my early love.
The problem with creating better societies is the humans – it requires better people. We love to hate corporations, but I tend to this that hatred mostly comes from envy, and until we breed societies which train their children in love and care for their fellows, we will not be able to replace them with something better simply by setting up different structures.
Best wishes,
*Phillip *
I have read Sen. Not Rawls, but The idea of justice describes Rawls’s thinking at great length, and I believe I have a basic grasp on it.
Rawls made a major breakthrough with the idea of veil of ignorance. However, that is unrelated to value theory. It is closer to game theory (Harsanyi also worked on the same concept).
Sen, now, that’s another matter. If memory serves, his idea of “capabilities” is actually directly relevant for value theory. It proposes a dynamic notion of value. You can almost measure the value of something by how it shifts the light cone (the state-space reachable from where we are now). Hmm…