Nov

21

Capitalism rests in an energetic sense on one and only one assumption: that the total useful energy surplus keeps going up for a fixed amount of input (either energetic or monetary). This hasn't been true now for a while.

Kim Zussman adds:

To Tyler's point, the attached chart plots annual change in hourly output (blue), and annual change in unit labor cost (red), 1970-2009. Recession-era peak/valley years are noted adjacent to their respective peaks and valleys.

Over the past 40 years, the general trend has been a lower rate of increase in cost of labor and increasing hourly output, with a marked transformation after about 1982 (coinciding with the inception of the great bull market in stocks). Another change was the nature of recessions: The recessions of 74, 80, and 82 were associated with large jumps in labor costs and declines in hourly output. 1990 exhibited this pattern as well, though with much smaller magnitude. However the recessions of 02 and (thus far) 09 go the opposite direction; decline in labor costs and increase in hourly output.

Perhaps some of this change is due to decreased unionization of labor.

Tyler McClellan replies: 

Wel,l basic economic theory, Marxist, Hayekian, Ricardian, are all in agreement that rich countries should benefit from explosive growth in poorer countries even if they are becoming relatively poorer due to comparative advantage. And in that vain all list members can rest assured that global energy use ( of exclusively fossil fuels even) has been going up very evenly per capita even as the population has exploded. 


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