More from Less: The Surprising Story of How We Learned to Prosper Using Fewer Resources – and What Happens Next

By Andrew McAfee, Aug/2019 (352p.)


This book is “fascinating and deeply encouraging.”  It offers important and relevant information in a convincing and well-organized manner – that will have a much larger and longer-lasting impact than most of the other things we read about on a daily basis.  Andrew McAfee was co-author of The Second Machine Age, which was another must read when it came out in January 2014, because it anticipated the dominance of Tech that is undeniable today.  He is a renowned scientist who has been, and likely will continue to be, ahead of the ball in terms of understanding and explaining how technology is changing the world. His other book, Machine, Platform, Crowd, made less of an impact on me when it came out in June 2017.  I think the reason for that is that Geoffrey Parker’s book, Platform Revolution had already done a fantastic job of explaining the same subject more than a year earlier.  But this latest book, More from Less, which came out in October 2019, is fresh, and will likely prove to be the most influential as well – given the heated debate over how to best regulate big tech, save the environment, and construct better societies/economies.

Below I share most of the highlights that I exported from our Kindle.  There are some great quotes in there, such as: “If you want to be good to the environment, stay away from it.” and “Like innovation itself, technologies are combinatorial; most of them are combinations or recombinations of existing things,” and  “Talent is equally distributed; opportunity is not,” and “Predicting exactly how technological progress will unfold is much like predicting the weather: feasible in the short term, but impossible over a longer time,” and “we must make Nature worthless,” and “economies run and grow on ideas.” 

Chapter 12 was the most important, in my opinion, because it is where McAfee explains the implication of technology driving concentration and leading to a world of superstars and zombies.  He observes that “a few companies have become much more productive and have started paying much higher salaries (two developments that are closely related), while the rest have seen near-stagnant productivity and pay,” before concluding that “when stock ownership is closely held by a relatively small group of people and share prices increase, members of that group become much wealthier than everyone else.”  Finding the stocks of these few outstanding companies that makes us “much wealthier than everyone else” is the reason Victori Capital exists.

So in conclusion:  This book is a must read.




Highlighted Passages:


Introduction: Readme

We invented the computer, the Internet, and a suite of other digital technologies that let us dematerialize our consumption: over time they allowed us to consume more and more while taking less and less from the planet. This happened because digital technologies offered the cost savings that come from substituting bits for atoms, and the intense cost pressures of capitalism caused companies to accept this offer over and over. Think, for example, how many devices have been replaced by your smartphone.

I call tech progress, capitalism, public awareness, and responsive government the “four horsemen of the optimist.” When all four are in place, countries can improve both the human condition and the state of nature. When the four horsemen don’t all ride together, people and the environment suffer.  … They stand in sharp contrast to the Four Horsemen of the Apocalypse portrayed in the New Testament’s book of Revelation, which are commonly interpreted as war, famine, pestilence, and death. 

The Return of Nature: How Technology Liberates the Environment,” published in 2015 in the Breakthrough Journal. When I encountered that headline, I had to click on it, which led me to one of the most interesting things I’d ever read.

What caused dematerialization to take over? … capitalism is a big part of my explanation.

So just about any reader will probably initially feel that something in this book is wrong. Again, I just ask that you approach the book’s ideas with an open mind. I hope you’ll believe that I’m arguing in good faith. My intention here is not to write a polemic or start a flame war. I’m not trying to troll or dunk on anyone (in other words, I’m not trying to provoke anyone into losing their temper or to demonstrate my superiority). I’m just trying to highlight a phenomenon that I find fascinating and deeply encouraging, explain how it came about, and discuss its implications. I hope you’ll come along for the journey.

Chapter 1: All the Malthusian Millennia

In one sense, this is entirely fair. As we’ll see, the gloomy predictions that Malthus made right at the end of the eighteenth century have proved to be so wrong that they deserve a special designation. But in another sense we’re being too hard on the good reverend. Most discussions of his work overlook that while Malthus was badly wrong about the future, he was broadly correct about the past.

Malthus is best known for An Essay on the Principle of Population, published in 1798 … Malthus pointed out, correctly, that human populations grow rapidly if no force acts to reduce them. If a couple has two children, each of whom has two children, and this process keeps repeating, then the original couple’s total number of descendants will double with each generation from two to four, then eight, then sixteen, and so on. People can do only two things to retard this exponential (or “geometric”) growth in numbers: not have children, or die. 

The economic historian Gregory Clark put these two types of evidence together and provided my favorite view of what life was like in England over six centuries prior to the publication of Malthus’s Essay. It’s not a pretty picture.

Researchers have also found Malthusian vibrations in the populations of Sweden, Italy, and other European countries over the same period.

Between the time we Homo sapiens left our African cradle over one hundred thousand years ago and the dawn of the Industrial Era in the late eighteenth century, we lived in a Malthusian world. We covered the planet, yet didn’t conquer it.

Ten thousand years ago, about 5 million people were on the planet. As we moved into new regions and improved our technologies, that number increased along a steady but shallow exponential curve, reaching almost 190 million people by the time of Christ. Agriculture allowed higher population densities, so as farming spread, human population growth accelerated in the Common Era. 

By the year 1800, just about a billion of us were on the planet. That sounds like a big number, but when compared to the inhabitable area of the earth, it starts to look small. If all the world’s people were spread out evenly around the planet’s inhabitable land in 1800, everyone would have had almost sixteen acres—an area about as large as nine World Cup soccer fields—to himself or herself. We would not have been able to hear each other, even by shouting.

Chapter 2: Power over the Earth: The Industrial Era

The title of William Rosen’s book about the history of steam power is apt; it was The Most Powerful Idea in the World.

Steam changed the course of humanity not by helping to plow farms, but instead by helping to fertilize them.

The line connecting population and average prosperity (wages, in other words) zooms off upward and to the right at the start of the nineteenth century and rarely again changes course. England’s Malthusian oscillations and vibrations fade into a small corner of the past. Population and Prosperity in England, 1200–2000

Eventually, they could afford them. In 1935, the English social reformer B. Seebohm Rowntree found the working classes in York were eating much the same diets as their employers, a huge change from what he had found during a similar 1899 survey. Even during the depths of the Depression, Rowntree observed that poor families could afford roast beef and fish each once a week, and sausages or other animal protein two more times.

Charles Dickens’s A Christmas Carol, published in 1843, mentions apples, pears, oranges, and lemons as seasonal treats, but not bananas. Refrigerated steamships eventually shrank the time and distance between tropical plantations and northern Europe. In 1898 more than 650,000 bunches of bananas, each bearing as many as a hundred pieces of fruit, were exported from the Canary Islands. 

In 1885, Daimler and his colleague Wilhelm Maybach demonstrated their Petroleum Reitwagen, a clunky motorcycle-like machine that was the world’s first vehicle powered by internal combustion. There would be many more of them, more than a few built by the company that became Daimler-Benz, the home of Mercedes.

Electric power started small, got big, then shrank again. In 1837 the Vermont blacksmith and tinkerer Thomas Davenport received a US patent for an “Improvement in Propelling Machinery by Magnetism and Electro- Magnetism.” We now call such devices for propelling machinery motors. Unfortunately for Davenport, the batteries of his time were too primitive to supply the electrical energy his device needed, and power lines, utilities, and the grid did not yet exist. Davenport was apparently bankrupt when he died in 1851.

About half a century after Davenport’s patent was granted, Thomas Edison, Nikola Tesla, and others made use of an electric motor running in reverse—it could be used to convert mechanical energy (from falling water or expanding steam) into electrical energy. When used in this way, a motor becomes a generator. The electricity could then be conducted over wires to one or more distant motors.

The belts were often made of leather, and factories needed so many of them that in 1850 leather manufacturing was America’s fifth-largest industry.

To some, indoor plumbing might not seem a profound enough innovation to stand alongside electricity and internal combustion. A flush toilet and water on demand out of a tap are certainly convenient, but are they fundamentally important to the story of twentieth-century growth? They absolutely are. Health researchers David Cutler and Grant Miller estimate that the availability of clean water explains fully half of the total decline in the overall US mortality rate between 1900 and 1936, and 75 percent of the decline in infant mortality. Historian Harvey Green calls the technologies of widespread clean water “likely the most important public health intervention of the twentieth century.”

The breakthroughs of the Industrial Era—technological, scientific, institutional, and intellectual—created a virtuous cycle of increasing human population and prosperity. It took over two hundred thousand years for the global population of Homo sapiens to hit 1 billion. It only took 125 years to add the next billion, a milestone that was reached in 1928. And the timescales kept getting shorter. Subsequent billions were added in thirty-one, fifteen, twelve, and eleven years.

The battles over the Corn Laws led the politician James Wilson, who was in favor of free trade, to found The Economist. It’s still published today and is one of my favorite magazines (even though it calls itself a newspaper).


Chapter 3: Industrial Errors 

People as Property It has been acceptable in many societies throughout history for people to own other people, especially if they come from a different ethnic group, religion, or tribe. The cognitive scientist Steven Pinker writes that sentiment toward slavery began to change in the late 1700s with the rise of humanism, or the belief that “the universal capacity of a person to suffer and flourish… call[s] on our moral concern.” As Pinker writes in his book Enlightenment Now, “The Enlightenment is sometimes called the Humanitarian Revolution, because it led to the abolition of barbaric practices [such as slavery] that had been commonplace across civilizations for millennia.”

Many industrialists had no compunction about putting children to work. A 1788 survey in England and Scotland, for example, found that approximately two-thirds of all employees in nearly 150 cotton mills were children.

Industrial coal use explains roughly one-third of the urban mortality penalty observed during [the] period [1851–60].” Among British men born in the 1890s, those from most coal-intensive parts of the country were, on average, nearly an inch shorter as adults than those who grew up with the cleanest air. This gap was twice as large as that between children of white-collar and working-class families. 

No animals better represent the voracious, nearly all-consuming appetite of the Industrial Era better than the North American bison and the whale. … The population of the North American bison herd completely collapsed in the second half of the nineteenth century. Yellowstone National Park, established in 1872, served on paper as the only refuge from the remorseless hunting. However, poaching inside the park was rampant. By 1894, the Yellowstone herd numbered only twenty-five animals.

Norwegian inventions were critical in industrializing the whale hunt. The first was the harpoon cannon, which Svend Foyn refined and mounted on the bow of powered ships and chase boats. The second innovation was the factory ship, designed by the whale gunner Petter Sørlle, which acted as a giant carving board for the animals’ carcasses. These two technologies made it much easier and more profitable to hunt rorquals such as the blue, fin, and humpback whales.  … In 1900, as many as a quarter of a million blue whales may have lived in the Southern Ocean. By 1989, about five hundred remained. These animals were used mainly to make margarine, soap, lubricants, and explosives (the glycerin in whale blubber can be used to make nitroglycerin)—all products that could easily have been made with other ingredients.


Chapter 4: Earth Day and Its Debates

The biologist Paul Ehrlich became the most popular exponent of this view. In his bestselling 1968 book, The Population Bomb, Ehrlich laid out a scenario that made Malthus look like a sunny optimist. Early editions of the book began, “The battle to feed all of humanity is over. In the 1970s hundreds of millions of people will starve to death in spite of any crash programs embarked upon now. At this late date nothing can prevent a substantial increase in the world death rate.”

The MIT team discussed the results of their work in the bestselling 1972 book The Limits to Growth. They found that even under their most optimistic scenarios about resource abundance, the known global reserves of aluminum, copper, natural gas, petroleum, and gold would all be exhausted within fifty-five years if population and the economy were both allowed to grow without constraint. Absent constraints, their model showed that the world’s population would suffer a sudden and sharp collapse well before the end of the twenty-first century as resources vanished and economies around the planet ground to a halt.

Some observers felt that Limits to Growth’s estimates of energy reserves were, if anything, too optimistic. The ecologist Kenneth Watt predicted in 1970, “By the year 2000, if present trends continue, we will be using up crude oil at such a rate… that there won’t be any more crude oil. You’ll drive up to the pump and say, ‘Fill ’er up, buddy,’ and he’ll say, ‘I am very sorry, there isn’t any.’”

Paul Ehrlich agreed, writing in 1975, “Giving society cheap, abundant energy at this point would be the moral equivalent of giving an idiot child a machine gun. With cheap, abundant energy, the attempt clearly would be made to pave, develop, industrialize, and exploit every last bit of the planet.”

The extraordinarily tight relationship between the size of the economy and the amount of energy used led many researchers to think that the two were essentially equivalent—that if you could measure the amount of energy a society used, you’d have an excellent idea of how large, prosperous, and advanced it was. This line of study was kicked off with a series of articles in Scientific American in 1971, including geologist Earl Cook’s “Flow of Energy in an Industrial Society.” 

Jevons concluded, “Indefinite growth in energy consumption, as in human population, is simply not possible … Making the changes will call for hard political decisions… democratic societies are not noted for their ability to take the long view in making decisions.”

Around Earth Day, it seemed as if we might not survive the twentieth. To give an idea of the prevailing mood, beliefs, and predictions of the mainstream environmental movement around Earth Day, here are a set of quotes from 1970 that I find representative. They read to me like dispatches from a society in a panic attack. Senator Gaylord Nelson wrote in Look magazine, “Dr. S. Dillon Ripley, secretary of the Smithsonian Institution, believes that in 25 years, somewhere between 75 and 80 percent of all the species of living animals will be extinct.” Pete Gunter, a North Texas State University professor, wrote, “Demographers agree almost unanimously on the following grim timetable: by 1975 widespread famines will begin in India; these will spread by 1990 to include all of India, Pakistan, China and the Near East, Africa. By the year 2000, or conceivably sooner, South and Central America will exist under famine conditions.… By the year 2000, thirty years from now, the entire world, with the exception of Western Europe, North America, and Australia, will be in famine.”  

Their first evidence-based claim was that many of the bad things confidently predicted by the environmental movement—chronic food shortages and famines; irreversible ecosystem collapses; mass species die-offs; crippling shortages of natural resources; and so on—kept on not happening. Instead, some of the things that were supposed to get much worse kept getting better.

This had not always been his view. In the late 1960s Julian Simon had, like Ehrlich, written about the dangers of unchecked population growth. But the continued improvement in human standards of living and lack of environmental catastrophes caused him to change his mind. Simon eventually became a strong optimist because he came to have faith. Not in divine providence, but in human ingenuity. Population and economic growth bring with them challenges, but Simon argued that people are actually quite good at meeting challenges. We learn about the world via science, invent new tools and technologies, create institutions such as democracy and the rule of law, and do many other things that let us solve problems and create a better future.

Simon offered the following terms: Paul Ehrlich could pick any resources he liked. He could also pick the time frame for the bet, as long as it was at least a year. If at the end of the chosen time frame the real price of the resources had risen, then Simon would pay Ehrlich the amount of the rise. If prices had fallen, Ehrlich would pay Simon. Ehrlich accepted. He picked a decade for the duration of the bet and chose five resources: copper, chromium, nickel, tin, and tungsten. He virtually “bought” $200 of each on September 29, 1980, and waited for their prices to rise in the following years. They didn’t. The real price of all five metals had fallen by late September of 1990. Chromium declined by only a bit, from $3.90 per pound to $3.70, but the others became much cheaper. The price of tin, for example, collapsed from $8.72 per pound to $3.88. The overall value of Ehrlich’s $1,000 resource portfolio declined by more than half. In October of 1990 he mailed Simon a check for $576.06.


Chapter 5: The Dematerialization Surprise

This was unexpected, to put it mildly. As Ausubel wrote, “The reversal in use of some of the materials so surprised me that Iddo Wernick, Paul Waggoner, and I undertook a detailed study of the use of 100 commodities in the United States from 1900 to 2010.… Of the 100 commodities, we found that 36 have peaked in absolute use… Another 53 commodities have peaked relative to the size of the economy, though not yet absolutely. Most of them now seem poised to fall.”

“Evidence presented in this paper supports a hypothesis that the United Kingdom began to reduce its consumption of physical resources in the early years of the last decade, well before the economic slowdown that started in 2008.”

Goodall was eloquent about the significance of the dematerialization of the United States or United Kingdom: “If correct, this finding is important. It suggests that economic growth in a mature economy does not necessarily increase the pressure on the world’s reserves of natural resources and on its physical environment. An advanced country may be able to decouple economic growth and increasing volumes of material goods consumed. A sustainable economy does not necessarily have to be a no-growth economy. 

This graph clearly shows that a huge decoupling has taken place. Throughout the twentieth century up to the time of Earth Day, consumption of metals in America grew just about in lockstep with the overall economy. In the years since Earth Day, the economy has continued to grow pretty steadily, but consumption of metals has reversed course and is now decreasing. We’re now getting more “economy” from less metal year after year. We’ll see a similar great reversal in the use of many other resources. 

American consumption of plastics
, which is not tracked by the USGS, is an exception to the overall trend of dematerialization. Outside of recessions, the United States continues to use more plastic year after year in the form of trash bags, water bottles, food packaging, toys, outdoor furniture, and countless other products. But in recent years, there has been an important slowdown.  According to the Plastics Industry Trade Association, between 1970 and the start of the Great Recession in 2007 American plastic use grew at a rate of about 5.2 percent per year. This was more than 60 percent faster than the country’s GDP grew over the same period. But a very different pattern has emerged in the years since the recession ended. The growth in plastic consumption has slowed down greatly, to less than 2.0 percent per year between 2009 and 2015. This is almost 14 percent slower than GDP growth over the same period. So while America is not yet post-peak in its use of plastic, it’s quickly closing in on this milestone.

Finally, let’s look at total energy consumption combined with greenhouse gas emissions, which are the most harmful side effect of generating energy from fossil fuels. US Real GDP and Total Energy Consumption, 1800– 2017.  I was surprised to learn that total American energy use in 2017 was down almost 2 percent from its 2008 peak, especially since our economy grew by more than 15 percent between those two years. Greenhouse gas emissions have gone down even more quickly than has total energy use. This is largely because we have in recent years been using less coal and more natural gas to generate electricity (a switch we’ll examine in chapter 7), and natural gas produces 50–60 percent less carbon per kilowatt hour than coal does.

The conclusion from this set of graphs is clear: a great reversal of our Industrial Age habits is taking place.  

Developing countries, especially fast-growing ones such as India and China, are probably not yet dematerializing. But I predict that they will start getting more from less of at least some resources in the not-too-distant future.


Chapter 6: CRIB Notes

 Real GDP of the United States grew by an average of 3.2 percent per year between the end of World War II and Earth Day. From 1971 to 2017, it grew by an annual average of 2.8 percent.

 America’s population increased by an average of 1.5 percent a year from 1946 to 1970, and by 1 percent annually from 1971 to 2016.

we don’t make them the same way we used to. We now make them using fewer resources.

So it seems most likely to me that we’d use less metal overall in a hypothetical zero-recycling economy than we do in our actual enthusiastic-about-scrap-metal-recycling economy. This does not mean that I think metal recycling is bad. I think it’s great, since it gives us cheaper metal products and reduces total greenhouse gas emissions (since it takes much less energy to obtain metal from scrap than from ore). But recycling, whatever its merits, is not part of the dematerialization story. It’s a different story.

The back-to-the-land movement is a fascinating chapter in the history of American environmentalism, but a largely insignificant one. There were simply never enough homesteaders and others who turned away from modern, technologically sophisticated life to make much of a difference. Which is a good thing for the environment.  Going back to the land might have been widely discussed, but it was comparatively rarely practiced. We should be thankful for this because homesteading is not great for the environment, for two reasons. First, small-scale farming is less efficient in its use of resources than massive, industrialized, mechanized agriculture. Second, rural life is less environmentally friendly than urban or suburban dwelling. As economist Edward Glaeser summarizes, “If you want to be good to the environment, stay away from it. Move to high-rise apartments surrounded by plenty of concrete…”

But after reading Limits to Growth, A Blueprint for Survival, and other books limning the looming dangers of unchecked population expansion, the missile scientist Song Jian came to believe that even faster birth rate reductions were required. He became the architect of the new policy, the main effect of which was to limit ethnic Han Chinese families to a single child. Exceptions to this restriction included giving some couples the right to a second child if their first was a girl, but the one-child policy soon became a central fact of Chinese family life.

In 1970, the same year as the original Earth Day festival, the United States established the federal Environmental Protection Agency and made major amendments to 1963’s Clean Air Act. This was the start of a cascade of laws and regulations aimed at reducing pollution and other environmental harms. These have worked amazingly well.

Chapter 7: What Causes Dematerialization? Markets and Marvels

A November 2007 cover story in Forbes magazine touted that the Finnish mobile phone maker Nokia had over a billion customers around the world and asked, “Can anyone catch the cell phone king?” Yes. Apple sold more than a billion iPhones within a decade of its June 2007 launch and became the most valuable publicly traded company in history. Nokia, meanwhile, sold its mobile phone business to Microsoft in 2013 for $7.2 billion to get “more combined muscle to truly break through with consumers,” as the Finnish company’s CEO Stephen Elop said at the time of the deal. It didn’t work. Microsoft sold what remained of Nokia’s mobile phone business and brand to a subsidiary of the Taiwanese electronics manufacturer Foxconn for $350 million in May of 2016. Radio Shack filed for bankruptcy in 2015, and again in 2017.

Also in 2007 the US Government Accountability Office (GAO), a federal agency known as “the congressional watchdog,” published a report with an admirably explanatory title: “Crude Oil: Uncertainty about Future Oil Supply Makes It Important to Develop a Strategy for Addressing a Peak and Decline in Oil Production.” It took seriously the idea of “peak oil,” a phrase coined in 1956 by M. King Hubbert, a geologist working for Shell Oil.

Thanks to fracking, US crude oil production almost doubled between 2007 and 2017, when it approached the benchmark of 10 million barrels per day. By September of 2018 America had surpassed Saudi Arabia to become the world’s largest producer of oil. American natural gas production, which had been essentially flat since the mid-1970s, jumped by nearly 43 percent between 2007 and 2017. 

We do want more all the time, but not more resources. Alfred Marshall was right, but William Jevons was wrong. Our wants and desires keep growing, evidently without end, and therefore so do our economies. But our use of the earth’s resources does not.

When fracking made natural gas much cheaper, total demand for coal in the United States went down even though its price decreased. 

If we use more renewable energy, we’ll be replacing coal, gas, oil, and uranium with photons from the sun (solar power) and the movement of air (wind power) and water (hydroelectric power) on the earth. All three of these types of power are also among dematerialization’s champions, since they use up essentially no resources once they’re up and running. 

Neither the fracking revolution nor the world-changing impact of the iPhone’s introduction were well understood in advance. Both continued to be underestimated even after they occurred. The iPhone was introduced in June of 2007, with no shortage of fanfare from Apple and Steve Jobs. Yet several months later the cover of Forbes was still asking if anyone could catch Nokia.

As the Second Machine Age progresses, dematerialization accelerates. Erik and I coined the phrase Second Machine Age to draw a contrast with the Industrial Era, which as we’ve seen transformed the planet by allowing us to overcome the limitations of muscle power.

Hardware, software, and networks let us slim, swap, optimize, and evaporate. I contend that they’re the best tools we’ve ever invented for letting us tread more lightly on our planet.

Like knowledge itself, technologies accumulate. … Like innovation itself, technologies are combinatorial; most of them are combinations or recombinations of existing things. This implies that the number of potentially powerful new technologies increases over time because the number of available building blocks does.

For our purposes, capitalism is a way to come up with goods and services and get them to people. Every society that doesn’t want its people to starve or die of exposure has to accomplish this task; capitalism is simply one approach to doing it.

The phrase most closely associated with capitalism is voluntary exchange. People can’t be forced to buy specific products, take a certain job, or move across the country. Companies don’t have to sell themselves if they don’t want to. 

The biggest difference between rich and poor countries might be whether laws are clearly and consistently enforced. Poorer countries don’t lack laws; they often have extensive legal codes. What’s in short supply is justice for all.

The Limits to Growth, published in 1972, assumed that exponential consumption would continue, and that the planet would run out of gold within twenty-nine years of 1972; silver within forty-two years; copper and petroleum within fifty; and aluminum within fifty-five. … Known aluminum reserves are almost twenty-five times what they were in the early 1970s. How could these predictions about resource availability, which were taken seriously when they were released, have been so wrong? Because the Limits to Growth team pretty clearly underestimated both dematerialization and the endless search for new reserves.

Chapter 8:  Adam Smith Said That:  A Few Words About Capitalism

The impulse to acquisition, pursuit of gain, of money, of the greatest possible amount of money, has in itself nothing to do with capitalism. This impulse exists and has existed among waiters, physicians, coachmen, artists, prostitutes, dishonest officials, soldiers, nobles, crusaders, gamblers, and beggars. One may say that it has been common to all sorts and conditions of men at all times and in all countries of the earth, wherever the objective possibility of it is or has been given. It should be taught in the kindergarten of cultural history that this naïve idea of capitalism must be given up once and for all. —Max Weber, The Protestant Ethic and the Spirit of Capitalism, 1905

Capitalism is not popular these days. In a 2016 survey, a majority of Americans between the ages of nineteen and twenty-eight said that they didn’t support it; in a follow-up survey, capitalism found majority support only among Americans over fifty.  

So, with Adam Smith as a guide, let’s look at three valid critiques of capitalism, and three invalid ones. First, the valid criticisms: Capitalism is selfish. Yes, it absolutely is. But as Smith points out, this is a good thing. … Self-interest is not a flaw in capitalism, it’s a central feature.

Capitalism is unequal. Without question, it is. As Smith observed, “Wherever there is great property, there is great inequality.” … For now, I just want to note how insightful Smith was about one of inequality’s most serious consequences: a feeling of not belonging and not participating, of being shut out of larger communities.  

Smith saw that government had a role to play in making sure that competitors don’t become cronies—close friends who collude to all get rich together by simultaneously raising prices.

Capitalism will cause great prosperity to blossom, but only in a properly tended garden. Laws and courts are needed to protect the rights, property, and contracts of society’s weaker members; violence and the threat of violence can’t be tolerated; and taxes are necessary even though they’re unwelcome.

Social is fine. Socialism is a catastrophe.

Hayek used this insight to shoot down the idea of socialism in 1977: “I’ve always doubted that the socialists had a leg to stand on intellectually.… Once you begin to understand that prices are an instrument of communication and guidance which embody more information than we directly have, the whole idea that you can bring about the same order… by simple direction falls to the ground.… I think that intellectually there is just nothing left of socialism.”

“In Venezuela, there is no war, nor strike. What’s left of the oil industry is crumbling on its own” because of incompetence and corruption. The IMF predicted that Venezuelan inflation could hit 13,000 percent in 2018, but this estimate proved far too conservative. By November of that year, the annual inflation rate was 1,290,000 percent. Three months later, the IMF estimated that it was 10 million percent.

UK prime minister Margaret Thatcher famously observed in 1976, “The trouble with socialism is that eventually you run out of other people’s money.” … The Problem with Capitalism Is That There Isn’t Enough of It.


Chapter 9:  What Else is Needed?  People and Policies

In November of 2017, during an annual period of heavy pollution, the air in Delhi turned bad enough to cause traffic accidents. As was the case in Donora almost seventy years earlier, drivers couldn’t see one another through the gray haze. Schools were finally shut down, but not as a result of any coordinated government action. The shutdown happened only because the deputy chief minister of Delhi State saw children vomiting out the windows of their school bus.

Someone who has studied the bet between Julian Simon and Paul Ehrlich might respond that whatever our feelings and beliefs toward animals, there’s no reason to be too concerned about extinctions.

I hope we’ll save the elephants, too. Africa had an estimated 26 million elephants when Europeans started exploring and exploiting the continent in the 1500s. Our fondness for ivory products and hunting trophies reduced the population to about 10 million by 1913 and 1.3 million by 1979. Weak enforcement of antipoaching laws, large-scale illegal trade in ivory, and rapidly rising incomes in China (the world’s largest ivory market) continued to drive down populations; the comprehensive Great Elephant Census, completed in 2016, counted just over 350,000 animals across the continent.

Forbidding GMOs is bad not only for the environment but also for people. This is probably easiest to see in the case of golden rice, a strain of rice genetically modified to produce beta-carotene, a precursor to vitamin A. Vitamin A is critically important for young children, yet many Asian and African infants weaned on rice gruel don’t get enough of it. UNICEF estimates that approximately half a million children become blind each year because of vitamin A deficiency, half of whom die within a year of losing their sight. In total, the deficiency is thought to cause more than a million deaths annually.

Under Trump, the federal government was responsive neither to the best available evidence on climate change nor to the will of its people. It was instead apparently guided by Trump’s belief that “the concept of global warming was created by and for the Chinese in order to make U.S. manufacturing non-competitive,” as he tweeted in 2012.

A critic might respond that caring about the environment is a luxury that only rich countries can afford. While there’s some truth to this, it dodges a fundamental question: Why did some countries become rich, but not others? 

In my view the best answer to this question comes from the work of the economist Daron Acemoglu and political scientist James Robinson, summarized in their book Why Nations Fail. They argue that the differences between rich countries and poor ones … stems from differences in their institutions.

The author and self-described “rational optimist” Matt Ridley makes a stark comparison: “A car today emits less pollution traveling at full speed than a parked car did from leaks in 1970.”

The only thing worse than the scale and timing of the Soviet whale hunt was its utter pointlessness. Russians have never had a taste for whale meat. So while Japanese whalers turned 90 percent of the whales they harpooned into products, Soviet crews only took the animals’ blubber (approximately 30 percent of its weight) and tossed the rest of the carcass back into the sea.  In The Truth About Soviet Whaling: A Memoir, Berzin documented how the USSR’s extensive and unresponsive economic planning bureaucracy doomed so many whales. Whaling was considered part of the fisheries industry, and fishing ships were evaluated not on market demand for their catch—Soviet central planners loudly and proudly rejected market signals such as supply, demand, and price as valid elements of an economy—but instead on gross tonnage, or the total weight of whales killed. So plans for growth in USSR fisheries were simply plans for more and more dead whales, no matter their use. [Note:  another example of Goodhart’s Law in practice]


Chapter 10:  The Global Gallop of the Four Horsemen

People with access to a device such as this can do much more than just communicate. They can also compute and access the substantial portion of humanity’s accumulated knowledge that’s now available for free on the Internet.II These are powerful capabilities, reserved until recently for the global elite. As the author and entrepreneur Peter Diamandis observed in 2012, “Right now, a Maasai warrior on a mobile phone in the middle of Kenya has better mobile communications than the president did twenty-five years ago. If he’s on a smartphone using Google, he has access to more information than the US president did just fifteen years ago.” 

“1991… deserves its spot in the annals of economic history alongside December 1978, when China’s Communist Party approved the opening up of its economy, or even May 1846, when Britain voted to repeal the Corn Laws.” India’s 840 million people quickly found themselves operating in a transformed economic environment—one with a great deal less central planning and more free-market entry, competition, and voluntary exchange.

Between 1978 and 1991, then, more than 2.1 billion people—about 40 percent of the world’s 1990 population—began living within substantially more capitalist economic systems. This is certainly the largest and fastest shift toward economic freedom that the world has ever seen. It’s even bigger and more abrupt than the adoption of communism by the Soviet Union and China, which unfolded over the more than three decades between Lenin’s 1917 Bolshevik Revolution and the final victory of Mao’s army in 1949. 

As Evans writes, “When Tele São Paulo was privatized, with Telefónica buying it, there was a waiting list of 7 million lines, out of a population of 20 million.… As well as the 7 million people waiting for a line, it was routine for your number to be swapped with someone else, just because.” Telebrás also appeared to be padding its payrolls by more than a bit: “Telefónica worked out there wasn’t enough room in the headquarters building for all the people listed as working there to physically fit.” Meanwhile, an estimated 45 percent of São Paulo’s businesses didn’t have a telephone line.

Economist Max Roser calculates that in 1988 41.4 percent of humanity lived in a democracy. Within eighteen years that figure increased almost 40 percent … Although autocracies still governed more than 23 percent of the global population in 2015, there are fewer and fewer of them over time. And as Roser says, “It is worth pointing out that four out of five people in the world that live in an autocracy live in China.


Chapter 11:  Getting So Much Better

Once you have these tools, you can’t not use them.… You can delete the clichéd image from your brain of supplicant impoverished people not having control of their own lives. That’s not true. —Bono, TED Talk, 2013 

Max Roser’s Our World in Data is one of my favorite websites, for two reasons. The first is that it contains a lot of valuable information. The second is that it tells an invaluable story—an optimistic and hopeful one.

Why isn’t the good news sinking in? A few factors are at work. One is our basic human “negativity bias”: bad news makes a bigger impression on us and stays with us longer than does neutral or good news. Another factor is that the press tends to emphasize sensationalistic news, which is often negative. Journalism’s jaded motto is “If it bleeds, it leads.” One other important factor, I think, was identified by the British philosopher John Stuart Mill in an 1828 speech: “I have observed that not the man who hopes when others despair, but the man who despairs when others hope, is admired by a large class of persons as a sage.” In many elite circles and publications negativity seems to be a sign of seriousness and rigor, while optimism and positivity seem naive and under-informed. Simon, Rosling, Pinker, Roser, and others have pushed back against this institutional negativity bias. They’ve done work that is both rigorous and positive. In fact, they’ve shown that doing rigorous work—looking systematically at the best available evidence—often compels you to be positive about many things because the evidence is so encouraging.

I’m not trying to make the case that things today are good enough. Because they’re certainly not. The world has too many poor, hungry, and sick people. Too many children are malnourished and uneducated. Too many people, despite the laws on the books, are forced into indentured servitude and slavery. We continue to pump greenhouse gases into the atmosphere, dump plastic into the oceans, kill rare animals, cut down tropical forests, and otherwise befoul our planet. But we can document improvements without saying or implying that everything’s okay now. We should document the improvements because they tell us something critically important: what we’re doing is working and therefore we should keep doing it instead of contemplating huge course changes. 

… documented extinctions are relatively rare (with about 530 recorded within the past five hundred years) and appear to have slowed down in recent decades; for example, no marine creatures have been recorded as extinct in the past fifty years.

Ocean overfishing is a classic example of the “tragedy of the commons,” an unhappy phenomenon named in a 1968 Science article by the ecologist Garrett Hardin. Hardin defined a commons as a shared resource, such as a pasture or a body of water, that is available to many but owned by none. That open access sounds great but has a big problem: everyone has ample incentive to exploit the commons (by grazing cows on the pasture or taking fish from the water), but because no one owns it, no one has the incentive to protect or sustain it. So the strong tendency is for everyone to do the economically rational thing, which is to try to exploit it before it’s stripped bare. As they do this, they help strip it bare.

Parks and other protected areas made up only 4 percent of global land area in 1985, but by 2015, this figure had almost quadrupled, to 15.4 percent. At the end of 2017, 5.3 percent of the earth’s oceans were similarly protected.  … Declaring that a piece of land or water is a park isn’t the only way to help out its living things. We can also interact with them less, which seems to suit them just fine. For example, both the demilitarized zone between North and South Korea and the exclusion zone around the still-radioactive Chernobyl nuclear plant in Ukraine have seen animals thrive because humans are absent.

We often see this pattern: richer countries have turned the corner, lessening their overall planetary footprint and reversing previous environmental harms, while poorer ones have not yet. This isn’t because poor people are indifferent to the environment. Instead, it’s because poorer countries tend to have weaker institutions and less responsive governments.

For the first time since the start of the Industrial Era, our planet is getting greener, not browner. Since 2003, large-scale reforestation in Russia and China, growth in African and Australian savannas, and slowing tropical deforestation have combined to increase the amount of carbon-storing vegetation on Earth.

The planet’s most worrisome environmental issue is global warming. Sustainability scientist Kim Nicholas has beautifully summarized key points about climate change on a sign she takes to marches and rallies. Titled “Climate Science 101,” it reads: It’s Warming. It’s Us. We’re Sure. It’s Bad. We Can Fix It.

We Can Fix It because It’s Pollution, and we know how to deal with that negative externality. … Worldwide, over 20 percent of greenhouse gas emissions come from industry, 6 percent from buildings, 14 percent from transportation, 24 percent from agriculture, and 25 percent from electricity and heat production.

As India’s Indira Gandhi said in 1972 at the United Nation’s first conference on the environment, “Poverty is the biggest polluter.” So as poverty declines, so, too, will pollution.

In 1999, 1.76 billion people were living in extreme poverty. Just sixteen years later, this number had declined by 60 percent, to 705 million.

in 1986 fewer than half of the world’s teenagers were in school; at present, more than 75 percent are.

…global life expectancy was about 28.5 years in 1800. Over the next 150 years, that number increased by 20 years. Then, in the years between 1950 and 2015, it increased by 25 more.

Today, we still have desperately poor regions, failed states, and the decimations of war. But in no region today is the child mortality rate higher than the world’s average rate was in 1998.


Chapter 12:  Powers of Concentration

Lewis Dijkstra of the European Commission (EC) concluded, “Everything you heard about urbanization is wrong.” Dijkstra and his colleagues found that by 2015 the world was already 84 percent urbanized, and that contrary to previous estimates Asia, Africa, and Oceania were already more urbanized than both North America and Europe.

After standardizing what urban meant and looking at the entire planet using satellite data, a very different picture emerged of where people live. We’re not on our way to becoming a city-dwelling species—we’re already largely there.

The service industries, meanwhile, continued to need ever-more people. “Service industry” is a category so broad as to be almost meaningless: it includes everything from investment banking to software programming to dry cleaning to dog walking. Most service industries do have two important things in common: many of their jobs have been harder to automate (no dog-walking robot is commercially available yet, as far as I know), and they rely heavily on in-person interactions.

The US presidential election of 2016 provided a vivid illustration of concentration—both of the country’s population and its economy. Despite winning almost 3 million more votes than Republican candidate Donald Trump, Democratic candidate Hillary Clinton won a majority of the vote in fewer than five hundred counties. These counties, however, together generated 64 percent of the country’s economy. The more than twenty-five hundred counties won by Trump were responsible for only a bit more than a third of the American economy.

The American board game Monopoly traces its roots to 1903, when the Landlord’s Game was invented by Elizabeth Magie to illustrate the problems of concentrating land ownership. The game eventually became quite popular. It was played frequently and earnestly during the 1970s by a group of students at the University of Chicago. When one asked the free-market-loving (and Nobel Prize–winning) economist Milton Friedman to sign the player’s Monopoly set, Friedman obliged, but also wrote “down with” before the game’s title.

… industrial concentration is rising globally not because of a decline in capitalism and tech progress, but rather because of an increase in them. Recent tech progress is so profound that it’s changing the nature of competition, and this change is reflected in the concentration evidence. So it’s not that competition is decreasing (due to bad government policies, weak antitrust enforcement, or other causes) and a new crop of lazy monopolists is being grown. Instead, technology-fueled competition is fierce, and a new generation of sophisticated leading firms is being forged. A few companies have become much more productive and have started paying much higher salaries (two developments that are closely related), while the rest have seen near-stagnant productivity and pay.

Van Reenen writes, “Many of the patterns are consistent with a… view where many industries have become ‘winner take most/all’ due to globalization and new technologies rather than a generalized weakening of competition due to relaxed antitrust rules or rising regulation.” Erik Brynjolfsson and I agree with this view.I We argued in 2008 that concentration was increasing because of tech progress, and that it would continue to do so. 

So a period of broad, deep, and fast tech progress such as we’re experiencing during this Second Machine Age should be expected to generate both superstars and zombies in industries around the world.

Most Americans, however, don’t own stock in Amazon. Or in any other company. Economist Edward Wolff found that, in 2016, 50.7 percent of US households owned no stocks at all, either directly or in retirement accounts. So all stock market wealth is concentrated in less than half of America’s households. Even within this group, there’s a lot of concentration: Wolff found that the top 10 percent of US households owned 84 percent of total stock market wealth in 2016. High concentration here means high inequality; when stock ownership is closely held by a relatively small group of people and share prices increase, members of that group become much wealthier than everyone else.

A Capital under Attack A social scientist would say that what Mattis has observed is a decline in social capital in the United States and elsewhere. That term, which has been in use since the turn of the twentieth century, is well defined by the sociologist Robert Putnam as “connections among individuals—social networks and the norms of reciprocity and trustworthiness that arise from them.”

Between 1958 and 2015, the Pew Research Center found that public trust in the federal government fell from about 73 percent to about 19 percent.

Chapter 13:  Stress Be the Tie that Binds:  Disconnection

Early in the Second Machine Age, however, Robert Putnam found something very different. He observed a decline in just about all forms of voluntary association, even recreational sports usually played in groups. As the title of his 2000 book put it, we were Bowling Alone.

The US suicide rate rose by 14 percent between 2009 and 2016, when it reached a level not previously seen since the end of World War II. Overdose deaths have climbed even more quickly. They almost doubled between 2008 and 2017, when more than 72,000 people lost their lives to an overdose. This is far more than the 58,220 American military deaths recorded throughout the Vietnam War.

According to the Centers for Disease Control, in 2016, 197,000 deaths were related to suicide, alcohol, and drug abuse. This was more than four times the 44,674 people who died from HIV/AIDS at the peak of its epidemic in 1994.

Durkheim was adamant that “dropping out of society” (to use an appropriate but unscientific expression) was a primary cause of suicide, and more than a century of accumulated evidence and research provide a great deal of support for this view. In 2018, the World Health Organization found that “a sense of isolation” was strongly associated with suicide risk around the world.

As Johann Hari, a writer and researcher on the global “war on drugs” puts it, “The opposite of addiction isn’t sobriety, it’s connection.”

Recent election results across countries as dissimilar as the United States, Poland, Turkey, Hungary, the Philippines, and Brazil indicate a global growing desire for authoritarian leaders.

In Suicide, he maintained that companies were important institutions for maintaining social capital during the upheavals of the Industrial Era: “The corporation has everything needed to give the individual a setting, to draw him out of his state of moral isolation.” As concentration continues in the Second Machine Age and establishments and jobs in industries such as manufacturing decrease, such settings become fewer. It’s not surprising that suicides would increase as “moral isolation” does. 

While both Al Gore in 2000 and Hillary Clinton in 2016 won the popular vote but didn’t win a majority of electoral college votes (and so did not become president), this outcome also occurred three times in the nineteenth century.


As Steven Sloman and Philip Fernbach explain in their book, The Knowledge Illusion, many people believe that they have a good idea how a flush toilet works, but few can actually explain the mechanisms by which that device carries away waste and refills with water. 

“As people seek out the social settings they prefer—as they choose the group that makes them feel the most comfortable—the nation grows more politically segregated …”


Chapter 14:  Looking Ahead:  The World Cleanses Itself this Way

“This is my long-run forecast in brief: the material conditions of life will continue to get better for most people, in most countries, most of the time, indefinitely.” —Julian Simon, WIRED, 1997

The Pythagorean theorem, a design for a steam engine, and a recipe for delicious chocolate chip cookies aren’t ever going to get “used up” no matter how much they’re used.

“The most interesting positive implication of the model is that an economy with a larger total stock of human capital will experience faster growth.”

But Romer showed that as long as that economy continued to add to its human capital—the overall ability of its people to come up with new technologies and put them to use—it could actually grow faster even as it grew bigger. This is because the stock of useful, nonrivalrous, nonexcludable ideas would keep growing. As Romer convincingly showed, economies run and grow on ideas. 

The operating system that powers most non-Apple smartphones is Android, which is both free to use and freely modifiable. Google’s parent company, Alphabet, developed and released Android without even trying to make it excludable; the explicit goal was to make it as widely imitable as possible. This is an example of the broad trend across digital industries of giving away valuable technologies for free.

Contributors to efforts such as these have a range of motivations (Alphabet’s goals with Android were far from purely altruistic—among other things, the parent of Google wanted to achieve a quantum leap in mobile phone users around the world, who would avail themselves of Google Search and services such as YouTube), but they’re all part of the trend of technology without excludability, which is great news for growth.

Google’s chief economist, Hal Varian, points out that hundreds of millions of how-to videos are viewed every day on YouTube, saying, “We never had a technology before that could educate such a broad group of people anytime on an as-needed basis for free.”

Romer’s work leaves me hopeful because it shows that it’s our ability to build human capital, rather than chop down forests, dig mines, or burn fossil fuels that drives growth and prosperity.

The world still has billions of desperately poor people, but they won’t remain that way. All available evidence strongly suggests that most will become much wealthier in the years and decades ahead.

Malthus’s and Jevons’s ideas gave way to Romer’s, and the world will never be the same.

Predicting exactly how technological progress will unfold is much like predicting the weather: feasible in the short term, but impossible over a longer time. Great uncertainty and complexity prevent precise forecasts about, for example, the computing devices we’ll be using thirty years from now or the dominant types of artificial intelligence in 2050 and beyond.

Because 3-D printing generates virtually no waste and doesn’t require massive molds, it accelerates dematerialization.

The same technologies that power today’s small drones can be scaled up to build “air taxis” with as many as eight propellers and no pilot. Such contraptions sound like science fiction today, but they might be carrying us around by midcentury.

Opposition to genetically modified organisms is fierce in some quarters, but isn’t based on reason or science. This opposition will, one hopes, fade.

The battle against global warming isn’t the only battle we need to fight and win during these decades. We also need to fight against pollution of the air, water, and land so that we and the rest of life on Earth can be healthier. We need to reduce our planetary footprint and give land back to nature so that forests can regrow and animals can move back in. We should leave fewer scars on the land from mines, wells, and clear-cut timberland. We should learn to use less energy if generating that energy also generates greenhouse gases and other pollutants. And we need to continue to lift people out of poverty, reduce mortality rates and disease burdens, ensure clean water and sanitation, give more people more education, increase economic opportunities, and improve the human condition in countless other ways.

Like Julian Simon in 1980, I’m willing to make monetary bets. Simon believed that prices for natural resources would decline and was willing to put his money behind his predictions. My bets are about quantities rather than prices. I believe that America’s total consumption of most natural resources will go down in the years ahead, and I am willing to put money on it. I’ll also wager that greenhouse gas emissions will decrease in the United States, and that the country’s environmental footprint will shrink in other ways as well.

Details about these bets—what data they draw on, how quantities are calculated, how payouts will be handled, and so on—are available at the Long Bets website ( This site is also where you can sign up for one or more bets if you’re interested, and confident enough that these predictions are wrong. Each bet can be between $50 and $1,000. I’m putting up $100,000 of my own money.


Chapter 15:  Interventions:  How to be Good

Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has. —Attributed to Margaret Mead (1901–78)

A study published in the Lancet in 2007 found that over the previous fifteen years death rates from pollution were generally hundreds of times lower for nuclear power than for coal, gas, or oil, and that accident rates were also comparatively low for nuclear. As Shellenberger points out, “Nobody died from radiation at Three Mile Island or Fukushima, and fewer than fifty died from Chernobyl in the thirty years since the accident.” 

As the social entrepreneur Leila Janah puts it, “Talent is equally distributed; opportunity is not.

Salesforce has also announced its intentions to move away entirely from fossil fuel energy sources by 2022. Other large technology companies, including Apple, Facebook, and Microsoft, have similar plans. In 2017 Google reached 100 percent renewable energy for all global operations including both their data centers and offices, becoming the world’s largest corporate buyer of renewable power. 

CEOs and other members of the business community don’t need to be encouraged to keep pursuing dematerialization. They’re going to do this anyway.

We believe things because the people around us believe them, or members of our political tribe do, or members of the opposite political tribe believe the opposite. Many of us believe things because we have an inherently zero-sum perspective: if someone is doing better, it must be because someone else is doing worse. Most of us are more likely to believe things if we hear them enough times, since we have a glitch in our mental hardware to mistake familiarity for truth. Similarly, we believe a lot of things because our innate negativity bias is reinforced by a constant stream of dire headlines, expert predictions of decline and doom, and vivid images of things going wrong.

So is adopting a vegan diet, though few seem willing to abandon altogether foods made from animals: in 2018, only 3 percent of Americans identified as vegan. Short of this extreme step, eating less beef and dairy would help reduce greenhouse gases. As Linus Blomqvist of the ecomodernist think tank Breakthrough Institute puts it, “A diet including chicken and pork, but no dairy or beef, has lower greenhouse gas emissions than a vegetarian diet that includes milk and cheese, and almost gets within spitting distance of a vegan diet.”  

For many of us, the strong tendency when we interact with people who have different beliefs and moral foundations is to quickly try to show them why they’re wrong—why their logic is flawed, their evidence is fake news, and their beliefs are unsupportable. This almost never works. It usually just makes other people dig in their heels and hold on to their existing beliefs even more strongly. A lot of debate and discussion increases disconnection. A better way is to start by finding common ground. The psychologist Jonathan Haidt, whose work has been mentioned in prior pages several times already, highlights that people with both liberal and conservative moral foundations believe deeply that we have a responsibility to care.


Conclusion:  Our Next Planet

We’ve sent robotic probes to every planet in this solar system. Earth is BY FAR the best one. —Jeff Bezos, Twitter, 2018

(Because grasslands keep the planet cooler than forests do,II our current lack of mammoths and mastodons is bad news for climate change.)

Which is, as we’ve seen, to let us and our planet flourish. Jesse Ausubel, the first great scholar of dematerialization, counsels that “we must make Nature worthless.” He means, of course, that we should be working to make it economically worthless, so that it’s safe from the voracious attention of capitalism. Then we can enjoy its true worth.

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