Sunday, June 5, 2011

The Era of Cheap

The New York Times has a very good article on how the pace of agricultural yields are declining and how they might further decline in the future due to the ill effects of climate change, but there’s one line in particular that stood out to me:
Experts are starting to fear that the era of cheap food may be over. “Our mindset was surpluses,” said Dan Glickman, a former United States secretary of agriculture. “That has just changed overnight.”

You hear the phrase “era of cheap _____ may be over” so often—Google suggests “oil”, “capital”, “food”, “Chinese products”, “airfare”, etc.—that it’s striking no one has quite put it all together yet: the number of people is increasing and their wealth is increasing faster, meaning a proportionately larger increase in demand for stuff. Meanwhile, the amount of stuff—the amount of energy available to the world—is basically constant; it’s the ability to be more productive per unit of energy that increases wealth. Nevertheless there are constraints and we are running into them. This leaves us to either figure out some huge breakthrough in productivity per unit of energy, or in total energy available, or the end of an era of a lot of cheap stuff.

(And remember those stagnating wages? They really stink if all the cheap stuff is gone.)

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