In 1972, researchers at MIT concluded that society was on track to collapse by the year 2040, a follow-up study conducted by an analyst at KPMG found that we are ahead of schedule.
Advanced human civilizations have existed for, at best, 10,000 years. In that time, many great empires rose from nothing and returned to nothing, leaving behind little more than artefaxing crumbling architecture.
All it's hard for historians to definitively say what caused any of these particular collapses, the determining factors tend to fall into four broad categories, the political issues, social and cultural issues, environmental issues, and of course the one that we're specifically interested in, economic issues.
Any civilization that has been reduced a little more than an entry into a textbook fell through some combination of these four factors. Some were almost instantaneous. The great city of Pompeii succumbing to the eruption amount for Sirius. Some took a few weeks, the Aztec Empire collapsed after 93 days of resistance against the Spanish, and some took centuries. 300 years separated the height of the Roman Empire with its eventual collapse.
Our modern civilization is the greatest ever known. Hundreds of thousands of times wealthier and more advanced than even the most massive empires of history could have imagined. If you are watching this video, you have access to the internet. If you have access to the internet, you have access to a source of knowledge that scholars and kings could not have dreamt of just a hundred years ago. The same is true for other modern luxuries that we take for granted.
Climate control, worldwide travel, cheap, and effective clothing, medicine, instantaneous communication, plentiful and safe food, water on tap and even little luxuries like being able to listen to your favorite song pretty much whenever you feel like it.
A question I get asked a lot is who is the richest person in history? The answer? Elon Musk, or it was about a week ago when he was worth more than $270 billion, that might have changed depending on when you actually watched this video.
Oh, but what about Rockefeller, the Ross Stralds, the Romanovs or even this Marzo Musa fella that people keep on bringing up? What about them? Sure, they were rich for their time, but their time was one of almost universal poverty. Despite their relative wealth, they couldn't dream of all the amenities that you think nothing of. Let me tell you, if I had the choice between my modern rented two bedroom apartment and a sprawling 15th century French palace with no air conditioning, no plumbing, and no food that wouldn't give me cholera, I would take the apartment 10 times out of 10 and you are a fool if you wouldn't do the same.
The best part is I haven't even mentioned war yet. Despite what most people might think based on their diet of cable news and the front page of Reddit, we are living through one of the most peaceful periods in human history ever. Overwhelmingly, this has all been thanks to a combination of technology, education, and global cooperation.
Even nations that have resentful hostilities bubbling away beneath the surface are more dependent on one another today than even the closest of allies were back in the time of Napoleon. Why get hostile when you can get rich? It sounds vapid, but it's a good thing, albeit a fickle one.
Comparing our modern global economy to even the greatest empire throughout history is like comparing a jet engine to a donkey. That's not hyperbole, that's how far ahead we are today. But this is actually the problem. Sure, a jet engine is faster and more powerful than a donkey, but it's less resilient.
One tiny floor in its incredibly complex network of interdependent components could render the whole thing useless. What's worse is that it moves so fast and flies so high that even the slightest hiccup becomes catastrophic.
Most of us are live today, and especially those of us sitting at home watching internet videos on our smartphones would not know how to survive very long if we didn't have food within easy reach. Sometimes literally delivered to our door.
But I'm getting ahead of myself, and probably starting to sound like some kind of deranged doomsday prep us screaming the end is nigh. So let's break down exactly how this MIT study predicted that society would collapse.
What measurable metrics was MIT looking at to determine that the world was going in a good or a bad direction? What did these metrics tell us about the way our society would supposedly break down? And finally, is the fact that this report is ahead of schedule actually something to be worried about? Or is this all just the case of too much weight being given to statistical correlations?
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OK, so the MIT study specifically titled The Limits to Growth set out to primarily explore if our current usage of the world resources was sustainable. Spoiler alert, it wasn't. The study was actually one of the first economic studies ever to use computers sporting dynamic systematic models. I am not a computer scientist, so there are plenty of people who could explain what system dynamics are far better than I could, but in brief, it's basically a piece of software that attempts to replicate the workings of complex real-life systems by replicating them in the software.
It sounds very familiar to us today, but remember this was taking place back in the 60s and the 70s where computers looked like this and had about as much processing power as your kettle. Despite these limitations, the MIT team eventually created World 3, which was a computer model for the entire global economy. This piece of software modeled everything from variable population growth to industrial capacity. It also crucially modeled how everything would interact with one another.
For example, a large population is naturally going to require more resources, more food, more water, more homes, more of everything, but a larger population will also naturally lead to more innovation. We have a much better chance of finding a Tesla, Da Vinci, Haber, Bosch or Whittle with a population of 8 billion than we do with a population of 2 billion, which is where the world was 100 years ago. It's a common joke amongst macro economists that every change you make to the economy changes at least three other things.
Sometimes we pave over this issue by assuming Ceterus Parabas, or all other things been equal in our models. This economic assumption is great for looking at cause effect in isolation. For example, a soda tax increases the price of and therefore reduces the demand for sugary beverages, all other things been equal, but this is the real world. Everything ever remains the same, just because it's easier to model that way. Predicting the future is extremely hard at the best of times, and almost impossible if you don't account for almost every variable. And that's what World 3 attempted to do.
The World 3 program had systems for modeling everything from birth rates to farming technology. The idea was that all of these variables were very important to maintaining the modern lifestyles that we enjoyed today, but because they interact with one another, they were prone to feedback loops. The idea of a feedback loop actually comes from musical performances. If you have ever held a microphone up to a loudspeaker, you will know the horrible high-pitched sound that comes out of it.
That's because the microphone is hearing a loud noise, it is then telling the speaker to amplify and play that loud noise even louder, only for that new loud noise to be picked up by the microphone all over again. The same kind of effect can happen in economies. For example, declining birth rates can lead to an aging population. An aging population will put more financial pressure on younger workers to care for the elderly, rather directly by caring for them at home or indirectly through taxes to fund pension schemes and aged care.
This financial pressure will mean younger workers have less time and less agreeable conditions to make a family of their own and you are left with further declining birth rates. This is actually a very important example as it pertains to the MIT study. You see, while the study accounted for hundreds of variables in its computer-generated model of the global economy, it was actually only interested in tracking five of them. These were population, industrial output, food production, available resources and pollution.
It's worth remembering that this report was published in 1972, before climate change was more than a blip on the scientific community's radar and certainly far from being the widely recognized issue it is today. Chances are if the paper was replicated today, it would also include average global temperatures, but it wasn't, so it didn't.
Now despite that, you should be able to see that all of these individual factors are very important to how we live and work in the world today. But perhaps what is more important is again, how they end up interacting with one another.
Let's go back to the economist safe space for a second and assume that all other things are equal, outside of food and population. Now these variables are obviously dependent on one another. If one moves the other will too, all other things been equal. But what sounds like a more concerning order of events? A decline in population leading to a decline in food production or a decline in food production leading to a decline in population? Yeah, obviously two very different scenarios right there.
Okay, so now that we understand how to interpret the data generated by this report, what did it actually say? Well, like good economists, the researchers kind of hedged their bets. Making the future exactly is a fool's errand. They could have published their paper one day before a design for a commercially viable fusion reactor was developed and researchers realized this, so what they did instead is they tweaked the initial conditions and ran the simulation over and over again.
In some simulations, they would assume that innovation remains at a constant pace and worker productivity continues to improve at the rate it currently has been. In other simulations, they would assume that technological innovation continues to compound on itself, meaning things like harvesting resources from space or growing food in laboratories becomes possible, and then in other simulations, they would assume that technological progress would slowly plateau. A quick side note is that a technological plateau might not sound very realistic to us today, but that's only because we have grown up in a time of constant innovation.
Moore's Law is a great example of this. For the past five decades, computing power has roughly doubled every two years, but we are starting to reach the physical limits of how many transistors we can pack onto a microchip. Promising technologies like quantum computing may solve this issue and let us continue to gain access to even more computing power, but then again it may not. And that's just one example. A lot of technological innovation these days is just major companies finding new and innovative ways for you to waste your time consuming avocados of content, and yes, I realise the irony that I am part of the problem here, but here go, have an ad. What a good little consumer you are.
Anyway, technological innovation was just one variable of the researchers of this report tweaked. They also ran models that assumed lower birth rates, higher birth rates, higher rates of recycling, more resource discoveries, greater levels of global trade, reduced levels of global trade. They basically tried to account for every outcome that would be possible with a realistic combination of factors in this economic model. They then averaged out the trajectories of five crucial factors to determine where humanity would end up.
As you would suspect from a range of models with variables changed up every time, they got a range of different results. But they all sort of had one thing in common. They all showed a significant decline around the year 2040. Of course, it's impossible to address all of the thousands of potential outcomes that were modeled, but the researchers really focused on a few that fell well within the standard deviation of all of these potential outcomes.
The first and potentially most optimistic outcome was called the Comprehensive Technology scenario. This was a model where we continue to live like we currently do today, but technology progressed fast enough to ensure that our productive capacity was able to keep up with the new people that needed to be fed and housed and closed. The model still predicts a significant drop in food production brought about primarily due to pollution of waterways and the misuse of arable land, but that is addressed through technological innovation.
The population does start to plateau around the year 2040, but that's due to the natural tendency of wealthier, more urban populations to have less children, rather than people starving to death due to lack of food. In this model, industrial output does peak and then decline, which would normally indicate lower living standards. But this is almost entirely contradicted by the more efficient use of the goods that we do have.
If tomorrow, technology got to such a point where we had self-driving cars, then the need for individual car ownership would be greatly reduced. This would likely lead to a fall in industrial output, but it's not like we would be poorer because of this. It's just that suddenly a car that used to service only one household can now be efficiently shared amongst dozens.
This is actually what the World Economic Forum was talking about when they famously said that you will own nothing and be happy about it. They either just really don't understand how to communicate with the general public, or they secretly enjoy making people angry.
The more efficient use of resources would also reduce pollution and ensure that raw materials are never reduced to nothing. This wouldn't be a totally terrible outcome, and yeah, we might not continue to see the same exponential growth in living standards that we have seen over the past 100 years or so, but it also wouldn't be a societal collapse either.
If you don't feel comfortable relying on some new way of technological innovation to save us all, then the researchers who publish this report have an alternative. The so-called stabilized world scenario is what would happen if the world just maintained its current rate of innovation, while also investing heavily into things like renewable energy sources and materials recycling processes.
Again, this model was made before climate change was considered a factor, so when we are talking about recycling and renewables, we are looking at it purely through the lens of resource depletion and local pollution while, wholly disregarding other externalities like carbon emissions. This stabilized world scenario looks very similar in many ways to the comprehensive technology outcome we explored earlier.
The main difference is an almost voluntary reduction in industrial output before it creates problems like food shortages and excessive pollution. Of all the models based on all the different combinations of variables, this is what the researchers identified as the most optimistic.
Again, most optimistic barring some crazy unforeseen technological development that radically reshapes how we run our economies. This could happen and hopefully it will, but it's hard to make concrete plans for technologies that we can't conceive of yet, outside of maybe making a spiritual sacrifice to Daddy Elon. Can't hurt.
Anyway, the bad news is that while the original study in 1972 thought this could be something that we could realistically work towards, the timeline of all the captured variables in this outcome has the least closest fit to our current reality, as explored by the 2021 follow-up study.
The Gaya Harrington study instead suggests that the path that we are actually on best represents what the 1972 researchers dubbed the business as usual scenario, and that's not good. This is a model that highlights a very clear collapse. Pollution continues to increase exponentially and things like recycling of common materials never become economically viable or subsidized widely enough.
Industrial output does reach a higher level than in all of the other possible scenarios, but that is about where the good news ends. A drop in food production causes massively declining birth rates in rich countries and famines in poor countries. The lack of young workers reduces industrial output which further hinders economic prosperity. Easily accessible resources also dwindle away, which again further reduces industrial output and economic prosperity.
By all accounts, this is what we would consider a complete collapse of society. I said at the beginning of this video that I would rather be a middle class worker in today's world than a king from anywhere beyond 150 years ago.
If the business's usual model was to play out, then I would rather be a middle class worker today than a king just 20 years in the future, and that's a genuinely scary thought. So if you are feeling a bit anxious like I was while reading this study, perhaps it's important to address the criticisms of this model.
A study that basically amounts to someone screaming the world is going to end is naturally going to be met with some cynics, and that was the case for the limits to growth report. It's worth noting that a lot of these criticisms have been proven wrong simply by the fact that the data is tracking the predictions in the business as usual model with pretty frightening accuracy.
Other critics point out that this study has a very pessimistic way of dealing with human innovation. These critics consider that, yeah, sure. Right now our rate of innovation might not be sufficient to avoid this kind of collapse, but necessity is the mother of invention.
As soon as humanity's back is against the proverbial wall, a lot more attention will be placed on researching and investing in technologies that could push us from the doomsday scenario of the business as usual model into the more palatable comprehensive technology scenario. We can already start to see this taking place with a huge surge in renewable technologies becoming available in the public market. Certainly there are still some areas where we are lacking. Waste management being a huge one, but we are much better than we were even a decade ago.
If you want me to tell you what I think will happen, I'm sorry, I'm just going to encourage you to read the two reports yourself. I generally want to be optimistic about the future, but I also realise that my opinion does not carry nearly as much weight as research published by a collection of 17 of the world's top economists and scientists. Research that has been vindicated by another very talented individual. Best case scenario? This was all massively overblown and we could use this as an excuse to learn about the limits of creating systematic models to predict the future. Worst case scenario? Well, I guess it's time to start learning how to forage for food in the wilderness, which you can start right now with Skillshare.
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