As I've suggested elsewhere, the relative stagnation of the last few decades compared to the decades before are largely a result of declining energy availability per capita. As of 2025, energy from oil acts as a multiplier on the rest of economic activity because of the ubiquity of oil and gas burning engines. Between the late 1800s and the 1950s, oil extraction technology improved faster than the decline in the quality of accessible oil reserves. Since then, oil has become harder to extract faster than the improvement in extraction technology, and the resulting oil has been shared over a larger fraction of a growing human population. So even though we as a species are pulling more oil out of the ground than at any time in the past, the amount of oil burned per human per year has been declining.
A good way to express the idea that oil is becoming harder to extract is EROEI, energy returned on energy invested, or how much energy you have to spend to pull energy out of the ground. EROEI has been declining ever since oil was discovered, although the decline has been mitigated by improving technology.
I'm optimistic that as humanity migrates to solar and wind power, energy availability per capita will start growing again, leading to a reinvigoration of progress. Indeed, growth in renewables are likely the main reason the wheels haven't completely fallen off the world economy.
Thank you for your thoughts! I agree that Energy Return on Energy Invested is a major factor in innovation and growth. In fact, in my attempt to analyze the economic side of this hypothesis in PART III (https://drsnyder.substack.com/p/part-iii-on-failed-and-dogmatic-economics), I arrived at the conclusion that EROI is a major factor as well. Moreover, it is a factor not always appreciated by economists concerned with growth as far as I can see. However, progress and innovation remain somewhat fuzzy concepts. Correlations and pattern can be found, as was shown, but I try not be too dogmatic and reductionist. That said, I also believe this discussion is crucial, as our ability to innovate in the right direction is of existential importance—and energy use will always remain a fundamental, hard physical constraint.
Thanks for this. Hadn't heard of Modis but his idea of 'diminishing returns' as you describe seems very useful.
We suffer from the idea that because we *can* 'computerise' something then we *should*. This has led to the introduction of IT systems which do a worse job than their manual predecessors. For example, 'making tax digital (MTD)' enforces IT systems on businesses, together with the overheads that entails, to supply the taxman with half a dozen easily calculated numbers every three months. The simple job of posting a package from A to B has now become overburdened with reams of (electronic) documents which are utterly irrelevant. And all this bureaucratese has to be maintained and made even more complex when the next set of hobby-horse regulations shows up. No wonder businesses are struggling.
If it's this bad in the simple cases described above, how much worse will it be in complex cases. My guess is that we're already in the rapidly diminishing returns phase for most IT.
Thanks for your comment! I think you are correct that we seriously 'over-bureaucratized' society and that in some cases IT technology only supercharged this tendency. I believe a lot of contemporary bureaucracies find their origin in the 90s, where the idea was conceived that all organizations, public and (semi-)private, have to be managed like a quasi-market system to improve efficiency. This produced the need for auditing systems, endless feedback mechanisms and managerialism. Needless to say, bureaucracy tends to expand, becoming increasingly self-serving as it sustains itself, pretending to improve efficiency while actually doing the opposite. I wrote about this in my latest post.
As I've suggested elsewhere, the relative stagnation of the last few decades compared to the decades before are largely a result of declining energy availability per capita. As of 2025, energy from oil acts as a multiplier on the rest of economic activity because of the ubiquity of oil and gas burning engines. Between the late 1800s and the 1950s, oil extraction technology improved faster than the decline in the quality of accessible oil reserves. Since then, oil has become harder to extract faster than the improvement in extraction technology, and the resulting oil has been shared over a larger fraction of a growing human population. So even though we as a species are pulling more oil out of the ground than at any time in the past, the amount of oil burned per human per year has been declining.
A good way to express the idea that oil is becoming harder to extract is EROEI, energy returned on energy invested, or how much energy you have to spend to pull energy out of the ground. EROEI has been declining ever since oil was discovered, although the decline has been mitigated by improving technology.
I'm optimistic that as humanity migrates to solar and wind power, energy availability per capita will start growing again, leading to a reinvigoration of progress. Indeed, growth in renewables are likely the main reason the wheels haven't completely fallen off the world economy.
Thank you for your thoughts! I agree that Energy Return on Energy Invested is a major factor in innovation and growth. In fact, in my attempt to analyze the economic side of this hypothesis in PART III (https://drsnyder.substack.com/p/part-iii-on-failed-and-dogmatic-economics), I arrived at the conclusion that EROI is a major factor as well. Moreover, it is a factor not always appreciated by economists concerned with growth as far as I can see. However, progress and innovation remain somewhat fuzzy concepts. Correlations and pattern can be found, as was shown, but I try not be too dogmatic and reductionist. That said, I also believe this discussion is crucial, as our ability to innovate in the right direction is of existential importance—and energy use will always remain a fundamental, hard physical constraint.
Thanks for this. Hadn't heard of Modis but his idea of 'diminishing returns' as you describe seems very useful.
We suffer from the idea that because we *can* 'computerise' something then we *should*. This has led to the introduction of IT systems which do a worse job than their manual predecessors. For example, 'making tax digital (MTD)' enforces IT systems on businesses, together with the overheads that entails, to supply the taxman with half a dozen easily calculated numbers every three months. The simple job of posting a package from A to B has now become overburdened with reams of (electronic) documents which are utterly irrelevant. And all this bureaucratese has to be maintained and made even more complex when the next set of hobby-horse regulations shows up. No wonder businesses are struggling.
If it's this bad in the simple cases described above, how much worse will it be in complex cases. My guess is that we're already in the rapidly diminishing returns phase for most IT.
Thanks for your comment! I think you are correct that we seriously 'over-bureaucratized' society and that in some cases IT technology only supercharged this tendency. I believe a lot of contemporary bureaucracies find their origin in the 90s, where the idea was conceived that all organizations, public and (semi-)private, have to be managed like a quasi-market system to improve efficiency. This produced the need for auditing systems, endless feedback mechanisms and managerialism. Needless to say, bureaucracy tends to expand, becoming increasingly self-serving as it sustains itself, pretending to improve efficiency while actually doing the opposite. I wrote about this in my latest post.