Long-run evolution of the global economy – Part 2: Hindcasts of innovation and growth

Garrett, T. J.

doi:https://doi.org/10.5194/esd-6-673-2015

Articles | Volume 6, issue 2

https://doi.org/10.5194/esd-6-673-2015

© Author(s) 2015. This work is distributed under
the Creative Commons Attribution 3.0 License.

Special issue:

Social dynamics and planetary boundaries in Earth system...

https://doi.org/10.5194/esd-6-673-2015

© Author(s) 2015. This work is distributed under
the Creative Commons Attribution 3.0 License.

Articles | Volume 6, issue 2

Research article

|

13 Oct 2015

Research article |

| 13 Oct 2015

Long-run evolution of the global economy – Part 2: Hindcasts of innovation and growth

T. J. Garrett

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Final revised paper (published on 13 Oct 2015)
Preprint (discussion started on 24 Mar 2015)

Interactive discussion

Status: closed

AC: Author comment | RC: Referee comment | SC: Short comment | EC: Editor comment

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- Supplement

RC C171: 'Commentary on Garrett's picture of thermodynamic constraints on global energy use', Peter Haff, 20 Apr 2015
- AC C233: 'Reply', Timothy Garrett, 08 May 2015
RC C205: 'Viewing the forest, beyond counting the trees', Carsten Herrmann-Pillath, 27 Apr 2015
- AC C236: 'Reply', Timothy Garrett, 08 May 2015
RC C211: 'Review of same - Andrew Jarvis', Andrew Jarvis, 28 Apr 2015
- AC C243: 'Reply', Timothy Garrett, 08 May 2015
RC C259: 'Further comment on Garrett article', Peter Haff, 08 May 2015
- AC C261: 'Organic Civilization', Timothy Garrett, 11 May 2015

Peer-review completion

AR: Author's response | RR: Referee report | ED: Editor decision

AR by Timothy Garrett on behalf of the Authors (15 May 2015) Author's response

ED: Referee Nomination & Report Request started (29 Jun 2015) by Jonathan Donges

RR by Peter Haff (08 Jul 2015)

RR by Carsten Herrmann-Pillath (11 Jul 2015)

Suggestions for revision or reasons for rejection

My point about explaining growth is simple: Garrett’s model remains descriptive in a substantial sense, because he does not causally explain technological change, just the same as neoclassical models. Innovation roots in complex determinants such as institutions, social norms etc. which drive human creativity. If one aims at a generic theory on that, I think one has to add an explanatory level between the physical and the economic, which is the level of evolutionary processes. As I argue in a recent paper, this is a deficit that most physical theories of economic growth share, such as Ayres’ or Kümmel’s (see Energy, Growth and Evolution: Towards a Naturalistic Ontology of Economics, Ecological Economics, http://dx.doi.org/10.1016/j.ecolecon.2014.11.014). In fact, Lotka recognized this point very early, that’s why he proposed to expand thermodynamics by the theory of evolution. That does not invalidate Garrett’s model, I just say that it cannot claim to be a fully-fledged causal one, it remains phenomenological and descriptive. That being said, reasoning in terms of human creativity is often presented as an argument against physical models of human society. This is certainly flawed, and therefore Garrett’s work is important.
Regarding my comment on public infrastructure, Garrett the entrepreneur is not aware of the fact that his deliveries to the government are just the costs of the public services, but not their value added which would only contribute to GDP. Since there is no market price for these services, we cannot calculate the value added, which would mean to subtract Mr Garrett’s deliveries from gross value, to avoid double counting. So, if one calculates wealth by adding up GDP data, government services and infrastructure are not included.
I recommend that the author adds an appendix where he clarifies the relationships between his economic terms and the standard meaning. For example, in calculating national wealth, economists might use cost based valuations of infrastructure as an approximation. But the author defines wealth differently. It is not enough to refer back to earlier writings, as authors cannot expect readers to digest the entire oeuvre when they glance through a fresh paper.

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RR by Andrew Jarvis (27 Jul 2015)

Suggestions for revision or reasons for rejection

In the discussions Prof. Haff identified my earlier comments as “push-back” against Prof. Garrett’s paper and the general thesis that society is a physical thermodynamic object. This is not accurate. I find Prof. Garrett’s work in general, and this particular contribution to it, extremely valuable and convincing additions to attempts to recalibrate our understanding of what the global socioeconomic system is. My central criticisms were largely technical, and in particular focused on the fact that the estimates that Prof. Garrett presents and discusses heavily depend on the data and methods he used. Given there are alternative data sets and estimation methodologies which can and do produce rather different results I think that it is important to properly stress to the reader the conditional nature of the results. The manuscript as is still does not handle this issue carefully enough in my opinion and this undermines what is otherwise excellent material. Another issue that is still not properly addressed in Prof. Garrett’s response is the role of human perception. In deploying the analogy of the house Prof. Garrett admits perception plays a role in the evolution of the system. His suggested revision reads:
“Part of such value may be only psychological since, even with no one home and all the utilities turned off, a house still maintains some worth for as long as it can be perceived as potentially being useful by other active members of the global economy.”

If so, how can this be a purely thermodynamic system? Prof. Garrett’s response that,

“Once lambda is established it is strictly thermodynamic as there are no further relations that are derived from empirical fits. The rest is just physics.”

appears to contradict with his earlier statement that human perception plays a role in the system, unless we can thermodynamically account for perception that is (which perhaps we can).

To these two outstanding issues I add the corrections that as far as I am aware Prof. Garrett is not a reviewer of http://www.earth-syst-dynamdiscuss.net/5/1143/2014/esdd-5- 1143-2014.html and that I and many others legitimately cite discussion papers.

Andrew (not Anthony – that’s my father) Jarvis.

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ED: Publish subject to minor revisions (review by Editor) (07 Aug 2015) by Jonathan Donges

Dear Dr. Garrett,

Please take into account the referee reports in another revision of the manuscript.

Concerning the comments of Carsten Herrmann-Pillath (CHP), I agree that adding a glossary for explaining the relationship of the economic terms used in the paper and their standard meanings in economics would be very helpful to clarify what has been done and to facilitate connecting to the literature in economics.

Furthermore, expanding the discussion of unexplained technological innovation in the model noted by CHP would be very valuable to point the way to future developments in further exploring the explanatory power of physics-based (socio-metabolic) models of socio-economic systems. Closely related to this issue is the comment by Andrew Jarvis calling for a more in-depth discussion of the role of human perception of value in a model that claims to be thermodynamic.

Along the lines of a corresponding comment by Jarvis, I would also like to stress the need for discussing more carefully the conditional nature of the results depending on both the data sets and statistical methodologies used. In the words of CHP: "It is not enough to refer back to earlier writings, as authors cannot expect readers to digest the entire oeuvre when they glance through a fresh paper."

Futher comments:

- Concerning Eq. 3, could you discuss the consequences of da/dt < 0 in the model framework? Is this even meaninful or might this case have to be excluded as a precondition?

- The first sentence of Section 3.1 is incomplete. Please check.

- Caption of Fig. 4: use "GWP" instead of "GDP"

- Tables 1-3: Please check carefully if the numbers given in Tables 1,2 and 3 match those mentioned in the text.

Best regards,
Jonathan Donges

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AR by Timothy Garrett on behalf of the Authors (03 Sep 2015) Author's response Manuscript

ED: Publish as is (28 Sep 2015) by Jonathan Donges

AR by Timothy Garrett on behalf of the Authors (28 Sep 2015)

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Short summary

GCMs and economic models are often coupled for climate scenarios. Here, what is examined is how well a simple non-equilibrium thermodynamic model can represent the multi-decadal growth of global civilization. Initialized with growth trends from the 1950s, the model attains high skill at hindcasting how fast the GDP and energy consumption grew during the 2000s. This opens treating the coupled economy and climate as a physically deterministic response to available flows of energy and matter.