Tuesday, April 22, 2008

Disaster Gap

Economist Michael Mandel sees a missing piece in many disaster scenarios:

Why is this chart so important? It says that increases in knowledge--technology and new ways of doing things--represent roughly half of productivity gains since 1987. In fact, this pattern reaches back far longer...when I get some time later, I will splice together the numbers since World War II. This is one of the great regularities of economics...the fact that roughly half of productivity growth is driven by intangible improvements in knowledge, rather than tangible investments in physical and human capital.

The flip side: Reverend Malthus and the forces of dismalness always win, in the absence of technological change and improvements in knowledge. Without technological advances, the walls always close in, the disasters never stop. We get a meek and meager existence which we cannot outrun.

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