Progress Daily

Bradford DeLong has estimated that for most of the the past 7,000 years economic growth proceeded at a steady exponential rate, with a doubling of output about every 900 years (see “Estimating World GDP, One Million B.C.–Present“). Within the past few centuries, output began doubling faster and faster (the Industrial Revolution), approaching a new steady doubling time of about 15 years. That’s about 60 times faster than in the previous seven millennia.

In the roughly 2 million years our ancestors lived as hunters and gatherers, the population rose from about 10,000 protohumans to about 4 million modern humans. If, as we believe, the growth pattern during this era was fairly steady, then the population must have doubled about every quarter million years. Then, beginning about 10,000 years ago, a few humans began to settle down and live as farmers. The resulting communities grew so fast that they quickly accounted for most of the world population (the Agricultural Revolution). From that time on, the farming population doubled about every 900 years — some 250 times faster than before.

Both eras before now switched suddenly to a new era having a growth rate that was between 60 and 250 times as fast. Both switches were completed in much less time than it had taken the previous regime to double — from a few millennia for the agricultural revolution to a few centuries for the industrial one.

If a new revolution were to show the same pattern as the past two, then growth would quickly speed up by between 60- and 250-fold. The world economy, which now doubles in 15 years or so, would soon double in somewhere from a week to a month. If the new revolution were as gradual (in power-law terms) as the Industrial Revolution was, then within three years of a noticeable departure from typical fluctuations, it would begin to double annually, and within two more years, it might grow a million-fold. If the new transition were as rapid as the Agricultural Revolution seems to have been, change would be even more sudden.

In the era of hunting and gathering, the economy doubled nine times; in the era of farming, it doubled seven times; and in the current era of industry, it has so far doubled 10 times. So if the number of doublings is similar across these three eras, then we seem overdue for another transition.

About two-thirds of all income in the rich countries is paid directly for wages, and much of the remaining third represents indirect costs of labor.

As machines become more “intelligent,” the economy would start growing much faster. We could create machine workers in much less time than it takes to breed, rear, and educate new human workers. Being able to make and retire machine workers as fast as needed could easily double or quadruple growth rates.

The cost of computing has long been falling much faster than the economy has been growing. When the workforce is largely composed of computers, the cost of making workers will therefore fall at that faster rate.

As the economy begins growing faster, computer usage and the resources devoted to developing computers will also grow faster. And because innovation is faster when more people use and study something, we should expect computer performance to improve even faster than in the past.

“Economics Of The Singularity,” by Robin Hanson

According to Joel E. Cohen, there is enough grain grown on earth to feed 10 billion vegetarians. But much of it is being fed to cattle, which are eaten by the world’s wealthy.

There may be enough acreage already planted to keep the planet fed forever, because 10 billion humans is roughly where the UN predicts that the world population will plateau in 2060. (In the late 1980s, Brown University’s World Hunger Program calculated that the world then could sustain 5.5 billion vegetarians, 3.7 billion South Americans or 2.8 billion meat-loving North Americans.)

The world’s current population, with 1,000 square feet of living space each, could fit into Texas.

A water shortage that raised prices to around $150 would make it profitable to build pipes from the polar icecaps, or desalinate seawater, as the Saudis already do.

“Malthus Redux,” by Donald G. McNeil Jr.

Early in the twentieth century, the share of total national income drawn by the top 1% of US earners hovered around 18%. That share hit an all-time high in 1928 — when top earners took home 21%, including capital gains. The top 1% of earners took home less than 10% of all income through the 1960s and 1970s, 15% in 1996, and 20% in 2006.

Americans at the 95th income percentile or higher can expect to live nine years longer than those at the 10th percentile or lower.

The US ranks 21st among the 30 nations in the OECD in terms of life expectancy, and 25th in terms of infant mortality.

The Gini coefficient measures income distribution on a scale from zero (where income is perfectly equally distributed among all members of a society) to one (where a single person possesses all the income). For the US, the Gini coefficient has risen from .35 in 1965 to .44 today. On the per-capita GDP scale, our neighbors are Sweden, Switzerland, and the U.K.; on the Gini scale, our neighbors include Sri Lanka, Mali, and Russia.

In 1965, the average salary for a CEO of a major US company was 25 times the salary of the average worker. Today, the average CEO’s pay is more than 250 times the average worker’s. The current top marginal tax rate — 35% — is far lower than the 91% tax levied on top earners from 1951 to 1963.

Societies with higher inequality tend to have higher crime rates, although it’s not clear which way the causal arrow runs, or if it exists.

When a society is starkly divided along racial or ethnic lines, the affluent are less likely to take care of the poor, Edward L. Glaeser and Alberto Alesina have found. Internationally, welfare systems are least generous in countries that are the most ethnically heterogeneous. Those US states with the largest black populations have the least generous welfare systems. And in a nationwide study of people’s preferences for redistribution, Erzo F.P. Luttmer found that people who lived near poor people of the same race were likely to support redistribution, and people who lived near poor people of a different race were less likely to do so (see “Group Loyalty and the Taste for Redistribution”; pdf file here).

“Unequal America,” by Elizabeth Gudrais

For the third successive year, America’s Border Patrol reports a sharp drop in arrests on and near the frontier. In 2006 the figure dropped 8% to around 1m. Last year it dropped by a full fifth. The six months to March showed a year-on-year drop of 17%. By the (imperfect) measure of border arrests, the migrant flow today is roughly half that of 2000, when 1.6m arrests were made.

Mexico’s central bank reports that, after years of rapid growth, the amount of cash sent home by migrants inside America is falling. Last year such flows were worth $24 billion (more valuable than tourism). But in the first quarter of this year the year-on-year figure was down 2.9%.

A poll of migrants across America published by in April confirmed that fewer are sending money back regularly: in 2006 three-quarters of migrants did, this year only half report doing so. Brazil, the second-largest recipient of remittances in the region, saw them slide by 4% last year, to $7.1 billion.

A study by the Institute for Public Policy Research (IPPR) this year noted that of the 1m or so East Europeans who came to Britain since 2004, around half have already left. The inflow of migrants to Britain from this region has also dropped sharply, by 17% last year.

In Britain the economy is slowing, and the sharp drop in the value of the pound has cut the attraction of the country to foreign workers. Every pound a Pole sent home in May 2004 earned him seven zloties; today he gets little more than four.

East European economies have grown relatively fast in recent years, their labour forces are shrinking fast (partly because of emigration, partly because of ageing populations) and unemployment has dropped quickly in the past half-decade.

Kathleen Newland suggests that based on the experience of countries like Spain, Portugal, Greece and South Korea, emigration usually slows when income per person approaches a threshold level in relation to income in the richer countries where the migrants are heading. The tipping point is when the ratio of incomes reaches about 1:4 or 1:5, especially if the upward trend seems stable. For migrants looking to go to western Europe and North America, this would imply a threshold level of $6,000-7,000.

“A turning tide?,” The Economist

About one in 20 children have a group of symptoms that has come to be known as attention-deficit hyperactivity disorder (ADHD). About 60% of them carry those symptoms into adulthood. ADHD is believed to be genetic, and is associated with particular variants of receptor molecules for neurotransmitters (chemicals that carry messages between nerve cells) in the brain. In the case of ADHD, the neurotransmitter is often dopamine, which controls feelings of reward and pleasure. People with ADHD apparently receive positive neurological feedback for “inappropriate” behaviour.

ADHD sufferers are impulsive. They have trouble concentrating on any task unless they receive constant feedback, stimulation and reward. They tend to perform poorly in modern society and are prone to addictive and compulsive behaviour.

Dan Eisenberg speculated that such behavior may be advantageous for people who lead a peripatetic life. Since today’s sedentary city dwellers are recently descended from such people, natural selection may not have had time to purge the genes that cause it.

Eisenberg tested this by studying the Ariaal, a group of pastoral nomads who live in Kenya. The receptor Mr Eisenberg looked at was the 7R variant of a protein called DRD4, a variant is associated with novelty-seeking, food- and drug-cravings, and ADHD. (See “Dopamine receptor genetic polymorphisms and body composition in undernourished pastoralists.”)

The researchers looked for 7R in two groups of Ariaal. One was still pastoral and nomadic. The other had recently settled down. They found that about a fifth of the population of both groups had the 7R version of DRD4. However, the consequences of this were very different. Among the nomads, who wander around northern Kenya herding cattle, camels, sheep and goats, those with 7R were better nourished than those without. Among their settled relations, those with 7R were worse nourished than those without it.

This discovery fits past findings that 7R and a set of similar variants of DRD4 (the “long alleles”) are more common in migratory populations.

There remains the question of why 7R is found in only a fifth of the Ariaal population. One possibility is that its effects are beneficial only when they are not universal, and some sort of equilibrium between variants emerges.

“The misfits,” The Economist

The biggest investment boom in history is under way. Over half of the world’s infrastructure investment is now taking place in emerging economies, where sales of excavators have risen more than fivefold since 2000. In total, emerging economies are likely to spend an estimated $1.2 trillion on roads, railways, electricity, telecommunications and other projects this year, equivalent to 6% of their combined GDPs — twice the average infrastructure- investment ratio in developed economies.

Morgan Stanley predicts that emerging economies will spend $22 trillion (in today’s prices) on infrastructure over the next ten years, of which China will account for 43%. China has spent more (in real terms) in the past five years than in the whole of the 20th century.

Never before has infrastructure spending been so large as a share of world GDP. Even at the peak of Britain’s railway mania in the 1840s, total infrastructure investment was only around 5% of GDP; China is already spending around 12% of its GDP.

The World Bank estimates that a 1% increase in a country’s infrastructure stock is associated with a 1% increase in the level of GDP.

Goldman calculates that a 1% increase in the share of people living in cities leads to a 1.8% increase in demand for installed electricity capacity. A 1% rise in income per head leads to a 0.5% increase in demand. Putting this together, electricity capacity may have to surge by 140% in China and by 80% in India over the next decade.

A 1% increase in income per person leads to a 1.4% increase in the number of passengers travelling by air, so the number of air passengers could jump by more than 350% in China and by 200% in India over the next decade.

“Building BRICs of growth,” The Economist

According to a new report by Marilyn A. Brown, et al., (”Shrinking the Carbon Footprint of Metropolitan America“) each resident of the 100 largest US metropolitan areas is responsible on average for about 2.5 tons of carbon dioxide in energy consumption each year, 14% below the 2.9 ton national average.

Those 100 cities (where two thirds of the people in the US live) still account for 56% of the nation’s carbon dioxide pollution. But their greater use of mass transit and population density reduce the per-person average.

Emissions of carbon dioxide are highest in the eastern US, where people rely heavily on coal for electricity. They are lower in the West, where weather is more favorable and where electricity and motor fuel prices have been higher.

“City dwellers dubbed ‘green’,” by H. Josef Hebert

Justin Wolfers and Betsey Stevenson analyzed all the major post-war happiness studies data (.pdf file here), including new data from the Gallup World Poll, which contains detailed data on subjective well-being for 132 countries in 2006. Contrary to previous researchers using less complete date, they found that: 1) Rich people are happier than poor people. 2) Richer countries are happier than poorer countries. 3) As countries get richer, they tend to get happier.

The following chart takes the average levels of satisfaction reported on the Gallup Poll’s 0-10 scale, and plots it against G.D.P. per capita (note the log scale):

The correlation between average levels of happiness and average incomes is very high — greater than 0.8.

The relationship between happiness and log income appears nearly linear. Thus, a 10% rise in income in a rich country like the USA appears to increase happiness by about as much as a 10% rise in income in Burundi — in fact, the slope appears to get steeper above $15K!

A 10% rise in income in Burundi requires one-sixtieth as much income as a 10% rise in income in the USA. Thus, even if the slope is three times as steep for rich countries as poor countries (as Wolfers & Stevenson estimate), this still means than an extra $100 has about a twenty-times-greater effect on happiness in Burundi.

“The Economics of Happiness, Part 1 & Part 2,” by Justin Wolfers

Robert J. Barro and Rachel M. McCleary (”Religion and Economic Growth Across Countries” & “Religion and Political Economy in an International Panel“) researched the relationship between religion and development.

Their cross-country analysis shows that per capita gdp has a significantly negative effect on religion, both in terms of beliefs and participation. This tendency is gradual as countries grow richer. A steady pattern of secularization has only applied to a few countries, such as Britain, France, and Germany.

For a given level of religious participation, increases in core religious beliefs — notably belief in hell, heaven, and an afterlife — tend to increase economic growth. In contrast, for given religious beliefs, increases in church attendance tend to reduce economic growth. In other words, the main growth effect is a positive response to an increase in believing relative to belonging (attending).

A certain amount of participation in religious activities is positive, in that people acquire useful beliefs. But if people spend too much time in religious activities, there is a negative effect on economic growth.

Religious participation is correlated with a lower probability of substance abuse, juvenile delinquency (Michael J. Donahue and Peter L. Benson, “Religion and the Well-Being of Adolescents“),  and depression (”Immigrant Generation, Assimilation and Adolescent Psychological Well-being“), and positive attitudes toward marriage and having children (Elaine Marchena and Linda J. Waite, “Re-assessing Family Goals and Attitudes in Late Adolescence”).

Overall, urbanization has a negative effect on religiosity, particularly in terms of participation.

“Religion and Economic Development,” by Rachel M. McCleary

As human societies grow richer, people have fewer children. In most species, such an increase in available resources leads in the opposite reproductive direction. What makes the “demographic transition” even more paradoxical is that in less developed times and places, the rich do not have smaller families than the poor.

Most explanations of the demographic transition are social, and none is really satisfactory.

A study by Agnar Helgason, of deCODE Genetics, has recently provided a new explanation: that the mixing-up of people caused by the urbanisation which normally accompanies development is, itself, partly responsible — because it breaks up optimal mating patterns.

Iceland’s records since its founding by a few Vikings are so good that the antecedents of today’s inhabitants (apart from a handful of recent immigrants) are known with precision. Its medical records are also good, and most Icelanders have given genetic samples to deCode.

The study’s principal finding is that the most fecund marriages are between distant cousins. The optimum degree of outbreeding (measured in terms of the number of children and grandchildren produced) lay somewhere between cousins of the third and fourth degrees.

(”Kissing cousins, missing children,” The Economist)

Icelandic women born between 1800 and 1824 who mated with a third cousin had significantly more children and grandchildren (4.0 and 9.2, respectively) than women who hooked up with someone no closer than an eighth cousin (3.3 and 7.3). Those proportions held up among women born more than a century later when couples were, on average, having fewer children.

Despite the general pattern for reproductive success favoring close kinship, couples that were second cousins or more closely related did not have as many children.

With close inbreeding — between first cousins — there is a significant increase in the probability that both partners will share one or more detrimental recessive genes, leading to a 25 percent chance that these genes will be expressed in each pregnancy.

Mating with a relative might reduce a woman’s chance of having a miscarriage caused by immunological incompatibility between a mother and her child. Some individuals have an antigen (a protein that can launch an immune response) on the surface of their red blood cells called a rhesus factor. In some cases — typically during a second pregnancy — when a woman gets pregnant, she and her fetus may have incompatible blood cells, which could trigger the mother’s immune system to treat the fetus as a foreign intruder, causing a miscarriage. This occurrence is less probable if the parents are closely related, because their blood makeup is more likely to match.

It may be that the enhanced reproductive success at the level of third and fourth cousins (who on average would be expected to have inherited 0.8 percent to 0.2 percent of their genes from a common ancestor) represents a point of balance between the competing advantages and disadvantages of inbreeding and outbreeding.

(”When Incest Is Best,” by Nikhil Swaminathan)