I just wanted to start by saying I’ve become much more lackadaisical about these posts recently. My work is getting interesting, so I’m not putting as much time and effort into my research prior to posting. I’m mostly shooting from the hip based on whatever comes to mind. I still enjoy this though so I’ll keep doing it, and I hope my couple of readers don’t mind the decline in quality.

With that said, it’s so interesting that Joel Kurtzman detects the exact opposite problem as Richard Heinberg. For those who remember, Richard Heinberg wrote “The End of Growth” in which he posited that there would be no more economic growth after 2010 (lol, lmao even). He claimed that this was because the world had entered an inextricable supply crunch, there just wasn’t enough stuff to go around (especially oil!) and our economy was already well past the carrying capacity of the planet. This meant that we couldn’t keep growing, because without more stuff to put in our factories we couldn’t make products to sell to people. We would all have to get by with less.

Hilariously, Joel Kurtzman detects the opposite problem from his vantage point in 1987. He detects a severe overproduction of commodities and finished goods caused by the industrialization of the global south and its competition with America, Europe and Japan. In Kurtzman’s thesis, we are entering an inescapable race to the bottom where wages will continue to fall further and further as companies try to make money while the prices of goods fall. Not only that but the nations of the world have financed their overproduction through the accumulation of debt, which they won’t be able to pay off as prices fall meaning there will be a debt collapse and further unemployment.

I’m sure both authors would think me uncharitable towards their theses, but that was my reading from their books.

The point is, I think both of them are suffering from extreme recency bias. Heinberg was writing after a decade of constricted oil supply had caused a rise in prices and had been followed by an economy crash. He thought the constricted supply would continue forever and the low-growth era following the crash was permanent.

Kurtzman was writing after a supply crunch had turned into a supply glut. OPEC’s oil embargo of the 70s had forced the world’s economies to become more efficient and induced many companies to step up their own oil production. In the late 80s, rising oil investment turned into an oil boom, and to maintain market share OPEC countries increased production without the consent of the entire group. This, alongside new technologies to make oil use more efficient, led to an oil glut and depressed prices. Add to this that prices were falling in other sectors, and Kurtzman thought this trend would continue forever.

Both Kurtzman and Heinberg astutely identified trends in their immediate present, and then extrapolated those trends infinitely into the future to arrive at their desired policy goals. For Heinberg: it was degrowth. For Kurtzman: it was protectionism. Both of them failed to understand that actions change with changing conditions. Heinberg didn’t realize that a rise in oil prices would spur investment into new extraction methods (fracking) and more efficient usage of oil (hybrid/electric cars). Kurtzman didn’t understand that falling commodity prices allows companies to produce more for less, nor did he understand that the American economy didn’t need manufacturing jobs to stay highly paid. If more stuff is being produced while still profitable, then consumers win because prices go down. And American consumers won most of all because tech jobs were replacing laborious manufacturing jobs.

I know pontificating is a hard job, I think all the pontifications I’ve made on this blog have been off the mark (though I don’t ask for money). But I find it fascinating that these two authors erred in exactly the same way to arrive at completely divergent answers. I’d love to have Kurtzman from 1987 debate Heinberg from 2010. Don’t let them use historical data, just explain to each other why will commodity prices have to remain high/low for the foreseeable future? I wonder whose head would explode first.