Showing posts with label Adam Smith. Show all posts
Showing posts with label Adam Smith. Show all posts

Wednesday, August 5, 2026

Massive AI Infrastructure Planned in the E.U. and U.S.: A Synergistic Opportunity

The relationship between human and artificial intelligence is a tantalizing but formidable investigative topic requiring much more intelligence than I can proffer. The likelihood of interlarding emotion and desire to warp the former under the gravitational pull of selfishness may render us the weaker party even though, at least as of 2026, we humans still held the strings. That the human mind is not far-reaching enough in its intellectual gaze may be why we are so afraid of the potential of AI as being able at some point to displease our desire to control it (and just about everything else under the Sun). The advent of planned AI gigafactories in the E.U. and giant data centers in the U.S. presented American and European elected officials in 2026 with a synergistic opportunity that, if successfully achieved, could cause a leap in AI while paradoxically showcasing the human mind and thus possibly increasing our confidence in ourselves while decreasing our corresponding fear of AI.

At the AI Action Summit in the E.U. in February, 2025, President von der Leyen announced a plan  to build “up to seven AI gigafactories . . . to train advance AI models and catch up with global tech companies.”[1] Gigafactories “are large-scale computing facilities equipped with state-of-the-art, highly specialised chips designed to train the next generation of AI technologies—notably the most advanced large language models, which require crunching trillions of data points.”[2] So many data points would present the need for huge data centers to house so much data. So it is highly relevant that over in the U.S., in late July, 2026, President Trump announced a plan to repurpose “large chunks of federal land to host enormous data centers and the power plants needed to run them” in order to “accelerate the development of artificial intelligence.”[3] The obvious yet politically challenging synergistic conclusion would be to open both the factories and data centers to both European and American tech companies.

The net gain from specialization and “trade” can be gleamed simply from reading Adam Smith’s famous text, The Wealth of Nations. Getting in the way of such a lucrative “marriage,” with both countries anxious to thwart China’s intent to dominate the tech sector, including AI, was the E.U.’s enormous fine against Google for having operated a search engine in preference to the company rather than its competitors. The Trump Administration’s defense of Google and the E.U.’s less business-friendly Digital Act clashed and this difference could quell any political interests in favor of linking the gigafactories and data centers in spite of the tremendous potential synergy.

Moreover, both the Commission’s “rhetoric about the urgency of catching up with the US and China” and U.S. Energy Secretary Chris Wright hoping that the U.S. “wins the A.I. race” evince a mercantile governmental position that is at odds with joint mega-projects. In his text, Smith argues that the economic advantages to two countries trading with each other as each takes advantage of its comparative advantage vastly exceed economic gain from countries being exclusively oriented to their own gain (and even trying to cause other countries to lose, economically and in terms of AI). Whether a government is trying to maximize its storage of gold and silver or its exclusive AI technology, the resulting technology achievable by E.U. and U.S. firms (and governments) by linking the planned gigafactories to the planned data centers can be anticipated to be much greater. 

Such a feat would take the enlightened self-interest that is in leadership oriented to the long-term. For both the E.U. and U.S., the threat of China’s dominance in AI—in particular, how the autocratic government might use its AI to spy on the West and even undermine Western tech companies and even governments—highlights the self-interest part of enlightened self-interest, which in turn is associated with visionary rather than exclusively transactional leadership. The presidents of the E.U. and U.S. (i.e., the respective heads of the respective executive branches, whom I contend can be regarded as the respective presidents of the respective unions) would have to look past the Commission’s fine against Google (without cancelling the fine, for no common ground on that score need be supposed or demanded as a precondition for broader synergistic relations).

Moreover, high officials of both the E.U. and U.S. would also have to look askance at the natural political interest of each administration to defend and look out for the interests of home tech companies while being unconcerned with or even hostile to giving greater access to tech companies based in the other union. A synergistic agreement with respect to sharing access to the gigafactories and data centers would benefit from a vision of Western civilization out in front on AI as geo-political foes Russia and China are forced to try to catch up rather than dominate and thwart from up front. In this way, foreign policy, trade policy, and tech policy can be seen as dovetailing, which itself implies some synergy. The question in mid-2026 was perhaps whether the human, all too human intelligence of the politicians in high office in the two unions would be enlightened enough over narrow self-interests (both of the unions and the respective politicians themselves!) for artificial intelligence to be able to leverage tremendous synergy. In this relationship, I am afraid that we are the weaker party.



1. Luca Bertuzzi, “EU Opens Call for Seven ‘Gigafactories’ to Train Next-Generation AI Technologies,” Euronews.com, 30 July, 2026.
2. Ibid.
3. Brad Plumer, “Energy Dept. Wants to Put Data Centers on U.S. Land,” The New York Times, July 31, 2026. Print edition. Online: https://www.nytimes.com/2026/07/29/climate/trump-federal-data-centers.html 

Monday, April 7, 2025

Tariffs as a Negotiating Tactic: Undercut by Wall Street Expediency

With all the economic and political turmoil from the anticipated American tariffs, it may be tempting, especially for financially-oriented CEOs and billionaires looking at quarterly reports, to call the whole thing off even though doing so would deflate the American attempt to renegotiate trade bilaterally with other countries. The concerns of the wealthy, whether corporations or individuals, have their place, but arguably should not be allowed to "lead the proverbial dog from behind, lest the dog run in circles and get nowhere." Moreover, the notion that any goal that is difficult and takes some time to materialize can or even should be vetoed by momentary passions at the outset is problematic and short-sighted. That U.S. President Trump's announcement of bilateral tariffs quickly brought fifty countries to the negotiating table is significant as a good sign for the United States, as long as that country's powerful business plutocracy (i.e., private concentrations of wealth that seek to govern) can be kept from vetoing the emergent trade policy, which at least in part is oriented to trade negotiation and ultimately to the notion that fair trade is conducive to increased free trade. 

As of 3:10 pm (CET) on April 7, 2025, the Euro STOXX 50 was down 5.27 percent, and the STOXX 600 lost 5.15 percent of its value. “The bloodbath is in full swing, and that’s exactly what you see when you look at the European markets. There is no safe haven; equity markets have entered a complete free-fall with no clear bottom in sight,” according to Zaye Capital Markets.[1] Meanwhile, the Dow Jones opened down 3.2 percent.[2] “The sheer volatility was enough to spook CEOs on that rainy Monday in New York. The Dow “briefly erased a morning loss of 1,700 points, shot up more than 800 points, then went back to a loss of 629 points.”[3] The S&P 500 “likewise made sudden up-and-down lurching movements”.[4]

U.S. President Trump had “announced a 20% across-the-board tariff on imports from the European Union, set to take effect on 9 April,” with steel, aluminum and cars being subject to a separate 25% rate; over all, over €380 billion in E.U.-made products could be affected.[5]

In that uneasy context, I contend that two markers are worthy of attention, only one of which is arguably productive.  E.U. President von der Leyen proposed to her counterpart, U.S. President Trump, that both unions cut their respective tariffs to zero; essentially, there would be a free-trade agreement on industrial goods. Just such an overture is in line with President’s intent that other countries get rid of their unfair trading practices, which, the president believed, had aggravated the U.S. trade deficits for decades. In this regard, President von der Leyen’s proposal can be viewed as an overture, which could lead to a counter-proposal that not only tariffs, but also non-tariff barriers of the E.U. be removed (or that the E.U. compensate the U.S. for those annually).

Adam Smith’s ideal of competitive free-trade rather than mercantilism presupposes trade that is free even of non-tariff barriers so comparative advantage can be a major factor in international trade. To be sure, national-security concerns are arguably legitimate constraints on Smith’s ideal of competitive advantage. Being dependent on China for computer chips would be risky for both the E.U. and U.S. because China could hold either or both unions hostage as Taiwan is invaded by China with impunity.

So von der Leyen’s response was in “the right direction,” if free and fair trade was among Trump’s goals in unilaterally imposing tariffs—that is to say, to the extent that the announcement of tariffs was geared to triggering real negotiations.

That the billionaire hedge fund manager, Bill Ackman, a supporter of President Trump, just one day earlier, had “urged the president to pause his sweeping new tariffs, warning they could economically devastate America if implemented, as planned,” can be likened to a driver unilaterally letting some air out of his own car’s tires just before a race.[vi] Ackman may have been rich, but his intelligence was lacking in his assumption that the tariffs would be permanent even though fifty governments were already willing to negotiate on trade with the American government. Also, his understanding of negotiation could have used a spare tire.

It is one thing for a republic to be an open society, and quite another for a dog to be led by its own tail, meaning for the U.S. Government to be led by greedy and short-sighted finance managers and CEOs of even major corporations. The enlightened self-interest of whom would be focused on the wealth that could be obtained from fewer trading obstacles in other countries, for the money that an American-based (and owned) company can possibly be made on exports from the U.S. is hardly nugatory. The capture of legislative and regulatory bodies by private companies and billionaires is a danger not only to democracy itself, but also to a country’s pursuit of its long-term strategic interests globally. A dog that is led by its hungry tail doesn’t get very far, and an argument can be made that such a dog doesn’t deserve to get very far, for weakness within a polity is hardly laudatory. Put another way, that elected offices in a republic have terms of years rather than, say, just a few months, is an important impediment to short-term passions in society seeking to get their way in policy. Sometimes long-term goals require momentary sacrifice even if the measures are erroneously assumed to be permanent rather than negotiating tactics.


1. Angela Barnes, “European Markets Dive as Global Tariff Fears Shake Investor Confidence,” Euronews.com, April 7, 2025.
2. Ibid.
3. The Associated Press, “Stocks Are Making Wild Swings as Markets Assess the Damage from Trump’s Trade War,” Apnews.com, April 7, 2025.
4. Ibid.
5. Jorge Liboreiro, “Von der Leyen Offers Trump ‘Zero-For-Zero’ Tariffs Deal on All Industrial Goods,” Euronews.com, April 7, 2025.
6. Lee Moran, “Billionaire Trump Backer Warns America of ‘Self-Induced Economic Nuclear Winter.” The Huffington Post, April 7, 2025.

Tuesday, October 29, 2024

Be Fruitful and Multiply

John Locke claimed that “the main intention of nature” is “the increase of mankind and the continuation of the species,” the “preservation of all mankind” being a “law of nature.”[1] Centuries later, Locke’s assumption that an increased population necessarily makes the preservation of the species more likely could be challenged in a way that he could hardly have imagined. The human population reached 8.16 billion at the end of 2023, as compared with only 2 billion of our species having been alive in 1900. The exponential increase of energy-consuming organic hominoids has undoubtedly been a cause of the increased carbon emissions arising from human sources, and therefore of climate change in the Anthropocene. The biblical permission to be fruitful and multiply may have come from an eternal source (i.e., Yahweh), but that the divine decree is to be applied regardless of the size of the population as well as the impact that the human imprint is having on the environment, including the climate, is, I submit, a faulty and foolhardy assumption to make in the twenty-first century. The decree in the biblical narrative could be interpreted as a mandate that the Hebrews, freed from slavery in Egypt, follow to fully occupy the promised land.  Empirically, it may even be time for humanity to take stock of its increased numbers globally.

By suggesting that the human population has grown too much, given the finitude of our planet’s resources, I do not mean that wide swaths of the human population on this planet should be plagued, starved, or blown up. Such a specious ends-justify-the-means rationale for harm is the theme of one of the DaVinci Code movies, wherein the bio-destructive antagonist is clearly crazy. Even the Rev. Thomas Malthus, in his Essay on the Principle of Population (1798), relegated to Nature the clean-up role of using disease, famine, and increased conflict to get the number of humans on Earth back within ecologizing constraints, which is to say, to get human population down to a number that is consistent with the resources on Earth. In the twenty-first century, we might add, and does not ruin the planet in the process. Theoretically stated, a population growth rate that is behaving like a maximizing variable in mathematics, even if the derivative is negative (i.e., the rate of acceleration is decreasing), is a problem because such a variable has no problem piercing an ecosystem’s boundaries. Yet this is not done with impunity from Nature, according to Malthus.

According to one scholar, Malthus’ main theme is that a species’ population “inevitably grows beyond what the food supply can sustain.”[2] I have also read elsewhere that Malthus only claims that a population can grow beyond what the food supply can sustain. Even this throws a wrench into the deist assumption that a divine designer can be inferred from the order in Nature, so Malthus’ claim was controversial in his day.

Mitigating Nature’s devices to restore a population to good measure, Malthus admits that “the discrepancy between food and population spurs” industry, which in turn can enhance food growth and production such that the gap is closed.[3] But with the population at over 8 billion in 2024, I suspect that Malthus would have warned of impending natural limits to resources such as land and water (especially in the midst of climate change) as being something hard that even human enterprise must accept; the planet’s resources are, after all, finite. Furthermore, even if scientific advancement can render one resource more efficiently used and even augment it, another resource could then become a bottleneck, or hard constraint.

Whether as a divine decree or a natural, non-deist process, a larger human population is not necessarily beneficial for the species. Antedating Malthus’s work on population by about a half-century, however, Adam Smith, in The Theory of Moral Sentiments, “invokes the invisible hand in arguing that the earth’s increasing fertility benefits humanity as a whole, despite [economic] inequality and the monopolization of land ownership by a few. The landlord can only eat a tiny portion of his land’s produce, the rest of which feeds the people who provide his luxuries.[4] The rich, despite their ‘natural selfishness and rapacity,’ are thus ‘led by an invisible hand to make nearly the same distribution of the necessities of life which would have been made had the earth been divided into equal portions among all its inhabitants; and thus without intending it, without knowing it, advance the interest of society, and afford means to the multiplication of the species.’[5] The rich man, motivated by ‘luxury and caprice,’ rather than ‘humanity’ or ‘justice,’[6] thus promotes a salutary ‘end which was no part of his intention.’”[7] In other words, industriousness has the unintended presumably beneficial consequences of advancing civilization and increasing the human population. Whereas a civilizing influence is arguably good under any circumstance, Smith’s assumption that increasing the size of the population is not in our day as unqualifiably beneficial as Smith assumed it to be in population growth from prosperity being limited to being in proportion  to its additional largess.

In Wealth of Nations, “Smith argues that the accumulation of capital and the increase of national wealth help ‘the great body of the people’ to ‘thrive,’ and that population growth is ‘the most decisive mark of prosperity.’”[8] This result of thriving is constrained rather than unlimited, for Smith maintains that, “’Every species of animals naturally multiplies in proportion to the means of their subsistence.’”[9] An increase in population is an unintended beneficial consequence only in some relation to a period’s economic prosperity. But Smith undercuts Malthus’ claim that industriousness can catch food production up to a given population level because the prosperity resulting from the increase in industriousness or productivity causes the population to increase, albeit proportionately rather than maximally. Prosperity begets more people, perhaps to such an extent that the benefits from improved food-production productivity may not be enough to feed the larger population. Admittedly, Smith’s claim that family planning can be used to keep the standard of living up during a period of industriousness—rather than decreasing as the economic benefits of the additional industriousness are spread thin (i.e., decreasing GNP per capita) as the population increases due to the prosperity—could also mean that the proportioned population growth does not outstrip the enhanced food production. Perhaps it can be realistically said, therefore, that closing the gap between food availability and population can be expected to be problematic.

Similar to the idea that a tax cut can “pay for itself” by stimulating economic activity (GNP) and thus generating more tax revenue going into government coffers—a theory that has been empirically disproved since Reagan’s tax cuts in the U.S. in 1981—growing ourselves economically out of a gap between food production and the global population is too idealistic. Once that population reaches a certain level, “hard” constraints in terms of resources, which were not something that Malthus would have considered given the low population of humans on Earth in 1798 relative to the planet’s abundance, can become relevant in functioning like a “brick wall” that even scientific and technological advancement cannot penetrate. Yet Smith had written of an upper-bound, or “full complement,” of “riches” that is “allowed” in a geographical area by “nature,” such as in the soil, there, but this is geographically limited whereas in the twenty-first century, the human impact on the worsening conditions of the planet’s atmosphere and oceans could essentially move that brick wall closer in, hence narrowing the distance that human industriousness can go.[10] There is a big difference, in other words, between the limits to industry given the nature of a local ecosystem and running up against the limits of resources globally, such as in having drilled up all of the deposits of oil in the earth.

Unfortunately, reducing the extent, or depth, of the human imprint on the planet, whether in terms of the population or its offshoots such as pollution, warmer oceans (and air), and soil erosion, is an externality as far as markets, whether competitive, oligarchical, or monopolistic, are concerned. The political muscle of large concentrations of private wealth, whether of billionaires or large corporations, can styme government regulatory action to protect the overall good. Plato and Aristotle claimed that a passionate crowd is the downside of a demos (i.e., democracy), but perhaps today plutocracy, or the rule of (privately held) wealth, is the downside or even the inexorable eventual result of representative democracy.

So, where are we as a species if even the unintended beneficial consequence in the efficient allocation of resources, goods, and services in a competitive market is not enough to outweigh the baleful consequences of self-interest not only in terms of maximizing the chances of self-preservation, but also the preservation of one’s genes in offspring? Even in their 80s, Robert De Niro and Al Pacino, two famous Hollywood actors, became fathers yet again. Lest it be contended that they were selfish in knowingly fathering children that could not be expected to know their respective fathers for many years, the obverse possibility, namely, that science may one day extend the human lifespan even possibly indefinitely, could mean that population size could jump like the burst of new acceleration of a rocket from its second state igniting and adding a jolt of added thrust. No one would seriously contend that economic industriousness could close the gap between such a population size and the natural limits of the planet’s resources.

I submit that countries with low or even declining birth-rates should not feel the need economically or normatively to promote population growth by public policy. Furthermore, China, much of Africa, and especially India should take more seriously the interest of the species in prudently getting its population size down to size while doing so is still possible, and, absent these regions taking an interest in the good of the species, multilateral global governance should be strengthened particularly in terms of enforcement powers in the interest of the species. In this regard, the United Nations is a bad joke—an embarrassment, actually. For the species cannot rely on Smith’s unintended benefits of competitive markets to redress externalities; even Smith recognized the need for government, and he even warned of the likely collusion between business and government at the expense of labor, and, I might add, of the species itself.  For short-term economic prosperity to be more pressing than the longer-term interests of the species can be reckoned as a vulnerability in the very constitution of the human mind itself, and of course corporations like to invest in elected representatives and people tend to vote, both with their wallets and purses in mind.

This writing draws on my multidisciplinary studies that unfortunately kept me out of the much-siloed ivory towers of American provincialism that have been so populated by epistemological and administrative pedestrians of incrementalism. To be sure, seeing connections between seemingly far-ranging academic areas is not much valued by folks whose eyesight has been trained on minute analytical distinctions that fail the “so what” question yet satisfy Adam Smith’s claim that specialization of labor boosts productivity in business. Even so, I have been writing publicly to apply my eighteen years of formal university education and four more of post-doctoral study under a scholar of historical moral, political, and religious thought for the good of humanity in spite of our species’ narrowness and yet paradoxical arrogance that functions as if on stilts during a flood. Why the inclusion of benevolentia universalis in addition to my interest in connecting seemingly unrelatable ideas or theories and making societal (and global) blind-spots transparent is a question that I have not so far been able to answer. From my multidisciplinary perspective, from theology to political economy, I am struck by how interrelated human phenomena are, and by how much flies under the proverbial radar screen at least in societal public discourse. Both the interrelatedness and the societal and global “blind spots” pertain to population and climate change, as well as to ethics and political economy; Smith’s field, after all, was moral philosophy rather than economics, the latter of which, as a field, subsequently materialized in large part because of Smith’s Wealth of Nations. Why does anyone seek to contribute to the species in spite of its stubborn, selfish refusal to change—to develop—even for its own good? Entrenched ignorance on stilts during a flood is not a very attractive beneficiary of charitable benevolence, and yet perhaps instinctually we feel the urge to help the human gene pool to persevere. Perhaps my judgment is overly negative or pessimistic. Nietzsche wrote that no philosopher is a person of one’s own time. Such creatures tend to dig and travel cognitively, whereas most people remain in their hometowns. Perhaps I have been writing for another and you are along for the ride. Nevertheless, I do hope that my thinking stimulates your own, because I believe our species very much needs new thoughts this century.



1. John Locke, Two Treatises of Government, P. Laslett, ed. (Cambridge: Cambridge University Press, 1963), First Treatise, sec. 59 and Second Treatise, sec. 7.
2. Peter Minowitz, Profits, Priests, and Princes: Adam Smith’s Emancipation of Economics from Politics and Religion (Stanford, CA: Stanford University Press, 1993), p. 291n31.
3. Ibid.
4. Ibid., p. 124. Minowitz quotes from Smith, Adam. The Theory of Moral Sentiments, Ed. D. D. Raphael and A. L. Macfie (Oxford: Oxford University Press, 1976), IV. I.10.
5. Ibid. Minowitz quotes from Smith, Adam. The Theory of Moral Sentiments, Ed. D. D. Raphael and A. L. Macfie (Oxford: Oxford University Press, 1976), IV. I.10.
6. Ibid. Minowitz quotes from Smith, Adam. The Theory of Moral Sentiments, Ed. D. D. Raphael and A. L. Macfie (Oxford: Oxford University Press, 1976), IV. I.10.
7. Ibid. Minowitz quotes from Smith, Adam. The Theory of Moral Sentiments, Ed. D. D. Raphael and A. L. Macfie (Oxford: Oxford University Press, 1976), IV. I.9.
8. Ibid., p. 127. The passages that Minowitz quotes are from Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. ed. R. H. Campbell, A. S. Skinner, and W. B. Todd (Oxford: Oxford University Press, 1976), I.viii.21-23, 43.
9. Ibid. The passages that Minowitz quotes are from Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. ed. R. H. Campbell, A. S. Skinner, and W. B. Todd (Oxford: Oxford University Press, 1976), I.viii.39-40.
10. Ibid., pp. 126-27. The passages that Minowitz quotes are from Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. ed. R. H. Campbell, A. S. Skinner, and W. B. Todd (Oxford: Oxford University Press, 1976), I.ix.14.

Friday, February 23, 2024

On the Role of Agribusiness in Global Warming

Agriculture is a major source of carbon and methane emissions, which in turn are responsible for the general trend of the warming of the planet’s atmosphere and oceans. In fact, agriculture emits more than all of the cars on the roads. 10 percent of the emissions carbon dioxide and methane in the U.S. come from the agricultural sector. Livestock is the biggest source of methane. Cows, for example, emit methane. Methane from a number or sources, including the thawing permafrost, accounted for 30 percent of global warming in 2023. As global population has grown exponentially since the early 1900s, herds of livestock at farms have expanded, at least in the U.S., due to the increasing demand.[1] We are biological animals, and we too must eat. More people means that more food is needed, and the agricultural lobby in the U.S. is not about to let the governments require every resident to become a vegetarian. Indeed, the economic and political power of the large agribusinesses in the U.S. have effectively staved off federal and state regulations regarding emissions. It comes down to population, capitalism, and plutocracy warping democracy.

In the early 80s, the farm lobby in the U.S. “began to get concerned about environmental regulations” and made sure the FDA would not regulate American farms.[2] The EPA has delegated permits to the States, but they have been “uneven in issuing permits. In 2009, a law barring the EPA from applying clear air regulations to livestock” took effect.[3] The agriculture lobby has thus been “extremely effective.”[4] This has been so even in spite of the Paris Agreement reached in 2016, and the steadily increasing average global temperatures. A U.S. Government-sponsored report admits that increased demand/consumption of meat impacts climate change, which in itself is interesting given all the political donations and lobbying by the agribusiness companies in the U.S., but the report concludes that people in developing countries should eat less meat.[5] Apparently Americans are uniquely privileged to die of heart-disease. Perhaps the hospital lobby wants to encourage more business thanks to third-party payors.

The figures on the political contributions and lobbying by agribusinesses (and oil companies) are mind-blowing. For instance, American agribusiness spent a record $165 million on federal lobbying in 2022.[6] A total of $128 million went to political contributions to campaigns in the 2021-2022 cycle.[7] The sheer amounts spent lend credibility to the claim that wealth rather than votes rule: plutocracy over the veneer of democracy in America. The capture of regulatory agencies by the companies or industries being regulated has existed in the academic literature since at least the 1980s. So too has the strategic use of regulation. For example, the capture of methane at farms through technology qualifies for government subsidies, but only the bigger agribusinesses can afford this technology. Additionally, JP Morgan and other large banks have been lending primarily to large agribusinesses because they are less risky than smaller farms. It is no surprise, when all is said and done, that medium and small farms have been going out of business for decades. I submit that this cannot be explained by economies of scale alone.

To be sure, a lot of agribusinesses have pledged to be more transparent on the emissions from operations, but very few of the businesses report on the bulk of their emissions.[8] Transparency only goes so far until entrenched concentrations of economic wealth (e.g., agribusinesses) find that holding the curtains open too much can hurt business. Moreover, both the political donors and their “elected representatives” both have an interest in maintaining the veneer that the public interest is being served. Adam Smith’s invisible hand only works in a competitive market, whereas neither agribusiness nor the market for political donations in Congress is a competitive market. In Wealth of Nations, Smith does not apply the competitive-market price mechanism to government. In fact, political contributions from businesses can be thought of as a special case of price-fixing.

The encroachments of plutocracy on representative democracy are largely hidden from view, and the corruption does seem to be ineluctable. Given large enough concentrations of private wealth, the buying of political power seems inevitable. Smith wrote as much concerning the use of government by managements outweighing the ability of labor unions to do just that. He predicted the strikes and the one-sided involvement of police and even military troops. The cost of plutocracy at the expense of the public good is much more since public good and the viability of our species came to depend on our baleful impact on the earth’s climate and ecosystems.  Even so, the negative impact of a political economy of business is dwarfed by the negative impact from the sheer growth of the human population on this planet since the 1800s. As intractable as the partisan, self-serving, and narrow involvement of business in government is, it would be difficult for a population that has gone from 2 billion to 7 billion in the twentieth century to begin to trim the sails by discouraging population growth. For one thing, reducing the number of potential consumers would be bad for business.


1. Georgina Gustin, “Climate Change and Agriculture,” Yale University, February 22, 2024.
2. Ibid.
3. Ibid.
4. Ibid.
5. Ibid.
6. Madison McVan, “GRAPHIC: Agribusiness Spent a Record-breaking $165 million on Federal Lobbying Last Year,” Investigate Midwest, February 16, 2023.
7.Agribusiness Top Contributors,” Open Secrets.
8. Georgina Gustin, “Climate Change and Agriculture,” Yale University, February 22, 2024.

Thursday, February 22, 2024

Energy and Global Population

There is a temptation, especially since the global average temperature reached the 1.5C increase threshold in 2023 much faster than anticipated, to focus narrowly on the progress in renewable energy sources without placing it in perspective relative to the total amount of energy being used globally, the annual increases in energy demand, and the root cause, the explosive growth in human population since the early 20th century. The strategic geo-political international interests of countries impacted and should thus be considered as well.  

According to Nick Butler, a former advisor at BP, a European oil company, the global use of energy increased 4-fold by 2024 since 1965. The increased use of energy commercially has led to increased trade as supply has become global. The world has thus become even more interdependent, which means that yet another basis for political instability has sprung up. Interruptions in supply led to a political push in the U.S. for energy independence. Even though as of 2024 every country still depended on the global trade in energy, the U.S. was trending towards energy independence and could eventually even be in a position of being able to export energy supplies without importing any. It’s debatable, however, whether exporting energy increases a country’s power. It had not worked for OPEC in managing prices, although the oil shocks in 1974 and 1979 gave the impression that OPEC could have considerable leverage over the U.S. As it turned out, substitution and the development of new supplies undercut OPEC’s higher prices. In contrast, Butler contends, building up sources of energy is a source of wealth, though political instability can also result as fights can break out over the new wealth.[1]

Besides being at odds with efforts to reduce carbon emissions if the stock is exported to be consumed, maximizing stocks of oil, natural gas, and coal as a source of a country’s wealth be wrongheaded. It may suffer from the same fallacy that is in mercantilism. Under that economic policy, a country minimizes imports and maximizes exports in order to accumulate as much silver and gold as possible. According to Adam Smith, “The exportation of gold and silver in trade might frequently be advantageous to the country.”[2] Historically, “the exportation of gold and silver in order to purchase foreign goods, did not always diminish the quantity of those metals in the [British] kingdom. That, to the contrary, [the exportation] might frequently increase that quantity.”[3] This still assumes that increasing the stocks represents an increase in a country’s wealth. Before critiquing that assumption, let’s look at the argument wherein exporting gold and silver to pay for imports actually winds up increasing the domestic supply of those metals to a net-increase.”

How could trading away some of those precious metals that were used as money increase a country’s wealth? If a country has gold and silver in surplus, part of it could be exchanged “for something else, which may satisfy a part of [the domestic] wants, and increase [the people’s] enjoyments” at home.[4] The benefits from the exports of the metals to pay for imports of goods extend back to domestic manufacturers being able to produce more output, given the increased demand, and thus increase the division of labor—Smith’s big thing!—and thereby produce goods more efficiently.  According to Smith, “By means of [the increased demand], the narrowness of the home market does not hinder the division of labour in any particular branch of art or manufacture from being carried to the highest perfection.”[5] The increased division of labor enhances efficiency of production, which in turn makes the pricing of exports more competitive, and thus demand increases. As exports to satisfy the increased foreign demand for the goods rise, the gold and silver that are used abroad to pay for the goods come into the home country and thus increase its supply of the two metals.

As for the need to increase the holdings of gold and silver as much as possible, the assumption that this enhances a country’s ability to fight a war is something else that Smith contests in his text. Regarding the need for stocks of silver and gold from which to be able to send abroad some in order to pay for the home army while it is fighting abroad, “(t)he commodities most proper for being transported to distant countries, in order to purchase there, either the pay and provisions of an army, or some part of the money of the mercantile republick (sic) to be employed in purchasing them, seem to be the finer and more improved manufactures.”[6] These, rather than sending silver and gold, have the benefit of increasing the demand of manufactures. “The enormous expense of the late war,” Smith contends, “must have been chiefly defrayed, not by the exportation of gold and silver, but by that of British commodities of some kind or other.”[7] So the need to accumulate silver and gold by minimize the imports of manufactured goods while maximizing exports—the key tenet of mercantilism—is, according to Smith, less beneficial than free-trade. Moreover, he holds that the market mechanism is much better than government fiat in allocating goods, services, and even metals used as money and wealth.

Similarly, perhaps exporting other commodities than coal, liquified natural gas, and oil might benefit the U.S. more by enhancing the efficiency of domestic producers of other goods (and services), especially if economies of scale exist, and increasing employment since more workers would be required and each could be more efficient and thus valuable to the companies. Additionally, carbon emissions would not be as high were the U.S. to sit on, rather than export, its stockpiles of “dirty” energy sources.

Admittedly, the pressure from unmet energy demand in other countries that are not energy-independent would tempt the U.S. Government and American companies to respectively allow and make more exports of coal, liquified natural gas, and oil because such sales would be lucrative. Behind this pressure is the relationship between a steeply growing global population and the ongoing prevalence of the “dirty” energy sources in meeting the increasing demand from an exponentially growing population. Indeed, because of shale, the US had become the largest exporter of natural gas in the world by 2024.

As of February, the world had 4 billion more people than in 1970. That translates into a 10,000 increase per hour, which in turn means 200 million new customers for commercial energy supplies every year.[8] Along with the increased global population, oil consumption increased by 150% since 1970. Because renewables were still focused on electricity, which was only one fourth of energy demand globally in 2023, the “dirty” sources were still supplying most of the increased demand.[9] Put another way, the increased supply of renewables was not even keeping up with the annual increases in demand for energy. In spite of the carbon-emission targets, oil and gas still accounted for 80% of global energy in early 2024.[10]

Most of the increase in energy demand and all the increase in carbon emissions during the previous 20 years was in Asia Pacific (esp. China).  By 2024, China was importing a lot of energy supplies—even markedly changing the patterns of global trade away from the U.S. being the dominant import market—and accounted for about a third of total global emissions.[11] Crude oil imports doubled from 2013 and 2023.[12]

Unfortunately, forecasts did not include a dramatic reduction in oil and coal use. In China, 300 million poor people in China were projected in 2024 to move into the middle class by 2050. This means more energy use, and thus more oil and gas. Nuclear energy was being developed there, but coal was still a major source of employment in 2023, and fit the Party’s goal of shifting wealth inland. Also, wanting to be the world’s leading industrial power is not in the direction of decreasing the commercial demand for energy.[13]

It is important to include the impact on international relations. As of the start of 2024, China was dependent on imports from Russia and the Middle East. As the U.S. strategic oil-imports interest in policing the Middle East diminishes as the U.S. gets closer to energy independence, the increased interest of China in exercising control in that region meant that a new conflict-zone might open up between the two empires. 

With the world going from over 8 billion people in late 2023 to a projected nearly 10 billion in 1045, we can anticipate more demand for energy, and with it, more international (and domestic) instability. With plenty of oil still in the ground and decreased demand due to substitutes such as electric cars and nuclear energy, the world won’t run out of oil.[14] This is bad news for our species as the planet continues to warm. Even as the press highlights the increase in renewable energy sources, the default is much, much larger and thus diminishing the share of “dirty” sources will not come as quickly as we might think. In short, we are in quite a mess as a species both because it isn’t easy to reduce our sluggish reliance on sluggish oil and invisible gas, and our global population grew so fast and so much in the 20th century and has continued to increase in the first two decades of the next century that, as biological organisms needing external sources of energy, the energy demand of our species is likely to keep on increasing even if we become more efficient. The expediential increase in population can be so large that its baleful effects outweigh any gain from increased efficiency. Again, the baseline is so massive that changes from greater efficiency merely mitigate the increased harm done. 

Similarly, the large amount of energy consumption from “dirty” sources relative to the increased supply from renewables renders any shift very gradual. The Titanic could not turn fast enough to avoid the iceberg in 1912 because the rudder was too small for the mass, and thus momentum, of the ship. We would like to turn away from “dirty” sources of energy, but our rudder pales in comparison to the magnitude (and proportion) of those sources. We need a bigger rudder, or we too may flounder. The global economy does not “turn on a dime.”


1. Nick Butler, Lecture on Energy and Security, Yale University, February 15, 2024.
2. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, 4th edn., R. H. Campbell, A. S. Skinner, and W. B. Todd, ed.s (Oxford, UK: Clarendon Press, 1776/1976), sec 9, p. 433.
3. Ibid., sec 7, p. 431.
4. Ibid., sec 31, p. 446.
5. Ibid., sec 31, pp. 446-47.
6. Ibid., sec 29, p. 444.
7.  Ibid., sec 27, p. 443.
8. Nick Butler, Lecture on Energy and Security, Yale University, February 15, 2024.
9.  Ibid.
10. Ibid.
11. Ibid.
12. Ibid.
13. Ibid.
14. Ibid.