A few years ago, the idea of capitalism without capital was trending as the world’s largest companies had no tangible assets but ran on intellectual property, network effects, brand, etc. Now, the same companies are spending on physical assets like never before. And it is not just semiconductors. With GPUs turning out to be energy guzzlers, the biggest delimiter of AI’s progress is now energy. Big tech is spending on power generation (turbines, solar cells), storage (batteries) and transmission (transformers) at an unprecedented scale. This blog brings about the point that has represented humanity’s progress best – how we use energy. He begins by saying why capitalism is a temporary condition and the ultimate unit of progress is not money but that of energy (joules).
He draws from the work of Vaclav Smil, the author of the book ‘How the world really works’: “Coal gives humans access to immense stores of ancient solar energy. You can see a parallel to wealth in that phrase alone. Steam will turn that energy into mechanical work, replacing what he calls prime mover energy (human and animal labor). Oil makes enormous amounts of energy portable while electricity makes it transmissible and almost infinitely adaptable.
Smil puts numbers on this.
In 1800, the world had access to roughly 0.05 gigajoules of useful energy per person each year. By 1900 it was 2.7. By 1950, about 10. By 2000, 28. By 2020, roughly 34.
In a little over two centuries, useful energy per person increased nearly 700-fold.
The average person today commands roughly the energy equivalent of 60 adults working continuously, day and night. In affluent countries, the equivalent is closer to 200–240 permanent laborers.
And the averages hide enormous differences.
Measured in primary energy, someone in one of the world’s poorest countries may use less than 10 GJ a year. India is around 20–30. The global average is roughly 75–80. China is above 100. Western Europe and Japan generally sit around 120–160. The United States is closer to 250–280.
It sounds a lot like how GDP per capita is distributed. We measure GDP in dollars, but money can be printed, thus distorting its exchange rate versus the stored value of work. In that sense, energy may be civilization’s only uncorruptible currency.”
With AI too, intelligence is just a manifestation of energy as models use GPUs running on power to see patterns and deliver outputs to us. He ends with an irony that talks about our ‘comprehension deficit’ in a world with abundant intelligence: “Modernity is a black box. Light comes from a switch, and meat comes from a carton lined with a maxi pad. It’s all so effortless. Students of economics read I, Pencil to appreciate how capitalism’s profit-motive and competition actually lead to complex chains of cooperation. The side effect of the story is a (demoralizing?) inference that the world is so invisibly complicated now that you should feel good in your choice of major because it’s strategic to be a symbol-pusher since details are hopelessly infinite. (Sorry, did I go to far here? I’m an econ major, so it’s kind of like Chappelle using the n-word. Kinda? Nevermind.)
Smil’s punchy take on specialization: You could meet real Renaissance men on Florence’s Piazza Signoria in 1500, but not for too long after that…By the middle of the 18th century, Diderot and d’Alembert could still assemble a group capable of summing up much of their era’s knowledge in the Encyclopédie…In 1872, a century after the appearance of the last volume of the Encyclopédie, any collection of knowledge had to resort to the superficial treatment of a rapidly expanding range of topics…today, it is impossible to sum up our understanding even within narrowly circumscribed specialties…experts in particle physics would find it very hard to understand even the first page of a new research paper in viral immunology …Highly specialized branches of modern science have become so arcane” that many practitioners must train into their thirties “in order to join the new priesthood.”
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