In a push to wrap up my book The World After Capital to a point where I will make a print copy available, I am finally tackling the appendix one more time. The goal of the appendix is to provide more data to show that physical capital is no longer humanity’s binding constraint. Or in the language of the book, the goal is to show that physical capital is sufficient.
The plan of attack is as follows. I will first be pulling together some general data on global physical capital (this is today’s post). I will then use some data from World War II to show what can be accomplished when there is a decision to redirect physical capital towards fighting a specific crisis. Finally I plan to examine the sufficiency of capital with respect to our human needs.
It turns out to be surprisingly difficult to find global data on physical capital. The best source I have been able to locate is the World Bank, which publishes a data series on gross capital formation. Unfortunately the data here reaches back only to 1970 but it still shows an increase from roughly $5 trillion to $22 trillion in 2019 (this is measured on constant 2010 dollars, i.e. adjusted for inflation).
For triangulation it is worth considering the output of some things that require productive capacity. Put differently we can infer the availability of physical capital through outputs. To that end, I was able to find the following chart of global crude steel production over time
Compared to gross capital there is only about a twofold growth here from 1970 to today, but it is important to keep in mind that during that time period we have come up with many materials other than steel from which to make things, such as aluminum and of course plastics. Importantly though this graph lets us compare steel output today with output at the time of World War II and we can see that there has been more than an order of magnitude growth (roughly 15x).
What about finished goods production? This too is of course a good proxy for the amount of total available physical capital. A great example is the global production of cars. Here is a chart that shows it over time going back to the earliest days of the industry.
Here again we can see a roughly twofold increase relative to the 1970s and a greater 10x increase if we go back further. This chart has an important feature worth pointing out now: there is a dip to near zero production in the mid 1940s corresponding to World War II.
Here is a dramatic example of what all this productive capacity makes possible. The first commercially available handheld mobile phone was the Motorola DynaTAC 8000x which became available in 1984. Here is the growth of mobile phones since then, measured in active subscriptions (these are totaled from published carrier statistics)
Over the course of three decades we basically went from not having mobile phones to having more than the global population (this of course brings to mind William Gibson’s great quote that “[t]he future is already here – it’s just not evenly distributed” – with many people having two mobile phones, one for work and oner personal for example, while others have none).
And here is one more example that’s highly relevant to the climate crisis: the rate at which we have produced solar panels.
Over a decade and a half we went from basically making none, to making 150 Gigawatts in new panels on what looks like an exponential growth trajectory. Now crucially we are currently using a small part of our productive capital to make solar panels. How do we know this? Because we have not yet taken the drastic steps necessary to fighting the climate crisis, which will eventually have to reach levels similar to the resource deployment in World War II.
What is possible when a larger part of the economy is pointed at a specific challenge will be the next post.
