This is the third part of a rewriting of the appendix to The World After Capital. In the first part, I provided evidence on the tremendous growth of physical capital over the past one hundred years. The second part dealt with looking at World War II production as an indication for how much excess capital we have above what we need to meet our needs. Now comes a more specific examination of our needs with regard to the sufficiency of capital.
The overall physical capital statistics provided earlier abstract away any regional differences. The examination of World War II showed that the US was able to meet people’s needs with a fraction of the available capital but obviously that wasn’t true elsewhere. In particular of course in the actual war zones much physical capital was destroyed, resulting in needs going unmet. In the following discussion too we will see that capital is not yet sufficient everywhere. Given the total amount of aggregate physical capital available now that is a distribution problem (which is really an attention scarcity problem). Paraphrasing a famous William Gibson quote: capital is already sufficient, it is just not yet evenly distributed.
Furthermore, I should caveat that I am providing a mix of statistics, anecdotes and arguments. My goal is not to make an incontrovertible case that capital is sufficient. I doubt this would be possible even with a lot more time, given the limited state of measurement of much of the world’s capital. Incidentally, I believe that eventually this paucity of data will be something humanity will look back in surprise, much as we sometimes wonder how things worked before we had mobile phones. Thankfully Max Roser, Hannah Ritchie, and the rest of the team at Our World in Data are starting to make a dent here. Instead, I am simply aiming to make a case that’s compelling enough to bolster the overall argument that attention has now become humanity’s critical scarcity.
I initially planned to publish this as a single post but am now realizing that would be much too long. I am breaking it up into a series of posts instead addressing one or two needs at a time.
In the following the passage from the needs section is in italics, followed by an examination of the sufficiency of capital. I would love feedback on the level of detail here.
Oxygen. On average, humans need about 550 liters of oxygen every day, depending on the size of our body and physical exertion. Our most common way of meeting this need is breathing air. Although that may sound obvious, we have developed other solutions through technology – for example, the blood of patients struggling to breathe can be oxygenated externally.
There is no shortage of oxygen in the Earth’s atmosphere. Throughout industrialization the issue has been air pollution. For example, in London the air was so bad that the Great Smog of 1952 killed four thousand people in the span of less than a week. More recently it has been Indian and Chinese cities that are experiencing similar levels of air pollution. This can definitely be seen as an example of a local insufficiency of capital. In the more developed countries the passage of clean air acts forced the installation of catalytic converters, a switch from coal to gas heat, etc. and largely resolved this deficiency. These same and even more advanced technologies (e.g. electric vehicles) can be deployed globally. China has already taken crucial steps in this direction, with the province of Hainan setting a 2030 deadline for all new and replacement vehicles to be emission free.
We should, however, not take the earth’s atmosphere for granted. Many different phenomena resulted in the existence of and maintenance of today’s breathable atmosphere. For example, the Earth’s magnetic field protects it from the solar winds which would otherwise tear off large parts of the atmosphere. A reduction in or even loss of the magnetic field is exactly the kind of long tail “Black Swan” type of event that we do not pay nearly enough attention to as humanity.
Water. We need to ingest two or three liters of water per day to stay hydrated depending on factors such as body size, exertion and temperature. In addition to drinking water and fluids that contain it, we have other solutions for this, such as the water contained in the foods that we eat.
As with oxygen, there is no shortage of water on Earth. The challenge is access to drinkable water which means sufficiently clean and desalinated water. Here too we can see how at an earlier point in development capital was insufficient. Again London serves as a great example: frequent Cholera outbreaks were the result of water wells that were not separated from sewage. John Snow famously documented the connection by establishing a detailed map in the 1854 outbreak which helped to overcome the prior “Miasma” theory of Cholera and ultimately resulted in London building out an elaborate water infrastructure.
A more recent example is the water crisis in Flint, Michigan where lead from old pipes resulted in toxic drinking water. So we can see how capital has been insufficient here and is still insufficient in some parts of the world but not because of some fundamental lack of technology or capital but rather because of a failure of attention to clean water access. The World Bank has come up with an estimate of only about $28 billion annually to provide everyone in the world with basic water, sanitation and hygiene, and about $114 billion to make these services available continuously. These surprisingly low numbers show how little physical capital would need to be deployed. Clean drinking water is a great example of the type of problem where markets tend to fail and hence attention allocation needs to happen through other processes (e.g. by electing a capable city government).
