Humanity’s Great Energy Enrichment
If an inherently scarce energy supply explains the limited economies and grim living standards of the pre-industrial era, energy abundance and improved human well-being remain the distinguishing characteristics of modern, industrialized society.
In the second half of the eighteenth century, England found an escape route from the energy scarcity that had constricted economic growth in agrarian societies over most of history. As the historian E. A. Wrigley of Cambridge University points out, “The [pre-industrial] energy flow was insufficient to underwrite increased output on the scale associated with an ‘industrial revolution.’ Only by gaining access to a vast store rather than a limited flow could this problem be solved.”1 England found that “vast store” of energy in coal, though in the nineteenth and twentieth centuries industrial societies found even more in oil and natural gas.
The creative applications of the dense and versatile energy stored in abundant fossil fuels that began around 1800 and are still spreading across the world have transformed human life and the productive capacities of economies. “The ability to transcend both the land constraint through the use of fossil fuel and the muscle constraint by mechanization which increased power (largely fueled by coal) were founding acts of the modern world.”2 Among the profound benefits of such energy enrichment, life expectancy has tripled and global real income per person has increased at least ten to thirtyfold.
In his world history A Farewell to Alms, Gregory Clark explains what this change meant: “Around 1800, in northwestern Europe and North America, man’s long sojourn in the Malthusian world ended. . . . Between 1770 and 1860 . . . the English population tripled. Yet, real incomes, instead of plummeting, rose. . . . A new era dawned.”3
The hockey-stick graph at the beginning of this book, charting human progress from AD 1 to 2000, tells many stories but none more dramatic than the story of mankind’s great energy enrichment, otherwise known as the Industrial Revolution. The vertical trajectory, beginning around 1800, shows the extent to which man-made emissions of carbon dioxide (indicating the consumption of fossil fuels) track sustained economic growth and the continual rise of income for the majority of the human race. Increasing use of fossil fuels still tracks rising economic growth with a statistical correlation of over 95 percent—about as close as such a correlation ever gets.4
When the chemical energy in coal was converted to heat and then to mechanical energy by a machine in the latter part of the eighteenth century, man was liberated from the physical limits of muscle—his own and animals’—that had consigned the majority of men to lives of arduous physical labor and poverty with extremely limited mobility. When electricity became available for lighting, heat, and power in now countless household appliances, industrial motors, and electronics, a second energy revolution took place, amplifying human well-being beyond measure. And the internal combustion engine that still powers our vehicles vastly expanded the horizons of individual liberty, mobility, and choice. By converting electric energy into photons (light) our minute digital devices transmit to each person an endless stream of information, communication, and entertainment.
Energy Enrichment as a Necessary Condition
Historians and economists have long debated the origin, causes, conditions, timing, and even the appropriate name for the great change that emerged in England in the nineteenth century. The most common name, the “Industrial Revolution,” is typically attributed to the historian Arnold Toynbee (1889–1975), although French historians used the name earlier than Toynbee. Instead of identifying the breakthrough as an industrial revolution, some scholars argue that the great change is more properly understood as either a technological, economic, capitalist, market, cultural, promethean, or energy revolution. Although many historians give little weight to the energy factor, we are persuaded by Wrigley, David Landes of Harvard, and others that an exponential increase in the energy available in fossil fuels was not a cause but a necessary condition of the sustained productivity, economic growth, and human enrichment that distinguish this historical transformation.5
But for the abundance and the versatility of the energy stored in fossil fuels, the sustained economic growth per capita and improvements in human welfare that the Industrial Revolution produced would have been impossible. “The quantity of energy needed,” Wrigley concludes, “to underwrite the scale of material production reached in England by the middle of the 19th century would have been far beyond attainment in an organic economy and, in the absence of coal, this would have prevented growth on a comparable scale.”6 In other words, the many technological advances occurring during the eighteenth century in England are conceivable without coal, but the sustained growth of the economy in the nineteenth and twentieth centuries would have been impossible without the vast store of fossil fuels and their countless, innovative applications. Fossil fuels do not explain why the Industrial Revolution began but why it continued and gained steam along the way.
In fact, what we call the Industrial Revolution might be more aptly called the Great Energy Enrichment, a term we borrow from the inimitable polymath Deirdre McCloskey.7 The sea change in man’s material horizons, widely characterized as industrial or economic, arose from physical, biological, and chemical factors: a shift from reliance on a variable flow of energy derived from annual plant growth to reliance on a huge store of the remains of once-living plants and organisms geologically concentrated over millions of years, that is, coal, natural gas, and oil.
The key development that propelled the Industrial Revolution was therefore physical. Now there’s no doubt that the economic system known as capitalism, articulated in 1776 by the classical economist Adam Smith in An Inquiry into the Nature and Causes of the Wealth of Nations, was also a necessary condition of the unprecedented growth that marked the Industrial Revolution, as were English legal institutions. Indeed, the coincidence of tapping into a vast store of energy, the development of transformative technologies like the steam engine, and capitalism, was an extraordinarily powerful—although fortuitous—dynamic.
We would also submit that fundamental Judeo-Christian principles regarding the value of the human person also played a powerful role. The Declaration of Independence imbeds this principle as a foundation of our country when it declares the inalienable rights of the individual to “life, liberty and the pursuit of happiness.” It is, perhaps, not merely a coincidence that in 1807, when the British Parliament finally passed William Wilberforce’s bill to end the English slave trade, the largest industrial complex in the world using steam power and lighting generated by coal opened in Manchester, England.
With the energy enrichment made possible by fossil fuels, an enduring middle class with upward mobility emerged for the first time in history.8 “[N]othing has ever furnished so many opportunities to rise in the social scale as the Industrial Revolution,” writes Landes.9
Public discourse about global warming and climate policies ignores fundamental physical realities about energy and overlooks the profound benefits of carbon-rich energy. Our healthy, comfortable, affluent lives depend on our high consumption of fossil fuels. The complex and intricate global systems that constantly deliver the energy services we assume in developed countries are the result of miraculously fine-tuned engineering that evolved over the past century. We are a fossil-fueled civilization. Without fully comparable energy alternatives, climate policies to rapidly subvert the energy-rich hydrocarbons risk a necessary foundation for human well-being and economic productivity.
From an Organic Economy to an Energy-Enriched Mineral Economy
Until coal was harnessed on a massive scale in the English Industrial Revolution, mankind’s energy and material horizons were physically bounded by the energy harvested from natural materials such as wood, plants, animals, human muscle, and diffuse flows of wind and water. “As long as the supplies both of mechanical and heat energy were conditioned by the annual quantum of insolation [solar radiation received by the earth] and the [relatively low] efficiency of plant photosynthesis in capturing incoming solar radiation,” Wrigley explains, “it was idle to expect a radical improvement in the material conditions of the bulk of mankind.”10 Fossil fuels vastly expanded the scope of mankind’s material horizon and energy budget.
The contrast between an agrarian economy reliant on organic sources of energy and raw materials and a mineral economy reliant on mineral fuels and inorganic raw materials throws light on the wellsprings of the unprecedented growth generated by the Industrial Revolution. The word “organic” is now used vaguely to describe anything considered “natural.” But to speak precisely, organic material is derived from living matter.
Organic—also known as agrarian—economies derive almost all energy and raw materials from the annual cycle of plant growth. All fuel, food, fodder, and fiber needed for human subsistence depend on organic materials produced from the land. Human creativity may stretch the yield of land and products made from wood, wool, flax, leather, hops, barley, reeds, straw, fur, bone, and horn. The material base and energy budget for all manufacture in an organic economy, however, is inherently limited and subject to nature’s whims such as floods and droughts. With coal, the productive capacity of the economy was no longer limited to the “fortune” of the harvest from the soil.
Minerals are not derived from living matter. There are perhaps four thousand identified minerals, of which iron ore, aluminum, clay, copper, and silica may be familiar to our readers. Coal, oil, and natural gas are considered mineral energy fuels, but that classification gets complicated. The carbon content of fossilized plants and animals that lived millions of years ago is higher than that of most minerals. The point, however, is that fossil fuels are not subject to the vicissitudes of plant growth nor do they compete with other needed resources for land use. And most importantly, they offer a massive, concentrated source of fuel with much higher energy content than wood. More than any other so-called organic resource, chronically scarce wood—the sole organic source of heat energy—was the bottleneck of pre-industrial economies.
To appreciate Wrigley’s emphasis on the inescapable physical realities of energy, consider that the harvest from a hayfield may capture a year’s worth of energy flow from the sun,11 while the harvest of mature timber might capture a century of solar insolation. As a source of heat energy, peat contains a store of energy concentrated over thousands of years. But coal, natural gas, and oil provide a more accessible, larger, and more concentrated store of solar energy highly compressed over millions of years. “The secret of the Industrial Revolution,” according to Matt Ridley, “was shifting from current solar power to stored solar power.”12
As a mineral fuel, coal not only provides a massive stock of heat energy that breaks the energy bottleneck of wood. Coal also allows the energy-intensive extraction and processing of a wide variety of minerals that were previously precluded for reason of costs. The major industries that developed during and after the Industrial Revolution were based on mineral raw materials. Metals, chemicals, pottery, glass, bricks, plastics, building materials, and many textiles all depend on raw materials.
The shift from the organic economy to a mineral economy was slow, but step by step it opened a path for growth that did not strain a resource in fixed supply—as occurred with wood for centuries before. As Wrigley explains, “[It] meant that expansion no longer entailed a call upon a flow [of energy] whose scale could be enlarged only with much difficulty, but was accommodated instead by increasing calls on a capital stock [of energy] that was often large enough to pose no problems even when demand grew to unprecedented levels.”13
In contrast to other minerals, fossils generate enough heat energy in volumes large enough to extract and convert “unpromising” mineral substances into useful materials. These versatile hydrocarbons also can serve as raw materials which the “ultimate resource”—human intellect and imagination—can turn into “synthetic” materials, as we call them. With the master resource and the ultimate resource, we will never run out of energy. Given the now irreplaceable marvel of fossil fuels, however, the highest caution should greet political demands that we end the era of fossil fuels right now.
Every production process (and each human breath) involves the expenditure of energy. The shift from an economy circumscribed by the annual flow of energy from the sun, inefficiently captured by photosynthesis in plants, to an economy based on a store of solar energy concentrated over millions of years revolutionized the material basis of all production.
In England, it was not until around 1850 that a full-fledged, energy-intensive, mineral economy propelled substantial economic growth both in the aggregate and per person. Conventional explanation in pure economic terms overlooks something more fundamental about the energy escape route from pre-industrial energy scarcity. The analytical framework, largely based upon Adam Smith’s view of the division of labor, capital, and market economies, may explain the economic growth in the golden age of the Netherlands, but it cannot explain the exponential growth in the aggregate and per capita that later appeared in England and now extends across the world.
Smith, Ricardo, Malthus, and many of today’s neo-classical economists conclude that sustained growth that could indefinitely improve real income per person was impossible. According to economist George Gilder, “The leading economic growth model, devised by the Nobel laureate Robert Solow of MIT, assigned as much as 80 percent of this advance to a ‘residual’—a factor left over after accounting for the factors of production in the ken of economists: labor, capital and natural resources. In other words, economists can pretend to explain only 20 percent of the apparent 119-fold expansion.”14 We submit that the kind of energy stored in affordable fossil fuels helps to explain a meaningful portion of the exponential growth that indeed did occur.
Earlier we shared Ridley’s vivid portrait of the scale and intensity of the energy enrichment. His jaw-dropping numbers bear repeating. The magnitude of the energy gain that coal contributed to England’s economy in the late nineteenth century is staggering. By 1870, coal provided an amount of heat energy equivalent to the caloric needs of 850 million additional laborers. For perspective, England’s population was about twenty million in 1870. And the mechanical energy available in England’s steam engines was equivalent to the mechanical power available in six million horses. Without that steam engine, the horses would have consumed three times the wheat harvest. Need we point out the magnitude of the energy gain involved? Indeed, England’s nineteenth-century economic miracle was energy enrichment unlike anything seen before. “That is how impossible the task of Britain’s nineteenth century miracle would have been without fossil fuels.”16
FIGURE 6.1
Energy Consumption in England and Wales (1561–1570) Compared with Italy (1561–1570)
Source: E.A. Wrigley, Energy and the English Industrial Révolution, p. 95
The Improving State of the World
Between 1900 and 2015, life expectancy increased from forty-seven to seventy-nine years in the United States. “Americans now have more creature comforts, they work fewer hours in their lifetimes, their work is less physically demanding, they devote more time to acquiring a better education, they have more options to select a livelihood and live a more fulfilling life, they have greater economic and social freedom and they have more leisure time and greater ability to enjoy it. And these trends are evident not just in the United States but, for the most part, elsewhere as well.”15
By around 1800, the human population reached one billion people. Within two centuries, human numbers increased more than sevenfold. Yet the gross world product increased more than seventyfold, and real income per capita rose at least tenfold as a conservatively estimated global average. The productivity of the world economy meant that there was more than enough life-sustaining energy “stuff” and “material” to meet the basic needs of all human beings. Poverty was no longer an ineluctable fate for the majority of people.17
Instead of population pressure forming a Malthusian ceiling on growth—or worse, a collapse, as predicted by the classical economists and the modern doomsayers—living standards for the much larger human population have continuously improved in developed and developing countries with the exception of those regions wracked with violence and corrupt rulers. As Indur Goklany shows, “Never before had the indicators of the success of the human species advanced as rapidly as in the past quarter millennium.”18 Improvements advanced earlier and at a more rapid rate in Western countries, but since 1950, global indicators of human well-being have advanced more rapidly than population.
“And in truth,” Deirdre McCloskey spiritedly argues, “the amount by which average material welfare multiplied under actually existing innovations exceeds by far the official and cautious statistics. Stuff unimaginable in 1700 or 1820 crowds our lives from anesthesia to air conditioning. The new stuff makes the factors 16 or 18 or even 30 [i.e., by what multiple real income per capita has increased] into gross understatements.”19 And the speed of economic development in some countries has been amazing. England’s Industrial Revolution took three centuries, but South Korea’s took only four decades.
How the Great Energy Enrichment Began
England was not the first country to harness fossil fuels. Some societies with coal seams, oil deposits, and gas vents near the surface of the earth used fossil fuels for a certain period to great advantage. The Netherlands made highly productive use of peat, a relatively young, less concentrated hydrocarbon, and was primed to outpace England in industrialization. And then peat became scarce, and Holland’s economy stalled.
So why was it England—a small, island country—that changed the world? Historians still debate the multiple, reinforcing, and interrelated factors that led to England’s breakthrough. The physical presence of large deposits of coal alone doesn’t explain why or how England initiated the great change of industrialization.
Britain was more advanced than other countries in a number of categories. In food supply, population, life span, literacy, and the energy availability in coal, England had progressed further than any other country. In 1750, life expectancy in England was thirty-five years, while the global average was twenty-five, having risen by only a year since AD 1000. Global per capita income likewise had barely budged since 1000, whereas per capita income in England was rising at an annual rate of 0.36 percent, according to Angus Maddison’s numbers.20
Another advantage Britain enjoyed was the flurry of scientific activity from the mid-seventeenth century, exemplified by the work of Isaac Newton. Practical application of science led to many creative devices and instruments. Political and economic theory, such as Adam Smith’s Wealth of Nations, as well as legal and financial institutions that protected property rights and economic freedom also primed the pump for the English Industrial Revolution.
The use of the word “revolution” to describe the origins of industrialization is misleading because it connotes an abrupt change. What is commonly called the Industrial Revolution was indeed a monumental change, but it occurred over several centuries. The energy enrichment that literally fueled the economic productivity for which this revolution is known did not occur at a certain date, decade, or even century. England and other countries, particularly in Europe, had been using coal for heat energy from the late sixteenth century, but wood remained the dominant source of heat energy for centuries.
England’s use of coal steadily increased in the latter decades of the sixteenth century. Coal’s initial use was to provide heat energy to mine more coal, but wood, draft animals, and human muscle still provided the majority of energy consumed. By the middle of the nineteenth century, coal had become the predominant source of energy consumed in England.21
Industrialization of the more pervasively agrarian United States took off a little later than in England. Raw materials and foodstuffs exported from the United States to England were an important supplement to the needs of England’s industries and growing population. Without these “ghost acres,” many historians question whether England’s comprehensive industrialization would have been as successful. The story of American industrialization, however, is quite the same as England’s: dramatic rise in life expectancy, GDP per capita, population, and carbon dioxide emissions.
The proponents of a fast transition from fossil fuels to renewable fuels assume that energy sources are readily interchangeable. But the value of coal, natural gas, and crude oil is not only in their abundance and affordability but also in their chemical potency and versatility. An affordable, abundant, dense, versatile, reliable, controllable, and portable source of heat energy, coal was a source of thermal energy with a far higher heat content than wood. It made economical the energy-intense extraction and processing of metals and other mineral raw materials previously precluded or limited by energy cost. The flurry of scientific advances and energy innovations that emerged in the seventeenth century and continued through the next three centuries took beneficial advantage of these distinctive chemical properties of fossil fuels.22
This shift from the diffuse and variable flows of energy to the massive store of hydrocarbon minerals was a turning point for human progress. Energy was no longer inherently scarce.
Productivity Unleashed
The hallmark of the Industrial Revolution was the rapid and radical expansion of the productive powers of an economy. Efficiency is the amount of work completed per input of energy. Power is the amount of work performed per unit of time.23 Efficient and profitable enterprises produce more output per unit of input and thus can generate profit. The magic of fossil fuels is that their creative applications can exponentially increase output and thus overall efficiency. Let’s look at a few examples of the promethean gains in productivity.
Cotton
Cotton textiles were the flagship English industry at the time of the Industrial Revolution. According to Clark and Wrigley, the textile industry accounted for more than 50 percent of the increased productivity, and thus growth, in England during the entire nineteenth century. “Efficiency in converting raw cotton to cloth increased 14-fold from the 1760s to the 1860s, a growth rate of 2.4 percent per year, faster than productivity growth in most modern economies.”24 In 1760, transforming a pound of cotton into woven cloth took approximately eighteen man-hours. By 1860, the same work was completed in 1.5 man-hours.25 Similar gains were achieved across many industries.
Metals
Steel and cast iron are the raw materials for the physical infrastructure of modern societies. A huge supply of cheap coal revolutionized metallurgy and access to mineral resources previously limited because of the energy-intensity of extraction and processing. The concentrated energy in coal dramatically expanded the production of iron, steel, and other metal resources that had long remained scant and expensive. Transforming iron ore into steel requires tremendous heat energy, making the energy cost of metallurgy extremely high without an inexpensive, dense, and controllable source of thermal energy.
Before the Industrial Revolution, smelting required large volumes of wood or charcoal. Coal, where available in a huge store, eventually replaced wood to provide heat energy to smelt hundreds of millions of tons of iron ore at far less cost. Wales, without much timber but abundant coal, became one of the world’s major steel-producing regions. “Coal use permitted a rapid expansion of metals at low prices and in previously unimaginable quantities.”26
Light
Another example of the productivity achieved by the hydrocarbon energy enrichment is the staggering decline in the cost of basic services such as light itself. Could there be a greater gift of fossil fuels than the affordability of indoor and outdoor illumination? George Gilder calls the fall in the cost of lighting “one of the most astonishing increases in wealth in the history of mankind, a million-fold increase in the abundance and affordability of light itself. . . .27
In 1800, six hours of work in England at the average wage bought one hour of light from a tallow candle. In 2009, one half-second of work paid for an hour of illumination from a light bulb. The difference in labor costs in 1800 and 2009 means that the price of lighting decreased to one-tenth of 1 percent of its price in 1800.28 Modern versions of Thomas Edison’s incandescent light bulb deliver light three orders of magnitude greater than a candle.29
And fossil fuels saved the whales! In early industrial societies, whale blubber was the preferred source for lighting among the elites. Tallow candles made out of the rendered fat from sheep and cattle—a much smokier and smellier source of light, although still expensive, were used by the masses. The demand for whale blubber eventually decreased the population of whales. Kerosene derived from petroleum then replaced blubber and was a more efficient source of illumination.30
At the Heart of the Industrial Revolution: Mechanical Energy
The invention of a steam engine that translated the heat energy stored in coal into mechanical energy, replacing dependence on human or animal muscle to perform work on which all human societies had relied, unleashed the productivity, efficiency, and inventiveness for which the Industrial Revolution is known. These machines were far more powerful, tireless, and controllable than the amassed muscle of even hundreds of horses. This was a turning point for mankind. The transformation of the energy in coal and petroleum into mechanical power is the most important energy conversion in industrial civilization. If photosynthesis is the most fundamental natural energy conversion, the steam engine is the most fundamental anthropogenic conversion.
As the historian David Landes notes, “It was precisely the availability of inanimate sources of power that has enabled man to transcend the limitations of biology and increase his productivity a hundred times over. . . . It is no accident . . . that the growth of capital has been proportional to the consumption of fossil fuels.”31
Watt’s Steam Engine: The Emblem of the Industrial Revolution
The first true steam engine that could convert heat energy into mechanical energy was the invention of Thomas Newcomen around 1712. His engine, developed to pump water out of the coal mines, an instance of consuming energy to generate more energy, was extremely inefficient, converting only 1 percent or less of the heat energy released from burning coal, and the high cost limited its application. It was James Watt’s later steam engine, patented in 1769, which deservedly became the symbol of the British Industrial Revolution.
Watt’s machine converted 10 percent of the heat energy, consuming a fourth of the coal that Newcomen’s engine did, and was much faster.32 “This was the decisive breakthrough to an age of steam, not only because of the immediate economy of the fuel, . . . but even more because this improvement opened the way to continuing advances in efficiency that eventually brought the steam-engine within reach of all branches of the economy and made of it a universal prime mover.”33 Further refinements of the steam engine throughout the nineteenth century revolutionized transport.
Conversion of the heat energy in fossil fuels to mechanical power launched yet another chapter of the great energy enrichment when the internal combustion engine was developed. The passenger car made personal liberty possible on a scale unimaginable to our ancestors a century ago.
Landes stresses that “the key to the steam engine’s revolutionary effects on the pace of economic growth” was that “it consumed a mineral fuel [fossil fuel] and thereby made available to industry, for provision of motive power [movement] as against pure heat, a new and apparently boundless source of energy.”34 The value of an “apparently boundless,” concentrated store of energy in versatile fossil fuels remains a foundational driver of economic growth. And the young shale revolution that has unlocked the mother lode of oil and natural gas resources means that our store of hydrocarbon is virtually boundless—sustainable for centuries or millennia to come.
Choosing Energy Austerity?
Most climate policies assume the developed world will embrace “planned austerity” to decrease consumption of energy and a shift to the renewable energy sources of the past: wood (now given the more distinguished name “biomass”), wind, and solar. The policy makers behind these plans evidently discount the burgeoning growth of the world’s information-communications-technology (ICT) system—often considered the clean and green industry of the future. At the moment, the digital universe consumes 50 percent more energy than global aviation. “Shortly,” as Mark P. Mills calculates, “hourly Internet traffic will exceed the Internet’s annual traffic of the year 2000.”35 This ICT universe is totally dependent on highly reliable, affordable electric generation.
Our small smartphones may need a negligible electric charge to run for hours, and they may appear absolutely clean at the point of use, but they depend on thousands of data centers across the world, broadband wired and wireless networks, and the factories that manufacture our devices and related ICT hardware. The data centers consume huge volumes of electricity twenty-four hours per day. For a sense of the scale of energy use: “The average square foot of data center uses 100–200 times more electricity than does a square foot of a modern office building. Put another way, a tiny few thousand square foot data room uses more electricity than lighting up a one hundred thousand square foot shopping mall.”36 And there are tens of thousands of these data centers housed in huge warehouses.
Wind turbines and solar panels cannot power data centers. Google tried it, and it was a complete flop. Coal, natural gas, and nuclear are the only generating sources right now that can reliably power the data centers. The administrator of the Environmental Protection Agency may nonchalantly announce that coal is no longer “marketable.” The more sober Energy Information Agency, however, projects that fossil fuels will continue to meet 80 percent of global demand through 2040.37 Coal remains in high demand in developing countries, especially China, India, and Africa, because their leaders understand that the availability of electricity transforms the lives of the world’s most impoverished people.
Sustainable Fossil Fuels?
At least one of the classical economists’ contemporaries understood the role of energy in England’s Industrial Revolution. William Stanley Jevons (1835–1882) correctly assessed the magnitude of the energy revolution taking place around him—mankind’s liberation from the Malthusian trap. In The Coal Question he wrote, “With coal almost any feat is possible or easy; without it we are thrown back into the laborious poverty of earlier times.”38
But he too overlooked the factor of human ingenuity and was captured by Malthusian logic. Jevons expected that as England used more and more coal, the price would rise and thus arrest the phenomenal growth that he had witnessed. Coal, however, did not become scarce or more expensive. Indeed, coal-fired energy produced more energy, productivity, and income. More than 150 years later, the world’s coal supply remains massive.
Until the English Industrial Revolution, every other economic boom in human history eventually burned out because resources dwindled—whether timber, cropland, pasture, labor, water, or peat. These resources, in principle unlike coal, natural gas, and oil, are renewable and so replenish themselves but at a pace far too slow to meet ongoing demand. Coal in the English Industrial Revolution was a different story. As England used more coal, it actually became more accessible and cheaper.
Although not in principle renewable, fossil fuels remain abundant enough to sustain economic growth for many centuries until fully comparable or superior energy sources are genuinely available at scale. After four decades of predictions of the near-term depletion of oil and gas, the United States has now gained access to the protean store of oil and gas shale. Never underestimate human ingenuity.
FIGURE 6.2
Carbon Intensity of the U.S. Economy, 1949–2012
Source: U.S. Energy Information Administration (Oct. 2013).
More output from less input remains the inherent dynamic of economic growth from fossil fuels. Modern societies are getting more work out of each ton of fossil fuel. According to recent EIA data, the carbon intensity of the U.S. economy has been declining since 1949.39 (See Figure 6.2.) The United States now uses 50 percent less energy per unit of GDP than it did in 1950.
“A Farewell to Alms”
The greatest gift of the great energy enrichment, available in market economies today unless politics denies it, is the release of entire populations from abject poverty. In the Industrial Revolution, the poorest—not the already wealthy—were the greatest beneficiaries. “The plain fact is that the mechanization of production in the Industrial Revolution raised incomes across all classes,” remarks Matt Ridley.40
Obviously, the Industrial Revolution did not guarantee a swift release from poverty but the productivity of the economy made such a release physically and economically possible. “The increase in the productive powers of an industrialized society were such,” Wrigley concludes, “that for the first time in human history the miseries of poverty, from which previously only a minority of the population were exempt, could be put aside for whole populations. There were no guarantees but the potential for such a change existed.”41 By the second half of the twentieth century, major improvement in health, education, and general welfare was widespread, and a middle class was growing.
FIGURE 6.3
Average Annual Rate of Increase for Various Time Periods
Source: Indur Goklany, Humanity Unbound, p. 6.
The historian Gregory Clark of Princeton University, who titled his global economic history A Farewell to Alms, states his theme in bold terms:
The Industrial Revolution, a mere two hundred years ago, changed forever the possibilities for material consumption. Incomes per person began to undergo sustained growth in a favored group of countries. . . . Moreover the biggest beneficiary of the Industrial Revolution has so far been the unskilled.42
Figure 6.3 shows the barely measurable increase in global income per capita from 1 AD until 1750. The dramatic increase from 1750 to 2009 is strongly correlated with the first measurable increase in man-made emissions of carbon dioxide in human history, that is, the first intensive use of fossil fuels.
Clark’s figures on England in Figure 6.4 show what he characterizes as “the unprecedented, inexorable, all-pervading rise in incomes per person since 1800. The lifestyle of the average person in modern economies was not unknown in earlier economies: it is that of the rich in ancient Egypt or ancient Rome. What is different is that now paupers live like princes and princes live like emperors.”43 As Goklany more soberly characterizes these numbers, “Never in human history had indicators of human wellbeing advanced so rapidly.”44
FIGURE 6.4
Real Income per Person in England (1200–2000)
Source: Gregory Clark, A Farewell to Alms, p. 195
Greatest Gains to the Poor
Real income per capita calculated as an average may be highly misleading. But the most distinctive feature of the economic boom fueled by the Industrial Revolution is that the income gains accrued more to the poorest and the average worker than to the wealthy. The average English income headed upward around 1800. By 1850, it was 50 percent above the level of 1750 even though the population had tripled. As Ridley notes, “The rise was steepest for unskilled workers. . . . The share of national income captured by labour rose. . . . Real wages rose faster than real output throughout the nineteenth century, meaning that the benefit of cheaper goods was being garnered by the workers as consumers, not by bosses and landlords.”45
As the abundant heat, mechanical, and chemical energy supplied by coal increased productivity, the supply of goods increased while the price declined. A winter coat, which may have cost a month’s wages in 1800, may have cost only a week’s wages by 1850. As productivity increased, factory workers were more able to afford to buy the products they helped produce.
Ridley writes: “In Gregory King’s survey of the British population in 1688, 1.2 million laborers lived on four pounds/year and 1.3 million ‘cottagers’—peasants—lived on two pounds/year. That is to say, half of the entire nation lived in abject poverty; without charity they would starve. During the Industrial Revolution, there was plenty of poverty but neither as widespread nor as severe.”46 The violent protests of the nineteenth-century textile workers known as the Luddites against the laborsaving machines were short-lived. Although factory workers in the early stages of the Industrial Revolution may have worked, by modern standards, in dangerous and dirty work conditions, their living conditions were better than their tenant farming ancestors’, which is why they flocked to the factories from the farms.47
The Puzzle of Industrialized Economic Growth
Many traditional economists remain puzzled that the increased productivity and associated economic growth begun in the Industrial Revolution have never stopped. In Knowledge and Power, George Gilder reflects on the perplexing magnitude of modern economic growth. “The central scandal of traditional economics,” George Gilder writes, “has long been its inability to explain the scale of per capita economic growth over the last several centuries. It is no small thing. The sevenfold rise in world population since 1800 should have attenuated growth per capita. Yet the conventional gauges of per capita income soared some seventeen-fold, meaning a 119-fold absolute increase in output in 212 years.”48
The pivotal role of energy as a driver of sustained growth was also not foreseen by the classical economists who lived during the early days of the English Industrial Revolution. Adam Smith (1723–1790), David Ricardo (1772–1823), and Thomas Malthus (1776–1834) assumed that the “fortune of the economy” was intractably circumscribed by the annual harvest of food and natural raw materials from the “land,” as they named the material factor. These early economists also concluded that sustained growth in wages that could offer an escape from poverty for the majority of a growing population was impossible. The harvest of their organic economy could be extended by innovation and trade, but all three of these economists concluded that the law of diminishing returns would eventually slow and then arrest economic growth.
Added Mechanical Power at the Elbow
As Fred Cottrell explains: “A coal miner who consumes in his own body about 3,500 calories a day, will, if he mines 500 pounds of coal, produce coal with a heat value of 500 times the heat value of his food which he consumed while mining it. At 20 percent efficiency, he expends about 1 horsepower of mechanical energy to get the coal. Now if the coal he mines is burned in a steam engine of even 1 percent efficiency, it will yield about 27 horsepower-hours of mechanical energy. The surplus of mechanical energy gained would thus be 26 horsepower-hours, or the equivalent of 26 man-days per man-day. A coal miner who consumed about one-fifth as much food as a horse, could thus deliver through the steam engine about four times the mechanical energy which the average horse in Watt’s day was found to deliver.”49
And these were the gains in productivity at an early stage of the Industrial Revolution!
Their pessimistic outlook for enduring growth that could lift all boats was soon undermined by application of fossil fuels. Tapping into a massive store of mineral fuels and mineral raw materials provided an escape from the bottleneck in an agrarian economy reliant on fruits of the land for all energy sources and raw materials. The availability of fossil fuels, indeed, made the extent of land a less important production factor than the classical economists understandably then assumed.
Many modern economists still downplay the energy factor or subsume it under other economic factors such as technology, stock of machinery, or equipment. Without the vast store of controllable energy in fossil fuels, however, the substantial and sustained gains in real income per capita that distinguishes modern economic growth would have been physically impossible. The innovative use of fossil fuels on a massive scale helps explain, not necessarily why modern economic growth began, but why it never stopped.
Many historians also overlook the role of energy—this physically necessary variable—in their account of the radical changes associated with industrialization. And many economists don’t include energy in their models for economic growth. They recognize the technologies of power (machines that convert fossil fuel into mechanical power) but not the energy source itself. Yet the prodigious increase in the availability of concentrated hydrocarbon energy sources and advances in their conversion account for the difference between pre-industrial and industrialized societies.
Until the historical data were collected and analyzed in the second half of the twentieth century, many economists and historians viewed human progress—from the cave to the farm to the factory to the jumbo jet to the semi-conductor—as an incremental, cumulative, and unitary march of knowledge through time. While advances in ideas, technology, legal institutions, and economic systems may have followed that pattern of steady progress, advances in the basic living conditions of most human families did not until the great energy enrichment.
The historical data show that most of mankind was trapped in subsistence poverty for thousands of years until the Industrial Revolution. Periods of material progress followed by regression—not continuous improvement—appear to have been the common lot of mankind until a phenomenal departure from this trend around two hundred years ago on the island of Great Britain.
Smithian and Promethean: Two Kinds of Capital
The Industrial Revolution and the sustained economic growth it spawned—a decisive departure from previous history—cannot be adequately explained as yet another incremental, cumulative advance. The unprecedented economic growth associated with industrialization had a dual nature that was the product of happenstance: Adam Smith and fossil fuels. The advent of capitalistic economic systems explains a lot about the emergence of the Industrial Revolution, but it is the energy revolution—which we call Promethean—that explains why the economic growth—aggregate and per capita—did not slow and then halt as all previous booms in history had done. The coincidence of Smithian capitalism, with its understanding of the division of labor, trade, and accumulation of capital, and Promethean capitalism explains the uniqueness of the Industrial Revolution.
Smith especially stressed the connection between specialization of labor and productivity, yet output per worker was increased not only by specialization but also by the availability of fuel and mechanical power “at the elbow” of labor, as Wrigley puts it.50
Satanic Mills?
For many, the word “industrialization” evokes bleak images of Blake’s “dark satanic mills”—smoke-belching factories where workers trapped on assembly lines performed their mindless, repetitive motions. Karl Marx, Charles Dickens, and other writers decried the pollution, filth, and squalor in the new factories and urban apartments. Later writers, however, have pointed out that worse poverty, disease, pollution, and child labor certainly existed in England before the Industrial Revolution. Rural poverty may have been worse than urban poverty.
The poverty of early industrial England may be memorable because it was the first time politicians and writers expressed concern. The prosperity that industrial growth made possible indeed increased and helped institutionalize compassion. In the nineteenth century, when industrialization was spreading and the related commerce was exploding, slavery and child labor were abolished in most Western nations.
The Great Energy Divergence
Although the Western world now enjoys the greatest energy bounty, a larger portion of the developing world’s population also has access to electricity, the form of modern energy with transformative advantages for economic growth, health, and general well-being. Yet billions of people, mired in miserable poverty, still lack access to electricity. The energy poverty in Sub-Saharan Africa is likely far worse than that of our ancestors in pre-industrial societies.
The farewell to alms that modern economic growth made possible clearly has not eliminated chronic hunger in all countries. “Material consumption in some countries is now well below the pre-industrial norm. . . . Just as the Industrial Revolution reduced income inequalities within societies, it has increased them between societies,” Clark notes.51 The causes of this “Great Divergence” are analyzed in a book by that name by Kenneth Pomeranz. The gap in incomes between the poorest and richest countries is now of the order of fifty-to-one.52
In much of the developing world, better nutrition and increased access to modern medicine have extended life expectancy, and the rate of population growth has slowed. Yet many of these countries have not engendered stable, enduring legal institutions, and they don’t have the energy availability on which economic growth rests. Perhaps half of the world’s population still lacks access to low-cost, reliable, and safe electricity.53 Electric heat, lighting, and refrigeration still remain unavailable for a substantial portion of the population in many developing countries. As in all pre-industrial societies, energy scarcity perpetuates life spans still much briefer than in developed countries as well as poor health and harsh poverty in many African and Asian countries.
Contaminated drinking water, inadequate disposal of waste, and inadequately ventilated cook stoves burning dung and biomass remain major killers.54 Modern treatment plants for water and waste, although not expensive, cannot operate without electricity. And without electricity, an estimated one billion people receive poor healthcare in clinics and hospitals, where vaccines and medicines cannot be refrigerated and equipment cannot be sterilized. Without electric power, X-ray machines and incubators are useless.55
Half of all children in developing countries attend primary school without electricity. Power shortages and unplanned outages stall business activity. In Pakistan, outages of twelve to eighteen hours a day have amounted to a loss of 6 percent of gross domestic product and five hundred thousand jobs in recent years.56
These populations don’t need a diffuse flow of intermittent, far more expensive green energy. Subsidized, costly, and unreliable renewable systems of electric generation will not alleviate the energy poverty in these countries. They need base-load, reliable, cheap, on-demand electricity with basic emission control technology.
Fifty percent of Africans lack access to reliable electricity.57 In India, almost three hundred million people have no electric power at all, and another seven hundred million live without electricity in their homes.58 Blackouts in South Africa similarly stymie growth.59
The world’s poor don’t want “climate aid” to force them to buy wind turbines and solar panels. A survey conducted by the United Nations of over nine million people in developing countries found that taking action on climate change ranked last on a list of sixteen major needs, among which education, healthcare, jobs, and government reform led the list. So the United Nations, the wealthiest countries, and the scores of nongovernmental organizations swarming around the climate crusade would impose their green dreams on countries still fighting tuberculosis, malaria, and malnutrition? Caleb Rossiter clarifies the issue: “Real years added to real lives should trump the minimal impact that Africa’s carbon emissions could have on a theoretical catastrophe.”60
Denial of the severe limitations of renewable energy has been institutionalized in national governments and global organizations such as the United Nations. In an editorial in the Wall Street Journal titled “This Child Does Not Need a Solar Panel,” the Danish environmentalist Bjorn Lomborg denounces the moral callousness of the green delusion: “Providing the world’s most deprived countries with solar panels instead of better healthcare or education is inexcusable self-indulgence. Green energy sources may be good to keep on a single light or to charge a cellphone. But they are largely useless for tackling the main power challenges for the world’s poor.”61
Increasingly over the last six years, the United States, the European Union, and major international institutions such as the International Monetary Fund and the World Bank have been limiting aid for energy development to those projects based on renewable energy. A study in 2014 by the Center for Global Development found that thirty-eight of forty projects receiving funding over the past five years from the U.S. Overseas Private Investment Corporation (OPIC) were renewable projects. The same study found that sixty million additional persons would have gained access to electricity if OPIC had been allowed to invest in natural gas projects and not just renewables.62
The United Nations and rich countries are not only conditioning aid for energy development on green energy sources, they are diverting existing funds dedicated to economic development and education to “climate aid”—that is, more wind, solar, and biofuel projects. This is a tragic waste of billions of dollars that could enrich the lives of the billions of human beings still living in a dark, smoky world.
Since the Industrial Revolution, we have learned how the availability of affordable and reliable electricity is essential to fundamental human welfare and economic development. Rather than throwing away billions of dollars to inefficient renewable energies that make the green elites feel good, wealthy nations could assist poorer nations in developing electric systems based on hydrocarbons with effective emission controls for genuine pollutants, not carbon dioxide.
China’s urban skies are not darkened by the invisible, harmless natural compound that is carbon dioxide but by the uncontrolled emission of real pollutants that can impair health. The environmental record of the United States shows that this conventional pollution can be reduced by more than 80 percent. The energy-poor nations of the world need that technology rather than the ideologically-driven climate aid.
“But it is a strange moral calculus,” Indur Goklany write, “that endorses policies that would reduce existing gains in human wellbeing, increase the cost of humanity’s basic necessities, increase poverty and reduce the terrestrial biosphere’s future productivity and ability to support biomass, all in order to solve future problems that may not even exist or, if they do, are probably more easily solved by future generations who would be richer economically and technologically.”63
Historically Clueless: Climate Policies to Supplant Fossil Fuels Deny History
Climate policies to eliminate fossil fuels without fully comparable alternatives threaten to rupture the energy foundation of the modern world. Without authority in law, the Obama administration is dismembering the coal industry in the United States. Coal still provides the cheapest and most reliable source of electricity, and billions of dollars already have been invested successfully to reduce coal’s emissions of genuine pollutants.
The regressive effect of high-cost but low-performing green energy systems already harms middle-, low-, and fixed-income households in Germany and England. And energy intensive industries are leaving these countries for places with stable and lower energy costs but with fewer emission controls. In testimony before the U.S. Senate in December 2014, Dr. Benny Peiser, of the Global Warming Policy Foundation, concluded that current renewable mandates represent “undoubtedly one of the biggest wealth transfers from poor to rich in modern European history.”64
Such a wealth transfer is an about-face from the phenomenal improvements in human welfare to a regression, indeed a devolution, from the Industrial Revolution—a cruel policy choice by the wealthiest countries in the world. The ruling elites will not be affected, as was the case in all pre-industrial eras, but the majority of the population will bear the brunt of the economic decline. We doubt the average citizen is aware of the already damaging repercussions of the grand decarbonizing programs. Poll after poll demonstrates that a strong majority of Americans put climate change at the bottom of their long list of worries. Would the leaders of the wealthiest countries of the world actually force a return to the energy-scarce world of the pre-industrial era in which the rulers lived comfortable lives but the majority of a population lived in misery?
Take note of history. As Isaiah Berlin put it, “Disregard for the preferences and interests of individuals alive today in order to pursue some distant social goal that their rulers proclaim is their duty to promote has been a common cause of misery for people throughout the ages.”65
The great energy enrichment that began in England less than two hundred years ago remains a necessary condition of the substantial and sustained economic growth. The novelty of this Industrial Revolution is that the economic growth once ignited, endured and expanded. And the greatest rate of economic growth occurred in the second half of the twentieth century. If not shackled by climate policies, the shale gale of energy secured by innovative private actors in the United States could revive our national economy and open up opportunities for growth across the world.