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MIT Has Predicted that Society Will Collapse in 2040 | Economics Explained - YouTube
Channel: Economics Explained
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in 1972 researchers at mit concluded
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that society was on track to collapse by
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the year 2040. a follow-up study
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conducted by an analyst at kpmg found
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that we are ahead of schedule advanced
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human civilizations have existed for at
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best 10 000 years in that time many
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great empires rose from nothing and
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returned to nothing leaving behind
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little more than artifacts and crumbling
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architecture while it's hard for
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historians to definitively say what
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caused any of these particular collapses
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the determining factors tend to fall
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into four broad categories political
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issues social and cultural issues
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environmental issues and of course the
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one that we're specifically interested
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in economic issues any civilization that
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has been reduced to little more than an
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entry into a textbook fell through some
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combination of these four factors
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some were almost instantaneous the great
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city of pompeii succumbing to the
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eruption of mount vesuvius some took a
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few weeks the aztec empire collapsed
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after 93 days of resistance against the
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spanish and some took centuries 300
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years separated the height of the roman
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empire with its eventual collapse our
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modern civilization is the greatest ever
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known hundreds of thousands of times
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wealthier and more advanced than even
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the most massive empires of history
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could have imagined if you are watching
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this video you have access to the
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internet if you have access to the
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internet you have access to a source of
[83]
knowledge that scholars and kings could
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not have dreamt of just a hundred years
[86]
ago the same is true for other modern
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luxuries that we take for granted
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climate control worldwide travel cheap
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and effective clothing medicine
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instantaneous communication plentiful
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and safe food water on tap and even
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little luxuries like being able to
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listen to your favorite song pretty much
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whenever you feel like it a question i
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get asked a lot is who is the richest
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person in history the answer elon musk
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or it was about a week ago when he was
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worth more than 270 billion dollars that
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might have changed depending on when you
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actually watch this video oh but what
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about rockefeller the rothschilds the
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romanovs or even this monster moosa
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fella that people keep on bringing up
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what about them sure they were rich for
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their time but their time was one of
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almost universal poverty despite their
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relative wealth they couldn't dream of
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all the amenities that you think nothing
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of let me tell you if i had the choice
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between my modern rented two-bedroom
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apartment and a sprawling 15th century
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french palace with no air conditioning
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no plumbing and no food that wouldn't
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give me cholera i would take the
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apartment 10 times out of 10 and you are
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a fool if you wouldn't do the same the
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best part is i haven't even mentioned
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war yet despite what most people might
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think based on their diet of cable news
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on the front page of reddit we are
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living through one of the most peaceful
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periods in human history ever
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overwhelmingly this has all been thanks
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to a combination of technology education
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and global cooperation even nations that
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have resentful hostilities bubbling away
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beneath the surface are more dependent
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on one another today than even the
[174]
closest of allies were back in the time
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of napoleon why get hostile when you can
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get rich it sounds vapid but it's a good
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thing albeit a fickle one
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comparing our modern global economy to
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even the greatest empires throughout
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history is like comparing a jet engine
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to a donkey that's not hyperbole that's
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how far ahead we are today but this is
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actually the problem sure a jet engine
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is faster and more powerful than a
[198]
donkey but it's less resilient one tiny
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flaw in its incredibly complex network
[203]
of interdependent components could
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render the whole thing useless what's
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worse is that it moves so fast and flies
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so high that even the slightest hiccup
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becomes catastrophic most of us alive
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today and especially those of us sitting
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at home watching internet videos on our
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smartphones would not know how to
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survive very long if we didn't have food
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within easy reach sometimes literally
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delivered to our door but i'm getting
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ahead of myself and probably starting to
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sound like some kind of deranged
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doomsday prepper screaming the end is
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nice so let's break down exactly how
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this mit study predicted that society
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would collapse what measurable metrics
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was mit looking at to determine that the
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world was going in a good or a bad
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direction what did these metrics tell us
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about the way our society would
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supposedly break down and finally is the
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fact that this report is ahead of
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schedule actually something to be
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worried about or is this all just the
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case of too much weight being given to
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statistical correlations
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okay so the mit study specifically
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titled the limits to growth set out to
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primarily explore if our current usage
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of the world's resources was sustainable
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spoiler alert it wasn't the study was
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actually one of the first economic
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studies ever to use computers sporting
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dynamic systematic models i am not a
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computer scientist so there are plenty
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of people who could explain what system
[322]
dynamics are far better than i could but
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in brief it's basically a piece of
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software that attempts to replicate the
[327]
workings of complex real-life systems by
[330]
replicating them in the software it
[333]
sounds very familiar to us today but
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remember this was taking place back in
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the 60s and the 70s where computers
[339]
looked like this and had about as much
[340]
processing power as your kettle despite
[343]
these limitations the mit team
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eventually created world 3 which was a
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computer model for the entire global
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economy this piece of software modelled
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everything from variable population
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growth to industrial capacity it also
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crucially modeled how everything would
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interact with one another for example a
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large population is naturally going to
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require more resources more food more
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water more homes more of everything but
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a larger population will also naturally
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lead to more innovation we have a much
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better chance of finding a tesla da
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vinci haber bosch or whittle with a
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population of 8 billion than we do with
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a population of two billion which is
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where the world was a hundred years ago
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it's a common joke amongst
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macroeconomists that every change you
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make to the economy changes at least
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three other things sometimes we pave
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over this issue by assuming ceteris
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paribus or all other things been equal
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in our models this economic assumption
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is great for looking at cause effect in
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isolation for example a soda tax
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increases the price of and therefore
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reduces the demand for sugary beverages
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all other things being equal but this is
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the real world nothing ever remains the
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same just because it's easier to model
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that way predicting the future is
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extremely hard at the best of times and
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almost impossible if you don't account
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for almost every variable and that's
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what world 3 attempted to do the world 3
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program had systems for modeling
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everything from birth rates to farming
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technology the idea was all of these
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variables were very important to
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maintaining the modern lifestyles that
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we enjoy today but because they interact
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with one another they were prone to
[438]
feedback loops the idea of a feedback
[441]
loop actually comes from musical
[442]
performances if you have ever held a
[444]
microphone up to a loudspeaker you will
[446]
know the horrible high-pitched sound
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that comes out of it that's because the
[450]
microphone is hearing a loud noise it is
[452]
then telling the speaker to amplify and
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play that loud noise even louder only
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for that new loud noise to be picked up
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by the microphone all over again the
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same kind of effect can happen in
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economies for example declining birth
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rates can lead to an ageing population
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an aging population will put more
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financial pressure on younger workers to
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care for the elderly either directly by
[472]
caring for them at home or indirectly
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through taxes to fund pension schemes
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and aged care this financial pressure
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will mean younger workers have less time
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and less agreeable conditions to make a
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family of their own and you are left
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with further declining birth rates this
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is actually a very important example as
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it pertains to the mit study you see
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while the study accounted for hundreds
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of variables in its computer-generated
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model of the global economy it was
[494]
actually only interested in tracking
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five of them these were population
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industrial output food production
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available resources and pollution it's
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worth remembering that this report was
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published in 1972 before climate change
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was more than a blip on the scientific
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community's radar and certainly far from
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being the widely recognized issue it is
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today chances are if the paper was
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replicated today it would also include
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average global temperatures but it
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wasn't so it didn't now despite that you
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should be able to see that all of these
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individual factors are very important to
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how we live and work in the world today
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but perhaps what is more important is
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again how they end up interacting with
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one another let's go back to the
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economist safe space for a second and
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assume that all other things are equal
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outside of food and population now these
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variables are obviously dependent on one
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another if one moves the other will too
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all other things been equal but what
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sounds like a more concerning order of
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events a declining population leading to
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a decline in food production or a
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decline in food production leading to a
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decline in population yeah obviously two
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very different scenarios right there
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okay so now that we understand how to
[568]
interpret the data generated by this
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report what did it actually say
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well like good economists the
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researchers kind of hedged their bets
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predicting the future exactly is a
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fool's errand they could have published
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their paper one day before a design for
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a commercially viable fusion reactor was
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developed and researchers realized this
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so what they did instead is they tweaked
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the initial conditions and ran the
[591]
simulation over and over again in some
[595]
simulations they would assume that
[596]
innovation remains at a constant pace
[598]
and worker productivity continues to
[600]
improve at the rate it currently has
[602]
been in other simulations they would
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assume that technological innovation
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continues to compound on itself meaning
[607]
things like harvesting resources from
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space or growing food in laboratories
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becomes possible and then in other
[612]
simulations they would assume that
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technological progress would slowly
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plateau a quick side note is that a
[618]
technological plateau might not sound
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very realistic to us today but that's
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only because we have grown up in a time
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of constant innovation moore's law is a
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great example of this for the past five
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decades computing power has roughly
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doubled every two years but we are
[633]
starting to reach the physical limits of
[634]
how many transistors we can pack onto a
[636]
microchip promising technologies like
[639]
quantum computing may solve this issue
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and let us continue to gain access to
[642]
even more computing power but then again
[645]
it may not and that's just one example a
[648]
lot of technological innovation these
[650]
days is just major companies finding new
[652]
and innovative ways for you to waste
[653]
your time consuming advertiser content
[655]
and yes i realize the irony that i am
[657]
part of the problem here but here you go
[659]
have an ad what a good little consumer
[661]
you are anyway technological innovation
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was just one variable the researchers of
[666]
this report tweaked they also ran models
[668]
that assumed lower birth rates higher
[670]
birth rates higher rates of recycling
[672]
more resource discoveries greater levels
[674]
of global trade reduced levels of global
[677]
trade they basically tried to account
[678]
for every outcome that would be possible
[681]
with a realistic combination of factors
[683]
in this economic model they then
[685]
averaged out the trajectories of five
[687]
crucial factors to determine where
[689]
humanity would end up as you would
[691]
suspect from a range of models with
[693]
variables changed up every time they got
[695]
a range of different results but they
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all sort of had one thing in common they
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all showed a significant decline around
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the year 2040. of course it's impossible
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to address all of the thousands of
[707]
potential outcomes that were modeled but
[710]
the researchers really focused on a few
[712]
that fell well within the standard
[714]
deviation of all of these potential
[716]
outcomes the first and potentially most
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optimistic outcome was called the
[720]
comprehensive technology scenario this
[723]
was a model where we continue to live
[724]
like we currently do today but
[726]
technology progressed fast enough to
[728]
ensure that our productive capacity was
[730]
able to keep up with the new people that
[731]
needed to be fed and housed and clothed
[734]
the model still predicts a significant
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drop in food production brought about
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primarily due to pollution of waterways
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and the misuse of arable land but that
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is addressed through technological
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innovation the population does start to
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plateau around the year 2040 but that's
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due to the natural tendency of wealthier
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more urban populations to have less
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children rather than people starving to
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death due to lack of food in this model
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industrial output does peak and then
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decline which would normally indicate
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lower living standards but this is
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almost entirely contradicted by the more
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efficient use of the goods that we do
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have if tomorrow technology got to such
[770]
a point where we had self-driving cars
[772]
then the need for individual car
[774]
ownership would be greatly reduced this
[776]
would likely lead to a fall in
[777]
industrial output but it's not like we
[780]
would be poorer because of this it's
[781]
just that suddenly a car that used to
[783]
service only one household can now be
[785]
efficiently shared amongst dozens this
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is actually what the world economic
[789]
forum was talking about when they
[791]
famously said that you will own nothing
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and be happy about it they either just
[795]
really don't understand how to
[796]
communicate with the general public or
[798]
they secretly enjoy making people angry
[801]
the more efficient use of resources
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would also reduce pollution and ensure
[804]
that raw materials are never reduced to
[807]
nothing this wouldn't be a totally
[809]
terrible outcome and yeah we might not
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continue to see the same exponential
[813]
growth in living standards that we have
[814]
seen over the past 100 years or so but
[816]
it also wouldn't be a societal collapse
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either if you don't feel comfortable
[820]
relying on some new way of technological
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innovation to save us all then the
[824]
researchers who publish this report have
[826]
an alternative the so-called stabilized
[828]
world scenario is what would happen if
[830]
the world just maintained its current
[832]
rate of innovation while also investing
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heavily into things like renewable
[836]
energy sources and materials recycling
[838]
processes again this model was made
[841]
before climate change was considered a
[842]
factor so when we are talking about
[844]
recycling and renewables we are looking
[845]
at it purely through the lens of
[847]
resource depletion and local pollution
[849]
while totally disregarding other
[851]
externalities like carbon emissions this
[853]
stabilized world scenario looks very
[855]
similar in many ways to the
[856]
comprehensive technology outcome that we
[858]
explored earlier the main difference is
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an almost voluntary reduction in
[862]
industrial output before it creates
[864]
problems like food shortages and
[865]
excessive pollution of all the models
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based on all the different combinations
[870]
of variables this is what the
[871]
researchers identified as the most
[873]
optimistic again most optimistic barring
[876]
some crazy unforeseen technological
[878]
development that radically reshapes how
[880]
we run our economies this could happen
[882]
and hopefully it will but it's hard to
[885]
make concrete plans for technologies
[887]
that we can't conceive of yet outside of
[889]
maybe making a spiritual sacrifice to
[891]
daddy elon can't hurt anyway the bad
[894]
news is that while the original study in
[896]
1972 thought this could be something
[898]
that we could realistically work towards
[900]
the timeline of all the captured
[902]
variables in this outcome has the least
[904]
closest fit to our current reality as
[906]
explored by the 2021 follow-up study
[909]
gaia herrington's study instead suggests
[912]
that the path that we are actually on
[913]
best represents what the 1972
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researchers dubbed the business as usual
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2 scenario and that's not good this is a
[922]
model that highlights a very clear
[924]
collapse pollution continues to increase
[927]
exponentially and things like recycling
[929]
of common materials never become
[930]
economically viable or subsidized widely
[932]
enough industrial output does reach a
[935]
higher level than in all of the other
[936]
possible scenarios but that is about
[938]
where the good news ends a drop in food
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production causes massively declining
[942]
birth rates in rich countries and
[944]
famines in poor countries the lack of
[946]
young workers reduces industrial output
[948]
which further hinders economic
[950]
prosperity easily accessible resources
[952]
also dwindle away which again further
[954]
reduces industrial output and economic
[956]
prosperity by all accounts this is what
[958]
we would consider a complete collapse of
[961]
society i said at the beginning of this
[963]
video that i would rather be a middle
[964]
class worker in today's world than a
[966]
king from anywhere beyond 150 years ago
[969]
if the business's usual model was to
[971]
play out then i would rather be a middle
[973]
class worker today than a king just 20
[975]
years in the future and that's a
[977]
genuinely scary thought so if you are
[979]
feeling a bit anxious like i was while
[981]
reading this study perhaps it's
[983]
important to address the criticisms of
[985]
this model a study that basically
[987]
amounts to someone screaming the world
[989]
is going to end is naturally going to be
[990]
met with some cynics and that was the
[993]
case for the limits to growth report
[995]
it's worth noting that a lot of these
[997]
criticisms have been proven wrong simply
[999]
by the fact that the data is tracking
[1000]
the predictions in the business as usual
[1002]
model with pretty frightening accuracy
[1005]
other critics point out that this study
[1006]
has a very pessimistic way of dealing
[1008]
with human innovation these critics
[1010]
conceded that yeah sure right now our
[1012]
rate of innovation might not be
[1014]
sufficient to avoid this kind of
[1016]
collapse but necessity is the mother of
[1018]
invention as soon as humanity's back is
[1021]
against the proverbial wall a lot more
[1022]
attention will be placed on researching
[1024]
and investing into technologies that
[1026]
could push us from the doomsday scenario
[1028]
of the business's usual model into the
[1030]
more palatable comprehensive technology
[1032]
scenario we can already start to see
[1034]
this taking place with a huge surge in
[1036]
renewable is becoming available in the
[1038]
public market certainly there are still
[1040]
some areas where we are lacking waste
[1042]
management been a huge one but we are
[1044]
much better than we were even a decade
[1046]
ago if you want me to tell you what i
[1048]
think will happen i'm sorry i'm just
[1050]
going to encourage you to read the two
[1051]
reports yourself i generally want to be
[1054]
optimistic about the future but i also
[1056]
realize that my opinion does not carry
[1058]
nearly as much weight as research
[1059]
published by a collection of 17 of the
[1061]
world's top economists and scientists
[1063]
research that has been vindicated by
[1065]
another very talented individual best
[1067]
case scenario this was all massively
[1069]
overblown and we could use this as an
[1071]
excuse to learn about the limits of
[1072]
creating systematic models to predict
[1074]
the future worst case scenario well i
[1076]
guess it's time to start learning how to
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forage for food in the wilderness which
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watching mate bye
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