Sunday, December 29, 2013

Random chart - economic fragility?

Click to enlarge

Source: Upside down economics

Ran into this blog entry from 2007....  The chart shows "... data to summarize the sizes of various industries in the U. S. economy as of 2005..."  in an alternate format... The blog entry was discussing the economic impacts of  global warming, and posited a different way to look at the U.S. economy and thus the impacts. Per the blog entry;

"... The entire economy stands on the shoulders, as it were, of agriculture, forestry, and mining (especially the extraction of oil, gas, coal and uranium) and on the utilities that deliver the energy mined in usable form. This method for depicting the economy was suggested to me by two things. 

First, Liebig's Law of the Minimum states that an organism's growth is limited by the amount of the least available essential nutrient. In the case of world society that nutrient would be food, though many would argue that fossil fuels are the essential nutrient since so much food production depends on the use of fossil fuels and their derivatives including fertilizers and pesticides. 

Second, a piece by Dmitry Podborits argues that it is nonsense to say that the U. S. economy is less vulnerable to oil supply disruptions today than in 1970s because it produces twice as much GDP per barrel of oil. Instead, Podborits suggests, we are more vulnerable to oil supply disruptions because we have so much more GDP balanced on each barrel of oil. The same argument might be made with respect to agriculture which in the United States in 1930 employed 21.5 percent of the workforce and made up 7.7 percent of GDP. In 2000 the numbers were 1.9 percent of the workforce and 0.7 percent of GDP. We are balancing an ever larger total economy on an agricultural economy that on a relative basis is shrinking. Certainly, we are getting more efficient, but are we becoming more vulnerable?..." 

Interesting (and possibly even more relevant today)!

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