In the absence of new ideas, growth must eventually grind to a halt. The adding of labour or resources or capital (machinery and such) to an economy can boost income, but with diminishing returns; in the absence of technological progress, ore becomes harder and costlier to mine and there are ever fewer valuable tasks to be done by an extra worker or industrial robot. New ideas, though, allow an economy to do more with less or create new and valuable tasks to occupy labour and capital. Technological progress has thus enabled steady growth in real income per person over the past two centuries even as global population has soared.
But new ideas must themselves be produced. An economy can increase the flow of ideas by adjusting its use of human resources: by investing more in education and encouraging more people to work in research rather than production, for instance. But while these solutions sufficed to generate lots of new knowledge in the 20th century, Mr Jones says, they are themselves subject to diminishing returns. (The share of a population working in R&D can only rise so high, for example, and as it does the productivity of each additional researcher is likely to drop.) A decline in the absolute number of brains might thus place a serious dampener on innovation, he writes, and thus on prospects for continued growth in incomes. Using a simple model, Mr Jones suggests that the world may face two potential outcomes in future. If fertility stabilises at a high enough level, an “expanding cosmos” scenario awaits, in which the stock of knowledge, population and incomes all rise ever upward. Alternatively, a cycle of falling population and reduced idea creation could lead to an “empty planet” outcome, in which living standards stagnate while population figures dwindle.
Models like Mr Jones’s are less interesting as literal descriptions of how economies work than as illustrations of how different factors might affect future economic developments. It is possible, for instance, that computing advances might increase the productivity of research, or even enable the automation of some forms of idea generation, reducing the constraint he identifies.
At the same time, his work gestures at underappreciated sources of complacency. Rich economies may have worried too little about the growing numbers of researchers needed to generate steady improvement in computing power, for instance, out of a misguided assumption that there will always be more people available to don a lab coat. They may also have undervalued human potential more generally: by failing to prioritise education, or welfare programmes which might allow households that would like to have children to do so comfortably, with the same urgency as they have looked after other critical resources. Strangest of all, in the eyes of future inhabitants of an emptying planet, may be rich governments’ present disquiet at fast-growing populations in the developing world. That advanced economies did not invest lavishly in the talents of the world’s poorer billions may come to look existentially foolhardy.