Money and Finance
Jared Diamond: What’s Your Consumption Factor?
TO mathematicians, 32 is an interesting number: it’s 2 raised to the fifth power, 2 times 2 times 2 times 2 times 2. To economists, 32 is even more special, because it measures the difference in lifestyles between the first world and the developing world. The average rates at which people consume resources like oil and metals, and produce wastes like plastics and greenhouse gases, are about 32 times higher in North America, Western Europe, Japan and Australia than they are in the developing world. That factor of 32 has big consequences.
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To understand them, consider our concern with world population. Today, there are more than 6.5 billion people, and that number may grow to around 9 billion within this half-century. Several decades ago, many people considered rising population to be the main challenge facing humanity. Now we realize that it matters only insofar as people consume and produce.
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If most of the world’s 6.5 billion people were in cold storage and not metabolizing or consuming, they would create no resource problem. What really matters is total world consumption, the sum of all local consumptions, which is the product of local population times the local per capita consumption rate.
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The estimated one billion people who live in developed countries have a relative per capita consumption rate of 32. Most of the world’s other 5.5 billion people constitute the developing world, with relative per capita consumption rates below 32, mostly down toward 1.
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Books:
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Guns, Germs, and Steel: The Fates of Human Societies
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Collapse: How Societies Choose to Fail or Succeed
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The Absolute Return Letter, October 2013: Heads Or Tails?
The number of people on planet earth will grow from around 7 billion today to over 8 billion by 2030. At the same time, the old-age dependency ratio in many countries around the world will reach critical levels, creating significant headwinds for economic...
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The Absolute Return Letter - March 2012: The Protein Bomb
The World's population will grow from 7 billion to 8.3 billion people over the next decade. Meanwhile, arable land across the world will shrink and living standards will continue to rise, with the OECD projecting 3 billion new middle class consumers...
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Bill Gates: Growing Enough Food To Feed The World
How can we feed a growing population in the midst of climate change and an appetite for more meat? These factors and more are straining the world’s agricultural capacity and pushing up the cost of food, which makes it difficult for the world’s poorest...
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Gmo: Capturing Domestic Demand In Emerging Markets: Neither Small Caps Nor Multinationals Are A Good Proxy - By Arjun Divecha
As a complement to his article published in the FT on Jan. 4, Arjun Divecha fleshes out more fully his argument that buying emerging small cap stocks or large multinationals is not the best way to tap into domestic demand in emerging markets......Excerpt:...
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"the Worst Mistake In The History Of The Human Race" – 1987 Article By Jared Diamond
Link to article: The Worst Mistake in the History of the Human Race To science we owe dramatic changes in our smug self-image. Astronomy taught us that our Earth isn't the center of the universe but merely one of billions of heavenly bodies. From...
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