October 25, 2023
By Michael Muthukrishna
Excerpted from A Theory of Everyone: Who We Are, How We Got Here, and Where We’re Going, The MIT Press.
Inequality is a waste of human potential that harms us all. It prevents people from contributing all that they can to our collective brain. Entrenched inequality makes us less innovative and less able to break through to the next level of energy abundance. As evolutionary biologist Stephen Jay Gould so eloquently put it, ‘I am, somehow, less interested in the weight and convolutions of Einstein’s brain than in the near certainty that people of equal talent have lived and died in cotton fields and sweatshops.’
Inequality is particularly pernicious when it persists over generations, eventually leading to an almost impossible to irradicate, permanent elite. In this chapter we’ll focus on exactly what the problem with inequality is and the changes we can make to permanently create a fairer world with abundance and opportunity for more people.
In our unequal world in which wealth is transmitted intergenerationally, the happenstance of birth places a ceiling on what we can reasonably achieve. In such a world, ideals like the American Dream have become a fantasy. People live in entirely different worlds with vast differences in wealth, networks, access to education, and acquisition of the constellation of cultural traits that lead to success. We are running different mental software, see the world in entirely different ways, and have different experiences.
It’s not just that some people start life on third base and never look back to notice that others are hustling with all they’ve got from first, but that some people are playing entirely different sports in entirely different leagues with entirely different trophies available to them. And because we live in different worlds, we don’t see enough of the other side to appreciate just how large these differences are.
The average American has a median wealth of around $120,000 (about £100,000). The figure is $190,000 (£160,000) if you’re white, $250,000 (£210,000) if you own a house or are over sixty-five years old; $300,000 (£250,000) if you have a college degree. And so to the average American who has a lot less than one million dollars, the difference between a multimillionaire and a billionaire can be difficult to appreciate.
The difference is staggering.
To see how large it really is, let’s convert money to something we have a better sense of: time.
If dollars were seconds, the difference between a person with a net worth of $10 million and someone worth $1 billion is four months versus thirty-two years.
January to April versus 1990 to 2022.
Ten million dollars is roughly what it takes to be in the top 1% in America. But the top 1% often don’t feel wealthy, because they have their own 1%, which requires a net worth of around $400 million. And the top 0.01% don’t feel all that wealthy, because they have their own 1%, and so on upwards.
Elon Musk, Jeff Bezos, and possibly Vladimir Putin have a net worth that may be north of $200 billion. Convert that to time and we’re talking about over 3 millennia.
From when the Israelites arrived in the Promised Land to the present day.
And that’s wealth that’s well tracked. The Saudi royal family are estimated to have a net worth of around $1.5 trillion. That’s a family whose wealth represents roughly the entire GDP of wealthy countries like Australia, South Korea, or Canada. Or about 45,000 years in time – when Aboriginals first arrived in Australia to the present day. All of that wealth in just one family.
Even converting to time, these are unfathomable levels of wealth. Imagine that I offered you a job that paid $1 million every . . . single . . . day.
It would still take you over five centuries to reach $200 billion. Most people aren’t earning $1 million a year, let alone $1 million a day.
Consider the proposed US minimum wage of $15 an hour. Imagine you were one of the first members of our species born around 250,000 years ago. Imagine that for some reason you were immortal. And let’s say you were a hard-working immortal who didn’t sleep and instead worked twenty-four hours a day, every day of every year, up to the present day. Today, in this unrealistic hypothetical, you would have around $33 billion, still only around half the net worth of Charles Koch of the Koch brothers. How long do you think it will take you to get to $200 billion? The answer is well over a million more years. More time than humans have been around, and you’ve been working your exhausting all-day, all-night job for $15 an hour.
If you’re wealthy, it may be difficult to imagine what it means for $10 to be a lot of money. If you’re poor, it may be difficult to imagine what it means for $200,000 to not be that much money.
Many people argue that such wealth differences shouldn’t exist. That billionaires should be banned.
There is value in there being a strong relationship between a person’s wealth and their contribution to society. With a larger population and the power of technology, it is possible for individuals to make that large a contribution.
Technological innovations multiplied across our large populations have allowed for the legitimate, innovation-based accumulation of vast wealth. If you can sell widgets at a profit of $10 each to every Austrian, you would make about $90 million. If you can sell those same widgets to every American, you would make $3.3 billion. But not everyone got rich selling widgets. How you become wealthy matters to human progress and reaching the next energy level.
Some billionaires may have earned their billions by actually expanding the space of the possible. When the acquisition of wealth comes from innovation in energy or efficiency, it represents an expansion of the actual pool of wealth – the space of the possible. This is wealth that is in some sense ‘created’. And the billionaires rewarded for these innovations are taking a fraction of the new space of the possible that they have made. Their innovations improve life overall even if those put out of business or ‘creatively destroyed’, as economist Joseph Schumpeter described it, are less well off. Similarly, those who bet on the success of the successful innovator through investment in their companies also get a share of that wealth. This is wealth creation.
In contrast, when acquisition of wealth comes from what economists call rent seeking – wealth acquired without a contribution to productivity – then it is simply taking a piece of someone else’s pie without contributing to human activity. It is not expanding the space of the possible, but merely controlling some of that space and charging a rent for that control. And that kind of wealth harms our ability to innovate. Here, levels of wealth are not matched by contributions to society.
In contrast to wealth creation, this is wealth appropriation.
Wealth creation and wealth appropriation are often conflated, but they must not be confused. They have opposite effects on our society.
We think of money as something we are given based on the skilled use of our time for a particular job. And we are free to spend that money as we wish. But what we choose to consume affects what is produced. And people who have more money have more power over production. More power over how our energy budget is allocated in terms of goods produced and services rendered.
Imagine a person who has a magic money printer that produces as many counterfeit bills as they want. Let’s call him Benjamin. The magic of Benjamin’s printer is that those bills are indistinguishable from real bills. Benjamin can buy whatever he wants and what Benjamin loves are donuts. But Benjamin’s not a bad person. In fact, he’s altruistic. Thankful for the blessing of his magic money printer, he feels the urge to give money away to causes he feels matter the most: eczema research and hair loss solutions. It might seem as if Benjamin’s philanthropy and injection of cash into the local economy is a good thing. It’s not like he’s stealing from other people working hard for their pay checks, right? In reality, he is.
Benjamin’s money really represents control over what others produce and ultimately how we allocate our energy budget. Benjamin’s love of donuts leads to a bespoke, gourmet donut industry with a lot of research into the best possible donuts at exorbitant prices. Maybe Benjamin also likes super-yachts and the best ocean-front real estate. Energy is devoted to producing and running these super-yachts and much of the best ocean-front real estate is now Benjamin’s. And because Benjamin’s philanthropy dwarfs all others’, eczema and hair loss research end up as the best-funded research, affecting what our brightest minds end up working on. Benjamin’s magic money printer has allowed him to steal opportunities from others working hard in their jobs, oblivious to how Benjamin acquired his wealth.
The point of this story is that consumption determines production and so who can consume more matters. It matters for whether we allocate our energy budget in ways that expand the space of the possible to make all of us better off and ensure our species future, or whether we simply crowd out the ability for most people to buy a reasonable house, work reasonable hours, or go on nice vacations.
The ability of Elon Musk, Jeff Bezos, Bill Gates, Larry Page, Sergey Brin, and other entrepreneurs to acquire vast wealth is often the result of the law of innovation in efficiency. Specifically, technological changes that have allowed Musk to build electric cars (Tesla) and put satellites and astronauts into space with cheaper rockets (SpaceX); Bezos to more efficiently host Web applications (Amazon Web Services) and hollow out high streets and shopping malls with vertically aligned, more efficient commerce that consumers seem to prefer (Amazon); Gates to create software with low marginal costs and high marginal profits, because once software is written, it costs much less to distribute (Microsoft); or Page and Brin to more efficiently give us access to the world’s trove of knowledge (Google and Alphabet).
Such efficiency gains have, either directly or indirectly, made us all better off. And the wealth acquired by the above individuals and the investors and stakeholders in their companies is the result of a system that allows people who have made good bets in society – bets that have done more with less or created something new – to have greater control over our vast energy budgets.
They are given this control to make bigger bets on the assumption that they continue to make good bets. And if they don’t, they lose money. While some may rail against capitalism, the alternatives, such as centralized planning, are far worse. Capitalism done well gives control over concentrated created wealth to those making good bets as innovators or investors. It leaves us all better off.
Concentration of wealth is required for any long-lasting, large-scale project – many architectural wonders, great works of art, and breakthroughs in science have all been the result of concentrated wealth being put to good use. But in the past capitalism was even less fair than it is today, and those who wielded that wealth also wasted it. You see rent-seeking from workers or slaves, opulence for personal benefit, and wars of dominance to take from other groups in a zero-sum transaction.
The evolution of capitalism and the marketplace in its current form, where we can freely allocate our skilled labor and money to firms we choose at a cost the market is willing to pay leads to concentrations of wealth. The system is far from perfectly meritocratic with a fair playing field and has many distortions in how much money people make for what they create, but even with these imperfections, it does a reasonable job of rewarding success and allowing the successful to make further bets.
Today it means Musk can leverage his past success at PayPal to make large bets on space exploration, energy technologies, or a social media company, and Gates can leverage his past success at Microsoft to make large bets on health care and development. And sometimes, especially when aligned with profit-seeking, this can be more efficient than governments as an alternative mechanism for concentrated collective action. At the very least, it exists as a complement.
But even wealth creation did not happen in a fair system. Many who would have chosen to invest in Microsoft or Tesla simply could not because they didn’t have the capital to invest. They weren’t born in the right country, at the right time, to the right families.
How you get rich matters.
Wealth appropriation involves acquiring wealth without making a corresponding contribution to society. Here, control over our energy budgets is in the hands of those who don’t make our societies better off but instead control a resource and charge for its use with little improvement or work on their part, using it entirely for their own benefit. Examples include literal landowning rent-seeking, multigenerational wealth transfers, and corruption.
Britain is one of the last surviving European countries with vast wealth concentrations via wealth appropriation rather than wealth creation. Perhaps this is thanks to the efficient private school pipeline to powerful positions in British society. But whatever the reason, it cripples Britain’s innovative capacity and forces it to rely on financial transfers, often from illegitimate sources such as money laundering and property purchases by Russian oligarchs. Because of its wealth inequality, Britain relies on these outside injections of capital rather than on innovation. Wealth inequality is notoriously hard to measure, but long-standing inequality in land offers a proxy.
Half the land in Britain is owned by just 25,000 people. Twenty-five thousand people is less than half a percent of the UK’s population. So less than 1% of UK citizens own half of the UK. These are often multigenerational wealthy landowners, royals, and aristocrats, who might be starkly contrasted to the 20% of the UK population (in 2021, amounting to 13.4 million) who live below the poverty line, or even to what we might call an expanded productive working class, not in the traditional sense, but the working class of those who have to work for an income to live.
Browse Britain’s most popular property website, Rightmove, and you will find listings such as a nine-bedroom, eight-bathroom mansion in Marble Arch, central London, the details of which I was asked to remove for legal reasons. The property is listed among those sold as leaseholds. A leasehold property is a property where the owner doesn’t actually fully own the site, and must instead renew their lease by paying a fee to the actual owner – the person who owns the freehold. The time horizon is usually very long, something like ninety-nine years, which means little to most Brits but a lot to those with centuries-old multigenerational wealth. In a leasehold, ownership is illusory.
In the case of this particular mansion, rather than a £10,000,000 fee charged every century, £100,000 is charged annually. What is this fee for? It’s for nothing other than the fact that the owner controls the freehold. It is not an exchange of money for any added value. The freeholder does nothing other than freeload, collecting their regular fee. And as the advert states, ‘The freehold is not for sale.’ Why would it be?
How did the freeholder get this property in the first place?
In this case, the owner is Portman Estates. Portman Estates began in the sixteenth century, when Henry VIII – yes, the king with all those wives he didn’t like – gave his Lord Chief Justice, William Portman, over 100 acres of land in central London. The Portmans held on to their property for four centuries – four hundred years – until inheritance taxes were raised during the Second World War.
Research shows that wealth is often resilient to shocks and revolutions, but inheritance taxes, when actually implemented, as they were at the end of the Second World War, can weaken multigenerational wealth transfers.
William Portman’s descendent, the 7th Viscount Portman, was subject to high inheritance taxes (75%) when he died, in 1948. But wealth offers ways to shield wealth, which is why it’s so difficult to tax the ultra wealthy.
A deal was struck with developers to hold much of the estate in a trust for the benefit of the family. Although much was lost, much was also retained. The benefit of the high estate tax, however, was that it forced the aristocracy and other wealthy landowners to transition toward more productive businesses – some wealth creation – in addition to wealth appropriation.
Not far from the Portman Estate is Grosvenor Estate. In 2016 Gerald Grosvenor,the 6th Duke of Westminster, died. By 2016 inheritance taxes were much weaker than they had been in 1948, when William Portman died. By 2016 methods for shielding wealth had also become much more effective. This allowed Gerald’s 25-year-old son, Duke Hugh Grosvenor, godfather to Prince George, to access the £9.3 billion fortune held in trusts and businesses.
The Grosvenors had successfully transitioned to property development. Gerald was an introspective man, often publicly musing over the position in which he found himself as the inheritor of a vast fortune and business empire. A Financial Times reporter once asked him what advice he had for young entrepreneurs. His candid answer was: ‘Make sure they have an ancestor who was a very close friend of William the Conqueror.’ Grosvenor was referring to his Norman French ancestor Gilbert le Grosveneur, who caught a boat to England to fight alongside William the Conqueror in 1066. About a thousand years ago.
Contrary to the saying that the first generation makes the wealth, the second generation preserves it, and third generation loses it, measures of social mobility in Britain using rare surnames reveals that it takes approximately ten generations, or another three centuries, for the descendants of the elite to become average, and that there’s huge variation. Research reveals that wealth is highly robust to revolutions and wars, which may perhaps be seen as inter-elite competition – elites selectively amplifying and backing different middle- and lower-class revolutionaries, effectively trying to invest in the winners or sometimes both sides.
It’s very difficult to completely lose large amounts of money. Money grows and compounds. Remember, ‘Money makes money. And the money that money makes, makes money.’ Some elites lose in the inter-elite competition, but many stay on, and in the meantime innovation, growth, human welfare, and potential are all harmed.
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No one chooses their ancestors and we can’t blame aristocrats and those born into old money for the position in which they find themselves, anymore than we can blame those born into poverty. We can’t blame those who invest in property as landlords if that’s the system they find themselves in and that’s where the returns are. In any case, it’s not about people, it’s about allocation of their resources. People aren’t purely wealth creators or appropriators, they’re typically a mix. So we shouldn’t hate the player, we should hate the game. It’s a systems-level problem and the solution too needs to be at a systems level to disincentivize or remove the ability to appropriate wealth. But norms matter too, so the first step is recognizing the difference between wealth creation and wealth appropriation.
There are many dubious ways for people to preserve their wealth, including tax avoidance and wealth preservation vehicles like trusts. But quite apart from the many clever ways the wealthy and their accountants have found to protect their money, being born into wealth also offers social connections – a powerful cooperative group of people you know. These connections persist and open opportunities available only to a few. This is another reason that wealth weathers even popular uprisings. For example, analyses of surnames in China starting from after the Communist Revolution of 1949 – a revolution that deliberately targeted elites – reveals that elite surnames are still overrepresented among China’s elite today. Similar findings can be seen across the world, even in countries seen as socialist and equal, like Sweden.
These factors are not simply the result of choices made by individuals, but reflect the entrenched systems of power in which they exist. Weak inheritance taxes inevitably lead to persistent class divisions, shuffled only by the occasional war, revolution, or shock, and then only imperfectly. This is the state of established societies like Britain as well as many developing countries, and will be the future of relatively new countries with weak or weakening inheritance taxes, such as Australia and the United States, if they don’t take action. Both have weak or weakening mechanisms for minimizing intergenerational transfers of unearned wealth, and so too risk a slow and inexorable march toward oligarchy, the appropriation of wealth by a small elite, and a weakened ability to innovate.
Why is this a problem?
It is a problem because consumption determines production and, like Benjamin with his magic money printer, leads to misallocation of our energy budgets from fuel for private jets and super-yachts to control over the media and other means of shaping what most people think, what they believe, and how they act. It’s not an accident that Rupert Murdoch, owner of large, influential media companies, including Fox News, is rarely mentioned in the news, or that new billionaires like Jeff Bezos have bought news media, in Bezos’s case, the Washington Post.
The unchecked dominance of wealth appropriation over wealth creation marches us from meritocracy to mediocracy.
Rule by the best?
The etymology of the word ‘aristocracy’ is ‘rule by the best’, which may have been accurate when education and other opportunities were only available to a small section of society; when aristocrats were indeed the best educated and had the ability to make the best decisions when they were the only people with access to the knowledge and information that wealth brought with it. But it was not selection of the best based on potential. There were no doubt many non-aristocrats who would have achieved more with the same privilege. And sometimes wealth, power, and privilege mask mediocrity or less.
Donald Trump is an example of a trust fund inheritor losing vast amounts of inherited wealth, severely underperforming the average of the stock market, but still using that impossible-to-completely-lose inherited wealth and connections to forge a powerful and influential career. The Koch brothers and the Koch network of influence (dubbed the Kochtopus) are a similar story, having shaped American society through the strategic investment of money in an ecosystem of influence through universities, think tanks, and politicians.
As a society, we need to ask ourselves whether these inheritors of vast wealth are best placed to decide how we use our still vast energy budgets? And what might happen if others had the same opportunities.
One of the major predictors of becoming an entrepreneur in America is having wealthy parents and receiving a large inheritance or cash transfer. A child born into the top 1% income bracket is ten times more likely to become an inventor than someone from a below-median-income family. Indeed, a top-achieving math student in the top quarter from a lower-income family is less likely to graduate than a low-achieving math student in the bottom quarter from a wealthy family.
Being born into wealth is (a) a social safety net that allows a young person to take risks, (b) offers access to high-quality education, information, and cultural knowledge, and (c) means connections to turn ideas into reality.
We can see the effect of these multipliers even in the outlying, outsized success of Bezos, Musk, and Gates. But we must be careful: people’s stories are complicated.
Bezos was born to teen parents who divorced not long afterwards. He was raised by his mother and Cuban immigrant stepfather. Some amount of financial security was provided by his grandparents, who owned a large Texas ranch, and his self-made stepfather, who eventually had a well-paying job at Exxon. By the time Jeff was thirty one years old and ready to take the leap on a hunch that the potential for commerce on the Internet was under-realized, his parents had enough savings to invest $250,000 in Amazon. This was in 1995, so about half a million – the average price of an American house bought outright – in today’s money. Where would Bezos and Amazon be without that safety net, capital, and education?
Musk’s background is the subject of much speculation and limited information. His father seems to have been reasonably wealthy if not comfortable, allegedly owning shares in an emerald mine (though both Elon and his mother Maye dispute this). Musk attended expensive private schools in South Africa, so may have had some early advantages. His advantages later in life are less clear, estranged from his father, raised by a dedicated mother, and decidedly making his own way in the world. If advantages existed, they may have been through some in-theory possible level of safety net his family provided.
Gates, in contrast, was indisputably born to a wealthy family. His father was an attorney, his mother a teacher and businesswoman who famously sat on a board with the CEO of IBM, opening doors for her talented son. Gates went to an elite private school with access to computers at a time when few others did.
This is not in any way to denigrate the achievements of these three entrepreneurs. All are brilliant, driven, and hard-working, with many of the traits in the constellation of attributes it takes to even have a shot at such wild success. Yet while they may freely admit the role of their upbringing, it’s easy to forget that so many with the same advantages achieved so much less. And it’s just as easy to forget that so many with the same potential don’t have the same advantages.
The great shame is not Bezos, Musk, and Gates, but all those with the same potential who didn’t have that necessary capital and safety net, the necessary guidance and cultural input, and vital networks, connections, mentorship, and resources to turn ideas into reality. Houston’s impoverished Hispanic community near where Bezos grew up; those without stable employment, many of whom are black South Africans, near Musk’s hometown of Pretoria; the unemployed of south-east Seattle, south of Gates’s home in the north-east – that is what we must fix.
It is not that capitalism and commerce must be eradicated – there exists no better model for setting prices and maximizing human potential. But capitalism must be made more fair. Fairness is a laudable goal in its own right, but fairer capitalism is also more efficient. Inefficient allocation of capital and wealth leads to inefficient prices and inefficient progress.
Ultimately, to fix capitalism we must create a fairer, more level playing field for each generation. In practice, that fix might involve ensuring fair taxes during a lifetime, but even more important is ensuring that the control over our economies, energy, and future that wealth affords isn’t passed on from generation to generation of a small elite. By preventing generational transmission, many of the problems we currently face in entrenched wealth differences by class or race will disappear permanently within a few generations. But unlike many forms of redistribution that are economically inefficient, there are ways to make capitalism fairer while also making it more economically efficient.
A fairer game
Slavery, wars of conquest, and explicit exploitation are all forms of wealth appropriation. Before we created what Buckminster Fuller called energy slaves – putting energy to work for us – it was common for some to put actual enslaved humans to work for them. Slavery coercively channeled the energy of the enslaved toward slave owners. Like other forms of wealth appropriation, and quite apart from the immorality of such an action, taking from others the value of their work and even their freedom does not expand the space of the possible. Innovations may accidentally emerge, but this is neither a fair nor efficient collective brain. Moreover, it incentivizes zero-sum competition because little new wealth is created.
Meritocracies create a culture of achievement, opportunity, and education that aids progress for more. The control of power by a hereditary elite creates a culture of networking in small cooperative groups to outcompete and control the many. In this more unequal and less socially mobile world, people increasingly rely on the wealth and resources of their parents and family rather than their own labor. And so for obvious reasons, in this world, inheritance taxes are often unpopular. It’s a sad self-reinforcing loop. Yet inheritance taxes are an important way to break the loop, not because of the few thousand or even million you may or may not get after the sale of your grandmother’s house, but because they determine what happens to the vast accumulated wealth of people like Bezos, Musk, and Gates when they die. Are their children really best placed to have that much control over the vast portion of our energy budgets that their parents’ wealth represents?
The answer is that if they were, they would similarly and independently achieve levels of wealth as their parents did without that inheritance. John Stuart Mill, arguing for lifetime limits on inheritance, described it well when he wrote:
I see nothing objectionable in fixing a limit to what anyone may acquire by mere favor of others, without any exercise of his faculties, and in requiring that if he desires any further accession of fortune, he shall work for it.
Inheritance taxes instinctively go against our primal urge to protect, prepare, and provide for our children, to give them more than we had. They lead to fears of our children missing out on what we have worked so hard to earn or that we will deprive them of opportunities in a harsher world to come.
But, when we level the playing field, the children of almost everyone except the children of the very richest billionaires will be better off than they are now. And the children of those very rich will hardly be poorer. We all benefit by living in a society where more people can contribute to making us all wealthier. To understand why levelling the playing field is essential, imagine if we inherited debt in the same way we do wealth.
If debt were inherited over generations, it’s easy to see how it would quickly leave some trapped in permanent multigenerational poverty, unable to escape no matter how hard they worked or how high an income they managed to secure. The interest on debt would compound over generations and eventually no amount of work would be enough for it to be paid off. Being trapped in debt is something many can understand. But the reverse – inherited wealth – has exactly the same effect on society.
A few people and their descendants, like Benjamin and his magic money printer, have a distortionary effect and control over our society and our energy budgets, reducing the space of the possible, our ability to innovate, and ultimately preventing us from cracking the next energy level that leaves everyone better off. In turn, we gradually enter a new feudalism.
In 2013 French economist Thomas Picketty published Capital in the Twenty-first Century. Over 696 pages, he carefully provided table after table and graph after graph of empirical evidence showing that inequality was a natural consequence of capitalism. Notably, when the rate of return on capital exceeds the rate of economic growth, those with capital (the wealthy) will grow richer at a faster rate than those earning an income. To everyone’s surprise and no doubt his too, the book became a run-away success, a New York Times bestseller.
Through the lens of the laws of life, we can intuitively understand Picketty’s discovery. When the space of the possible grows through energy or efficiency, new wealth is created. This is when the economy grows. When this space is growing, the relative share of those who already have wealth is smaller than if their wealth grows but the space stays the same size. It’s like building more space in your house by building upwards or downwards. You can conceivably have a large house and so can your neighbor. But if we build an extension on limited shared land, we leave less space for our neighbors to also extend or even build their house.
Amazon and the washing machine have given you back more of your time. Microsoft and Google’s software and hardware have led to more efficient working. The inventors of insulin and the cervical cancer vaccine have extended our lives. These are all efficiencies and those associated with them are deserving of some portion of the increased space of the possible that they helped create. So too when new energy technologies are developed.
If the space of the possible is fixed then the richer get even richer and take ever more of that limited space. The poorer have nowhere to go and become more and more squeezed. They scramble over scraps. Mobility falls and inequality grows.
But if the space is grown, either by energy or by innovations in efficiency, then the actual space has grown and whoever grew the space can keep some of this newly created space in the form of money. The rest is redistributed through either direct benefits such as taxes or philanthropy. Or indirectly, because the innovation can be used by others in their own innovations and in their own work.
All of this becomes more difficult in a world of diminishing EROI. This is what we are seeing today.
Inequality makes innovation less efficient because those with the talent to improve society don’t have the opportunities to do so. In energy and economic terms, while the nominal value (number value) of money goes up, the real value (what you can do with the money) is decreasing because less true wealth is being created. The space is no longer growing as it once did and this in turn is moving us from a positive-sum win-win world to a zero-sum win-lose world with consequent effects on cooperation. And this in turn is creating vicious feedback loops.
We are not selecting the best in each generation. We are not ensuring the best people are at the helm. And, lacking the ability to generate new wealth, inheritors of vast fortunes instead spend their money on finding ways to entrench their positions in society, switching from wealth creation to more wealth appropriation – the reverse of what happened to Britain’s aristocracy when estate taxes were raised.
The control of unearned intergenerational wealth transfers is critical to the health of a society and its continued ability to innovate. We must level the playing field to create a fair game for each generation. We must tax the dead for the sake of the living.
Taxes, taxes, taxes
The World Economic Forum in Davos, Switzerland, doesn’t usually go viral, but it did in 2019 when a young Dutch historian, Rutger Bregman, got everyone talking about, of all things, taxes. The Dutch are known for their directness, and Bregman did not disappoint.
This is my first time at Davos, and I find it quite a bewildering experience, to be honest . . . 1,500 private jets have flown in here to hear Sir David Attenborough speak about, you know, how we’re wrecking the planet . . . I hear people talking about the language of participation and justice and equality and transparency, but then almost no one raises the real issue of tax avoidance, right? And of the rich just not paying their fair share . . . Just stop talking about philanthropy, and start talking about taxes . . . just two days ago there was a billionaire in here, what’s his name? Michael Dell. And he asked a question like, name me one country where a top marginal tax rate of 70% has actually worked? And, you know, I’m a historian – the United States, that’s where it actually worked, in the 1950s during Republican President Eisenhower, you know, the war veteran. The top marginal tax rate in the US was 91% for people like Michael Dell. You know, the top estate tax for people like Michael Dell was more than 70% . . . this is not rocket science . . . We can invite Bono once more. But, come on, we’ve got to be talking about taxes. That’s it. Taxes, taxes, taxes. All the rest is bullshit in my opinion.
It was an unscripted, somewhat rambling rant, but it hit a chord and quickly went viral. They say nothing in life is certain except death and taxes. These days, only death is certain.
Bregman is simplifying the challenge. It is notoriously difficult to tax the ultra-wealthy because, as we have already discussed, they have clever accountants and more money to invest in tax avoidance. Even the high taxes in the middle of the twentieth century were avoided or weakened in a variety of ways. The wealthy found ways to evade them through loopholes and elaborate structuring. For example, private foundations were a compromise whereby the wealthy could avoid inheritance taxes in exchange for giving away a small percentage of their wealth to the public good. Many philanthropic foundations exist under this model. These foundations have done a lot of good and advanced society in a variety of ways. But they also represent a powerful ability to direct our current energy budgets. Consumption determines production. The priorities of foundations and their vast wealth affect the priorities of scientists, researchers, and politicians, directly or indirectly.
Foundations are in theory limited in how much lobbying they can engage in, but in practice, some lobby in all but name. For example, the selective amplification of academics and think tanks exists in an ecosystem of influence over government and public institutions, including the IRS. This power has been used to change the laws themselves, for example, weakening inheritance taxes (rebranded as ‘death taxes’ in the US after focus groups revealed that even average people were more likely to reject ‘death taxes’ than ‘inheritance taxes’) to further reduce tax obligations, further increasing inequality.
Trusts exist to evade personal taxes. In a famous exchange with a heckler, US presidential candidate Mitt Romney famously said, ‘corporations are people, my friend’. Indeed, corporations are ‘legal persons’ and, through trusts, people can become a kind of corporation, effectively becoming immortal, their wishes and wealth existing across multiple lifetimes. But if trusts or other corporations are people then we can constrain them and oblige them to pay into the social good as we do with flesh-and-blood people.
The solution to this challenge is not straightforward. It’s not clear what to tax, how much to tax it, and how to administer the tax.
Taxes must be economically efficient so that growth continues. They must not undermine innovation in self-defeating distortions. They must not cause people to work less. And it’s difficult to set a tax rate knowing that differential tax rates across countries mean that some locations will exist as tax havens. Just as some people free-ride in a public goods game, some countries encourage wealth flight to their shores. Tax rates are another way that countries compete in a process of cultural-group selection.
And because of these challenges, there is often no countervailing force against tax avoidance.
The Panama Papers, the Paradise Papers, the Pandora Papers, and even non-alliterative evidence of tax avoidance and other unfairness are leaked. A few people lose their jobs, but many don’t and the system doesn’t change. It’s a challenging situation because it’s also unclear what we should be advocating for. But we can establish some goals, evaluate some options, and lay out how to get there. Let’s start with the goal.
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A fair system is one where we ensure equality of opportunity such that the brightest of each generation bubble to the top. We want to give the young people in each generation who can push forward our species the knowledge, connections, and capital to do so. But we also want to ensure that everyone else has the knowledge, connections, and capital to contribute to the collective brain, including in allocating their investments toward the things they think matter to them, to their children, and are likely to expand the space of the possible.
A fair meritocracy can only function if the playing field is level.
But when wealth begets wealth, a powerful few can collude and corrupt our institutions. We end up with a double whammy. Innovation and economic growth slow as what’s left in real terms for those with less becomes a smaller and smaller percentage of production. And wealth, legitimate or ill-gotten, created or appropriated, persists beyond a lifetime.
The natural starting point is to have billionaires pay more taxes and have larger inheritance taxes putting a cap on the total one can receive over a lifetime. The trouble with both these approaches is manifold.
First, loopholes exist. As mentioned, tax codes differ in different places, leading to wealth flight as people move their money to tax havens. As each leak reveals, almost anyone with substantial wealth, including those in charge of the tax system itself, are sheltering money in tax havens. Don’t hate the player, hate the game – though it doesn’t hurt to shame players. It’s hard to audit and catch these cases and then recover funds.
Second, inheritance taxes must be set in a way that doesn’t undermine one of the incentives to produce later in life – the desire to leave more for your children.
Third, while many from Bill Gates to Warren Buffett and others agree that wealth taxes and inheritance taxes are good and have signed up to campaigns like the Giving Pledge – contributing the majority of their wealth to philanthropy – this philanthropy, even when no longer under the direct control of the wealth creator, passes a disproportionate control over our current energy and production into the hands of unelected, unaccountable people who may or may not be efficient allocators. And even if we could tax these philanthropic foundations, it’s not clear that our governments would use these new funds in ways that aid human potential and economic growth over, say, more drones, missiles, or contracts for cronies.
Inheritance taxes are critical to human progress, but they are hard to achieve and implement. Of course, this does not mean we shouldn’t try, but in the meantime, there are other options on the table that avoid many of these challenges. Remember, the overall goal here is to tax unproductive money; to reduce wealth appropriation and rent-seeking. One solution is what Norway did in taxing it’s oil-rich land in the North Sea.
Taxing unproductive money
Monopoly is a ruthless game that tears families apart. There’s nothing more annoying than rolling the dice and making your way across the board knowing you’re going to get caught by rents you cannot pay to landowners who take too much away. Just as the board game tears families apart, the real-world equivalent tears societies apart. And unlike the board game, where the conditions are reset every time you play, these inequalities persist and grow across generations. Imagine how awful Monopoly would be if you had to start each game from where you left off last time. But that’s real life where the game doesn’t get reset. This core issue of persistence across generations is not fixed by a basic income every time you pass Go.
Monopoly was actually designed to teach people about the unfairness of the unchecked capitalist dynamics we’ve been discussing. More than just a fun game, it was intended to be a tool for teaching how unchecked capitalism inevitably leads to persistent control by a few. Its original formulation was the Landlord’s Game, and it was designed by Lizzie Magie, an activist known for her unconventional methods of conveying the logic of injustice.
Magie once bought an advert to sell herself to a potential husband as a ‘young woman American slave’ – ‘intelligent, educated, refined; true; honest, just, poetical, philosophical; broad-minded and big-souled, and womanly above all things’. It was her way of highlighting the unequal, slave-like position of women in her nineteenth-century society.
The Landlord’s Game was an introduction to the work of political economist Henry George – namely his emphasis on a fairer, more efficient capitalism through land value taxes. This wasn’t socialism. In fact, Karl Marx was not a fan, because Henry George’s proposal remained firmly within a capitalist model. George was proposing a better capitalism. One that removed a key distortion in what can be owned. George’s solution still applies today.
Land value taxes are what everyone agrees is a better tax system but are not sure how to introduce without risking a revolution. The basic idea is that, unlike everything else we can own – shares, businesses, patents, or art – land is not something anyone creates; it is never wealth creation. It is entirely wealth appropriation, and without land development it does not expand the space of the possible. Land value taxes therefore impose a tax on the value of the land, excluding what’s built and developed on it. That is, three adjacent blocks of land, one with a house, another with a block of flats, and another undeveloped, will have the same tax obligation. This incentivizes development, improvement, and reallocation of land for its most productive use. It also disincentivizes holding on to undeveloped land for speculation.
Land value taxes cause people to reallocate money to growth and property development over idle land speculation, leading to more efficient use of land, more available land, and more affordable housing. In general, it incentivizes the flow of capital away from unproductive rent-seeking or wealth appropriation toward more productive wealth creation. Unlike, say, raising income tax, which can disincentivize people from working harder to earn more lest it move them to the next tax bracket or cause them to spend money on avoiding tax. Both reduced productivity and tax avoidance reduce overall tax revenue. Land taxes do not distort incentives for production. Land taxes also have the advantage of being inescapable, because moving your block of land to the Cayman Islands is not an option. They incentivize people to reallocate land they control to more productive uses or sale to those who can use it more productively. In this way, land taxes are economically efficient and non-distortionary, encourage the flow of money, and, unlike other wealth taxes, have no danger of wealth flight because you can’t move land. In any case, being a simpler tax, land value taxes are in general harder to evade. Indeed, some proponents have argued that a land value tax would do away with the need for any other taxes.
Imagine a world with no income tax, no sales tax, and no capital gains tax. That may sound like a fantasy, but land value taxes have the support of a range of economists across the political spectrum. Friedrich Hayek, the 1974 Nobel Prize winner, was a proponent in his various writings (indeed, Henry George is said to have sparked Hayek’s interest in economics). Milton Friedman, the 1976 Nobel Prize winner, described it as ‘the least bad tax’. Joseph Stiglitz, the 2001 Nobel Prize winner, formulated the Henry George theorem, which lays out the conditions when a land value tax can finance 100% of public expenditure without the need for any other taxes. And 2008 Nobel Prize winner Paul Krugman argued that the theory was sound for financing city growth, though, with more of the economy in the stock market and other assets, it may not generate enough to replace all other taxes; it would, however, make housing affordable, increase development, and do away with the kind of rent-seeking we discussed earlier using London as an example. Whether land value taxes can replace all taxes for government spending remains an ongoing debate, but even conservative estimates suggest that it could do away with income and sales tax.
In the United States, even though less wealth is held in land, a land value tax of 6% would pay for Social Security, Medicare and Medicaid, the entire Defense budget and more. In countries such as Australia and Britain, where more wealth is held in land, it could effectively replace all other taxes and solve the crisis of lack of affordable housing. And because a significant portion of loans are made for purchasing property, more new money would be created for wealth creation rather than wealth appropriation, reducing inflation.
The two biggest challenges land value taxes face are how to transition from the current system to a land value tax system and how to value the land minus improvements, such as buildings. Both have solutions.
Transitioning to land value taxes
The transition problem exists because in the current system in the US, UK, and many other developed countries, the middle class own land. But what many middle-class landowners don’t realize is how little land they own. That the amount of land that even the richest own, let alone the middle class, is tiny in comparison to that of the ultra wealthy. We previously discussed the UK land ownership gap, but even in the United States, the top 10% of wealthiest Americans own about two-thirds of all privately owned land. What the middle class should know is that they would be much wealthier under a land value tax system. One transition pathway would be to reduce and eventually eliminate income, sales, and capital gains tax while gradually and proportionally increasing land value taxes to compensate for this. This pathway would also offer time and incentives for shifting from wealth appropriation to wealth creation. Many people’s property taxes would go down because what is taxed is only the land, not the value of what’s on it.
Psychologically, land value taxes also seem to undermine the very notion of property rights – indeed, the word ‘property’ is synonymous with land. But there is also a moral case against land ownership. Land is unlike everything else we can currently own. Land is more like water or air. We did not create it. So beyond the economic case for a land value tax, there is a moral case that no one should own land indefinitely without paying a tax to the common good for their control over our common land. Because of the unique status of land ownership compared to other assets, wealth often persists thanks to the persistent intergenerational transfer of land, which was often acquired generations ago, and often through dubious means, such as conquest, slavery, theft, and other forms of exploitation. Since those early means of acquiring land are no longer acceptable, newcomers have little access to large tracts of land that are effectively permanently controlled by a few.
As a result, in both the UK and US, research suggests, the gap between the wealthy and the poor will persist indefinitely. In the US, this gap is also correlated with race as a result of the history of slavery. To resolve this large and persistent Black–White wealth and asset ownership gap, reparations are sometimes proposed. Reparations, however, have low levels of support among Americans as a whole, and suffer from practical and ethical challenges in identifying the beneficiaries of slavery, the victims of slavery, and exactly how much they benefited and suffered.
Land value taxes have the added benefit of sidestepping many of the challenges of targeted reparations while still levelling the playing field against past injustices that are currently band-aided by inefficient redistribution and affirmative action efforts. Land value taxes are a systems-level solution that removes the path dependence of history and removes the practical and ethical challenges of wealth transfers on the basis of ancestry, identity, or skin color. Indeed, the abolishment of slavery, one of the greatest moral victories for our species, also offers guidance as to how we might transition toward land as the basis of taxation.
Today, while slavery or effective slavery still exists in parts of the world, including developed countries like the United States and United Kingdom, it is not only illegal but unthinkable. But slavery was once common and uncontroversial. The idea that you could own another person was taken for granted by every major civilization. Indeed, the holy books of major world religions, including the Bible and Quran, do not admonish against owning slaves but rather describe how they should be treated.
How that transition happened is a guide for other moral transitions.
In the United States, it took a civil war to remove an entrenched slave-owning class, but abolishing slavery there and elsewhere also required economic solutions. Slave owners (though notably not slaves themselves, leading to the case for reparations) were often compensated for the loss of their ‘property’. Britain’s 1833 Slavery Abolition Act, for example, which freed all slaves across the British Empire, cost 40% of the Treasury’s annual budget and required a loan that wasn’t paid off until 2015. But this compensation reduced the need for revolution or other violence.
Similarly, the least disruptive method of transition to land value taxes is some form of compensation to owners of land that encourages a transition to wealth creation, such as tax breaks that incentivize a transition toward investment in business, entrepreneurship, the stock market, and other, more productive investments. These could include tax offsets for property development and the reduction of income and sales tax proportional to the increase in land tax. There are also lessons and models from patent law. Just as there are time limits on ownership of intellectual property so one could introduce time limits on land, after which there are high taxes, such as at the point of death or land transfer. The focus here is land, so trusts, businesses, and other similar vehicles offer no protection and of course land can’t be moved offshore. Such solutions help transition us from a bad system to a better one, force companies profiting from natural resources to pay more based on the value of what they’re extracting from the land, and have the added benefit of incentivizing landowners to innovate and develop to pay the taxes needed to retain their control over land. No more buying empty land and holding it in the hope it will go up.
With house prices so high on the political agenda, there may be popular support for a politician or party running on this platform to lower or eliminate income, sales, and capital gains taxes. This shift would leave almost everyone with a lower tax burden. The final piece of the puzzle is how to value land minus what’s built on it, but there are many solutions to this problem.
The valuation problem has various solutions. Land value taxes differ from a property tax in that only the land is being taxed, not improvements such as buildings, which is why many people’s property taxes will decrease. Land intrinsically has value based on what’s under it (e.g. natural resources) or near it. Buildings, such as houses, add value to the land, but the value of the land and the value of the buildings can be separated. For example, two plots with identical buildings, one closer to the city and one further away, will have different overall values because of the land value. Similarly, two identical adjacent plots of land, one with a house and another empty, will have a different overall value based on the value of the house. In both cases, only the land is the target of taxes. So in the first case, the property closer to the city would have a higher tax obligation despite having the same buildings. In the second case both adjacent properties would have identical tax obligations despite only one having a house. There are various solutions for how to tax only the land without taxing what’s on the land.
These solutions calculate land value based on, for example, the value added by improvements or using the rental value of similar properties in different locations as a guide. Of the many methods of land valuation, one of my favorite solutions, because of its simplicity, is self-valuation. People tell you what their property is worth. Surely, you may counter, people would self-value at the lowest reasonable amount and pay less tax. Here’s the catch. You have to be willing to sell the property at the price you say the property is worth. For example, the government may wish to buy these properties to create a parallel public housing system similar to Singapore’s Housing and Development Board, where any citizen is eligible to own a public property, but only the one they live in. It may also discourage speculative holding of undeveloped land, freeing it for more productive purposes. Self-valuation is a system that can be used even when the property is not rented. It encourages higher rather than lower valuations, increasing tax revenues.
Indeed, the self-valuation approach has a long history. Denmark’s seventeenth-century king Christian IV is famous for the Sound Taxes whereby ships’ captains were allowed to self-declare the value of their cargo. No inspections were carried out, but the crown reserved the right to buy the cargo at the declared price.
‘Sound’ here refers to the strait between Denmark and Sweden, but this solution is also sound in the sense of a ‘good’ tax. Solutions such as self-valuation exist as a class of emergent solutions to fairness and are often preferred because they’re less susceptible to corruption. Another example is the ‘You cut, I choose’ procedure – the person who cuts the cake must take the last piece, incentivizing fair division and efficient allocation. A start-up city or programmable politics would be an ideal place to implement and test this solution.
Land value taxes are far simpler and more efficient than the current tax systems that they would replace. Even so, the goal here is not to go through all the details but instead show that a better system exists, even though it is not currently in the Overton window of political discussion. Indeed, both Henry George and land value taxes are memory-holed for many and there are large incentives to keep them from being widely discussed. Unlike other aspects of inter-elite competition, including the case of slavery, where not all elites owned slaves, most elites own land and would not want their land taxed lest they lose it. Those who hold vast swathes of land, often the most valuable prime real estate, hope that people’s fear of losing their relatively small property portfolios, family farms, or family home will prevent land taxes from being discussed or implemented. And so, the majority of society, not realizing the level of inequality, ends up fighting over scraps of space. For land value taxes to succeed, people will need to be shown how much more they would have under these taxes. They will need to be shown that housing will actually be more affordable for all. And beyond land, all but the ultra wealthy will enjoy reduced taxes overall.
Land value taxes are in a class of taxes on unproductive money. This is not a particularly socialist position. As mentioned, Marx was actually against land value taxes, which he regarded as entrenching capitalism. Land taxes will have the result of redistributing wealth that was appropriated, but without disincentivizing productive uses of money. But redistribution is not the goal, just a by-product. The goal is simply to create a more economically efficient, fairer capitalist system that incentivizes productive uses of our energy and resources every single generation.
By taxing unproductive money, we create a better capitalism that doesn’t kill the goose by disrupting incentives in the way that communism or extreme socialism does. And it widens the group of people who are incentivized to work and bring their talents to the benefit of all.
Norway’s tax on its North Sea resources is an example of how unearned wealth can be made to work for all. When unproductive money, rent-seeking, and wealth appropriation are taxed, it reduces the need for other forms of social welfare reallocation, limiting them to cases of bad luck in life rather than bad luck in where you were born and who you were born to. It’s a way to ensure a fairer capitalism.
Philosopher John Rawls asked us to imagine a veil that shields you from knowing the circumstances of your birth. You don’t know if you’ll be male or female, bright or average, dark or fair, hot or not, rich or poor, or what country you’ll call home. Like the ‘You cut, I choose’ solution, a fair society is one designed from behind a Rawlsian veil. We can achieve Rawlsian capitalism and a fairer playing field by taxing literal fields. Greed can be good when incentives and scales of cooperation are aligned and the world is positive sum. The invisible hand works best when the right rules are enforced.
There is an urgency in getting to this point quickly. Baby Boomers are about to retire and their massive inequality is about to get passed on to the next generation. This isn’t about those with even a few million in housing portfolios but those with hundreds of millions and billions that dwarf everyone else, such as the 25,000 people who own half of Britain. We must act now as part of the package that leads us to a better solution. By encouraging innovation, retirees too will have access to more affordable and higher-quality goods and services. The past should not prevent us from reaching a better future.
WTF happened in 1971?
In shattering the glass ceiling, we must consider the mechanism by which wealth is allocated and reallocated through taxes, but we also need to consider the total size of the pie – the space of the possible – which is a function of both energy and technological innovations in efficiency. The decoupling of total wealth and wealth distribution is most obvious when we look at what has happened to our societies since the 1970s.
A popular website asks a simple question: WTF happened in 1971? A series of graphs show rising inequality, lower wages for the middle class, increased costs of living, later marriage, falling birth rates, and general reduction in quality of life, all starting around 1971. The website implies that the answer is ‘Nixon shock’.
On 15 August 1971 President Richard Nixon effectively ended the Bretton Woods system by moving the United States off the gold standard. This gave the Federal Reserve the flexibility to control the money supply to adjust for stronger and weaker economic growth, avoiding booms and busts. Control over the money supply meant that we now had to trust central banks like the Federal Reserve to not devalue the currency. It also meant that one could now get wealthy by being closer not only to sources of energy and innovations in efficiency but also by being close to the money supply. The finance sector takes the best minds away from innovation and efficiency gains and pays them what seem like extraordinary salaries with multi-million-dollar bonuses. But these salaries are tiny compared to the billions being extracted. Being closer to the financial sector gets you closer to this new source of capturing money, capturing a larger space within the space of the possible decoupled from innovation and economic growth. And that is because of the monetary equivalent of share dilution – capturing the representation of wealth rather than wealth itself. Your money is like your share in the economy. When new money is created and distributed without growing the space of the possible – that is without creating new wealth through energy or efficiency – it devalues your shares. We call this inflation.
As money enters our system even when productivity stagnates, we may wonder why inflation hasn’t gone up more than it has already. But it depends on how you measure inflation. Inflation is typically measured by a basket of goods and services that households typically consume – food, clothing, transport, utilities. By this metric, inflation is typically low. But inflation can be artificially kept low as long as the price of this basket of goods stays low. If inflation were measured by rising asset prices – housing, the stock market, even bitcoin, then inflation is actually in the double digits and as high as you might expect given the creation of money and low productivity. But higher inflation is now measurable even by the basket of goods and we should see corresponding rises in each country based on their access to excess energy. Inflation will rise if new money is created while EROI and energy availability fall.
Around 1973 the Great Stagnation in innovation started – there was less room to expand innovative new efficiencies, but Nixon is probably not entirely to blame for WTF happened in 1971. Instead, the real departure was the end of cheap oil shrinking the space of the possible that started in 1973.
In 1973 the recently created Organization of Arab Petroleum Exporting Countries (OPEC), led by Saudi Arabia, embargoed oil to the United States, United Kingdom, Canada, and other nations that had supported Israel during the Arab–Israeli conflict or Yom Kippur War. Overnight, the price of oil quadrupled from $3 per barrel to $12 per barrel. This led to the recession of 1973–5. In 1979 oil production fell during the Iranian Revolution. This led to the recession of 1980–3.
We can now clearly see why the energy ceiling fell, the space of the possible shrunk, and how production and productivity and all that we do are ultimately contingent on continued access to plentiful excess energy. In financial terms, that means cheap energy, particularly cheap oil.
Thus the solution isn’t just in the money supply or financial instruments, which can increase inequality and harm our ability to innovate. It’s not just about setting the right neutral interest rates or increasing consumer confidence. It is ultimately all about how much excess energy we are able to produce, a function of our energy sources’ EROI and availability. We feel this directly in the price of energy as a proxy, though it is an imperfect proxy due to subsidies and other distortions. Ultimately, our future depends on expanding the space of the possible.
The next step is perhaps continuing to work on battery technologies and slowly expanding solar where it can be used. But what we really need is to transition to the nuclear age – a revolution stillborn for fears of problems with early reactors long since resolved in modern nuclear power technologies. Some countries already realize this.
China, for example, is entering the nuclear age all by itself, with 228 nuclear reactors in development in 2022, as I write. This will help at least China and others who choose this path reach a next level of energy abundance, increasing their wealth, power, and influence, as cheap coal did for Britain. And that wealth, power, and influence may lead to the next energy level – fusion.
But to get to fusion or even to solve the renewable battery and EROI challenges, we need to trigger a creative explosion.