The official explanation for the slowdown in travel centers on the high cost of fuel, which points to the much larger failure in energy innovation. Real oil prices today exceed those of the Carter catastrophe of 1979–80. Nixon’s 1974 call for full energy independence by 1980 has given way to Obama’s 2011 call for one-third oil independence by 2020. Even before Fukushima, the nuclear industry and its 1954 promise of “electrical energy too cheap to meter” had long since been defeated by environmentalism and nuclear-proliferation concerns. One cannot in good conscience encourage an undergraduate in 2011 to study nuclear engineering as a career. “Clean tech” has become a euphemism for “energy too expensive to afford,” and in Silicon Valley it has also become an increasingly toxic term for near-certain ways to lose money. Without dramatic breakthroughs, the alternative to more-expensive oil may turn out to be not cleaner and much-more-expensive wind, algae, or solar, but rather less-expensive and dirtier coal.
Warren Buffett massively capitalized on both of these trends with his $44 billion investment, most made in late 2009, in BNSF Railway — making it the largest non-financial company in the Berkshire Hathaway portfolio. Understandably, the Oracle of Omaha proclaimed “an all-in wager on the economic future of the United States” and downplayed any doubts he might have harbored. For present purposes, it suffices to note that 40 percent of railroad freight involves the transport of coal, and that railroads will do especially well if the travel and energy consumption patterns of the 21st century involve a regression to the past.
In the past decade, the unresolved energy challenges of the 1970s have broadened into a more general commodity shock, which has been greater in magnitude than the price spikes of the two world wars and has undone the price improvements of the previous century. In the case of agriculture, at least, technological famine may lead to real old-fashioned famine. The fading of the true Green Revolution — which increased grain yields by 126 percent from 1950 to 1980, but has improved them by only 47 percent in the years since, barely keeping pace with global population growth — has encouraged another, more highly publicized “green revolution” of a more political and less certain character. We may embellish the 2011 Arab Spring as the hopeful by-product of the information age, but we should not downplay the primary role of runaway food prices and of the many desperate people who became more hungry than scared.
While innovation in medicine and biotechnology has not stalled completely, here too signs of slowed progress and reduced expectations abound. In 1970, Congress promised victory over cancer in six years’ time; four decades later, we may be 41 years closer, but victory remains elusive and appears much farther away. Today’s politicians would find it much harder to persuade a more skeptical public to start a comparably serious war on Alzheimer’s disease — even though nearly a third of America’s 85-year-olds suffer from some form of dementia. The cruder measure of U.S. life expectancy continues to rise, but with some deceleration, from 67.1 years for men in 1970 to 71.8 years in 1990 to 75.6 years in 2010. Looking forward, we see far fewer blockbuster drugs in the pipeline — perhaps because of the intransigence of the FDA, perhaps because of the fecklessness of today’s biological scientists, and perhaps because of the incredible complexity of human biology. In the next three years, the large pharmaceutical companies will lose approximately one-third of their current revenue stream as patents expire, so, in a perverse yet understandable response, they have begun the wholesale liquidation of the research departments that have borne so little fruit in the last decade and a half.
By default, computers have become the single great hope for the technological future. The speedup in information technology contrasts dramatically with the slowdown everywhere else. Moore’s Law, which predicted a doubling of the number of transistors that can be packed onto a computer chip every 18 to 24 months, has remained broadly true for much longer than anyone (including Moore) would have imagined back in 1965. We have moved without rest from mainframes to home computers to the Internet. Cellphones in 2011 contain more computing power than the entire Apollo space program in 1969.