Quotes, data and comments: The Coal Question by Stanley Jevons

This great book is underrated for two reasons. First, neoclassic economists don't want to mention this book because the ideas are not consistent with today's neoclassical theory. Second, non-neoclassical people don't want to read it because it was written by the founder of neoclassical economics. This book is the first systematic exposition of biophysical economic theory and the most comprehensive study of the implication of the energy use.

The hallmark of a great research is to ask the most important question. Jevons apparently got it right to ask The Coal Question. This is why he could offer such clear explanation of so many fundamental problems in England of his day. He also made some very concrete and clear predictions about the future. Inevitably, some clear and concrete predictions will not turn out to be materialized. That made it easy for his ideas to be discredited.

From reading the preface, I can see that the same oppositions to Jevons’ ideas will come back again. Those who argue against us don’t have to provide anything concrete. They only have to mention “technology progress”.

To anyone who shares the views expressed by Jevons, on the supreme importance of coal in relation to industrial development, the advance of Germany, like that of the United States, will appear to have resulted from the natural conditions of the territory occupied by an energetic and intelligent race, rather than from the conditions created by legislatures. (p. xv)

Since the relation between efficiency and total consumption is a very important topic today, we would benefit from reviewing his ideas on this topic.

But persons will commit a great oversight here if they overlook the cost of an improved and complicated engine, which both in its first cost and its maintenance, is higher than that of a simple one. The question is one of capital against current expenditure. (p. xxxv)

It is wholly a confusion of ideas to suppose that the economic use of fuel is equivalent to a diminished consumption. The very contrary is the truth. As a rule, new modes of economy will lead to an increase of consumption according to a principle recognized in many parallel instances. (p. 140)

Most articles citing Jevons would say that people will use more when a system becomes more efficient. But the reality is that people have to use more when a system becomes more efficient. I will use an example to illustrate it.

Several days ago, we shop for a new washing machine. There are two choices, the traditional type and the high efficient type. The traditional type cost 350 dollars and the high efficient type cost 900 dollars. From the labels on the washers, the annual energy cost of the traditional type is 71 dollars, and the annual energy cost of the efficient type is 35 dollars. Therefore the annual energy saving from the efficient type is 36 dollars. However, the energy cost, or more generally, the resource cost of making an efficient washer is much higher. Since resource consumption is highly correlated with monetary value, we can, as a first approximation, assume to resource consumption in manufacturing a high efficient washer is 900-350 = 650 dollars higher than the traditional type. How long we need to use the high efficient washer to recoup its higher capital cost? The calculation depends on how one discounts future. But even with zero discounting, it will take 650/36 = 18 years. Few can use a washing machine for 18 years. Therefore, the high efficient washer ends up consuming more resources instead of saving. Under what kind of conditions the use of high efficient washer will be cost effective? It is when one use the machine much more often than before. For example, if one use the machine 6 times more often than the average, the time to recoup higher initial capital cost is 3 years. Therefore, only when one use more energy, the efficient machine becomes truly efficient.

There is, moreover, this most serious and yet obvious difference to be noted. A farm, however far pushed, will under proper cultivation continue to yield for ever a constant crop. But in a mine there is no reproduction; the produce once pushed to the utmost will soon begin to fail and sink towards zero. So far, then, as our wealth and progress depend upon the superior command of coal we must not only cease to progress as before – we must begin a retrograde career. (p. 201)

The following statement gives the amounts of coal raised about the years 1858-1860, in the chief coal-producing countries: --- (p. 320)

	Annual production (Tons)
Great Britain	80,042,698
United States	14,333,922
British American Possessions	1,500,000
New South Wales	250,000
Prussia, Saxony, etc	12,000,000
Belgium	8,900,000
France	7,900,000
Russia Empire	1,500,000
Austria	1,162,900
Spain	300,000
Japan, China, Borneo, etc	2,000,000

From the above table, the decline of Spain may due more to lack of coal instead of inferior institutions. Institutions are mainly a reflection of underlying physical conditions instead of causes.

	Annual production	Thousands of Tons
	1875	1889	1903
Great Britain	133,306	176,917	230,334
United States	46,686	126,098	319,068
British North America	929	2,373	7,140
Australasia	1,362	4,544	8,535
India	648	2,045	7,438
Germany	47,756	83,614	159,846
France	16,686	23,915	34,345
Belgium	14,771	19,552	23,529
Russia	1,674	6,107	17,522
Austria-Hungary	12,854	24,923	39,528
Total world’s output	277,531	474,230	863,650

From the above table, we understand why France never became the most powerful country in recent history, despite their earlier dominance.

And our anxiety must be indefinitely increased in reflecting that, while other countries mostly subsist upon the annual and ceaseless income of the harvest, we are drawing more and more upon a capital which yields no annual interest, but once turned to light and heat and motive power, is gone for ever into space. (p. 412)

Are we wise in allowing the commerce of this country to rise beyond the point at which it cannot be long maintained? (p. 454)

After all, commerce is but the means to an end --- the diffusion of civilization and wealth. To allow commerce to expand until the source of civilization is exhausted is like killing the goose to get the golden egg. Is the immediate creation of the greatest possible quantity of material wealth to be our only purpose? … And do we accomplish this duty in encouraging a growth of industry which must prove unstable, and perhaps involve all things in its fall? (p. 455)

The alternatives before us are simple. Our empire and race already comprise one-fifth of the world’s population; and by our plantation of new States, by our guardianship of the seas, by our penetrating commerce, by our just laws and firm constitution, and above all by the dissemination of our new arts, we stimulate the progress of mankind in a degree not to be measured. If we lavishly and boldly push forward in the creation of our riches, both material and intellectual, it is hard to over-estimate the pitch of beneficial influence to which we may attain in the present. But the maintenance of such a position is physically impossible. We have to make the momentous choice between brief but true greatness and longer continued mediocrity. (p. 460)

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Some thought on what determines population size.

Population of England and Wales (p. 205)

Year	Population	Numerical increase for ten years	Rate of increase per cent for ten years
1701	6,121,525
1711	6,252,105	130,580	2
1721	6,252,750	645	0
1731	6,182,972	-69,778	-1
1741	6,153,227	-29,745	0
1751	6,335,840	182,613	3
1761	6,720,547	384,707	6
1771	7,153,494	432,847	6
1781	7,573,787	420,293	6
1791	8,255,617	681,830	9
1801	8,892,536	636,919	11
1811	10,164,256	1,271,720	14
1821	12,000,236	1,835,980	18
1831	13,896,797	1,896,561	16
1841	15,914,148	2,007,351	14
1851	17,927,609	2,007,461	13
1861	20,066,224	2,138,615	12
1871	22,712,266	2,646,042	13
1881	25,974,439	3,262,173	14
1891	29,002,525	3,028,086	12
1901	32,527,843	3,525,318	12

How to understand the population change of England? I believe the answer can be found from the development of British iron industry. The following is a detailed quote.

(p. 384) It was Abraham Darby who revived the forgotten method of smelting with pit-coal. The earliest adventurers in the process, we have seen, were Germans, and it is curious that the success of the Darby family was founded upon foreign experience. The eldest Abraham Darby went over to Holland in 1706, and learnt the method of casting hollow iron pots, or Hilton ware, as it was then called. Briinging over skilled Dutch workmen, he took out a patent to protect his newly-acquired process, and then, in 1709, started the celebrated Coalbrookdale Works in Shropshire. At first the oak and hazel woods furnished fuel, but the supply presently proving insufficient for the growing trade, it became customary to mix coke and brays, or small coke, with the charge of fuel. Eventually, when an increased blast was obtained, coke took the place of charcoal entirely.

There is much uncertainty and discrepancy concerning the history of the Coalbrookdale Works. Scrivennor, in his History of the Iron Trade, represents pit-coal as used in 1713. Dr. Percy, on the other hand, describes the younger Abraham Darby as first employing raw coal in the smelting furnace between the years 1730 and 1735.

In his first successful experiment he is said to have watched the filling of his furnace for six days and nights uninterruptedly, falling into a deep sleep when he saw the molten iron running forth. The success of the work was probably secured by the erection of a water-wheel of twenty-four feet diameter, capable of giving a powerful blast. But water was scarce, and a fire-engine, or old atmospheric steam-engine, was set up to pump back the water from the lower to the upper mill-pond. Here is one of those significant instances which teach us the power of coal and the interdependence of arts. Employed in this engine as a source of motive power, it enabled coal to be also used in the smelting-furnace. And this is the typical of the iron trade, as it is of other trades to the present day; for our iron industry in all its developments is as dependant on coal for motive power as for fuel in the furnace.

In December, 1756, we find the works “at the top pinnacle of prosperity, twenty or twenty-two tons per week, and sold off as fast as made, at profit enough.” And from this time and from this success arose England’s material power. To this invention, says McCulloch, “this country owes more perhaps than to any one else.”

The subsequent history of the iron trade is best to be read in the growth of its produce. (p. 386)

Compare the dates of mass iron production the population growth in England, we can see a clear correlation. I think mass iron production, which made mass production of other industrial products possible, created great employment opportunities, which spurred rapid population growth. So human beings are ultimately supported by energy that we can utilize.