Oddbean

I was about to my own comment to say that in this instance the correlation probably does mean something, but what we interpret from the chart can be ambiguous based on the assumed “causation”. I think I agree with your above comment. Ability to harness (and consume) energy is a form of wealth.

I think there can be other variables that impact it and other forms of wealth. But even money is store energy. You applied energy (labor), you traded it for money, and that money represents a proof of work that you can then exchange for someone else's energy (labor). Through our work and innovation, we then created new methods of labor, where we can create more energy than just from the human body alone. But that's still wealth in the same sense.

The causality is very likely inverted but everyone who posts this plot gets it the wrong way. Higher energy consumption does not lead to wealth. Have you gotten richer by turning on your stove? That's implausible. It's the other way round. The wealthier you are, the more stoves you'll turn on.

I see your point and you’re not wrong…but the electricity value is the easiest proxy for domestic energy production (OR proximity to energy production). If as a country you don’t have access to or produce electricity, you won’t develop industry, which elevates standard of living. Access to affordable, useable energy at scale relative to your population is critical…the countries in the bottom left don’t have that…the countries in the top right do.

Yes, we agree that energy production is key. All I'm saying is that there is no causal relationship that is apparent from this graph, not the correlation (which is very obvious!). The graph measures energy *consumption* and there are many examples you can construct to show that the causality doesn't hold.

This is what I'm here for. And I get your point as well. I believe it is a good one. And very true, just having energy doesn't create wealth. It has to be correctly applied. This is true with any resource. Your stove example, me running a bunch of stoves for the sake of running a bunch of stoves doesn't create wealth. But me running a bunch of stoves to create great meals for you and your friends can. So though energy may not create wealth, to your point, it is absolutely required. So I believe the fundamental idea of the meme holds true. There is not and will not be a low-energy rich nation.

two nations with the same energy consumption. one is more efficient than the other, and this it's wealthier than the other. two nations, one four times more efficient but uses half of the energy consumption of the other country. that one is wealthier although it uses less energy. qed

I don't disagree. Wealth depends on the how the energy is applied. Several variables can impact this. The running a bunch of stoves for no purpose versus running the same stoves to sell cooked meals. But less energy is not necessarily the same as low energy.

I guess so… I mean, the chart literally has GDP on the independent axis so it’s really just the commentary that is the problem. The follow on from the assertion that rich countries use more energy is fundamentally more important though… why do they? Because humans are likely happier/healthier when they have access to abundant energy. Rich nations tend to have that access and poor nations don’t. I think people tend to think that, but then just want to equate being rich with being happy and so they explain the chart with inverted axes to oversimplify the interpretation.

> Because humans are likely happier/healthier when they have access to abundant energy I also realize that this statement 100% needs qualification and it is likely not true that happiness is perfectly correlated with the amount of energy one has access to

While I agree with your general point, this specific reasoning is also flawed. People don't randomly consume energy, they only consume it for whatever they believe is valuable. One of those things are machines that produce stuff they need.