Book review: “Abundance”




Did you ever read a book that makes you feel as if your head’s going to explode from all the new concepts? I don’t mean the U.S. Navy’s S5W Reactor Plant Manual, but Joe Dominguez’ “Your Money or Your Life” certainly qualifies.

I’d like to thank my friend John again for sending me a copy of Abundance. He’s an inquisitive Navy retiree who travels and talks with people and learns new things. He could even be mistaken for the stereotypical New England skeptic, as opposed to my stereotypical cynical nuclear engineer. We have somewhat pragmatic expectations of life and have learned to question most of what we read, but this book has filled both of us with optimism for the future of the human race and our environment.

It’s written by Peter Diamandis and Steven Kotler. The first is the founder of the X Prize foundation and the second is a science journalist. They’ve both done well for themselves and the royalties probably won’t make a significant difference in their lives. I think they’re both mature enough to have stopped chasing the limelight, too. It’s possible that they’ve written this book solely to spread the word so that more people will get interested in these projects.

The book’s been out for a few months and it’s a bestseller, so you can find a copy at your local library. (John, I’m passing your copy on to my daughter!) While you’re on the library’s waiting list you can download the first chapter on the book’s website. You might keep coming back to these to check the authors’ predictions, though, so in my opinion it’s even worth (*gasp*) buying a copy.

Diamandis & Kotler reaffirm all the media’s scary facts about today’s world population, environmental abuses, Third World poverty, and lack of resources. But then they go on to claim that there’s plenty for everyone if we can just figure out how to obtain it more efficiently.

They use the analogy of aluminum. In the early 1800s, the metal was so difficult to obtain that it was more valuable than gold. (Napoleon III once threw a dinner party using gold utensils, but he reserved aluminum utensils for his VIP guests.) Chemists began figuring out extraction methods soon after that but the process was difficult enough to keep the price high.

Ironically, aluminum is the third-most common element in the earth’s crust, after oxygen and silicon. However, it has a strong affinity for the latter two and is almost always present as bauxite, a clay-like compound of the three elements. Aluminum may have been common, but it wasn’t easy to separate from bauxite.

By the mid-1800s, cumbersome chemical processes had raised the extraction yield enough to drop aluminum’s price by 90%. However, it was still expensive and in very short supply. By the late 1800s, though, these complicated chemical extraction methods had been set aside in favor of the new high-tech process of electrolysis. Industrial electrolysis quickly scaled up to make aluminum so abundant that it had almost no value.

Diamandis and Kotler apply this analogy to nearly every other natural resource and technology that’s currently regarded as too scarce or too difficult. A modern analogy is energy. In the late 1990s oil cost roughly $10-$20 per barrel, and analysts forecast years of low prices. Yet only a decade later, during the Great Recession, oil surged to over $140/barrel and even today remains over $100/barrel. In the meantime, however, natural gas discoveries and extraction methods have dropped those prices enough that utilities are retooling electrical generation plants to use natural gas instead of oil. Natural gas is so cheap that even coal shipments have dropped.

These three hydrocarbon fuels are the obsessive focus of most of today’s extraction and power-generation industry (and its apparently unpredictable economics). Meanwhile the amount of sunlight falling on the earth’s surface is roughly 5000 time greater than the worldwide power that’s extracted from oil, natural gas, and coal combined. A century of infrastructure has been bought & built to pay for “conventional” energy generation, and the industries are rightfully striving to extract every penny of revenue from their capital investments. However, the prices of photovoltaic panels have dropped over 70% in the last three years. What if these miners, drillers, and refiners are spending all their time and money to pursue the wrong resource? What if the utility companies could invest in modern electrical grids to handle a web of PV power production instead of the existing huge funnel of generation & distribution? Instead of spending gazillions of dollars on utility plants (and charging customers for the funding to build new ones), why not subsidize their customers’ own generation systems that will save money for both the customers and the producers?

Water is another example– over 95% of it is salty. Instead of depleting the fresh-water aquifers with deeper wells, perhaps it makes more sense to recycle what we have and to desalinate the rest of our needs. We’ve been drilling bigger & deeper wells for millennia instead of redirecting our efforts into different extraction methods. We haven’t even begun to tap the ocean’s potential, and in Hawaii I’m keenly aware of the ocean’s potential.

Better tech is also closer than we think. Over the last five decades, computing power and electronics have improved at an exponential rate. It’s not just progress like Moore’s Law— or comparing a 1980s desktop PC to an iPhone 4S— but dozens of other technologies from materials science to medical diagnosis to vaccines. Computing power is a common example but Dean Kamen’s “Slingshot” water purifier also shows how decades of engineering development will make clean water cheap for everyone. Ironically of the world’s largest water sellers, Coca-Cola, is partnering with Kamen on production. Coke is a pretty pragmatic corporation itself, so maybe Kamen is on to something.

The “problem” with this exponential rate of progress is that we humans have trouble perceiving it and projecting its potential. Psychologists have shown for decades that human brains and senses aren’t equipped to deal with our own achievements, let alone our future. We tend to extrapolate linearly instead of exponentially, and we leap to conclusions with heuristics instead of through analysis. Our senses and our brains even find patterns where none exist, and those patterns aren’t graphed on exponential axes. The future is accelerating and new achievements are closer than we think, but it’s difficult for us to perceive the rate of change. Our brains are already struggling to cope with these concepts, but we’re also overwhelmed with negative (even hysterical) media images and a bias for projecting existing problems far into the future. However, the solutions are at hand, and they’re going to continue to surprise us with their results.

The authors go on for over 350 pages of projects, accomplishments, and predictions (with end notes and other documentation). If your brain is afflicted with TL;DR then watch the 15-minute TED video. Some of the projects are still in the concept stage or require extensive integration of existing tech, while other systems are well on their way to becoming as cheap as aluminum. Even more interesting is that the economics of collaboration and development are also becoming as cheap as aluminum. The Internet has put information into the hands of African farmers to boost their standard of living out of the 19th century, and it’s also greatly reduced the cost of innovation. Financial independence is at hand for much of the world, not just the 1%.

I could blather on for another thousand words myself, but I think you get the point. Read the book. It’s not only fascinating, but it’ll also fill you with hope.


Related articles:
Book review: “You Are NOT So Smart.”
Book review: “All The Money In The World”
Book review: “The Mindset List”


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About Doug Nordman

Author of "The Military Guide to Financial Independence and Retirement" and co-author of "Raising Your Money-Savvy Family For Next Generation Financial Independence."
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5 Responses to Book review: “Abundance”

  1. Jay Voss says:

    Nice book review Nords!

    I was thinking to order a copy of the book for a good buddy who is an environmental nut, but will send your review instead to see if it opens his mind a bit. Too many environmentalists extrapolate current conditions leading them to believe in a future of gloom and doom.

    • Doug Nordman says:

      Mike, Jay, you’re welcome!

      I think all humans (not just environmentalists) tend to extrapolate current trends without hoping for tech to save the planet. I can understand the viewpoint, which is why it was so pleasant to see the book show a bunch of silver linings peeking out of the gloom & doom…

  2. Mike says:

    Going on the reading list! Thanks!

  3. Thomas Watson says:

    Also, in addition to PVs, power plants using solar thermal techniques are also offering great alternatives to fossil fuels. Of particular interest is the promise of this sort of power plant to offer 24/7 baseline power production, often seen as a weakness of PV power plants and other forms of renewable energy.

    It will come down to people actually investing and promoting this sort of technology.

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