As stated in a comment below:
> The post-war growth in America was largely driven by cheap and abundant domestic oil... The oil crises of 1973 and beyond were the proximate result. But our economy as a whole never really recovered;
While lots of things contributed, this is almost certainly the case. Energy is an input into everything. Our current standard of living exists mainly due to energy and figuring out productive/efficient ways to consume energy.
For example if we retained all of our knowledge, all of our productive know how, but were banned from using fossil fuels and electricity we'd be essentially back to pre-industrial standards of living. When you think about it, it's self-evident, but we can't do anything modern without consuming enormous amounts of energy. Transportation, shipping, computing, agriculture, communication, heating manufacturing all of these are essentially energy consumption endeavors.
More expensive energy means all of these factors because significantly more expensive. The cost of your food goes up if every input is now paying more for energy. If maintaining a standard of living is now more expensive then cost of labor goes up without any improvement in standard of living. This drives inflation. Increasing the price of energy probably is likely a more broad economic driver of inflation than lowering interest rates. Lowering interest rates drives asset price increases heavily, but much less so on commodity and day to day price increases. Eventually those asset price increases work their way back to housing and then drive labor, but it's not very direct. Increasing the cost of energy drives up the price of everything. The only thing that tops it is direct giving of money to people.
The 1970s oil shocks cost us an enormous amount in our standard of living and drove pure inflation. Just like the oil price increases of the past few years (along with supply/labor shortages) drove our recent bout of inflation. Oil dropped in early 2020 and so did inflation. Oil peaked in mid 2022 and so did inflation. Energy prices drive your economy - anything that notably increases the cost of energy will have ripple effects on the rest your economy.
I haven't read anything that I've felt covered it fully. If you want something easy to consume on our economy and technological progress essentially being getting better at converting energy to productive work you can check out this somewhat decent link from Jancovici:
It meanders a bit for the first 5-7 mins, but does a decent job of making the argument. Min 40 also has another pretty good slide.
It does go into covering recommendations which I'm not necessarily recommending, but it does accurately summarize our economy as one of energy transformation.
The best analogy in it is this. Right now if we need to do construction and dig a 10ft x 10ft x 10ft hole we can pull out a backhoe and be done in a min. If we with all of our current knowledge had to do it without consuming energy we'd be digging by hand with a shovel, and no faster than someone pre-industrial would. When you start looking at every industry you come to the same conclusion. All of our technological know how boils down to just better ways to be more productive in converting energy. But fundamentally consuming energy to be productive is the modern economy.
One (of many things) to keep in mind when reading Vaclav’s work is that he is sloppy about distinguishing between types of energy; 1 kWh of energy in coal is “worth” much less 1kWh of electricity. They have the same units in the same way that an American dollar and a Canadian dollar are both measured in “dollars”.
As stated in a comment below: > The post-war growth in America was largely driven by cheap and abundant domestic oil... The oil crises of 1973 and beyond were the proximate result. But our economy as a whole never really recovered;
While lots of things contributed, this is almost certainly the case. Energy is an input into everything. Our current standard of living exists mainly due to energy and figuring out productive/efficient ways to consume energy.
For example if we retained all of our knowledge, all of our productive know how, but were banned from using fossil fuels and electricity we'd be essentially back to pre-industrial standards of living. When you think about it, it's self-evident, but we can't do anything modern without consuming enormous amounts of energy. Transportation, shipping, computing, agriculture, communication, heating manufacturing all of these are essentially energy consumption endeavors.
More expensive energy means all of these factors because significantly more expensive. The cost of your food goes up if every input is now paying more for energy. If maintaining a standard of living is now more expensive then cost of labor goes up without any improvement in standard of living. This drives inflation. Increasing the price of energy probably is likely a more broad economic driver of inflation than lowering interest rates. Lowering interest rates drives asset price increases heavily, but much less so on commodity and day to day price increases. Eventually those asset price increases work their way back to housing and then drive labor, but it's not very direct. Increasing the cost of energy drives up the price of everything. The only thing that tops it is direct giving of money to people.
The 1970s oil shocks cost us an enormous amount in our standard of living and drove pure inflation. Just like the oil price increases of the past few years (along with supply/labor shortages) drove our recent bout of inflation. Oil dropped in early 2020 and so did inflation. Oil peaked in mid 2022 and so did inflation. Energy prices drive your economy - anything that notably increases the cost of energy will have ripple effects on the rest your economy.