THURSDAY, May 18, 2017
Eco-nomy 101
Why you can never do merely one thing
The economy is an energy system, not a financial one.
—Dr. Tim Morgan
Eric Lee, A-SOCIATED PRESS
TOPICS: ECONOMY, FROM THE WIRES, SUSTAINABLE LIVING, REALITY-BASED, SURVIVAL ISSUES
Abstract: An economic system based on the flow of energy and materials, such as all ecosystems have, is alternative to one based on the flow of money and the ultimate failure to understand the money economy secondary to the flow of money being an externality of the biophysical economy. Conventional economics is pretend science attempting to ride the whirlwind of growth while taking credit for the growth. Currently about 22,000 colleges and universities offer degrees in NCE and over 7,000 PhDs in economics are produced each year to serve the SYSTEM. All publish in peer-reviewed journals, but that doesn't make what they do science.
TUCSON (A-P) — Envision a vast watershed covered in trees except where water flowed in the riverbed or lakes formed. One way to look at it would be to calculate the market value of the wood, the cost of sending in the trucks and chainsaws to remove it, and how much profit those financing the extraction of wood would make. The profit, being immense, would mean the trucks would roll unless political opposition interfered. In keeping with historical precedence, political opposition would not be significant unless the watershed was part of the last 5% of forest remaining, assuming business and politics as usual.
Imagine the Sustainability Party, however, is in power and is determined to harvest the trees sustainably to meet critical urban demands. Noted silvologists determine the sustainable rate of tree removal and pruning. But there was no longer any fossil fuels or trucks and chainsaws to remove them as civilization had been forced to go back to the Wooden Age where it had been prior to the coal/oil/gas powered hyper-industrial age. As there was no whale oil, civilization would have to be powered by wood powered steam engines and animal (including human) power.
To be sustainable, the forest would have to support those doing the harvesting, processing, and transportation. The forest would have to provide the energy to feed the humans involved and the energy needed to harvest, process, and transport the wood. To reduce the amount of wood that needed to be transported, some wood was processed into charcoal near where it was cut. Aside from human power and a few oxen, all other power was by wood-fueled steam engines made in wood-powered steam engine factories. The furnaces needed to smelt the metal to make the steam engines were also wood-powered, and so on.
Hundreds of lumberjacks and oxen had to be supported. All areas of bottomland suitable for growing food had to be clear-cut. The area clear-cut was the same area that produced the greatest forest growth, but humans and oxen need to be fed to do work (it's an energy thing). The area cleared also had to support the farmers, bankers, preachers, prostitutes, bar tenders, and families of the lumberjacks. The town that arose was made of wood and wood provided for all their heating and cooking needs. It was a wood-based eco-nomy managed by eco-nomists to be sustainable.
Some wood and charcoal was exported to Big City in return for needed recycled metal, clothing, and alcohol. The city, however, was dismayed by how little wood and charcoal was reaching them. Politicians began to claim the steam trucks were using too much of their charcoal. The ashes of the city had to be hauled back uphill to the forest and too many ash spreaders were employed to distribute the nutrients about the forest so it could remain sustainable. The people of the city wanted more, they demanded change.
The power plants of the city were 'barely' being fed. The forest had once looked like a vast resource that would provide more power than could ever be needed. But after the economists had been replaced by eco-nomists, the point was finally made clear (or so they thought) that sustainable depended on net energy over the long run and that the net energy of a wood-based energy production system would never resemble that of the fossil fuel based energy production system of yore.
The city got tired of hauling the ash back to the mountains and wanted more energy. The Sustainability Party was replaced by the Business-As-Usual Party. They imported experts from China who knew how to make a solar electric powered civilization. Almost all the trees were cut down, sold to China, and the profit used to buy solar panels from China, copper wiring, batteries, charge controllers, inverters, and all the devices that would use all the power that would be produced, including electric can openers and electric cars. Steam engines were melted and turned into electric motors. The educational system had to be ramped up as many more years of schooling was need to educate those needed to support the solar electric based system than had been needed to educate the lumberjacks, steam-truckers, and ash spreaders.
The infrastructure needed to support the solar PV based economy was vastly greater than needed for the wood-based one. It turned out that those who had been democratically elected (on the basis of promises), who had decided to switch from wood to the solar electric based system, were former economists all. They had calculated how much power could be produced if all the trees were replaced with solar panels whose power was sent to the city. They neglected to figure out how much net energy would be produced in the long run. They thought they could sell all the trees to China, which still had coal and used it to make solar panels, import solar panels, and wallow in energy wealth forever. Well, as it turned out, they only wallowed in energy wealth for what remained of their lifetimes before the solar panels had to start being replaced (at which time there was no coal in China).
When the vast wealth and luxury, as promised by the Business-As-Usual Party, could not be sustained, the Sustainability Party came back in power. After the eco-nomy was restored as best it could be, the eco-nomists explained why the net energy that the solar electric system could export to Big City was not as much as the forest of trees had once provided. They also explained why, after the forest had been removed and the soil eroded, that the forest as it once was could not just be replanted to reappear in a few decades. They proposed that some of the remaining solar power and man/ox power be used to support a public works project to help rebuild the soil so trees could be replanted in the eroded areas and the forest mostly restored in a few thousand years. They explained why most of the solar production infrastructure should be sent to the desert areas where people had more sun and no trees, where solar PV could be used to make some solar PV panels over and above those needed to replace the panels that powered the PV manufacturing system. It would be good to have some solar electric and wood could be traded with the Desert Sun people of Tucson for solar panels.
Some wood for some panels could be traded. The wealthy elites, such as scholars who had 10 watt smartbooks, had up to 40 watts of solar electric power, when the sun was shining, for personal use that could charge a small battery for a reading light at night, and power electronic information devices, and to power palm sized fans and thumb sized pumps (average citizens had 32W for enough and the poor had 24W of just enough). The fans and pumps helped provide heating and cooling for up to 2 m² (21 ft²) of personal space when sleeping, resting, or reading. As the centuries passed, more soil developed, nutrients accumulated as soils formed, more trees grew (approaching earlier productivity), and the Age of Prosperity for a smaller population had arrived thanks to eco-nomists molding 'individual behavior into a plan of actions or avoidances that are oriented toward the maintenance of a viable equilibrium between Man’s demands and Nature’s resources'.
From The Economics of the Coming Spaceship Earth by economist Kenneth E. Boulding, 1966, the first eco-nomist:
Men of the early civilizations imagined themselves to be living on a virtually illimitable plane... Gradually, however, man has been accustoming himself to the notion of the spherical earth and a closed sphere of human activity.... Economists in particular have failed to come to grips with the ultimate consequences of the transition from the open to the closed earth.... We can think of the world economy or "econosphere" as a subset of the "world set...." We see the econosphere as a material process involving the discovery and mining of fossil fuels, ores, etc.... In advanced societies this [solar power] is supplemented very extensively by the use of fossil fuels, which represent, as it were, a capital stock of stored-up sunshine. Because of this capital stock of energy, we have been able to maintain an energy input into the system, particularly over the last two centuries, much larger than we would have been able to do with existing techniques if we had had to rely on the current input of available energy from the sun or the earth itself.... In regard to the energy system there is, unfortunately, no escape from the grim Second Law of Thermodynamics; and if there were no energy inputs into the earth, any evolutionary or developmental process would be impossible.... The large energy inputs which we have obtained from fossil fuels are strictly temporary.... The time is not very far distant, historically speaking, when man will once more have to retreat to his current energy input from the sun.... The earth has become a single spaceship, without unlimited reservoirs of anything, either for extraction or for pollution, and in which, therefore, man must find his place in a cyclical ecological system which is capable of continuous reproduction of material form even though it cannot escape having inputs of energy.... The essential measure of the success of the economy is not production and consumption at all, but the nature, extent, quality, and complexity of the total capital stock, including in this the state of the human bodies and minds included in the system.... This idea that both production and consumption are bad things rather than good things is very strange to economists.... There is nothing desirable in consumption at all. The less consumption we can maintain a given state with, the better off we are.... The most satisfactory individual identity is that which identifies not only with a community in space but also with a community extending over time from the past into the future.... A long-run vision of the deep crisis mankind faces may predispose people to taking more interest in the immediate problems and to devote more effort for their solution.
Anyone who believes that exponential growth can continue forever in a finite system is either a madman or an economist. —Kenneth Boulding, 1973
The world can, in effect, get along without natural resources, so exhaustion is just an event, not a catastrophe. —Robert Solow, 1974, Nobel prize-winning economist [as distinct from eco-nomist]
Technology exists now to produce in virtually inexhaustible quantities just about all the products made by nature—foodstuffs, oil, even pearls and diamonds.... We have in our hands now — actually, in our libraries — the technology to feed, clothe, and supply energy to an ever-growing population for the next 7 billion years. —Julian Simon 1995, longtime economics and business professor at the University of Illinois.
The twenty-first century could end in world peace, universal prosperity, and evolution into a higher level of compassion and accomplishment. —Converging Technologies for Improving Human Performance 2003, joint report, National Science Foundation and US Department of Commerce.
There may be curbs on traditional forms of growth, but there is no limit to human ingenuity. That is why Malthus remains as wrong today as he was two centuries ago. —The Economist, 2008
The greatest shortcoming of the human race is our inability to understand the exponential function. —Al Bartlett, Professor Emeritus, Physics
For a more sciency overview of biophysical economics (BPE or eco-nomy as distinct from faith-based neoclassical economics), with a couple of pages of references, and look at sustainability of natural and human systems in the United States in relation to 21st century issues associated with energy scarcity, climate change, the loss of ecosystem services, the limitations of neoclassical economics, and human settlement patterns: Sustainability and place: How emerging mega-trends of the 21st century will affect humans and nature at the landscape level, 2013
Yes, Virginia, there really is no biophysical Santa Claus. Too many have been affected by a need to believe in our believing age. They do not doubt what is obviously false but comforting. It is the nature of the human species to reject what is true but unpleasant, and so geobiophysical reality is not as popular as believing what you want. All minds, Virginia, whether they be men’s or children’s, are little. In this great universe of ours man is as an insect, a eusocial ant in his intellect, as compared with the finite yet unbounded world about him, hence we must listen to Nature who alone has all the answers. — Anonymous
SUBNOTE TO FILE 11/19/2022
Economist Steve Keen says the planet cannot sustain 8 billion people
Economics 101: GDP is transformed energy, is energy transformed into useful work and products for us Anthropocene consumers, and so if you don't have energy inputs (85% fossil fuel and alternative sources, e.g. hydro, wind, solar PV, nuclear are built using mostly [85%-99%] fossil fuels), you don't have goods and services either.
Declining energy = Declining GDP. Expect decline to what sustainable agriculture supports. MTI (modern techno-industrial) game over.
We are, for the first time, playing a global endgame [E.O. Wilson]. Without oil to turn into plastics and natural gas to turn into nitrogenous fertilizers (which alt energy cannot do at scale), expect population to decline (managed or unmanaged) by 4 billion. We MTIed expansionist ones are energy blind and posterity blind. Posterity will pay the overshoot debt we have enthusiastically incurred over the last 300 years.
Expect to degrow the economy (GDP) by 95% in the coming century or few for a prosperous way down (if population degrowth is faster). Will the teeming billions just say 'no' (double-down on denialism) to rapid population decline? Will the Mar-a-Lago Club (elevation 5m) be underwater? Will those few who can just say 'no' to the MTI form of civilization vote with their feet to form a viable civilization? I don't know (and other usually clothed apes don't either). We are playing (badly) a high-stakes endgame (not good news for 10 year olds).
And 83% of wild animal biomass and 50% of natural plant biomass has been turned into humans, livestock, pets, and crops (including tree/fiber farms), up from less than 1% of life on earth 12k years ago. Humans are now 36% of mammalian biomass (up from 1%) with our livestock/pets being 60%. Of the 4% remaining for wild mammals, half are terrestrial mammals (the 2%).
Given our up, up, and way (from nature as externality) trajectory, what could go right?
You're in a car (arguing about who gets to sit by the window and for how long as you have fairness, entitlement, and justice concerns), and someone mentions that 12k years ago (12k seconds or 3.3 hours ago in your time) civilization (Car) started going downhill slowly from humanity's evolutionary heights on Mount Improbable where the non-expansionist San still live (when we monument-building empire builders cease being evolvable systems and became dissipative structures operating far from thermodynamic equilibrium).
About 2 hours ago (7k BP) Indo-European expansionists began to take control of Car. About 16 minutes ago the global expansion of Modern Techno-Industrial societies (MTI form of civilization) began, and about 10 minutes ago the Māori reached Zealandia, the last continent to be taken, completing the Polynesian expansion. And 5 minutes ago Indo-Europeans began their fossil-fueled global expansion that is nearing climax (crash event, likely within 60 seconds followed by dissipation over several minutes, full of sound and fury, unto Car's stop—will anyone get out?).
The rate of acceleration has been increasing for 3 hours, though too slowly for anyone to notice in their 75 second lifetime until recently (noticing only started happening about 5 minutes ago) when Car went into free fall (maximum acceleration). Because growth is the best thing ever, we are frantically growing the economy as fast as we Anthropocene enthusiasts can.
The ground is rapidly approaching. Some say the bumper has already touched the ground and is beginning to bend, and so acceleration, the best thing ever, is slowing (barely perceptually to some). What could go right with our trajectory?
Car stops. And then what? Does anyone renormalize? No Anthropocene enthusiast would, but until about 50k years ago all of our K-strategist ancestors would have if they had had to. Only we modern expansionists, who haven't been normal for millennia, have to. Perhaps the expansionists (e.g. Bantu) pressing in upon the Kalahari will leave the area to maraud greener pastures. Perhaps no one possessed of (by) an expansionist culture (consensus narrative as social construct) will return to the Heart of the World (and perhaps other Hearts will beat on elsewhere, but none must again go forth to subdue as extinction would be the better outcome).
- Gen.1 [28] And God blessed them, and God said unto them, Be fruitful, and multiply, and replenish the earth, and subdue it: and have dominion over the fish of the sea, and over the fowl of the air, and over every living thing that moveth upon the earth.
- Num.32 [22] And the land be subdued before the LORD....
- Num 32 [29] And Moses said unto them..., and the land shall be subdued before you; then ye shall give them the land of Gilead for a possession.
- Deut.20 [20] ... thou shalt destroy and cut them [trees] down; and thou shalt build bulwarks against the city that maketh war with thee, until it be subdued.
- Josh.18 [1] And... set up the tabernacle of the congregation there. And the land was subdued before them.
- Judg.8 [28] Thus was Midian subdued before the children of Israel....
- Judg.11 [33] And he smote them..., even twenty cities, and unto the plain of the vineyards, with a very great slaughter. Thus the children of Ammon were subdued before the children of Israel.
- Neh.9 [24] So the children went in and possessed the land, and thou subduest before them the inhabitants of the land....
- 4Ezra.4 [15] ..., let us go up and subdue the woods of the plain, that there also we may make us another country.
- 1Mac.5 [44] But they took the city, and burned the temple with all that were therein. Thus was Carnaim subdued....
