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« Report from The Institute for the Future - Ten-Year Forecast Retreat | Main | Homo sapiens, I'm glad I knew ye »

May 10, 2010

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Jason

This was a really excellent post, nice to see everything in one place.

I'd like to add a couple of points for your consideration. The first is that there is a cyclicality at work, to the extent that the tendency of interest-credit to create cultural problems was recognized in early Christianity, which saw usury as a mortal sin.

I'm certain that our cultural decline will see new popular religions with equally stern attitudes towards credit, as well as the revival of old ones like we are seeing in Latin America.

The second thing is that I very much like John Michael Greer's revival of the E.F.Schumacher concept of primary, secondary and tertiary economies in this context. The primary economy is nature itself, and the secondary is the system of physical interrelationships we normally think of as our economy.

The massive amount of 'money' that is bet on futures and derivatives, though, creates a tertiary economy which refers only to itself and increasingly explodes free of real wealth in the first two economies, even _without_ the additional factor of the energy downsizing we have to go through now.

(I'm told the Babylonians had futures trading, it's another classic way to spread risk.)

So as well as the linear progression, you can see it breathing up and down in cycles. Dark ages happen naturally as crashes, because we don't smooth these cycles out but instead grab grab grab, and should read our Lao-tzu etc.

Thanks for writing all this stuff George, you make a lot of sense. Any updates on the surprisingly realistic and positive reception your stuff received from business leaders recently? I must admit, I was very surprised by that.

Icarus

I figured out some of the basics of what you're saying myself, years ago, but this is much more detailed and formal and fascinating.

Something Paul McCartney once said struck a chord with me. It was about being rich, and was something to the effect that what money really gives you is not material things but freedom, freedom of choice - If you have money you can choose not to get out of bed in the morning, or you can choose to go and spend a year on a tropical island, things the rest of us can't just do on a whim. He was right, but it's even more fundamental than that, because money gives you power, and power is what makes things happen. Money is an indirect way of getting other people to do what you want - to make things for you, to drive your car, organise your holiday, cook your food etc. It's the same kind of principle as EROEI - you massively increase your leverage for making things happen. You couldn't personally cook and prepare a banquet for a thousand people but if you're rich you can put in a tiny amount of effort and cause massive amounts of work to be done by other people. Money is an indirect way of achieving power - of course you can achieve it directly, if you're a good rabble-rouser, dictator, religious leader or whatever. We've been doing this - amplifying our own individual human muscle power - ever since we first invented levers and wheels, tamed horses, used fire to clear land, acquired slaves, harnessed the wind and so on, all the way up to oil and nuclear power.

Anyway I'm just rambling now, but thanks for continuing to provide fascinating and insightful articles like this.

Robin Datta

Regrettably all too many of the wise men of economy and finance do not grok the idea that the world of their domain is disintegrating because of something that has this far been outside their ken - the energy flows that are an essential basis of well-being and prosperity. And they continue to delude the rest of the sheeple - including the CEOs of major organizations - into expecting a return to BAU.

Shoudaknown

You say “energy is the only real currency in human life” but doesn’t that omit organization?

My study of the energy budgets for how systems change finds exceptionally strong evidence that wherever you see energy powering various things what seems to be actually doing that is a local system of organization. Local systems of energy transfer commonly have the unusual property of *developing in place*. Of course, energy using systems developing by releasing an energy gradient are a “chicken and egg” proposition, that the energy can’t be used without organization and you can’t build organization without using energy.

So, wouldn’t you then need to say that the currency of life is the *partnership of energy and organization*, not just one or the other? Both human economies and natural systems seem to rely on that partnership in much the same way, except for humans also organizing their information and using money as a measure of value, as well as organizing the physical processes of the economy themselves. Our crisis appears related to how the energy costs of organizing information are going down, that is, except for the great cost of our large glaring information errors....

So, yes “The future is dim, as in a fog at dawn”, especially in that we’re continuing to push ahead into the darkness, follow major misdirections. The strongest clear evidence I know is the hard data for the relation between energy use and economic growth.

Comparing the total monetary value of economic products and the total purchased energy used, the ratio of the two makes a good proxy for the effectiveness of the organization of the system (us) doing the work. That organization of the whole economy for using the earth and energy to create things of value is “our economic technology”.

What you find in the developmental history curves is the record of that learning process, the record of our organizing our economic technology. It shows our learning rate has itself been improving at a remarkably regular rate. The curves are relatively very smooth and have followed a quite constant formula for the past 35 years at least...

What the math says is the rate of our learning to improve our economic technology has been reducing the energy needed to create value by constant %’s. It also says that the total energy consumption has been going the other way, growing at a rate 2.5 times as fast. That’s a problem for the common belief that “doing more with less” will make less go further. It doesn’t. It has clearly always made less go faster.

So, really, I buy the idea that “the real value of any artifact inheres in its contribution to net energy gain”. When one uses calibrated measures, though, it seems clear that improving technology for using energy is an “artifact” with remarkably high negative value.

There is certainly more to it, but we clearly need to rethink. [see also "The curious case of stimulus as constraint"]

Jason

Shoudaknown: "It also says that the total energy consumption has been going the other way, growing at a rate 2.5 times as fast. That’s a problem for the common belief that “doing more with less” will make less go further. It doesn’t. It has clearly always made less go faster."

That's Jevons Paradox, no? Greer reckons that loses currency in a disappearing-resource situation, which makes sense to me.

George Mobus

Jason,

Good points.

Any updates on the surprisingly realistic and positive reception your stuff received from business leaders recently? I must admit, I was very surprised by that.

Nothing yet. It is possible that those folks went back to work the next day and reconsidered what they would tell their bosses. It probably wasn't something along the lines of 'hey we have to stop growing!'


Icarus,

Raj Patel makes essentially the same point in chapter 7 of The Value of Nothing. Money is freedom to do what you want. No question since it represents energy to do work. The real issue is who gets it and how.


Robin,

Perhaps there is an inkling of evidence that some of them are starting to 'get it', although not in the sense of understanding what and why. They just are starting to grasp that something fundamental has changed in the world and that it threatens their status quo. Just a bit more time and we will see the unraveling.


Shouldaknown,

You say “energy is the only real currency in human life” but doesn’t that omit organization? ... So, wouldn’t you then need to say that the currency of life is the *partnership of energy and organization*, not just one or the other?

I see your point. And I agree that organization has to be taken into account, but I see it as something of a chicken-egg problem. I think I tend to give energy flow primacy because it is the necessary (and in one sense sufficient) condition to generate emergent organization in evolution. What sorts of linkages are formed in an evolving and emergent system inhere in the kinds of interactions that the components are 'allowed' to have, but they would never test their possibilities if it were not for energy flow shuffling the deck, so to speak.

It seems to me that organization does seed greater organization, e.g. a little knowledge along with continuing experience begets greater knowledge over time.

"...made less go faster." Nicely phrased.

George

Dave

While this article starts out abstract enough for observational bias to be somewhat held in check, it starts to lose me towards the end when it addresses money and the economy. It feels like we should somehow make minor adjustments and if we only somehow wrap together money and energy, then everything will eventually get back to normal.

In terms of Buckminster Fuller’s quote: “You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete" - - I look for something that doesn’t necessarily take for granted the social constructs that give us our modern ideas about money and the economy. In terms of my desire for a book in terms of “A Revised History of Homo Caladus on the Planet Earth,” here’s the best I can come up with today. This is unedited and poorly written, but it clearly gives the feel I’m looking for in the abstraction of ideas and the way to truly question everything about our society and money and the ecomony.


Homo Calidus, after learning to use tools and creating elaborate processes, then invented various social constructs that acted to organize the species. Young members of the species were taught certain heuristics that enabled energy conservation and cleverly leveraged even more energy available to do useful work. These constructs evolved through ever-more-complex language to elaborate narratives and explanations of the world this species found itself in.

After the advent of trade and agriculture, multiple tribes were able to interact peacefully, cooperate, and transfer knowledge through the use of language. Additionally, tribes could agree on the boundaries between tribal lands in an attempt to avoid the tragedy of the commons. This idea of “property” was developed from inner-tribal concepts that individual families maintained their own shelters and their own tools, and could expect limited interference from other families on portions of land “owned” by a family.

Social constructs for government were required to settle disputes between families and disputes between tribes without resorting to violence, since violence would unnecessarily risk thinning of the biomass.

As energy available to do useful work was increased through these new tools and concepts, some individuals were able to withdraw completely from the production or hunting of food, and take on new responsibilities such as organizing the tribes and their relationships with other tribes. As these individuals exerted further logistical and tactical control over the tribe, they added value by ensuring continuity of biomass, regardless of the actions of other tribes or the natural world.

Eventually, some individuals became busy in full-time negotiations between tribes and control of larger groups of tribes. As the value of investments in sites increased over time, tribes became completely sedentary and relied on the negotiations between neighboring tribes to ensure the protection of tribal lands. The tribes came to rely continuously on these inter-tribal control groups to guide increasingly complex logistical and tactical issues.

Some of these control groups were called governments. Some of these control groups were called corporations. The orthodoxy of certain social constructs allowed for the idea of “property,” a state in which areas of land might not be in any productive use, but that members of the species tacitly agreed to not make use of these areas in deference to an individual who had a type of a-social claim on the property.

At times some of these constructs could be at odds with other constructs, as the epic narratives embodied in religion stood in contrast to emerging constructs for accurately describing aspects of the physical world.

With myriad constructs established to maintain certain narratives and beliefs, a distinct minority of the species spend its days involved in activities not related in any way to the accumulation of energy, or even to logistical or tactical control.

Some individuals are able to acquire food, shelter, and disposable products while exerting no effort to produce or direct energy. Their ability to receive these goods is based entirely on constructs and narratives in which members of the species tacitly agree that an ancestor of this individual in some way contributed significantly to the distribution of energy, and therefore through paper fiat have been able to continue to be supported by those doing the actual work of energy distribution.

Closely allied with this group of individuals is another group that similarly has little to do with the accumulation and distribution of energy. Much of the activities occupying one of these individual’s time are directed at producing objects that are energy sinks designed to temporarily delight the owner, to monitor and adapt the organization of the species and their social constructs, and the consumption of energy through moving at high speeds through the environment.

While a majority of the population of the species does spend most of its efforts on accumulating energy, the propensity for this group to create many offspring is creating additional pressures on the carrying capacity of the planet to serve the needs of the additional individuals.

George Mobus

Hi Dave,

...if we only somehow wrap together money and energy, then everything will eventually get back to normal.

You should probably read some of my other work in biophysical economics. I definitely am not saying things will get back to "normal", if the implication of normal is current business as usual.

What will be normalized is the value relation between work done and costs. People will better know what a true price would be if the tie between energy and money were reestablished. This will likely only apply to some future, more sapient, society as opposed to being something that will help us today.

I'd say your narrative sums up the situation nicely! Perhaps a more explicit statement about the role of cultural evolution (the word construct implies construction which might imply conscious engineering). The historical/developmental picture you weave is also present in many sources I've read. For example, Food, Energy, and Society, Third Edition by David Pimentel and Marcia H. Pimentel (CRC Press, 2007) has an excellent review of the anthropological/archeological picture of early man's cultural evolution and tool use. I'd also recommend William Catton's Overshoot for similar insights. Neither deals with the issue of brain evolution, or sapience per se, which is what I think I might be bringing to the table.

So, are you considering writing such a book?

Regards

George

Dave

If I were an anthropogist, or even had the ability to focus on anything at all, maybe. In general, it is much easier to sit back and consume the thoughts of people like you who actually produce ideas, rather than actually try to come up with one's own ideas. One can be critical and question the ideas of others, but unless one comes up with some semi-origial ideas and questions their own ideas, it's unlikely that they'll ever be able to truly question everything. So I'm stuck in consumer mode, albeit consumption of ideas and questions.

Dave

Sorry, I meant 'anthropologist.'

George Mobus

Dave,

Well producer or no, keep questioning!

George

t0wnp1ann3r

Thinking more about it, I realized that I'm thinking in terms of ages (like http://en.wikipedia.org/wiki/Three-age_system). In my system there's the pre-fuel age of hunting and gathering before fire; next is the wood age which lasted a really long time compared to the next two ages; then the age of coal which constituted the industrial revolution; then the age of oil which let everything fly off the handle.

Now is the next age a return to the wood age, since we pretty much can't go back to the coal age, or is the new age a hybrid age where we maintain some coal, some nuclear, some wind, some solar, and maybe here and there bits of oil that still happen to bubble up?

George Mobus

T0wnp1ann3r (formerly known as Dave?)

I am imagining that what is coming is something like what you are calling a "wood age", where I assume you also include early agriculture. But there will be (or rather can be) a significant difference. This time around, if we are careful to preserve our knowledge of how things work (like efficient heat engines and permaculture) and maintain a steady state population well within the carrying capacity of the land, we should be able to live much more comfortably than our ancestors did under similar energy conditions. The question is what is an adequate power level per capita for a comfortable life - that is one that is not mere subsistence? Then the next question is what sort of environment is needed to sustain a population (a village or tribe?) at that level? Finally, we ask, is such an environment feasibly available (given problems with climate change, etc.) long into the future. We need to establish the boundary conditions of a social system under the constraints of real-time energy flows but with the objective of living in sufficient comfort as to be able to pursue self-actualization (rather than material wealth).

The last thing we should attempt to to preserve our current consumptive life styles based on high power energy flows. That would be a huge mistake (one we are more than likely going to make out of lack of wisdom!)

George

t0wnp1ann3r

I keep coming back to this idea, the anthropology minus the sociology.

I'm thinking of it in terms of what it would take to change the worldview of society in general; to break people out of their shells and at least acknowledge that things like climate change and peak oil and the collapse of society are possible and not just science fiction.

Robert Kegan’s book called "Immunity to Change" (which is for personal development), says that the only way to change is to observe, recognize, and then deconstruct assumptions that you hold that you don't realize that you hold...
My hope is that a book about things as they empirically are, not just as society has agreed they are, would help to crack open the shell and let people examine what they really believe about things by making them aware of what assumptions they've layered on top of the physical world.

http://en.wikipedia.org/wiki/Genetic_epistemology
The bottom of that page talks about the difference between physical knowledge (the stuff that exists whether or not we have a name for it) and the social knowledge that we are taught.

Reading what I previously wrote, I actually was talking about the development of those social constructs. Now I look at it and I realize that you first have to start with just the physical world and don’t even acknowledge the existence of the social knowledge.

Then, once empirical, falsifiable, physical reality has been set out, then you can go back in and add social knowledge on top, recognizing that it is held only in the minds of Homo calidus, and not in any way empirical beyond that.

So you would first lay out that there are humans, that they live in organized tribes and large groupings…

and the objects that provide them energy have been aggregated from various plant and animal products from far distances brought to them through a network of other humans and agglomerations of metals and other products that are able to transport this energy-containing biomass by igniting a derivative of sweet crude inside of a complicated construction of various parts similarly transported across long distances. These constructions that burn the crude derivative can travel very quickly on a surface that has been prepared specifically for this transport of goods and humans. The large semi-organized built environments scattered across the land and concentrated mostly along rivers and coasts contain a rather large number of these surfaces, connecting the many constructions of mostly stone and would that the humans inhabit so as to protect them from various dangers in the environment. The material used often in place of stone is likewise made up of materials...

and so on.

Maybe I should go look at children's books, or maybe early foreign-language books that lay out the basic things that make up our civilization and start a wikipedia-like collaboration for the description of objects disregarding any social connotation.

George Mobus

T0wnp1ann3r,

Interesting idea. But you seem to cling to the notion that somehow you can get through and change minds, presumably just in time to save the world?

For myself I have abandoned the idea of convincing those who are not prone to grasp this on their own. Admittedly it makes my job easier. All I have to do is observe and record.

Actually I have started a project involving changing peoples' minds, but it is more of the kind where a hospice counselor helps someone develop their will! More later.

George

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