Monday, 20 March 2017

Economics as Thermodynamics

We tend to think of human activity as something altogether different to thermodynamics, but James Lovelock looked at the amount of energy that people have used and noticed that things start to get culturally interesting when we use more than one watt per square metre. As I wrote before, he linked human activity to the reynolds number, which is a measure of turbulence. 

Tim Garrett of Utah State calculated total human wealth is proportional to the amount of primary energy we consume. One 1990 US dollar is approximately 10 milliwatts.  

It's worth noting that this is talking about power and not energy. Wealth is not proportional to the amount of energy. It is proportional to the rate at which energy is used. So when there is inflation, and the amount of financial wealth increases, there is an increase in the rate we are using energy. In the fossil fuel paradigm, this means an increase in the rate we are using up resources. Inflation is compound, so the increase is exponential.

If we change to renewable sources of energy, we may be able to reduce the rate we are using up resources, but unless we have a zero-carbon economy, we will still be using up those finite resources. If you're heading towards a cliff, slowing down is not going to help: you need to stop or change direction. We don't need an economic paradigm where growth is used as the main metric, and lack of growth met by frowns on the faces of newscasters. 

Free market economics has been an interesting experiment, and we seem to be doing well at the moment, but in terms of experiments, it's a bit like an experiment with drugs. I once asked a friend what speed was like, and he said it was like riding a motorbike. But you had to walk back. The sooner we realise that free market economics, along with fossil fuel use, is an addiction, and that we too are going to have to walk back, the sooner we can start kicking the habit. 

When I talk about costs in terms of energy rather than in terms of money, I've been worrying that I'm just being an idealistic hippy. In fact, the reality may be precisely the opposite. Energy is the real metric, and money is just a loose approximation to it. Energy underlies the motions of the universe, not just in the shine of the sun and the orbits of the planets around it, but in the myriad human activities and their effects on a macroscopic level. It is people who don't see this who are living in a fantasy world. 

It's also worth going further into generalisation and thinking about the future. People spend a lot of time worrying about where to invest their money for the future. The Bible says that love of money is the root of all evil. Not the money itself. Rather than worrying about money, we should be thinking more about how we invest energy. It is now in great abundance, but there is no guarantee that it will be in the future. Money may lose most or all of its value, but energy will always have currency.  


Garrett, T. J.: No way out? The double-bind in seeking global prosperity alongside mitigated climate change, Earth Syst. Dynam., 3, 1-17, doi:10.5194/esd-3-1-2012, 2012.