The Physics of Energy and the Economy

I approach the subject of the physics of energy and the economy with some trepidation. An economy seems to be a dissipative system, but what does this really mean? There are not many people who understand dissipative systems, and very few who understand how an economy operates. The combination leads to an awfully lot of false beliefs about the energy needs of an economy.

The primary issue at hand is that, as a dissipative system, every economy has its own energy needs, just as every forest has its own energy needs (in terms of sunlight) and every plant and animal has its own energy needs, in one form or another. A hurricane is another dissipative system. It needs the energy it gets from warm ocean water. If it moves across land, it will soon weaken and die.

There is a fairly narrow range of acceptable energy levels–an animal without enough food weakens and is more likely to be eaten by a predator or to succumb to a disease. A plant without enough sunlight is likely to weaken and die.

In fact, the effects of not having enough energy flows may spread more widely than the individual plant or animal that weakens and dies. If the reason a plant dies is because the plant is part of a forest that over time has grown so dense that the plants in the understory cannot get enough light, then there may be a bigger problem. The dying plant material may accumulate to the point of encouraging forest fires. Such a forest fire may burn a fairly wide area of the forest. Thus, the indirect result may be to put to an end a portion of the forest ecosystem itself.

How should we expect an economy to behave over time? The pattern of energy dissipated over the life cycle of a dissipative system will vary, depending on the particular system. In the examples I gave, the pattern seems to somewhat follow what Ugo Bardi calls a Seneca Cliff.

Figure 1. Seneca Cliff by Ugo Bardi

Figure 1. Seneca Cliff by Ugo Bardi

The Seneca Cliff pattern is so-named because long ago, Lucius Seneca wrote:

It would be some consolation for the feebleness of our selves and our works if all things should perish as slowly as they come into being; but as it is, increases are of sluggish growth, but the way to ruin is rapid.

The Standard Wrong Belief about the Physics of Energy and the Economy

There is a standard wrong belief about the physics of energy and the economy; it is the belief we can somehow train the economy to get along without much energy.

In this wrong view, the only physics that is truly relevant is the thermodynamics of oil fields and other types of energy deposits. All of these fields deplete if exploited over time. Furthermore, we know that there are a finite number of these fields. Thus, based on the Second Law of Thermodynamics, the amount of free energy we will have available in the future will tend to be less than today. This tendency will especially be true after the date when “peak oil” production is reached.

According to this wrong view of energy and the economy, all we need to do is design an economy that uses less energy. We can supposedly do this by increasing efficiency, and by changing the nature of the economy to use a greater proportion of services. If we also add renewables (even if they are expensive) the economy should be able to get along fine with very much less energy.

These wrong views are amazingly widespread. They seem to underlie the widespread hope that the world can reduce its fossil fuel use by 80% between now and 2050 without badly disturbing the economy. The book 2052: A Forecast for the Next 40 Years by Jorgen Randers seems to reflect these views. Even the “Stabilized World Model” presented in the 1972 book The Limits to Growth by Meadow et al. seems to be based on naive assumptions about how much reduction in energy consumption is possible without causing the economy to collapse.

The Economy as a Dissipative System

If an economy is a dissipative system, it needs sufficient energy flows. Otherwise, it will collapse in a way that is analogous to animals succumbing to a disease or forests succumbing to forest fires.

The primary source of energy flows to the economy seems to come through the leveraging of human labor with supplemental energy products of various types, such as animal labor, fossil fuels, and electricity. For example, a man with a machine (which is made using energy products and operates using energy products) can make more widgets than a man without a machine. A woman operating a computer in a lighted room can make more calculations than a woman who inscribes numbers with a stick on a clay tablet and adds them up in her head, working outside as weather permits.

As long as the quantity of supplemental energy supplies keeps rising rapidly enough, human labor can become increasingly productive. This increased productivity can feed through to higher wages. Because of these growing wages, tax payments can be higher. Consumers can also have ever more funds available to buy goods and services from businesses. Thus, an economy can continue to grow.

Besides inadequate supplemental energy, the other downside risk to continued economic growth is the possibility that diminishing returns will start making the economy less efficient. These are some examples of how this can happen:

  • Deeper wells or desalination are needed for water because aquifers deplete and population grows.
  • More productivity is needed from each acre of arable land because of growing population (and thus, falling arable land per person).
  • Larger mines are required as ores of high mineral concentration are exhausted and we are forced to exploit less productive mines.
  • More pollution control devices or higher-cost workarounds (such as “renewables”) are needed as pollution increases.
  • Fossil fuels from cheap-to-extract locations are exhausted, so extraction must come from more difficult-to-extract locations.

In theory, even these diminishing returns issues can be overcome, if the leveraging of human labor with supplemental energy is growing quickly enough.

Theoretically, technology might also increase economic growth. The catch with technology is that it is very closely related to energy consumption. Without energy consumption, it is not possible to have metals. Most of today’s technology depends (directly or indirectly) on the use of metals. If technology makes a particular type of product cheaper to make, there is also a good chance that more products of that type will be sold. Thus, in the end, growth in technology tends to allow more energy to be consumed.

Why Economic Collapses Occur

Collapses of economies seem to come from a variety of causes. One of these is inadequate wages of low-ranking workers (those who are not highly educated or of managerial rank). This tends to happen because if there are not enough energy flows to go around, it tends to be the wages of the “bottom-ranking” employees that get squeezed. In some cases, not enough jobs are available; in others, wages are too low. This could be thought of as inadequate return on human labor–a different kind of low Energy Return on Energy Invested (EROEI) than is currently analyzed in most of today’s academic studies.

Another area vulnerable to inadequate energy flows is the price level of commodities. If energy flows are inadequate, prices of commodities will tend to fall below the cost of producing these commodities. This can lead to a cutoff of commodity production. If this happens, debt related to commodity production will also tend to default. Defaulting debt can be a huge problem, because of the adverse impact on financial institutions.

Another way that inadequate energy flows can manifest themselves is through the falling profitability of companies, such as the falling revenue that banks are now experiencing. Still another way that inadequate energy flows can manifest themselves is through falling tax revenue. Governments of commodity exporters are particularly vulnerable when commodity prices are low. Ultimately, these inadequate energy flows can lead to bankrupt companies and collapsing governments.

The closest situation that the US has experienced to collapse is the Depression of the 1930s. The Great Recession of 2007-2009 would represent a slight case of inadequate energy flows–one that could be corrected by a large dose of Quantitative Easing (QE)(leading to the lower cost of borrowing), plus debt stimulus by China. These helped bring oil prices back up again, after they fell in mid-2008.

Figure 1. World Oil Supply (production including biofuels, natural gas liquids) and Brent monthly average spot prices, based on EIA data.

Figure 2. World Oil Supply (production including biofuels, natural gas liquids) and Brent monthly average spot prices, based on EIA data.

Clearly, we are now again beginning to experience the effects of inadequate energy flows. This is worrying, because many economies have collapsed in the past when this situation occurred.

How Energy Flows of an Economy are Regulated

In an economy, the financial system is the regulator of the energy flows of the system. If the price of a product is low, it dictates that a small share of energy flows will be directed toward that product. If it is high, it indicates that a larger share of energy flows will be directed toward that product. Wages follow a similar pattern, with low wages indicating low flows of energy, and high wages indicating higher flows of energy. Energy flows in fact “pay for” all aspects of the system, including more advanced technology and the changes to the system (more education, less time in the workforce) that make advanced technology possible.

One confusing aspect to today’s economy is the use of a “pay you later” approach to paying for energy flows. If the energy flows are inadequate using what we would think of as the natural flows of the system, debt is often used to increase energy flows. Debt has the effect of directing future energy flows in a particular direction, such as paying for a factory, a house, or a car. These flows will be available when the product is already part of the system, and thus are easier to accommodate in the system.

The use of increasing debt allows total “demand” for products of many kinds to be higher, because it directs both future flows and current flows of energy toward a product. Since factories, houses and cars are made using commodities, the use of an increasing amount of debt tends to raise commodity prices. With higher commodity prices, more of the resources of the economy are directed toward producing energy products. This allows for increasing energy consumption. This increased energy consumption tends to help flows of energy to many areas of the economy at the same time: wages, taxes, business profitability, and funds for interest and dividend payments.

The need for debt greatly increases when an economy begins using fossil fuels, because the use of fossil fuels allows a step-up in lifestyle. There is no way that this step-up in lifestyle can be paid for in advance, because the benefits of the new system are so much better than what was available without fossil fuels. For example, a farmer raising crops using only a hoe for a tool will never be able to save up sufficient funds (energy flows) needed to pay for a tractor. While it may seem bizarre that banks loan money into existence, this approach is in fact essential, if adequate energy flows are to be available to compensate for the better lifestyle that the use of fossil fuels makes possible.

Debt needs are low when the cost (really energy cost) of producing energy products is low. Much more debt is needed when the cost of energy extraction is high. The reason more debt is needed is because fossil fuels and other types of energy products tend to leverage human labor, making human labor more productive, as mentioned previously. In order to maintain this leveraging, an adequate quantity of energy products (measured in British Thermal Units or Barrels of Oil Equivalent or some similar unit) is needed.

As the required price for energy-products rises, it takes ever-more debt to finance a similar amount of energy product, plus the higher cost of homes, cars, factories, and roads using the higher-cost energy. In fact, with higher energy costs, capital goods of all kinds will tend to be more expensive. This is a major reason why the ratio of debt to GDP tends to rise as the cost of producing energy products rises. At this point, in the United States it takes approximately $3 of additional debt to increase GDP by $1 (author’s calculation).

Figure 1. Inflation adjusted Brent oil prices (in 2014$, primarily from BP Statistical Review of World Energy) shown beside two measures of debt for the US economy. One measure of debt is all inclusive; the other excludes Financial Business debt. Both are based on data from FRED -Federal Reserve of St. Louis.

Figure 3. Inflation adjusted Brent oil prices (in $2014, primarily from BP Statistical Review of World Energy) shown beside two measures of debt for the US economy. One measure of debt is all-inclusive; the other excludes Financial Business debt. Both are based on data from FRED-Federal Reserve of St. Louis.

Clearly one of the risk factors to an economy using fossil fuels is that debt levels will become unacceptably high. A second risk is that debt will stop rising fast enough to keep commodity prices at an acceptably high level. The recent slowdown in the growth of debt (Figure 3) no doubt contributes to current low commodity prices.

A third risk to the system is that the rate of economic growth will slow over time because even with the large amount of debt added to the system, the leveraging of human labor with supplemental energy will not be sufficient to maintain economic growth in the face of diminishing returns. In fact, it is clearly evident that US economic growth has trended downward over time (Figure 4).

Figure 3. US annual growth rates (using "real" or inflation adjusted data from the Bureau of Economic Analysis).

Figure 4. US annual growth rates (using “real” or inflation adjusted data from the Bureau of Economic Analysis).

A fourth risk is that the whole system will become unsustainable. When new debt is issued, there is no real matching with future energy flow. For example, will the wages of those taking on debt to pay for college be sufficiently high that the debtors can afford to have families and buy homes? If not, their lack of adequate income will be one of the factors that make it difficult for the prices of commodities to stay high enough to encourage extraction.

One of the issues in today’s economy is that promises of future energy flows extend far beyond what is formally called debt. These promises include shareholder dividends and payments under government programs such as Social Security and Medicare. Reneging on promises such as these is likely to be unpopular with citizens. Stock prices are likely to drop, and private pensions will become unpayable. Governments may be overthrown by disappointed citizens.

Examples of Past Collapses of Economies

Example of the Partial Collapse of the Former Soviet Union

One recent example of a partial collapse was that of the Former Soviet Union (FSU) in December 1991. I call this a partial collapse, because it “only” involved the collapse of the central government that held together the various republics. The governments of the individual republics remained in place, and many of the services they provided, such as public transportation, continued. The amount of manufacturing performed by the FSU dropped precipitously, as did oil extraction. Prior to the collapse, the FSU had serious financial problems. Shortly before its collapse, the world’s leading industrial nations agreed to lend the Soviet Union $1 billion and defer repayment on $3.6 billion more in debt.

A major issue that underlay this collapse was a fall in oil prices to the $30 per barrel range in the 1986 to 2004 period. The Soviet Union was a major oil exporter. The low price had an adverse impact on the economy, a situation similar to that of today.

Figure 4. Oil production and price of the Former Soviet Union, based on BP Statistical Review of World Energy 2015.

Figure 5. Oil production and price of the Former Soviet Union, based on BP Statistical Review of World Energy 2015.

Russia continued to pump oil even after the price dropped in 1986. In fact, it raised oil production, to compensate for the low price (energy flow it received per barrel). This is similar to the situation today, and what we would expect if oil exporters are very dependent on these energy flows, no matter how small. Oil production didn’t fall below the 1986 level until 1989, most likely from inadequate funds for reinvestment. Oil production rose again, once prices rose.

Figure 6 shows that the FSU’s consumption of energy products started falling precipitously in 1991, the year of the collapse–very much a Seneca Cliff type of decline.

Figure 5. Former Soviet Union energy consumption by source, based on BP Statistical Review of World Energy Data 2015.

Figure 6. Former Soviet Union energy consumption by source, based on BP Statistical Review of World Energy Data 2015.

In fact, consumption of all fuels, even nuclear and hydroelectric, fell simultaneously. This is what we would expect if the FSU’s problems were caused by the low prices it was receiving as an oil exporter. With low oil prices, there could be few good-paying jobs. Lack of good-paying jobs–in other words, inadequate return on human labor–is what cuts demand for energy products of all kinds.

A drop in population took place as well, but it didn’t begin until 1996. The decrease in population continued until 2007. Between 1995 and 2007, population dropped by a total of 1.6%, or a little over 0.1% per year. Before the partial collapse, population was rising about 0.9% per year, so the collapse seems to have reduced the population growth rate by about 1.0% per year. Part of the drop in population was caused by excessive alcohol consumption by some men who had lost their jobs (their sources of energy flows) after the fall of the central government.

When commodity prices fall below the cost of oil production, it is as if the economy is cold because of low energy flows. Prof. Francois Roddier describes the point at which collapse sets in as the point of self-organized criticality. According to Roddier (personal correspondence):

Beyond the critical point, wealth condenses into two phases that can be compared to a gas phase and a liquid phase. A small number of rich people form the equivalent of a gas phase, whereas a large number of poor people form what corresponds to a liquid phase. Like gas molecules, rich people monopolize most of the energy and have the freedom to move. Embedded in their liquid phase, poor people have lost access to both energy and freedom. Between the two, the so-called middle class collapses.

I would wonder whether the ones who die would be equivalent to the solid state. They can no longer move at all.

Analysis of Earlier Collapses

A number of studies have been performed analyzing earlier collapses. Turchin and Nefedov in Secular Cycles analyze eight pre-fossil fuel collapses in detail. Figure 7 shows my interpretation of the pattern they found.

Figure 7. Shape of typical Secular Cycle, based on work of Peter Turkin and Sergey Nefedov in Secular Cycles.

Figure 7. Shape of typical Secular Cycle, based on work of Peter Turchin and Sergey Nefedov in Secular Cycles.

Again, the pattern is that of a Seneca Cliff. Some of the issues leading to collapse include the following:

  1. Rising population relative to farmland. Either farmland was divided up into smaller plots, so each farmer produced less, or new workers received “service” type jobs, at much reduced wages. The result was falling earnings of many non-elite workers.
  2. Spiking food and energy prices. Prices were high at times due to lack of supply, but held down by low wages of workers.
  3. Rising need for government to solve problems (for example, fight war to get more land; install irrigation system so get more food from existing land). Led to a need for increased taxes, which impoverished workers could not afford.
  4. Increased number of nobles and high-level administrators. Result was increased disparity of wages.
  5. Increased debt, as more people could not afford necessities.

Eventually, the workers who were weakened by low wages and high taxes tended to succumb to epidemics. Some died in wars. Again, we have a situation of low energy flows, and the lower wage workers not getting enough of these flows. Many died–in some cases as many as 95%. These situations were much more extreme than those of the FSU. On the favorable side, the fact that there were few occupations back in pre-industrial days meant that those who did survive could sometimes resettle with other nearby communities and continue to practice their occupations.

Joseph Tainter in The Collapse of Complex Societies talks about the need for increasing complexity, as diminishing returns set in. This would seem to correspond to the need for increased government services and an increased role for businesses. Also included in increased complexity would be increased hierarchical structure. All of these changes would leave a smaller share of the energy flows for the low-ranking workers–a problem mentioned previously.

Dr. Tainter also makes the point that to maintain complexity, “Sustainability may require greater consumption of resources, not less.”

A Few Insights as to the Nature of the Physics Problem

The Second Law of Thermodynamics seems to work in a single direction. It talks about the natural tendency of any “closed” system to degenerate into a more disordered system. With this view, the implication is that the universe will ultimately end in a heat-death, in which everything is at the same temperature.

Dissipative systems work in the other direction; they create order where no order previously existed. Economies get ever-more complex, as businesses grow larger and more hierarchical in form, governments provide more services, and the number of different jobs filled by members of the economy proliferate. How do we explain this additional order?

According to Ulanowicz, the traditional focus of thermodynamics has been on states, rather than on the process of getting from one state to another. What is needed is a theory that is more focused on processes, rather than states. He writes,

.  .  . the prevailing view of the second law is an oversimplified version of its true nature. Simply put, entropy is not entirely about disorder. Away from equilibrium, there is an obverse and largely unappreciated side to the second law that, in certain circumstances, mandates the creation of order.

We are observing the mandated creation of order. For example, the human body takes chemical energy and transforms it to mechanical energy. There is a dualism to the entropy system that many have not stopped to appreciate. Instead of a trend toward heat death always being the overarching goal, systems have a two-way nature to them. Dissipative systems are able to grow until they reach a point called self-organized criticality or the “critical point”; then they shrink from inadequate energy flows.

In forests, this point of self-organized criticality comes when the growth of the tall trees starts blocking out the light to the shorter plants. As mentioned earlier, at that point the forest starts becoming more susceptible to forest fires. Ulanowicz shows that for ecosystems with more than 12 elements, there is quite a narrow “window of viability.”

Figure 8. Illustration of close clustering of ecosystems with more than 12 elements, indicating the narrow "window of viability" of such ecosystems. From

Figure 8. Illustration of close clustering of ecosystems with more than 12 elements, indicating the narrow “window of viability” of such ecosystems. From Ulanowicz

If we look at world per capita energy consumption, it seems to indicate a very narrow “window of viability” as well.

Figure 9. World energy consumption per capita, based on BP Statistical Review of World Energy 2105 data. Year 2015 estimate and notes by G. Tverberg.

Figure 9. World energy consumption per capita, based on BP Statistical Review of World Energy 2105 data. Year 2015 estimate and notes by G. Tverberg.

When we look at what happened in the world economy alongside the history of world energy consumption, we can see a pattern. Back prior to 1973, when oil was less than $30 per barrel, oil consumption and the economy grew rapidly. A lot of infrastructure (interstate highways, electric transmission lines, and pipelines) was added in this timeframe. The 1973-1974 price shock and related recession briefly brought energy consumption down.

It wasn’t until the restructuring of the economy in the late 1970s and early 1980s that energy consumption really came down. There were many changes made: cars became smaller and more fuel efficient; electricity production was changed from oil to other approaches, often nuclear; regulation of utilities was changed toward greater competition, thus discouraging building infrastructure unless it was absolutely essential.

The drop in energy consumption after 1991 reflects the fall of the Former Soviet Union. The huge ramp-up in energy consumption after 2001 represents the effect of adding China (with all of its jobs and coal consumption) to the World Trade Organization. With this change, energy needs became permanently higher, if China was to have enough jobs for its people. Each small dip seems to represent a recession. Recently energy consumption seems to be down again. If we consider low consumption along with low commodity prices, it makes for a worrying situation. Are we approaching a major recession, or worse?

If we think of the world economy relative to its critical point, the world economy has been near this point since 1981, but various things have pulled us out.

One thing that has helped the economy is the extremely high interest rate (18%) implemented in 1981. This high interest rate pushed down fossil fuel usage at that time. It also gave interest rates a very long way to fall. Falling interest rates have a very favorable impact on the economy. They encourage greater lending and tend to raise the selling prices of stocks. The economy has received a favorable boost from falling interest rates for almost the entire period between 1981 and the present.

Other factors were important as well. The fall of the Soviet Union in 1991 bought the rest of the world a little time (and saved oil extraction for later); the addition of China to the World Trade Organization in 2001 added a great deal of cheap coal to the energy mix, helping to bring down energy costs. These low energy costs, plus all of the debt China was able to add, allowed energy consumption and the world economy to grow again–temporarily pulling the world away from the critical point.

In 2008, oil prices dropped very low. It was only with QE that interest rates could be brought very low, and commodity prices bounced back up to adequate levels. Now we are again faced with low prices. It looks as if we are again at the critical point, and thus the edge of collapse.

Once a dissipative structure is past its critical point, Roddier says that what is likely to bring it down is an avalanche of bifurcations. In the case of an economy, these might be debt defaults.

In a dissipative structure, both communication and stored information are important. Stored information, which is very close to technology, becomes very important when food is hard to find or energy is high cost to extract. When energy is low-cost to extract, practically anyone can find and make use of energy, so technology is less important.

Communication in an economy is done in various ways, including through the use of money and debt. Few people understand the extent to which debt can give false signals about future availability of energy flows. Thus, it is possible for an economy to build up to a very large size, with few realizing that this approach to building an economy is very similar to a Ponzi Scheme. It can continue only as long as energy costs are extremely low, or debt is being rapidly added.

In theory, EROEI calculations (comparing energy produced by a device or energy product to fossil fuel energy consumed increasing this product) should communicate the “value” of a particular energy product. Unfortunately, this calculation is based the common misunderstanding of the nature of the physics problem that I mentioned at the beginning of the article. (This is also true for similar analyses, such as Lifecycle Analyses.) These calculations would communicate valuable information, if our problem were “running out” of fossil fuels, and if the way to mitigate this problem were to use fossil fuels as sparingly as possible. If our problem is rising debt levels, EROEI and similar calculations do nothing to show us how to mitigate the problem.

If the economy collapses, it will collapse down to a lower sustainable level. Much of the world’s infrastructure was built when oil could be extracted for $20 per barrel. That time is long gone. So, it looks like the world will need to collapse back to a level before fossil fuels–perhaps much before fossil fuels.

If it is any consolation, Prof. Roddier says that once new economies begin to form again, the survivors after collapse will tend to be more co-operative. In fact, he offers this graphic.

Figure 10. F. Roddier view of what happens on the two sides of the critical point. From upcoming translation of his book, "The Thermodynamics of Evolution."

Figure 10. F. Roddier view of what happens on the two sides of the critical point. From upcoming translation of his book, “The Thermodynamics of Evolution.”

We know that if there are survivors, new economies will be likely. We don’t know precisely what they will be like, except that they will be limited to using resources that are available at that time.

Some References to Francois Roddier’s Work (in French)

THERMODYNAMIQUE DE L’ÉVOLUTION “UN ESSAI DE THERMO-BIO-SOCIOLOGIE” -The Thermodynamics of Evolution – Book, soon to be translated to English. Will at some point be available from the same site in English.

Roddier writes:

This is a talk I gave at the CNAM (Paris) on December 2, 2013. The title is:Thermodynamique et économie ; des sciences exactes aux sciences humaines

In this talk, I show that Per Bak’s neural network model can be used to describe an economic system as a neural network of agents exchanging money. The paper gives a brief explanation on how economies collapse.

The other talk is one I gave in Paris on March 12, 2015, for Jancovici’s Shift Project. The title is:

La thermodynamique des transitions économiques

A video of this talk is available on the web at the following address:

https://www.youtube.com/watch?v=5-qap1cQhGA

In this talk, I describe economy in terms of Gibbs-Duhem potentials (akin to chemical potentials). Money flows measure entropy flows (with opposite sign). The cost of energy plays the role of an inverse temperature. I show that economic cycles are similar to those of a steam engine. They self organize around a critical point.

1,942 thoughts on “The Physics of Energy and the Economy

    • Things are moving quite fast: in the Spanish province where my family live they are now talking about laying off 40% of workers at the big VW plant – or take a huge pay cut. Just a month ago they were assured all jobs were totally safe and substantial new investment was on the way. Cheap workers, too.

    • Shock and Awe may be rising as marketable commodities… again.

      >>>Shock and awe (technically known as rapid dominance) is a military doctrine based on the use of overwhelming power and spectacular displays of force to paralyze the enemy’s perception of the battlefield and destroy its will to fight.
      https://en.wikipedia.org/wiki/Shock_and_awe

  1. When the 2nd law of thermodynamics is applied to “economics” then you know you have witnessed the birth of a pseudoscience.

    • Not really, energy is the thing that powers civilization. That statement is absolute, final, non-negotiable. It’s as good as an axiom. Think about energy across all dimensions, think about energy from differing points of view. If you hold a PhD you should understand that as you reason by first principles. I’m surprised you’re unable to. What do you hold a PhD in?

      The economy is a surplus energy equation, not a monetary one, and growth in output (and in the global population) since the Industrial Revolution has resulted from the harnessing of ever-greater quantities of energy. But the critical relationship between energy production and the energy cost of extraction is now deteriorating so rapidly that the economy as we have known it for more than two centuries is beginning to unravel.

      The fundamental fact of energy commonality is often obscured by the use of different units to describe and measure different forms of energy. For instance, food is measured in nutritional calories; work can be measured as kilowatt-hours (kwh); and fossil fuels tend to be expressed as gallons (of gasoline or distillate fuel), barrels or tonnes (of oil), cubic feet or cubic metres (of natural gas) and tonnes (of coal). But these differing calibrations should not be allowed to disguise the fundamental commonality of all forms of energy.

      As an example, if you have an ageing demographic, say Japan, where we know more people are dying than being born, meaning their population is in decline etc. We know there are less workers in the system supporting an ageing demographic. We know younger people have more energy than older people, this is basic physics. We know older people aren’t as economically active as they age, they don’t spend as much, they tend to save more, they continually suffer atrophy, both mental and physical. The phenomenon of deflation, diminishing returns, entropy, atrophy from an energy perspective makes sense. Not enough energy across all forms into any given system = lights out.

      Sustainable energy in all its forms, across different dimensions, is our single greatest challenge of the 21st century.

      • You confirm my position.

        That PhD is one in physics & math and, yes, I happen to know a thing or two about thermodynamics.

        • Ed, wrong side of bed? What’s with all the passive hostility and you feeling the need to shove titles, qualifications down one’s eyeballs?

          You’re fighting with the likes of Elon Musk, Bill Gates, David MacKay et al. Remember we’re all smart Ed or else we wouldn’t be doing the things we do in life, not that I feel the need to share that intel with you or others here. That said, I also (hope at least) I know a few things about “physics & math” as you put it, but don’t feel the need to “peacock” strutting my stuff on the catwalk in order to gain attention/respect. Would Feynman have done that? I think not, although he had little time for dumbos.

          “Sustainable energy is our single greatest challenge of the 21st century” EM
          “Energy is the thing that’s powered civilization” BG

          I’ve had many wonderful, thought provoking discussions with the likes of say, David MacKay former Chief Scientific Adviser to the UK Dep’t of Energy & Climate Change. If you check out his creds they stack up and yes we’ve covered 2LOT, EROEI.

          If your “position has been confirmed” then please, share that confirmation like “adults” and we can discuss, of course I might be quite wrong in my assessment of reality and it’s many interactions, I still don’t really know the world very well. In fact the deeper I go, the less sense it all makes.

        • Please continue to post comments here. I’d be interested to hear your take on these issues from a pure physics and math perspective and in reading the responses.

          For example, since you appear to believe the connection between physics and “economics” to a tenuous one, what in your opinion would be a better way to try to understand our current predicament?

          Do you think that technological innovation can overcome our current economic woes? And if so, in what way?

          • Ya – and while you are at it perhaps you can weigh in on my Jules Verne Project – the one where we drive a pipe to the centre of the earth and tap into the extreme heat to power mega power plants.

            Is that feasible?

            • Ya but geothermal of that nature is not very reliable — my understanding is that you can drill in one spot and it goes cold 10 years later…

              If you go right to the centre of the earth you have endless heat…. and the thing is …. if you get this right you can drill from anywhere on the planet – not just where the crust is thin!

              Imagine the entire earth like a big piece of swiss cheese…. pipes driven into each and every one of them….

              I wonder what would happen if we sucked all of the heat out of the centre of the earth through such tubes?

              We need a PeeHdee to work the models…..

            • You need a fossil fuel system to do all of the drilling. And then the place you drilled gets cold, so you need to drill again.

              Drilling next to an active volcano is good for sustainable heat. The major problem is that no one wants to live next to an active volcano. You need to convert the output to electricity (by boiling water) and then use long distance transmission lines to where the people actually live.

      • Another PhD physicist chiming in: While energy analysis can give us some insight, we are looking at human actions,stressed by energy issues. Venezuela has no lack of energy — just an abundance of human folly. Donald Trump is a product of a society pressured by resource issues. However we had Mussolini and others arose when we still had easy resources. .

        • Stored energy, plenty of stored energy, useless if not released.
          Only the energy flows are meaningful.

        • interguru

          Exactly.

          After all, let’s not forget that the current ruler of Venezuela actually campaigned for election with a small stuffed bird on his shoulder, which he claimed served as a medium for the spirit of the deceased hero, Chavez. Or actually was Chavez, I could never quite make sense of the reports. I suppose one would have to ask the voters……

          Fast collapse is scary? Not really, compared to human nature.

          Our Lenins, Stalins, Hitlers and Maos are waiting in the wings, I am quite sure.

          • Hitler promised a 1000 year Reich—it lasted just 12—cos he ran out of fuel
            People like Trump are promising the same thing—infinite eternal prosperity–if only we remove those responsible for the basic problems
            The rhetoric correlates exactly

            • Of course Pol Pot…. who came to power after the US blasted a formerly peaceful country into the stone age….

              Whatever it takes…. (for us to live large)

        • There are some exceptional participants in the educational system with talents that I never had or will have. There is a dark side of accepting the knowledge givers as masters and their download unconditionally. That unconditionality also seems to be key to success in the academic world.
          Living for too long in the cush artificial world of academia really seems to produce a belief that that is indeed the world as it is. And when a truth comes along that is outside of the box it is attacked as heresay. Why is it that the same training that develops such exceptional talents also creates such close minded asses?

          • The system is broken down into tiny areas of knowledge. Each group puts together models of how the system works. Also, faculty are encouraged to publish a lot, and previously published work is deemed “correct.” The system is guided by financial grants, showing what kinds of outcomes governments and others would like to see. The result gets to be a lot of beliefs that are close to fairy tales that are passed on, and develop a life of their own. Political parties pick up one or another set of wrong beliefs and adopt them as the foundation of their belief system.

    • Can you give us your ivory tower view on what is wrong with the theory?

      Or should we all just kowtow to your PeeHDee?

      And btw – I have a PeeHDee too — a PeeHDee in Doom – from the University of Doom.

      Does that impress you? Does it intimidate you? Shall I pluck a hair and post it to you?

    • Economics already was a pseudo science, so I don’t know what you are talking about.

      The only Ed Zuiderwijk I find on Google seems to be a Team Leader at Castle Craig Rehab Hospital. My guess is that you have a Ph. D. in Psychology, and specialize in treating addiction problems. With such stellar credentials, it is hard to see what special expertise you might have in the physics of energy and the economy.

        • I’ll sell him a loan of my authentic titles for only 50 euros per piece per hour.

          Jeremy,

          Viscount of the Andes

          Emperor of Oceania

          Yeoman of the Jaguar People

          Knight of the Order of the Armadillo (with Octopus Tentacles)

          Keeper of the Amazonian Dream-Chambers

          Aztec Minister for Astral Travel and Skull Decoration

          Obersturmbannstationmaster of the Galapagos Underground

          Lord Protector of the Commonwealth of Hobbits.

        • Economics is a little harshly described as a ‘pseudo science’, for it does make testable predictions. One law that has never been falsified is Say’s Law: ‘No bid without offer’; and one law that has been conclusively falsified is the Marxist theory of value. No matter what ‘essence’ of labour ‘inheres’ to the product, if no-one will buy it, it’s worthless.

          One of the reasons for its failure is that mainstream economics, rightly, models desire; it thus needs underpinning from Psychology and Sociology; but these enquiries are yet to even get off the launch pad. Laziness and dogma mark all social science; but none worse than Sociology

    • When I attempt to conduct a scientific inquiry I try to use objective observation. I feel this is one of the cornerstones of science. I feel Gail uses every effort to try to incorporate empirical observation in her technique.
      If anything is pseudoscience it is the economics that has made several layers of assumptions.
      The very first layer is a assumption of infinite resources but the economist are unable to use basic empirical observation to see that the basic premise of their paradigm is unsound.
      When I see someone with “credentials” like your makes a sweeping generalization like yours about Gails work I find it quite repugnant. It is not only because you are unable to acknowledge truth. It is also because you betray the effectiveness of science by your statement when you are supposedly a representative of it. Lastly it shows what insane creatures humans really are and why we soon be extinct, and I find reminders of that somewhat depressing.

      • I understand Ed’s problem with economics. If it is science, it’s supposed to make correct predictions, and the record for economists has been a bit wide of the mark. Still, I think Gail is going in the right direction. Psychology isn’t any better, but a lot of it has improved recently with working an evolutionary viewpoint into it. Some places like the London School of Economics just abandoned Freud for EP.

        Most social “science* in which economics is included, is based on unsupported theory, i.e., like much of psychology it really doesn’t have a foundation under it. That’s unlike biology which has chemistry for the fine details and evolution to wrap it together.

        I think a new formulation of economics could be done based on ecology. A million years ago, the ecosystem and the economy were pretty much the same thing.

        • Before humans developed an absolute need for cooked food, and because of this requirement, were able to raise their replacement rate above 1.0000, I would agree with you that the ecosystem and ecology were pretty much the same thing. That break-away came a long time ago, perhaps 1 million years ago, but it could be more or less.

  2. I can’t understand the title of this blog.

    Julian Simon showed comprehensively why the Earth’s resources are effectively infinite back in the early 1980s – and he has been shown to be correct by all the later history. And yet this blog does not even seem to recognise this fact…

    • I hope you forgot to add the sarc tag…. because if you are serious then I am quite amazed that you even know how to type with an IQ that is surely low double digits….

      • What Simon claimed (from memory) is that the earth’s resources are infinite in the sense that some oil (for instance) will always be too expensive to extract. I’m not altogether sure how useful this is, but it does predict a situation which will make itself known in advance. With imagination, we may then be able to think of alternatives.

        More interesting is what he demonstrated: That there is no easy way to discover when this situation is upon us because our tools (our knowledge) are insufficient.

        Many have concluded correctly that shouting ‘peak oil’ etc. every decade or so is counter-productive; the boy who cried ‘wolf’. Taken together with the utter shambles of Anthropogenic Global Warming theory, this is almost certainly the case for vast swathes of people who now can’t give a damn about any of this.

        A shame because of a sham.

    • “Julian Simon showed comprehensively why the Earth’s resources are effectively infinite back in the early 1980s”

      Do you believe we can consume ever exponentially rising amounts of all resources, forever? Exponentials are kind of hard to get your mind around – 4 percent growth is no big deal, right? An easier way to visualize this is in doubling times. 72 / 4 = 18, so a sustained average of 4 percent compounding growth means doubling every 18 years.

      Do you think we can consume 200 million barrels of oil per day by 2034? 400 million barrels per day by 2052? 800 million barrels per day by 2070?

      How about population? Can we have 14 billion people in 2034, 28 billion in 2052, and 56 billion in 2070?

      We currently use nearly 50 million square kilometers of land to grow food – can we use 400 million square kilometers of land for food production in 2070? The entire surface of the Earth is only ~510 million square kilometers for reference.

      If you have a way that we can grow infinitely within the bounds of the planet Earth, please share.

      • Quite – one day a lot of it will be gone. But… when?

        The real question is (as ever) one about the limits to our knowledge. The complexity of variables governing human society is not even remotely understood. Those in the past who have either tried to predict gloom (such as Malthus and Ehrlich; and the recent ‘financial meltdown by 2013’ blokes); or Utopia (such as Marx) have one and all shown themselves to be charlatans whose claims were frequently worse than guesswork.

        The solution is: keep your nerve, avoid idle speculation about ‘peak oil’ or ‘melting ice caps’ (etc.) and press for common sense conservation/anti-pollution law whenever possible. Oh, and more railways

        • ‘one day a lot of it will be gone’

          It will never be gone — when the financial system collapses – the oil that is in the ground – will stay in the ground — forever.

      • hydrocarbons will never be ”gone”
        our civilisation exists on the margin between the cost of extraction and the point of use

        as that margin gets tighter, so our ”economic system” will slow down (its doing that already) and eventually stop.

        At that point we will be unable to extract any more from the ground

        Nevertheless the denial warfare will go on, until no one has the means to fight any more.

  3. Relax….this just reported on Blomberg
    China’s stocks rallied the most in three months, led by technology and industrial companies, after data showed the nation’s banks doled out a record amount of loans in January.
    The Shanghai Composite Index climbed 3.3 percent to 2,836.57 at the close, paring its decline this year to 20 percent. PetroChina Co. advanced 2.6 percent. New yuan lending jumped to 2.51 trillion yuan ($390 billion) last month, beating analyst estimates. Hong Kong’s Hang Seng China Enterprises Index extended Monday’s advance. The yuan weakened after having its biggest gain in more than a decade.
    Policy makers are expected to release a package of measures to ensure economic growth is in a reasonable range this year, the Economic Information Daily reported, citing unidentified people

    We are STILL in CONTROLL
    http://www.bloomberg.com/news/articles/2016-02-16/china-s-stocks-rise-as-financial-oil-companies-spur-rebound

    Whatever it takes

    • Do NOT pay attention to the detail…or the silly fellow behind the curtain

      China Created More Debt In January Than The GDP Of Norway, Austria Or The UAE
      Tyler Durden’s pictureSubmitted by Tyler Durden on 02/16/2016 07:58 -0500

      The world let out a collective gasp of shock last night when the PBOC announced that in January, China had created an absolutely gargantuan CNY3.4 trillion in new total debt (Total Social Financing) – or about $520 billion – more than 50% higher than expected, of which CNY2.1 trillion was in the form of new loans
      http://www.zerohedge.com/news/2016-02-16/china-created-more-debt-january-gdp-norway-austria-or-uae

    • “China’s stocks rallied the most in three months, led by technology and industrial companies, after data showed the nation’s banks doled out a record amount of loans in January.”

      Last ditch desperate loan bonanza to juice markets to eek out as much GDP growth before accepting inevitable post debt bubble global deflation economic contraction.

    • I think in the end we will arrive at infinte debt, infinite concrete parking lots and infinite cars etc and with zero nature. I already claimed here that this is a necessary evolutional step to conquer the stars because people will have to live as avatars in a machine for centuries to travel long distances. Economy professors will like that.

      • PS:
        “If a country could just print as much money as it wanted, and at the same time, preserve the external purchasing power of its currency, clearly there would be no poverty in the world…we would have all done this,”
        from automatic earth / Stewart Paterson, portfolio manager at Tiburon Partners

  4. Dear Finite Worlders

    I would like to comment on the charge that mentioning ‘thermodynamics’ in the same sentence with ‘economics’ is a sure sign of sorcery, rather than science.

    Let’s start with some numbers that Peter Donovan of the Soil Carbon Coalition put together.

    7 Generations of Sunlight
    Power in terms of watts per square meter of Earth’s surface, averaged over a full year, day and night, all latitudes, and all seasons.

    340 w/m2…reflection, atmospheric absorption, transmission to surface
    160 w/m2…surface absorption…producing wind and currents
    80 w/m2…evaporation of water… producing soil moisture, erosion, and deposition
    0.25 w/m2…photosynthesis…producing carbohydrates, biomass
    0.22 w/m2…respiration…producing behavior and cognition in all organisms
    0.0002 w/m2…knowing that we know… producing language and beliefs
    0.000001 w/m2…awareness of how we know…which can free us to shift our beliefs and behaviors

    The fact that we do know that we know, and we are aware of how we know should make us wary of fundamentalist interpretations of genetics and of strict application of thermodynamics to economic and social systems.

    For example, in David Denby’s excursions into the tenth grade schools, and particularly the ‘challenging’ teacher in Manhattan, he finds the students asked to grapple with issues that he suspects they simply haven’t lived long enough to really understand. He is not complaining that the teacher is making a pedagogical mistake (the teacher’s results speak for themselves), but he thinks that the students answers to the questions will likely change as they get more experience living.

    The question Denby raises is similar to the issue about the cost of education at Duke…or more generally, how much does it cost to maintain the economy that can use the oil to make useful products?

    How much does it cost the society and the parents to raise a child with the experiences which will prepare it to wisely spend the .0002 and the .000001 w/m2? If you are calculating the cost, is it simply a matter of working out the calories of food required to power the brain? Or is it a case of building what Denby calls the child’s ‘soul’? And your answers will be vastly different.

    IF you think that actual living is the cost of a mature ‘soul’, then the cost in power will be much higher than what is simply required to power the brain. And that is directly analogous to the current suspicion of several people that our society simply costs too much to support our oil habit. Thermodynamics can be, I think, very useful in getting some approximations of the size of the challenge. Working out the solutions and making the changes is quite a different question. And solutions and changes are what will ultimately shape our society and economy…or fail spectacularly.

    Don Stewart

    • I think it is not a matter of having not experienced something. If you want to make a student loan, it could be good to ask someone who has done it. So information passing to “unknowings” might save much more enegry than letting them make “the same mistakes” again. On the other hand, what youth makes different IS actually to make the same mistakes again. sigh.
      The question is, the same problem might lead to diffenernt answers as time goes on So you need to ask the same questions with a fresh mind. In my youth for example startup financing did not exist. I had a very tough start get my business going…

    • The snake devours its own tale. This orgy of stock buybacks is hardly a recipe for long-term corporate success, and tanking profits suggest the game is up. This article is from October 2014:

      Companies in the Standard & Poor’s 500 Index really love their shareholders. Maybe too much. They’re poised to spend $914 billion on share buybacks and dividends this year, or about 95 percent of earnings, data compiled by Bloomberg and S&P Dow Jones Indices show…

      Buybacks have helped fuel one of the strongest rallies of the past 50 years as stocks with the most repurchases gained more than 300 percent since March 2009. Now, with returns slowing, investors say executives risk snuffing out the bull market unless they start ploughing money into their businesses.

      “You can only go so far with financial engineering before you actually have to have a business with real growth,” Chris Bouffard, chief investment officer who oversees $9 billion at Mutual Fund Store in Overland Park, Kansas, said by phone on Oct. 2. “Companies have done about all that they can in terms of maximizing the ability to do those buybacks.”

      http://www.bloomberg.com/news/articles/2014-10-06/s-p-500-companies-spend-almost-all-profits-on-buybacks-payouts

  5. Just when it looked like big player oil producers might collude on reducing output to reduce supply to increase price, low and behold, the deal for now has apparently fell through.

    http://www.nasdaq.com/article/oil-prices-turn-negative-as-saudi-russia-deal-disappoints-20160215-00326

    ‘Oil Prices Turn Negative as Saudi, Russia Deal Disappoints’

    “Oil prices gave up their early gains on Tuesday, after investors expressed doubt that a preliminary agreement by four of the largest producers to steady output would ease the supply glut.

    The market had been up as much as 6% after Russia, Saudi Arabia, Venezuela and Qatar agreed to freeze production at levels which are already high. But they said the deal is contingent on other producers joining, and investors and analysts doubt that will happen.”

    http://www.bloomberg.com/energy

    WTI back under $30

    • https://www.google.com/?gws_rd=ssl#q=dow

      Even though oil is staying low, the Dow has jumped back up to 16,196 from last week’s low of 15, 650. Today it was up +222 as some investors and corporate buybacks are buoying the market up. 16,000 pts. seems to be the psychological barrier on the way down from a high in May 2015 of 18,350. Even though China is on the ropes, Europe is stagnating and emerging market economies are contracting, the US seems to be holding steady, at least for now. Should be fun to watch as this situation unfolds.

  6. Dear Finite Worlders

    I want to expand a little on my previous note about the cost of running the society which uses the oil. I will use David Denby’s book ‘Lit Up’ as a reference.

    Denby is describing a classroom in a poor section of New Haven, CT:
    ‘On May 9, two weeks after the Read Around, Miss Zelensi tried to start a class discussion of the books’ common themes. But Anika, the girl with the quickest responses in class, suddenly burst out, ‘I want to read!’ A little startled, Miss Zelenski asked how many students would rather read than talk; most of them raised their hands. That’s when the silent reading period began, and it lasted for twenty minutes; it would have lasted longer, but Miss Zelenski finally broke it off and began a discussion. The silent reading of a book they had chosen was the students’ victory, and it was hard-won. School had started in September. It was now May. It had taken eight months, five classes a week with Miss Zelenski, eighty minutes a class for the students to get to this point. At the beginning of the year, most of the class had been unwilling to read at all.’

    Miss Zelenski, the teacher, has 17 years of formal education. But she says that she learned most of what she needs to know as a result of working as a cocktail waitress putting herself through college.

    So the first thing I would like for you to notice is the enormous cost involved in getting these student to actually read.

    Denby observes: ‘These students knew a lot about families, about love and the absence of love, about loyalty and betrayal, and a great many other things. They knew how to take care of younger children, and they were perceptive about the character of the people around them. They knew whom to trust, they knew about their neighborhoods, how to stay safe. They demanded fairness; they had a very active sense of justice—not in the legal sense, necessarily, but in all the relations of life….But many of the students lacked necessary information—facts, for want of a better word. When wars took place, how American politics worked, who were the country’s great men and women, how a bank did its business, what, exactly they had to do to get into the professions or get any kind of good job—general information about how the world worked. What they experienced every day was shaped, in part, by political and economic forces they were barely curious about. They also lacked the rich vocabulary of students who had been frequently read to when they were children, and had then developed reading habits of their own.

    the students didn’t openly claim the privilege of being individuals. Mere survival came first.

    the complicated tangles in these teenagers’ lives, making them strong and weak at the same time, spiraled back a generation or two.

    the students came into tenth grade with an ardent and detailed belief in fairness. But the complications of morality extended the concept of fairness into a changed understanding of life. They puzzled over the fascinating pages of Ishmael Beah’s book in which he and other boy warriors had been liberated from army service by UNICEF and put into a gentle rehab facility—only to wind up hating it. The boys missed the companionship of war, the adrenaline high of live fire. It was impossible to understand such things with a simple division into right and wrong.’

    Describing the teacher:
    ‘She wanted the students to flourish. They needed information, they needed morally informed instruction in the ways of the world. They needed to be able to read themselves and other people. She didn’t protect them or condescend to them by giving them easy assignments…combined literature and ethical inquiry.’

    Now for my little essay. What the teacher is trying to do is train children to flourish in a world which has defeated their parents. Since parents are Nature’s way of imparting guidance to children, the teachers are trying to accomplish an unnatural task. And it is very costly for society. It is costly if the teachers fail, and it is costly if they succeed against the odds.

    I don’t know whether one describes our current version of capitalism as ‘complex’ or just as ‘complicated’. In either case, it is hard for someone raised in a neighborhood where you just don’t go out after dark to succeed in the larger world. Contrast with a hunter-gatherer society. Children naturally learn how to survive from the daily work with their parents. Hunting with some gathering for the boys, mostly gathering for the girls. It’s not that hunting and gathering is less complicated than capitalism…one can make the argument that the hunters and gatherers know far more facts about the world than modern people. The problem is that capitalism has created an underclass which is incapable of passing the traits needed for success down to their children. So we throw money and people at the problems, with scant success in the broader scheme of things.

    The chapter closes as a school superintendent, who came from Bloomberg’s operation in NYC, decides to break the three year school up into 3 one year schools. I don’t know how that turned out, but I don’t think that moving the deck chairs on the Titanic is going to make a lot of difference.

    If we come back to ‘how much does it cost to run the society which can turn oil into useful products’, we get some idea why the answer is so shockingly high.

    Don Stewart

    • We don’t live in the “real” world. We are a domesticated species. Everything we teach our children has to do with “survival” in the theme park that we’ve created for oursleves. Not much of that will remain once the illusion gives way to the real world outside these secure walls.

      And if things DO go that way, kids in the new world will immediately see through any bullshit that you try to indoctrinate them with. Threir eyes will be wide open.

  7. Dear Finite Worlders
    Pretty frequently here there is discussion of conspiracies. Less often there is talk about the necessity for independent thought and action. And the teachers in David Denby’s book are striving for some coherence, but also some variation (the Goldilocks principle).

    Some of you may have participated in the demonstration of synchronized clapping of hands which emerges in an auditorium. Here is a similar demonstration of purely mechanical metronomes:

    http://managingwholes.com/synchronize

    The challenge, in my opinion, is to get the optimum balance between coherence and independent action.

    Don Stewart

    • I was just wondering. Are you hoping to apply all of this wisdom before SHTF or some time after the gates of hell are opened?

      Because, from where I’m sitting, not many people are interested while BAU remains intact and as things go south pretty much everyone will have other things on their mind.

      There’ll be plenty of coherent action post BAU and a fair bit of indendent action too, but possibly not of the type that you have in mind…

      • Rick Grimes
        There is an old cemetery near my house, abandoned in the woods. There is a modest obelisk with the inscription : she hath done what she could. So, first, I try to do what I can, both for myself, my children and grandchildren, and others.

        I have no illusion about a majority of people doing anything other than following the path of least resistance. But there are people who ‘get it’. I try to be part of that society. I’m less physically active in that society since I retired from the farm, but I still get active in certain ways. I think I will garden until the day I die.

        As for the Finite Worlders, many seem to want to ignore any possibilities. I tend to agree with Nate Hagens that ultra-doomerism is just an excuse not to do anything. I do see that a few things that I have said have made an impact on some people…not necessarily readers of this blog.

        It’s also fun for me to continue to learn, and to connect the dots. For example, I am currently involved in a Carbon Farming initiative. It is pleasing to me to be able to put together the infiltration demonstration in South Dakota with the capitalistic wet dream of gene editing and notions of thermodynamic limits to see that much of what is likely to happen will be a disaster. It is also pleasing to examine David Denby’s experiences in the classroom in the light of thermodynamic limits and to think about how Nature could do something for a hundred million years that we seem unable to accomplish today. It’s not comforting to discover these things and articulate them…but it is interesting.

        Don Stewart

        • Don – yes – good to so something if it takes your mind off the situation ….

          The thing is…

          We ‘ultra doomers’ are here because we have already examined all the options and determined after much thought — that there really is no hope.

          7.3 billion people and virtually no food — that is what we are facing. Violence, disease on an epic scale for those who might survive. Spent fuel ponds. No electricity. No petrol. This is not the Great Depression – this is not a world war…. this is not an Ethiopian famine – this all of these x 1,000,000… it is well and truly an unthinkable situation …

          It is the bacteria in the cup and the sugar has all been consumed….

          It’s like we are standing on a beach — and before us is a 20,000 metre wave approaching — the options are to try to run from the wave — or grab another beer from the cooler…. and sit down with your friends and family — and enjoy the final minutes….

          Yes it is a sad situation – particularly for those who have children.

          But rather than flail about fretting and trying to imagine impossible solutions…. is it not more dignified to take a page out of the book from the Titanic — put on our dinner clothes — order up a bottle of champagne — and listen to the band play — as if this catastrophe were not happening?

        • Don
          Fair enough. We all do what we must – not only to survive, but to stay sane!

          There appears to be a problem with our ability to pin down exactly how things will progress from now on. Some feel that the situation is utterly hopeless. Others not so much. Some believe that things will wind down gradually leaving plenty of time for adjustment to novel approaches… the responses to claims of BAU Lite point out the difficulties downsizing would entail.

          When we hear the phrases… “I find it difficult to see…” or “It’s hard to believe…” that is a sign that many assumptions are being made and that a substantial amount of doubt remains as to how things will unfold. Everyone has their theories, but the truth is that no one has actually seen it yet and we won’t know until it actually happens.

          For me, a much higher level of certainty needs to be reached before declaring that it’s all over for everyone and that it’s time to bolt the door. Even so, I align myself with a fast collapse scenario because it appears to be the most likely given the way our world works.

          I do allow some room for miraculous unknowns but again since you can’t really know what these are or where they would play out it just adds to the guessing game.

          I will add, that like FE, I don’t have children, so it may influence my views somewhat. I’m not much of a farmer either but I’m prepared to milk as many goats as it takes to stay alive for as long as possible.

          I do have nephews though and I see the children living out their lives all around me. From that perspective, I think every moment we have is precious no matter how long we live.

          • Rick Grimes
            There are several key questions which need answers:
            *Is BW Hill correct that oil has passed a mid-way point, after which point it will never make energetic sense to go out and put new oil production in place?
            *Or are those who think that rising oil prices are all that are necessary to resuscitate the oil industry?

            *Is Gail correct that declining GDP NECESSARILY leads to collapse of all supply chains?
            *Or are Chris Martenson and Charles Hugh Smith on the right track when they anticipate a decline in US GDP of 33 to 50 percent? With what disappears being mostly a lot of stuff we can do without…such as the financial behemoths which have arisen in the last 40 years.

            *Is collapse from AGW already baked into the cake?
            *Or can carbon farming save us? (Eric Toensmeier has a book coming out on Monday, discussing in some detail how we need to go about carbon farming.)

            *Is it necessary to get ‘top down’ direction to save ourselves?
            *Or is the change only possible with bottom up initiatives?

            *Are humans necessarily non-sentient, merely reacting to programs which somehow emerge from genetic material?
            *Or are humans malleable creatures who can adjust to a wide variety of environments. (Such as the Dancing Rabbit commune in Missouri where people live apparently happy lives on less than 10,000 dollars per person).

            *Is more high-tech the solution to all problems? e.g., gene editing, colonies on Mars, geoengineering, fusion reactors
            *Or is the encouragement of deeper thinking and feeling the solution? e.g., the sort of education favored by David Denby

            I tend to agree with Nate Hagens that the only sensible place to invest your efforts is in those ‘humanistic’ solutions which lead us to reasonable lives consuming a lot less energy but using the abundant energy available from photosynthesis and passive heating of Earth.

            Don Stewart

            • Don, I appreciate your and Rick Grimes recent postings. It’s nice to see a bit of humility about our ability to predict the future. The only thing that seems likely about the future is that we will be surprised.

              On the subject of this blog, “finite world,” back in the 70s Dr. Peter Vajk dug into the mass of FORTRAN code behind Limits to Growth. He was interested in seeing what clean low cost energy would do to the model. Eventually this became a book “Doomsday has been canceled.” Pollution is much less of a problem with energy from space, and with enough energy, we can recycle everything. It’s not obvious how many people the Earth could support with lots of clean external energy, but it’s a substantial multiple over the current population.

              Vajk’s book never developed the following of Limits to Growth. It is an interesting psychological/evolutionary question why doomsday memes spread so well in humans populations.

      • I reckon there will be no room for ivory tower ideas post BAU…. if there is anyone still around it will be a daily war to stay alive… to find enough to eat … to keep warm…. to fend off those who will be trying to take what you have….

        I don’t see any children emerging as concert pianists post BAU….

  8. China is stepping up support for the economy by ramping up spending and considering new measures to boost bank lending.

    The nation’s chief planning agency is making more money available to local governments to fund new infrastructure projects, according to people familiar with the matter. Meantime, China’s cabinet has discussed lowering the minimum ratio of provisions that banks must set aside for bad loans, a move that would free up additional cash for lending.

    Officials are upping their rhetoric too. Premier Li Keqiang said policy makers “still have a lot of tools in the box” to combat the slowdown in the world’s No. 2 economy, days after People’s Bank of China Governor Zhou Xiaochuan broke a long silence to talk up confidence in the nation’s currency, the yuan.

    And to ram the message home, the biggest economic planning agencies on Tuesday promised to reduce financing costs as they rein in overcapacity. Throw in a record surge in lending in January and a picture emerges of an administration determined to put a floor under growth.

    “Policymakers are battling to prevent any further slowdown, which could escalate into a hard landing,” said Rajiv Biswas, Asia-Pacific chief economist at IHS Global Insight in Singapore. “These additional measures will act to boost liquidity in the banking sector and increase local government spending on infrastructure development.”

    http://www.bloomberg.com/news/articles/2016-02-16/china-turns-on-taps-and-loosens-screws-in-bid-to-support-growth

    Excellent!!!

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