Scientific Models and Myths: What Is the Difference?

Most people seem to think, “The difference between models and myths is that models are scientific, and myths are the conjectures of primitive people who do not have access to scientific thinking and computers. With scientific models, we have moved far beyond myths.” It seems to me that the truth is quite different from this.

History shows a repeated pattern of overshoot and collapse. William Catton wrote about this issue in his highly acclaimed 1980 book, Overshoot.

Figure 1. Depiction of Overshoot and Collapse by Paul Chefurka

What politicians, economists, and academic book publishers would like us to believe is that the world is full of limitless possibilities. World population can continue to rise. World leaders are in charge. Our big problem, if we believe today’s models, is that humans are consuming fossil fuel at too high a rate. If we cannot quickly transition to a low carbon economy, perhaps based on wind, solar and hydroelectric, the climate will change uncontrollably. The problem will then be all our fault. The story, supposedly based on scientific models, has almost become a new religion.

Recent Attempted Shifts to Wind, Solar and Hydroelectric Are Working Poorly Continue reading

Recession Ahead: An Overview of Our Predicament

Many people have the impression that recessions come from financial missteps, such as the US subprime loan fiasco. If energy is involved at all, the problem comes from high oil prices as supply becomes inadequate to meet demand.

The real situation is different. We already seem to be on the road toward a new crisis; this crisis is likely to be much worse than the Great Recession of 2008-2009. This time, a major problem is likely to be energy prices that are too low for producers. Last time, a major problem was oil prices that were too high for consumers. The problem is different, but it is in some ways symmetric.

Last time, the United States seemed to be the epicenter; this time, my analysis indicates China is likely to be the epicenter. Last time, the world economy was coming off a high growth period; this time, the world economy is already somewhat depressed, even before hitting headwinds. These differences, plus the strange physics-based way that the world economy is organized, explain why the outcome seems likely to be worse this time than in 2008-2009.

I recently explained what I see as happening in a presentation for actuaries: Recession Likely: Expect a Bend in Trend Lines. This post is based on this presentation, omitting the strictly insurance-related portions.

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Rethinking Renewable Mandates

Powering the world’s economy with wind, water and solar, and perhaps a little wood sounds like a good idea until a person looks at the details. The economy can use small amounts of wind, water and solar, but adding these types of energy in large quantities is not necessarily beneficial to the system.

While a change to renewables may, in theory, help save world ecosystems, it will also tend to make the electric grid increasingly unstable. To prevent grid failure, electrical systems will need to pay substantial subsidies to fossil fuel and nuclear electricity providers that can offer backup generation when intermittent generation is not available. Modelers have tended to overlook these difficulties. As a result, the models they provide offer an unrealistically favorable view of the benefit (energy payback) of wind and solar.

If the approach of mandating wind, water, and solar were carried far enough, it might have the unfortunate effect of saving the world’s ecosystem by wiping out most of the people living within the ecosystem. It is almost certain that this was not the intended impact when legislators initially passed the mandates.

[1] History suggests that in the past, wind and water never provided a very large percentage of total energy supply.

Figure 1. Annual energy consumption per person (megajoules) in England and Wales 1561-70 to 1850-9 and in Italy 1861-70. Figure by Tony Wrigley, Cambridge University.

Figure 1 shows that before and during the Industrial Revolution, wind and water energy provided 1% to 3% of total energy consumption.

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Supplemental energy puts humans in charge

Energy is a subject that is greatly misunderstood. Its role in our lives is truly amazing. We humans are able to live and move because of the energy that we get from food. We count this energy in calories.

Green plants are also energy dependent. In photosynthesis, plants use energy from the sun to convert carbon dioxide and water into the glucose that they need to grow.

Ecosystems are energy dependent as well. The ecologist Howard T. Odum in Environment, Power, and Society explains that ecosystems self-organize in a way that maximizes the useful energy obtained by the group of plants and animals.

Economies created by humans are in some respects very similar to ecosystems. They, too, self-organize and seem to be energy dependent. The big difference is that over one million years ago, pre-humans learned to control fire. As a result, they were able to burn biomass and indirectly add the energy this provided to the food energy that they otherwise had available. The energy from burning biomass was an early form of supplemental energy. How important was this change?

How Humans Gained Dominion Over Other Animals

James C. Scott, in Against the Grain, explains that being able to burn biomass was sufficient to turn around who was in charge: pre-humans or large animals. In one cave in South Africa, he indicates that a lower layer of remains found in the cave did not show any carbon deposits, and hence were created before pre-humans occupying the cave gained control of fire. In this layer, skeletons of big cats were found, along with scattered gnawed bones of pre-humans.

In a higher layer, carbon deposits were found. In this layer, pre-humans were clearly in charge. Their skeletons were much more intact, and the bones of big cats were scattered about and showed signs of gnawing. Who was in charge had changed.

There is other evidence of human domination becoming possible with the controlled use of fire. Studies show a dramatic drop in numbers of large mammals not long after settlement by humans in several areas outside Africa. (Jeremy Lent, The Patterning Instinct, based on P. S. Martin’s “Prehistoric overkill: A global model” in Quaternary Extinctions: A Prehistoric Revolution.) Continue reading

Why we have a wage inequality problem

Wage inequality is a topic in elections around the world. What can be done to provide more income for those without jobs, and those with low wages?

Wage inequality is really a sign of a deeper problem; basically it reflects an economic system that is not growing rapidly enough to satisfy everyone. In a finite world, it is easy for an economy to grow rapidly at first. In the early days, there are enough resources, such as land, fresh water, and metals, for each person to get a reasonable-sized amount. Each would-be farmer can obtain as much land as he thinks he can work with; fresh water is readily available virtually for free; and goods made with metals, such as cars, are not expensive. There are many jobs available, and wages for most people are fairly similar.

As population grows, and as resources degrade, the situation changes. It is still possible to grow enough food, but it takes large farms, with expensive equipment (but very few actual workers) to produce that food. It is possible to produce enough water, but it takes high-tech equipment and a handful of workers who know how to use the high-tech equipment. Metals suddenly need to be lighter and stronger and have other characteristics for the high tech industry, thus requiring more advanced products. International trade becomes more important to be able to get the correct mix of materials for the advanced products needed to operate the high-tech economy.

With these changes, the economic system that previously provided many jobs for those with limited training (often providing on-the-job training, if necessary) gradually became a system that provides a relatively small number of high-paying jobs, together with many low-paying jobs. In the United States, the change started happening in 1981, and has gotten worse recently.

Figure 1. Chart comparing income gains by the top 10% to income gains by the bottom 90% by economist Emmanuel Saez. Based on an analysis IRS data, published in Forbes.

Figure 1. Chart comparing income gains by the top 10% to those of the bottom 90%, by economist Emmanuel Saez. Based on an analysis of IRS data; published in Forbes.

What Happens When an Economy Doesn’t Grow Rapidly Enough?

If an economy is growing rapidly enough, it is easy for everyone to get close to an adequate amount. The way I think of the problem is that as economic growth slows, the “overhead” grows disproportionately, taking an ever-larger share of the goods and services the economy produces. The ordinary worker (non-supervisory worker, without advanced degrees) tends to get left out. Figure 2 is my representation of the problem, if the current pattern continues into the future.

Figure 2. Authors' depiction of changes to workers share of output of economy, as costs keep rising for other portions of the economy keep rising.

Figure 2. Author’s depiction of changes to workers’ share of output of economy, if costs keep rising for other portions of the economy. (Chart is only intended to illustrate the problem; it is not based on a study of the relative amounts involved.)

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