—”Near the window by which I write a
great bull is tethered by a ring in his nose. Grazing round and
round he has wound his rope about the stake until now he stands
a close prisoner, tantalized by rich grass he cannot reach,
unable even to toss his head to rid him of the flies that cluster
on his shoulders. Now and again he struggles vainly, and then,
after pitiful bellowings, relapses into silent misery.
This bull, a very type of massive strength, who, because he
has not wit enough to see how he might be free, suffers want
in sight of plenty, and is helplessly preyed upon by weaker
creatures, seems to me no unfit emblem of the working masses”
Henry George Quoted P. 303 Sprading Liberty and Great Libertarians.
Embodied energy cost of opportunity cost. Which would be a true metric of decision making where resource constraints involve mutually exclusive resource investment decisions.
The Problem with Debt and GDP is that it does not capture anything scientifically falsifiable it is subjective in the truest sense.
Both Debt and GDP in financial measures have no regard to actual resources and potential resource outputs from available energy and resource inputs.
Debt in Energy terms would be borrowing future Energy and using it up so that it is not available in the future In a very great sense this Energy Future Budget is Unknown. We have Proven Reserves and so forth and existing known Generating and refining and conversion capacities but until a sensible measure of debt based upon known future energy resources and their rate of use are coupled with ideas of a Unit of Debt, in the sense of Using future supplies or reserves Now instead of at some point in the future the Notions of Debt in financial terms are meaningless.
We do Know that all Debts and Credits do not sum to Zero in the existing system and this is due to the Principal Debt being issued without the Interest Element , it is from this simple fact that Money Scarcity exists as an idea and gives a notion then of a Time value of money expressed as a rate of Interest.
At this point there are lots of political choices which can be made with respect to Energy as a Commons, Or Money as a Commons in much the same way that Henry George with the Single Land Tax showed how a use it or lose it approach to Land with his Single Land Tax proposals would lead to Land being used to its best capacity, can we look at Energy resources in a similar way, notwithstanding the Geo-Political implications in thinking in such a way? ( OPEQ anyone?).
In one sense the Petro Dollar already is an energy-based unit of account although its per-view in its conception was to Provide a means of recycling Oil Revenue Surplusses of OPEC into Dollar claims on Hard Assets and Western Technology and Consumer Goodies and of course Armements. Personally, I think the inherent narrow-mindedness of the Approach post-Nixon Shock is a Smoking Gun regarding decisions which could have been taken back then that were not for what, I am sure, seemed at the time eminently sensible geo Political reasons.
Taking a Seeds Outlook even with the great need of OPEQ producers to exchange their Finite Resource for Longer term prosperity generators the short-term nature of Petro Dollar recycling must bring with it some regrets upon reflection some 45 years later?
Two groups clearly emerge as Key to the process of some sort of Paradigm shift in thinking about Prosperity as Energy Based and Not Fiance based upon debt Based. These two groups are The International Bank of Settlements Debt based FIAT Currency System, and The Military Industrial Complex expressed as the US Military and NATO. , This then Ranged Against the BRICS and non-aligned States to the Washington Consensus.
There are the Energy Sectors themselves and also the Pharmaceuticals and Agricultural Corporates to take into account but The Military Industrial Complex and the IBS FIAT Based FIance Model Rule the Roost in terms of the most threatened Vested interests from this sort of Thinking about Prosperity.“But China, albeit with growth in the range 6% to 7%, borrows more than 30% of GDP each year. That is totally unsustainable – and has been happening for ten years”.The Answer to this sustainability question is. Why So and under what boundary conditions.
Without Resource constraints and In Yuan, this is not true.
With Resource Constraints but trading energy in YUAN, this is only weakly true.
How close is China to Energy Security? Coal in the equation, Coal Out of the Equation.
Can China be self-sufficient outside of the Washington Consensus market? How close off is China from being circularly self-sustaining? Are China and Russia as a Unit Mutually Circularly self-sustaining?This begs the next question for a Modern Economy to be debt free in the sense that it is not robbing the Future Peter, to Pay Now (Robin). What are the objects of Peters thievery? Energy and Food.There is a question above regarding Agriculture? it is a very important aspect of making up a Debt Metric related to Resources and resource restraints to prosperity.
Roger – regarding China – I do know that they’re about the double their oil imports – why should tell you a lot about their energy security.Therefore as they are relying on outside sources do you still feel that their 30% borrowing of GDP is not a problem.If say they could be totally energy self sufficient with a growing base of energy then perhaps yes – but that doesn’t appear to be the case.Just interested in your thoughts
Hi Donald, I am formulating my thoughts the starting point for me are on this Blog and its links.
https://letthemconfectsweeterlies.wordpress.com/2018/05/24/global-primary-energy-use-associated-with-production-consumption-and-international-trade/The debate between Bill Mitchell and Steve Keen on whether deficits in Trade are a good or bad thing is informative in that both hold heterodox views and are therefore freed from Orthodox in box thinking.My Second Task over the next few days is to take a Generalised Circuit Diagram one where the Store of e
(cont)::: Store of Energy in a Battery and the other with the same circuity but with the store of Available Energy accumulating in a Capacitor. A Battery gives a constant discharge of the available surplus energy and the Capacitor has to fully Charge and then Release its load and then Wait to recharge to Discharge.
I think that this conceptual Model will be akin to the Capacitor as Minsky’s instability hypothesis but captured in Energy Terms.Finally, I have been pondering this Video for the past week and messing about with Euler’s Identity. I am thinking Elliptically and in Polyhedrons rather than in Idealised Circles.Euler’s number derived from the growth rate of interest on money and its ubiquity in various natural systems and phenomena that propagate according to an Exponential I think will allow a theoretical derivation Of e within boundary conditions provided from available surplus energy and available Food resources.made a cryptic reference to running out of electrons in an earlier post That electrical currents always propagate at Right angles to and Magnetic field I think tells us something deeply related to how we should be managing resources moving forward into a probabilistic future.Hypathia Was really quite the bomb too.
These questions are very important regarding theoretical limits to growth and in a very real sense determine what out discretionary Energy Budget can be in any given time period. This Energy budget should form the basis for any sensible units for monetary exchange which should be developed for Spatially discrete Markets, Local, National, International and Global.Bernard Leitaers Terra has already done most of the Geo-Political reasoning I think I think a mathematically coherent theoretical model based upon realisable Energy potentials will grow out of Tims SEEDS thinking.
http://www.lietaer.com/2010/01/terra/I am not exactly a Calculus whizz but from the above Ingredients, something tied together with Bale String is within even my compass I think.
3.1. Energy use associated with production and consumption world economy consumes 5.63E+08 TJ of primary energy resources (BP, 2016; IEA, 2016c). In order to identify which region is responsible for the energy use, three diﬀerent accounting principles as recorded by the indicators of EED (energy resources exploited directly), EEP (energy resources embodied in production) and EEC (energy resources embodied in ﬁnal consumption), respectively, are adopted inFig. 2. According to EED, mainland China, the United States, Russia, Saudi Arabia and India are the 5 largest exploiters, and together they are responsible for 51% of global total energy use. In addition, mainland China is also the largest producer with 1.22E+08 TJ of energy resources embodied in its production, based on the results of EEP. It indicates that 1.22E+08 TJ of energy resources are used globally to sustain the ﬁnal production activities in mainland China. The UnitedStates is the second largest producer, followed by Japan, India and Germany. When it comes to EEC, the United States surpasses mainlandChina as the largest consumer of embodied energy. The world total energy use is the same under diﬀerent accounting principles, however, the three methods diﬀer by which region is allocated the energy use. The diﬀerence between EEP and EEC is small at the regional level because the goods and services used for ﬁnal consumption in one region are mainly produced in the same region.(PDF) Global primary energy use associated with production, consumption and international trade. Available from: https://www.researchgate.net/publication/320445428_Global_primary_energy_use_associated_with_production_consumption_and_international_trade [accessed Jun 28 2018].There is a massive amount of information to take in in this report the same authors have also published several other groundbreaking papers. EED (energy resources exploited directly), EEP (energy resources embodied in production) and EEC (energy resources embodied in ﬁnal consumption), coupled with SEEDS Energy cost of Energy I think, point the way to a sensible Embodied energy cost of opportunity cost. WHich would be a true metric of decision making where resource constraints involve mutually exclusive investment decisions.
I think an analysis of China here is becoming imperative.
“MY PMM IS THE ONLY COMPLETE MODEL OF A SUSTAINABLE ECONOMY EVER BUILT!
and a model to play with, as an aside anyone who has not played with Steve Keens Minsky model is missing out on hours of endless fun.
New Developments in the Statistical Mechanics of Money, Income, and Wealth
Professor Victor M. Yakovenko
Fellow of the Joint Quantum Institute (JQI)
Member of the Center for Nanophysics and Advanced Materials (CNAM)
University of Maryland
E-mail sent to Garvin H Boyle.
SEEDS, Dr Tim Morgan
8:01 AM (2 hours ago)
I have found your wonderful website, I have been engaged in Monetary reform activism for around Ten years and have encountered the hetrodox work of Prof, Steve Keen, The MMT school of Money and found a lot to think about in Zarlenga’s Lost Science of Money.
My Studies have gravitated towards three Fields, Blockchain Technology and Distributed Community governance. DAO’s , https://github.com/tonefreqhzEnergy Economics SEEDS and Halls EROEi and Morgans Energy Cost of Energy Invested, And Political Economy based around Proudhon’s and Henry Georges Ideas.
In the Introduction to Technocracy, I became struck by questions of Entropy and money ” https://archive.org/details/introductiontotec00techdiscussions — of ‘value,’ of fluctuating prices, of the gold standard, of changing interest rates, of items of pecuniary wealth which are at the same time items of debt — aremerely discussions looking toward a readjustment of the factors which prevent themThe problem of analysing political choices against the metric of a Monetary measure is the Money as a Thing is most certainly a Variable and as any good technologist, scientist or metrologist will tell you a unit of measurement has to be clearly defined and fixed.The dollar. He notes that it is a variable. Why anyone should attempt, on this earth, to use avariable as a measuring rod is so utterly absurd that he dismisses any seriousconsideration of its use in his study of what should be done.” Both From Scott’s Work but also that of Frederick Soddy.
http://letthemconfectsweeterlies.blogspot.com/2018/03/energy-returned-on-energy-invested.html Soddy famously said, “Money is the nothing you get for something before you can get anything”
Bernard Leitaers work on the Terra and complementary currencies ( Wir and Swiss Franc , for instance) Also Leitaers work on sustainable economics
Finally, The work of Navack and Kropotkin on symbiosis in ecological systems has been very influential on my own thinking.
And My Latest efforts of quantifying an energy-based monetary unit lead me here.
(PDF) Global primary energy use associated with production, consumption and international trade. Available from: https://www.researchgate.net/publication/320445428_Global_primary_energy_use_associated_with_production_consumption_and_international_trade [accessed Jun 28 2018].
There is a massive amount of information to take in in this report the same authors have also published several other groundbreaking papers. EED (energy resources exploited directly), EEP (energy resources embodied in production) and EEC (energy resources embodied in ﬁnal consumption), coupled with SEEDS Energy cost of Energy I think, point the way to a sensible Embodied energy cost of opportunity cost. WHich would be a true metric of decision making where resource constraints involve mutually exclusive investment decisions.
It will take me a while to read all of your material and original research I already have found myself thinking what assumptions does Garvin make regarding Monetary measures of past economic trends, you have made an observation that Externalities are not captured in GDP measures, there is a sough of Humeian Is-Ought dichotomy regarding political economy a kind of They Did this but Should have done or could have done that dichotomy..
One final Link,
With Best wishes, I hope we might have a chance to compare notes when I get more familiar with the body of your Work,
Roger g Lewis
The title and subject of my next blog will be
Redefining Fiscal Conservatism.
The Terra/Energy Based Fiscal Unit.
Forres and Lagom White Paper, Boundary Conditions for a Fiscal Conservatism based upon Circular Economics.
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