Redefining Fiscal Conservatism. The Terra/Energy Based Fiscal Unit. Föres and Lagom White Paper, Boundary Conditions for a Fiscal Conservatism based upon Circular Economics. (Part One) Scope.
⨊GåFöre(O⨋)The FedratedMutualSociety.⨊Före(s)And⨋Lagom(s) Putting the Complementary into Crypto Currencies!.
⨊Före(s) The store of Value component of the föres, Lagom dynamic currency complex.
Energy Cost of Energy is explained here by Dr Tim Morgan.
SEEDS uses an alternative measure, ECoE (the Energy Cost of Energy), which expresses cost as a percentage of the gross energy accessed.Because the world economy is a closed system, ECoE is not directly analogous to ‘cost’ in the usual financial sense. Rather, it is an economic rent, limiting the choice we exercise over any given quantity of energy. If we have 100 units of energy, and the ECoE is 5%, we exercise choice (or ‘discretion’) over 95 units. If ECoE rises to 10%, we now have discretion over only 90 units, even though the gross amount remains 100.This is loosely analogous to personal prosperity. If someone’s income remains the same, but the cost of essentials rises, that person is worse off, even though income itself hasn’t changed.
Understanding ECoEECoE evolves over time. In the early stages of any given resource, ECoE is driven downwards by geographic reach, and by economies of scale. Once maturity is reached, depletion takes over as the driver, pushing ECoE upwards.
In the pre-maturity phase, technology accelerates the fall in ECoE driven by reach and scale. Post-maturity, technology acts to mitigate the rise caused by depletion. But – and this is often misunderstood – the capabilities of technology are limited to the envelope of the physical characteristics of the resource.
Hannah Ritchie and Max Roser (2018) – “Fossil Fuels”. Published online at OurWorldInData.org. Retrieved from: ‘https://ourworldindata.org/fossil-fuels’ [Online Resource]
Hannah Ritchie and Max Roser (2018) – “Energy Production & Changing Energy Sources”. Published online at OurWorldInData.org. Retrieved from: ‘https://ourworldindata.org/energy-production-and-changing-energy-sources’ [Online Resource]
Embodied energy cost of opportunity cost. Which would be a true metric of decision making where resource constraints involve mutually exclusive investment decisions.
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. GLOBAL PRIMARY ENERGY USE ASSOCIATED WITH PRODUCTION, CONSUMPTION AND INTERNATIONAL TRADE
15% of the energy use embodied in trade turns out to be induced by final consumption, and 85% is attributed to intermediate production https://www.researchgate.net/publication/320445428_Global_primary_energy_use_associated_with_production_consumption_and_international_trade
Steve you say EROI is only relevant to extractive industries I think this paper shows that is not correct. I think you are correct that International Trade is relevant, the relevance economically is relevant at the EROI embodied energy level though. Money in International Trade is a Convenient Posit ( Quine)(1) What is important regarding that is that the receipt of currency can be exchanged for something tangible, the money receive is not an end in itself. Looked at in EROEI and embodied energy terms it actually makes your point crystal clear. That said its pretty clear to those who are objectively considering the point.
(1)P.41 para 2.
MMT’s ignorance of economic thoughtMay 24 at 11:10amBill Mitchell has a new post “A surplus of trade discussions” responding to some of the criticisms of the MMT position on trade deficits (though he didn’t link to any of them, including my post “Some Preliminary Questions for MMT“). He opens with the proposition that “exports are a cost and imports are a benefit”, and reaches the following
Giving some real thing away is a cost. Getting some real thing is a benefit.That doesn’t equate, as I have been reading the last few weeks, in a conclusion that MMT’s preference is for a nation to have a current account deficit.
It just states the obvious fact that exports, by definition, involve sacrificing real resources and depriving a nation of their use.
Imports on the other hand clearly involve receiving final goods and services where the real resource sacrifice has been made by the exporting nation.
In a world where we produce to consume – not for its own sake – then receiving goods and services is better (real terms) than sending them elsewhere.
Steve Keen Responds.
Since I was one of the ones denying Mitchell’s opening gambit—though there must have been other people “torturing themselves”, since all I noted in my post was that I disputed it as a premise—I had better reply now on this issue.I do not deny the proposition that “Giving some real thing away is a cost. Getting some real thing is a benefit”: that’s obvious in a materialist world. What I do deny is that this proposition has any relevance to either macroeconomics or trade theory. And I am not the first one to deny this: that honour goes to Karl Marx.This raises one of my major issues with MMT: advocates know their own economic logic very well, but they seem to have little knowledge of compatible precursors to their views (or even compatible contemporaries, like complexity theory). Consequently, whether they realise it or not, they often end up making arguments that would be right at home in a conventional Neoclassical textbook. These arguments are just as wrong in MMT hands as they are in Neoclassical ones.This “exports=cost, imports=benefit” MMT analysis of international trade is a classic case in point. There are at least three ways in which this MMT perspective is a backward step in relation to preceding enlightened work in economics:
- Standard Neoclassical work on the irrelevance of opportunity cost below full employment
- Marx’s arguments on the irrelevance of the seller’s utility in trade
- The extensive Post Keynesian research on declining marginal costs of production and economies of scale.
INAPPLICABILITY OF OPPORTUNITY COST EXCEPT AT FULL EMPLOYMENT
End of Ownership, Circular Economy Proof of Brain and Primary, Intermediary and Consumption Energy Tokens. A Framework Evolves.
Here is my Working Draft spreadsheet for the synthesis of the Energy Production of the world in kilowatt-hours and the Debt Based world Financial economy based upon local dollar parity currency exchange rate basis from the CIA World Fact Book.
We find it in Plato’s Noble Lie, We find it in The God Pharaohs in Egypt, Chosenness is perhaps the oldest form of Idolatry.