“The further we go along the path of business as usual, the more we are lost.”James Lovelock
Most of us now seem to accept the fact that global warming is reality. We all have a vested interest in saying so, whether we believe it or not. We are seen by believers to be eccentric if we deny it.
But how about the fact that the economy is an energy system?
As a teenager in the 1950s, I was totally unaware of the reality of global warming. I first became aware of it in the late 1980s, when I went to Bradford to see an architect friend, John F C Turner, receive a Right Livelihood Reward, “for championing the rights of people to build, manage and sustain their own shelter and communities”.
Until then, I had assumed that the future would be an indefinite continuation of the way things were.
There is now a new emerging reality. That economic output is the product of surplus energy, after the energy cost of energy (ECoE) has been deducted. In other words, the economy is an energy system.
Until recently, around the beginning of this century, this didn’t present us with a problem. The energy cost of producing the energy we use was relatively small. From now on, it will be an increasing problem, albeit not yet recognised as such.
An immediate consequence of our economic system being an energy system, is the fact that prosperity is in decline and has been for a decade.
Declining prosperity means that although our take-home pay may have increased, we can buy less than we used to. We have less disposable income. The powers-that-be are in denial about this and constantly tell us how we are better off.
An expected impact of ECoE is that, in the end, our capitalistic society will not survive as such. Which is not a political statement. It is a future reality in a world which until now has depended on economic growth, albeit recently funded by borrowing.
Borrowing which assumed that debts will be repaid, from the proceeds of growth. But if prosperity is in decline there can be no growth. So, there can be no repayment of debts, which means there will be no borrowing.
Our economy is changing now. From growth to no-growth. Which means that everything is changing.
No-growth is now the way things are. Beneath our noses, our economic and social systems are changing. New ways are emerging, yet to be recognised as such.
There are some symptoms. In the UK declining public services can be attributed to the emerging new ways, albeit obscured by demographic trends.
Classical economists are unlikely to see the energy view of economics as reality. Their vested interest is in their kind of economics. Which is also true of the establishment, which understandably, is in a state of denial.
This is not to suggest that the energy view of economics has replaced the classical view. The two views exist alongside each other. Only one is real.
No amount of reasoned argument can yet convince the establishment – the government, commerce, public services administrators, academics the media and the professions – of this reality. To do so they would have to abandon their mindsets and put their jobs at risk. So, understandably they are in denial.
There is nothing wrong with being in denial, for the time being. Everyone must look after their self-interests until it becomes OK to openly accept that the economy is an energy system. But we should bear in mind that it is said that ‘he who hesitates is lost’.
For the time being, we will run with the herd – with our vested interests embedded in the traditional view of economics.
Think back to the days just before the reality of global warming became generally accepted by thinking people. That is where we are now with this new understanding of economics.
As a contributor to this think-tank, this gives me a problem. Am I a voice in the wilderness, because no-one likes the notion of surplus energy economics? Or is this something which an increasing number of people see as a possible explanation, but are unwilling to say so?
Maybe the first step should be to admit that is possible. And then think about it. So that, when the time comes, we will be ready to join in discussion about how to plan for it,
Hopefully, my grass-roots meanderings around the subject will help to open up discussion about this new reality.