* To establish feasibility, it is necessary to include some items in the energy invested term that are normally not thought of as investments. For example, the cost of sequestering such carbon dioxide as will be produced by the energy technology under investigation should be added to the energy invested term because feasibility requires that our society be sustainable (until astronomical events intervene). In this thought experiment, the support of an alternative energy technology would be the sole concern of every citizen.

Monday, December 3, 2012

Why We Need a Planned Economy


The notion that a market economy is the only basis for human economy has been supported by a massive propaganda campaign of unprecedented scope.  It is taken as an article of faith by nearly every American that every planned economy must be accompanied by merciless tyranny with the Soviet Union cited normally as the principal example and proof.  Before I prove that market economies are unsustainable if not positively harmful and immoral, it might be worth mentioning that (i) no proof of the principal claims of market apologists has ever been offered and (ii) not every form of economic planning has been considered.  When the argument presented here has been assimilated, it is safe to say that it is incumbent upon those of us who understand the finiteness of the earth and the limits to growth to give serious thought to the problem of crafting a planned economy that does not suffer from the defects of past attempts to replace market economies.  

What I found instead at the Austin meeting of the Association for the Study of Peak Oil (ASPO) was religious faith in market economies and, in fact, widespread intention to profit in the marketplace because of a better understanding of fundamentals than most traders.  Whatever I said in support of ERoEI* as a tool to determine feasibility was studiously ignored, presumably because it showed that every energy technology considered by the ASPO is infeasible (unsustainable) in a market economy – but possibly because my personal attributes do not meet the requirements of the ASPO for speakers, namely, youth, physical attractiveness, imposing stature, and a large public presence.  It seems that my only (slim) hope to overcome the prescriptions for doom advocated by speakers at the Austin meeting is the internet.  I plan to enter this document in my new blog at http://eroei.blogspot.com/.

The late David Delaney gave the best explanation of why capitalism and, in turn, market economies in general require economic growth. “The Economic Growth Trap”, which can be found at http://www.dematerialism.net/economicgrowthtrap.htm, begins as follows:

Economic growth requires increasing the amount of high quality energy and materials degraded by the economy each year.  Economic growth on a finite planet will eventually stop.  If it does not exhaust the resources needed for its continuation, it will stop earlier for some other reason.  Allowing resource depletion and biosphere degradation to terminate economic growth will produce catastrophe.  Unfortunately, our dependence on economic growth makes it extremely unlikely that we will give it up voluntarily before the catastrophe.  Our dependence has at least four aspects: A) in the need to deal with adverse consequences of labor-reducing innovations, B) in commercial bank money, C) in the need to maintain tolerance of inequality, and D) in financial markets. more

Various manifestations of market economies can be contrived to avoid all of these except the need to maintain tolerance of inequality.  Indeed, any steady-state economy that permits any sort of resource dominance will eventually devolve to a class of rich people who have been adept at acquiring wealth and a much larger class of losers in the competition for wealth who are not much better off than feudal surfs.  In the wake of Peak Oil, it is not clear that the losers would not become victims of Die-Off.  Any attempt to mitigate this unstable situation will be perceived as economic planning.  If society waits until instabilities arise, most of us may not like the sort of economic planning that is forced upon them.  Serfs liberated by revolution might not treat their former masters charitably.

But, according to papers I have written in the past such as “Energy in a Natural Economy” furloughed managers and financiers might be accorded equal shares of the sustainable community dividend measured in energy units with perhaps the energy that they would have expended by virtue of their participation in the economy as employee, employer, investor, trader, or hustler subtracted from a useful worker’s share. Indeed, it is time for us to channel some of the considerable creativity we have demonstrated in market activities toward the design and implementation of sustainable planned economies in which democracy is retained, tyranny is avoided, population is maintained at or near the optimum, and the greatest happiness possible for nearly everyone is assured.  I continue to dream of Earth as a garden.

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