Physics in the Economy I: Physical Work

This is the first in an occasional series of posts on the role of physics, particularly energy, in the economy. I've noted that on several sides of the peak oil debate that there is a serious lack of literacy in basic physical theory. On the one hand, classical economics seems to have been developed with an almost complete lack of consideration of the role of energy. For example, I have a college level Macroeconomics textbook by my side. It devotes about two out of 519 pages to consideration of energy, wherein it says nonsense like:
Because energy constitutes a small proportion of the nation's total expenditure on inputs, most statistical studies suggest that higher energy prices did not contribute much to the slowdown [in the 1970s].
My Microeconomics textbook is even worse: energy is not in the index. The reasons for this lack of consideration have been understandable in the past, as I will discuss later, but I believe will pose serious problems in the future.

On the other hand, there is a tendency for some peak-oil writers to throw around the Second Law of Thermodynamics as though it proves beyond doubt that any reduction in available energy must immediately result in a collapse of society, which is equally nonsensical.

Physics is a notoriously inaccessible subject. In this series, I'll try to make as clear as I can the answers to questions like: What is energy anyway? Why is it so important? And how should we think about its role in the economy? Today, I'll start by explaining the concept of physical work in this post, and in the next post we'll solidify the concept by looking at how much work is involved in getting oil out of a reservoir. We'll move on from there to talk about heat, temperature, the laws of thermodynamics, and then get into the energy basis of the economy, culminating, I hope, in explanations of recent work by energy economists.

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Forces and Motion

Let us start in the beginning, which is with Newton's laws of motion, the foundation of classical mechanics. These laws are probably the most successful scientific model humanity has ever come up with. The laws allowed Newton, back in 1686, to develop a unified quantitative explanation of both the behavior of the planets, and the motion of objects here on earth. They agree with experiments to incredible precision, as long as we don't deal in objects moving at a sizeable fraction of the speed of light (where we would need to think about Einstein's theory of relativity) or incredibly small objects (where we would need to worry about quantum mechanics). For everyday purposes, Newton's laws still outline a superb model.

No, don't run screaming from the computer yet. We'll take it slow and easy.

The first of the three laws is this:

A body in a state of rest or uniform motion will remain in the same state indefinitely if no force acts upon it.
and the second goes like this.
If a net force acts on a body, the body will accelerate proportionately to the force, with the constant of proportionality being the mass of the body.
Mathematically, this can be expressed as
F = ma
Force = mass x acceleration
These laws are formalizations of ideas that should be intuitive: if you want something stationary to move, you have to push on it (apply force). The increasing movement is acceleration (getting something to go faster and faster). If you push harder, it will accelerate faster. On the other hand, the heavier it is, the harder you'll have to push to get it going to any given speed (thus does the mass come in as the constant of proportionality between force and acceleration).

Similarly, if a heavy thing is already going fast, you're going to have to push hard in the opposite direction to slow it down (negatively accelerate it), or push hard sideways to get it to change course. These are all covered under the second law if we interpret the force and acceleration to have direction as well as magnitude. (Mathematically, they are vector quantities, but don't worry about it if you don't know what that means - we will try to keep things accessible here by not delving into a bunch of vector calculus).

The part of this that is not so intuitive is the idea that a body in a state of uniform motion will continue to move in that state unless there are forces on it. We are used to things always slowing down and/or falling to the ground if we stop pushing on them. But that's because there are pervasive forces down here near the surface of the earth: gravity (which pulls everything down to the earth), and friction, (which tends to slow everything). Any forces we apply must be added to these pervasive ones. If you find an isolated corner of interstellar space, Newton's first law will be a superb model of the behavior of objects there - they will go in a straight line at constant speed for as long as they are isolated. But the three laws together are a superb model down here too if we correctly account for gravity and friction when adding up all the forces on a thing. Gravity and friction will be investigated in more detail in the next post.

A very little thought should suggest that this force concept has economic significance. An economy consisting entirely of bodies in a state of rest or uniform motion would not be much of an economy. Instead, almost all economically significant actions involve some forces being applied to some bodies. For example:

  • A bottle of beer in the bar refrigerator will remain there in its state of rest until the bartender applies force to it by picking it up and handing it to us in exchange for our money.
  • A lump of coal at the bottom of a mine will remain there unless we apply a force to pry it away from it's neighbors, and then more force to lift it to the surface.
  • A car or truck will remain in a state of rest until the engine is started and begins applying a force to the wheels to move the vehicle.
  • Oil in an oil reservoir will remain there, resting, unless there is some force that pushes it to the surface.
  • Pallets on a warehouse shelf will remain in a state of rest on the shelf until a forklift applies force to them to get them moving towards the truck.
  • Electrons in a wire will not flow along it to power an industrial machine, or a computer, unless some force is applied to push them along the wire. No force, and the electrons will sit in a state of rest (ok, not quite, but we'll get to temperature later - at any rate the average movement of all the electrons will be zero).
From an economic perspective, if you want action faster (more acceleration) you will need more force, and if you want more stuff moved (greater mass), you will need proportionately more force also. So there should already be some sense that the total amount of forces being thrown around in the economy must be related somehow to the total amount of economic activity. We will make this more precise as we go.

The Third Law, and Physical Work

Newton's third law goes as follows:
Whenever one body exerts force upon a second body, the second body exerts an equal and opposite force upon the first body.
As the Wikipedia graphically puts it:
If a cement truck hits an old lady, the old lady's force on the truck is the same as the truck's force on her (although, due to her smaller mass, Newton's second law predicts that her acceleration will be much greater).
And thus we get to the idea of physical work. If we want something to move, we must push on it, and it pushes back on us (this is the sense of resistance you get when you try to push start your car after the battery has gone dead). That amount of physical work we have to do is defined as the total distance we move these resistance forces, times the size of the forces themselves. Mathematically:

W = Fd
Work = Force x Distance
Physical work intuitively corresponds to our subjective sense of how hard a task is. If we have to push our dead car up a hill, the damn thing is trying to push us down the hill and it takes a great deal of effort to overcome that. The heavier the car is, the greater the force required, and the harder the task. But also, it's clearly a lot more work to push it 100 yards up the hill than 2 feet up the hill (which is how the distance component comes into the definition).

But physical work also corresponds with energy. It turns out that doing physical work on a thing exactly corresponds to transferring energy to it. If we do physical work on our car by pushing it, the amount of energy transferred from us to the car is exactly the physical work. I'm not expecting this to be intuitive yet - at this point, physical work is pretty much just a definition and we'll round out the energy concept as we go. But hopefully it's intuitive that the amount of physical work going on in the economy is somehow closer as a measure of total economic activity than the total force - we aren't just pushing on things, we are actually getting them somewhere when we do physical work!

You might ask, why don't we define work as Force times the length of time the force is applied for? If the car is too heavy and we are just barely able to hold it on the hill but not move it, it will certainly feel like we are doing an enormous amount of hard work as we vainly attempt to push it. But note that we aren't doing the slightest bit of good to the task of moving the car - it isn't moving and no energy is being transferred to it. Instead, all we are doing is wasting our effort (in internal inefficiencies in our muscles as it turns out). So this is a less useful definition - we want a definition of work that involves actually getting somewhere with the task, not just trying in vain. Hence Force times distance moved is a more useful definition (and indeed is the one that will correspond with energy transfer as we will see as we get a deeper understanding of the energy concept).

That's it for today. Next time, we'll apply these concepts to something more concrete in an attempt to solidify our understanding. We'll look at how much work it takes to get a barrel of oil out of a reservoir and up to the wellhead.

So if we had a measure of our national, Gross Domestic Transport Load in terms of mass times our average national acceleration needs, times our average acceleration time, we would have a crude estimate of our gross domestic work need for transport purposes? (W=m*a*t)
That wouldn't be a physical value per se, because the work need is determined by the layout of cities. The worst case would be terminal sprawl, where you have to drive from your refrigerator to your kitchen. A city like that would have an incredible transport work need, but it wouldn't really be a need.
Work is force x distance, so the layout of cities would be crucial as noted by JD - it sets the amount of distance that needs to be covered. However, on the force side, most work done in moving a vehicle is actually to overcome friction - both rolling resistance within the vehicle itself and between the vehicle and the road, and air resistance. Air resistance in particular is interesting because the force rises as the square of the vehicle speed (which is why gas mileage gets so much poorer at high speeds). The force due to rolling resistance is approximately independent of speed.
Okay guys,

One more aspect to think of in the real world for you to calculate.  Rate of acceleration and deceleration has a huge effect on energy to do work in transportation.  It is not just moving something at 60 mph that takes energy. It is how fast one tries to get from 0 to 60 that is the biggest consumer of fuel today.

Vehicle drive trains waste energy as they wind up to bring in the torque for acceleration.  This is not overcoming friction, it is just a wasteful design that is pretty robust.

I own a Toyota Prius that tries to dampen this effect by using the electric motor for high torque, low rpm applications.  Most of the efficiency is gained this way.  But you can still get really poor fuel economy by exceeding the current flow from the battery to electric motor and inherent motor torque to the transmission limits.  You can rev. the heck out of the gas engine and not do anymore work than accelerating somewhat slower.

Conventional cars are pretty good at constant speed but efficiency drops rapidly if speed is varied.  So how does one calculate efficiency to move mass when the efficiency is highly modified by time allowed to move the mass?  And to make it more complicated you can go the same distance (say 20 miles) faster, using less energy, just by starting and stoping at slower rate but maintaining a slightly higher cruise speed.  Same horsepower but different energy used to move the same mass over the same distance at the same speed.  They now have a name for this: Eco Driving.

What does all this mean for our assumptions of how much energy it takes to do a given task?

you are right to mention the acceleration, NC (i think you mean the value or quantity of acceleration, which is equivalent to the rate of change of velocity).  as you know, Work = m*a*distance, so the higher the acceleration required, the larger the work and thus the energy necessary to perform the action. minimizing acceleration (using cruise control, speeding up/down slowly, etc.) is one good way to reduce energy use.  you are always fighting the force of friction when driving, both from the air and the ground, but by adding the force needed to produce a desired acceleration, you add to your energy consumption.  and of course the rate at which you change velocity (which is acceleration) is the precise quantity in the equation.  

so the lowest possible, reasonable acceleration should be used to minimize our work budget.  this goes into the second law, but entropy is the way we define the best possible method to perform a change in state while not "wasting" any energy.   any reversible transformation is a change of state that keeps the the net (system plus surroundings) entropy change = zero.  that is, we are not adding any entropy (or waste energy) to the universe by a reversible process.  the more entropy we create, the more energy we waste (e.g. large accelerations, circuitous paths or other losses).  ideally, we would change our velocity infinitesimally slowly in order to have the lowest possible energy expenditure, and the lowest entropy change.  of course this isn't practical, but gradual changes in speed are preferred (low acceleration and deceleration) over sudden changes (high accel and decel).  regenerative braking is one way to capture much of the waste energy used in deceleration, but braking slowly helps even more, because you waste less energy to begin with.  

practically, this means you should slowly accelerate to your ideal velocity, 40-60mph, the low end for large SUV's and the high end for light, low drag cars (calculated using the lowest drag/frictional losses per distance traveled - thus gets you where you want for the least amount of fuel) and stay there until you slowly decelerate upon your destination.

to quote:

"Economic Performance

The average electricity production cost in 2004 for nuclear energy was 1.68 cents per kilowatt-hour, for coal-fired plants 1.90 cents, for oil 5.39 cents, and for gas 5.87 cents.

Nuclear power plants provide low-cost, predictable power at stable prices and are essential in maintaining the reliability of the U.S. electric power system.

The energy in one uranium fuel pellet--the size of the tip of your little finger--is the equivalent of 17,000 cubic feet of natural gas, 1,780 pounds of coal, or 149 gallons of oil."

( as a member of the green party of USA the only nuclear
technology I would ever support is the

has a great overview of energy in food transport

"The US food system uses over 10 quadrillion Btu (10,551 quadrillion Joules) of energy each year, as much as France's total annual energy consumption. Growing food accounts for only one-fifth of this. The other four-fifths is used to move, process, package, sell, and store food after it leaves the farm. Some 28% of energy used in agriculture goes to fertilizer manufacturing, 7% goes to irrigation, and 34% is consumed as diesel and gasoline by farm vehicles used to plant, till, and harvest crops. The rest goes to pesticide production, grain drying, and facility operations. . . ."

but the real question is how to measure energy use by person, dollar
or company.  From the consumer point of view you could
rank each service or product by kilowatt hours per dollar. Or rank
each person by saying depending on your income and age and tax
status you consume this many kilowatt hours.  Or you could
rank each corportaion and government.  How many kilowatt hours
does each of the fortune 500 need to generate 1 dollar of
profits.  Factoring in use of materials gets way too complicated.
But I like how we can view it from an electricty and transport
point of view.

One area of nuclear power being neglected is the use of alpha and beta emitters that can be separated fron reactor waste. These particles can be safely contained by aluminum the thickness of a soda can. Strontium 90 is probably the best fuel for this use. The burial of 97% of the energy content of uranium fuel is the most ridiculous thing the DOE has in its plans.
Mmmm. Depends on the definition of "safe". If "safe" means "radiation won't get through the aluminum", then yes. If "safe" means "won't ever fall into the hands of Al-Qaeda", it gets harder to see how to use these materials in any widespread "safe" way.
Breeders arise proliferation, radiactive waste, and not-yet solved technical problems.

Besides, the usual not-greenhouse-emmiting claims of nuclear energy are bogus. And the avaiability of Uranium as well:

It has absolutely no future.

"On the other hand, there is a tendency for some peak-oil writers to throw around the Second Law of Thermodynamics as though it proves beyond doubt that any reduction in available energy must immediately result in a collapse of society, which is equally nonsensical"

Theories centering on collapse of society are focusing on White's Law such as the Olduvai Theory.  One thing I see that is not discussed on this board is human nature.  It seems like many here just assume people will be happy living in a culture where access to available energy is going to go into decline, i.e. a smooth transition.  No one is figuring in the riots over higher energy/food prices, resource wars, and the general disorder the people will bring upon themselves.  Humans are only "content" when they can acquire more "stuff".  It doesn't work in reverse.  Culture only evolves when the energy flow increases.  The only way to keep order in a society going into energy decline is with a totalitarian government, which is what we currently see forming in the US.


White's Law states that, other factors remaining constant, culture evolves as the amount of energy harnessed per capita per year is increased, or as the efficiency of the instrumental means of putting the energy to work is increased. (Leslie White, 1949.)

I call myself a "peak oil moderate" and I think other folks here claim a similar position.  That doesn't mean that our degrees of moderation are exactly equal though.  There is probably a fuzzy great band between the Olduvai Thoery and "a happy smooth transition."

I personally think we'll end up in that band, but I don't think I can predict its exact nature from current news - I think I have to wait and see.

Re: "...did not contribute much to the slowdown [in the 1970s]"

Well. Jimmy Carter will be pleased to know that. Anybody know of a way to contact him and give him the good news?
"On the one hand, classical economics seems to have been developed with an almost complete lack of consideration of the role of energy. For example, I have a college level Macroeconomics textbook by my side. It devotes about two out of 519 pages to consideration of energy, wherein it says nonsense like:

Because energy constitutes a small proportion of the nation's total expenditure on inputs, most statistical studies suggest that higher energy prices did not contribute much to the slowdown [in the 1970s].

My Microeconomics textbook is even worse: energy is not in the index. The reasons for this lack of consideration have been understandable in the past, as I will discuss later, but I believe will pose serious problems in the future."

This shouldn't surprise you.  Laissez-faire economics is not based on any kind of reality.  It is nothing more than a modern religion, a "MEANS OF CONTROL".  Read up on Francois Quesnay and the origins of the physiocrats...


"Historically, this pattern is a familiar one. Kings and emperors of bygone days were always backed up by priests and religions whose job it was to promote an ideology which served the interests of the ruler. The Roman Emperor Constantine and the English King Henry VIII both replaced state religions so as to better suit their political objectives. Today we don't have royal rulers in the West, but we have a ruling elite. Mainstream economists, trained in business school cloisters, function as a priesthood for this elite - muttering unintelligible technical incantations and then declaring absurdities to be truth. The corporate mass-media reinforces the orthodoxy in a thousand ways every day - in news and commentary and even in entertainment fare. Mumbo jumbo has served rulers down through the ages, and it is still being used today. As science or as common sense, the laissez-faire orthodoxy stands on a par with the belief in a flat Earth."

I happen to think classical economics has an enormous amount of useful insights into the world, but some blind spots also. I think (as I'll articulate in a later post) the reason they've been able to underplay the role of energy is because EROEI has been so high on oil/coal in the past. Thus society only had to put a very modest proportion of its effort into securing further energy supplies. Hence the energy industry has been a small proportion of GDP, which means (some) economists have viewed it as not that important. To look at it as a biologist might, energy has been nowhere near the bottleneck for the economy (in a Liebig's law sense, and so growth theory could safely neglect it - focussing instead primarily on the role of labor and capital as inputs to the economy).
One of the best energy economists is Ayres ( He has shown that the net effective energy is dominant factor in economic growth.

Energy is not only a constraint, it is the real driving force in economic growth. Its price or share of GDP is another matter. Classical economic s
is just what it sounds, classical. It means it has been developed at a time when economic growth was very slow and it models basically a static economy. The world has experienced sustained, long term rapid economic growth only about 50 - 60 years (this is at the level of 3 - 6% a year).

But here we speak about energy, not only oil. The '70s is an interesting period: the oil consumption really decreased considerably. But the total energy consumption did not. There was probably a small drop at the time of world energy crisis but otherwise constant growth. A sizable part of oil consumption could be substituted by natural gas, nuclear energy and coal. But now? This would be much more difficult.  

I am much enamoured of Ayres' thinking at present. But I'm afraid I'm going to have to get there at a slow plodding tutorial pace in the hope of bringing a broader audience along. I don't think the significance of Ayre's work can be appreciated without some grounding both in physics and in economics (which I hope to supply here as I go).
Does anyone have any figures on economic output per barrel of oil, or per quad of energy? These could be by country or by economic region (like Europe). It would be interesting to see which economies are most efficient in terms of producing useful output with modest energy inputs. This might establish a rough baseline for how much the less efficient economies could improve if they had to.
There are a lot of research on energy efficiency. But here I woiuld like to give a link to a small info of the World Energy Council ("THE ROLE OF ENERGY IN ECONOMIC GROWTH"

WEC has all kind of data on energy efficiency.

I looked at this paper but it seems to be missing some important data. Although it has some data series up to 1994, all the information on oil and energy consumption cuts off in 1972. In particular table 8 shows the annual growth rate in energy consumption per capita, and the last data is 3.2% growth for 1970-1972.

This fits into the theme that oil consumption helps with economic growth, but continuing the data would, I think, cast considerable doubt on that. In fact I think I read that energy consumption per capita actually began to fall in the 1980 time frame. That would mean negative growth rates if table 8 were extended.

So why didn't they do that? The data is widely available, and they included other data series up to 1994. But how would that fit with the theme: "This paper goes a step further and argues that the cost and availability of energy is a major factor promoting economic growth." Yet when you have economic growth while reducing oil consumption as happened through much of the 80s and 90s, that casts doubt on their conclusion.

You have right. The per capita energy consumption in the world has been declining from the '70s on. This is intriguing question. The economic growth slowed down markedly from the '70s. But no negative growth per capita of course(?). There are some explanations. Increasing energy efficiency is one. And then the way the world GDP is calculated. There are some hints that the GDP statisitics don't give right picture of the situation of the very poor (and they are many in the world), so the GDP per capita may not be correct. It is possible that the structural changes in economy make the GDP non-comparable to earlier periods. We might clear the US GDP from the hedonic corrections, make the CPI more realistic and get no real growth (or neagative growth) per capita in the beginning of '00s.

This is really an intriguing matter. But it shows that the energy viewpoint is useful because we can do some checking of the conventional statistics against it.


"There are some hints that the GDP statisitics don't give right picture of the situation of the very poor (and they are many in the world), so the GDP per capita may not be correct."

This is a great insight I had not considered.  World population increasing rapidly with many having tiny energy use.  A small percent of population having a large and growing energy use per capita.  If true, Peak oil would hit that small population hardest.

There's an addition explanation that NC hints at below: the average numbers are concealing (at least) two different and opposing trends. For simplicity, divide the world into 2 segments: developed and non-developed.

The developed world has essentially static population, high and increasing energy use in total, and per-capita energy use increasing. The non-developed world generally has rapidly increasing population, low energy use that is increasing, but at a rate lower than population growth, and per-capita energy use declining.

China is somewhere in the middle: without checking the figures, I'd guess it has a population held down, per-capita energy use low, energy growth rate high, increasing per-capita energy use.

If we look at averages, the important dynamics are concealed. At the moment, only the non-developed world is sinking into the Olduvai Gorge of reduced per-capita energy use--and they are doing it a lot faster than the average numbers suggest.

I will get to this stuff in detail in a later post in the series.
Here are some numbers I put together sometime ago.  Treat these as order of magnitude values only since they represent numbers for different years.  Most info is from the CIA Factbook and EIA Country Analyses.

                USA    EU    Japan    China    India    Russia    Brazil
Country GDP (PPP $trillion)    11.75    11.65    3.745    7.262    3.319    1.408    1.492
Population (million)        296    457    127    1306    1080    144    186
Per Capita GDP ($1000/yr)    39.696    25.492    29.488    5.560    3.073    9.778    8.022
Oil Usage (mb/d)        20    14.54    4.1    6.53    2.2    2.6    2.12
per capita Oil usage (b/yr)    24.66    11.61    11.78    1.83    0.74    6.59    4.16
Energy Intensity (BTU/$)    9,348      6,292      7,222      7,213      5,639      76,162      7,378
Oil Usage (b/$1000 GDP)        0.62    0.46    0.40    0.33    0.24    0.67    0.52

Note that GDP is Purchasing Power Parity (PPP).  Nominal GDP dollars based on current exchange rates for China, for example, is about $1.5  trillion.

Humans are only 'content' when they have more stuff...
Look you see contentment?
Plus, more energy does not mean more 'culture' but more complexity. It's a subjective viewpoint but culture has been declining for most of the twentieth century and that does not look like changing in this one.
Btus per $ of GDP has been falling for over 20 years in the US and Europe due to the decline of manufacturing as a percentage of their economies. It takes fewer btus the create a dollar of GDP through expensive health care than through manufacturing a 1972 Cadillac Eldorado.
People have been griping about cultural decline since Plato and Confucious. Culture is too vague a term to be quantitativly measured. If we have been in cultural decline throughout the 20th century then you would prefer a return to Jim Crow laws and Eurocentric colonialism in Asia and Africa and the elimination of woman's sufferage.
Exactly.  Because we have ship all our industries to third world countries and the IMF forces the populations into sweat shops to produce goods for US and European consumers.  Quite the system except that the US economy is now more than 60% services i.e. worthless.  The strength of a country can only be gauge but what it produces not consumes.  The Oil Empire is going to fall hard, real hard...


Yes, I see the shopping malls, restaurants, car lots etc, full and people going about like nothing is "wrong" getting their full dose of dopamine.  They fill in the voids with, drugs, alcohol, porn etc. As long as people can get some sort of "high" the wonder around the matrix with impunity.  I agree our culture is in severe "moral" decline, which is a direct result of our current capitalistic system (everything for profit).  A system was designed to be controlled by an elite cast that framed a constitution that allows corporations to govern the masses. Our "moral" culture has noting to do with the economic growth.  White's law has nothing to do with moral culture only that the culture "grows" or expands.  We have been growing at a steady clip. The way the system is running today, plutocracy, is the way it was designed from the start.  The constitution allowed checks against government power because the framers, who were all wealth land and slave owners, feared government and the masses.  The constitution put no balances on corporate power.

So this is what America has become.  A country that ships productive industries across it boarders so we can extract wealth from our peripheries while we force their children into sweat shops to produce goods for the US consumer.  All the while the oil empire uses it military to secure by fore and puppet regimes the raw materials for the production of these goods.

I apologize if my views may seem extreme in this forum...


Toward an American Revolution
Exposing the Constitution
and other Illusions
Jerry Fresia

Eric Foner writes that in the minds of the "founding fathers" was a "view of human nature as susceptible to corruption, basically self-interested and dominated by passion rather than reason. It was because of this natural `depravity' of human nature that democracy was inexpedient: a good constitution required a `mixed' government to check the passions of the people, as well as representing their interests." We should add that the "founding fathers" were less worried about checking their own passions. They did not see themselves as depraved. Only common people were depraved.

 According to John C. Miller:

[The Framers]...had no wish to usher in democracy in the United States. They were not making war upon the principle of aristocracy and they had no more intention than had the Tories of destroying the tradition of upper-class leadership in the colonies. Although they hoped to turn the Tories out of office, they did not propose to open these lush pastures to the common herd. They did believe, however, that the common people, if properly bridled and reined, might be made allies in the work of freeing the colonies from British rule and that they - the gentry - might reap the benefits without interference. They expected, in other words, to achieve a "safe and sane" revolution of gentlemen, by gentlemen, and for gentlemen."
How were the Framers to create a new system in which the many disenfranchised would support, or at least not contest, the privilege of the few?

"The researchers for World Values Survey described the desire for material goods as 'a happiness suppressant'.

They say happiness levels have remained virtually the same in industrialised countries since World War II, although incomes have risen considerably.

The exception is Denmark, where people have become more satisfied with life over the last three decades."

Two versions of the story:

So no, I don't think the data actually supports the "fear" that happiness is tied to progress or physical posessions.

In fact, this could be a place where people ride their hobby-horses (be they of the "growth" or "anti-growth" type), quite independent of the data.

With respect to limitations of Economics, I have a few comments.  First, basic micro will not necessarily address some of the issues raised.  However, more advanced treatments can, or at least do a better job of it.  For example, urban economics deals extensively with transport and distance relationships with respect to costs.  Higher fuel costs lead to predictions of the need for higher density (smaller commutes - death of suburbs anyone?). Also, basic micro does not address economic shocks particularly well and peak oil would certainly represent a shock (more advanced treatments do - particularly economic history papers on the depression as one example).  Economic theory does address well what we are seeing today as demand overtakes supply and cyclical changes in demand will lead to high volatility in prices.  We do not need peak oil per se to have significant adjustment ahead of us.  I am not a big fan of classical economics but it is useful.

While I am at it, lets bring in some finance theory.  Stock prices reflect future free cash flows (earnings potential).  Price earnings ratios reflect expected future growth.  Most companies have stock prices that suggest the investing public sees significant growth potential.  If peak oil represents an event that puts the breaks on growth (let alone contraction) for a large swath of publicly traded companies, it would be predicted that stock prices would fall, dramatically in many cases.  If a lot of free cash is parked in equity instruments, it does not take much imagination to predict what happens.

I support that multple theoretical frameworks are likely required as a lense to better understand the implications of peak oil in all its complexity.  Further, even if peak oil is somewhat far away but price volatility and rapid increases due to the supply and demand situation continue and lead to stagnent growth, a domino effect can still occur and it is important to transition in steps, before the actual peak is reached.  If peak is here, we are in a bit of trouble I would say.

Lastly, regarding the need for a totalitarian government to keep civil order, this would not prevent conflict between nations which poses a significant problem as scarce energy is chased.  How that problem could be addressed is something to think about - any ideas?

"Lastly, regarding the need for a totalitarian government to keep civil order, this would not prevent conflict between nations which poses a significant problem as scarce energy is chased.  How that problem could be addressed is something to think about - any ideas?"

The only way to eliminate the conflict between nations is to eliminate the nation state itself. This is the future of "globalism" [world commonweal] that is laid out in Barnett's "Pentagon's New Map"[1].  It is obvious that the ruling elite have plans to unite the US, Canada, and Mexico under the EU model [2].  They [corporations] say it's necessary to compete with the EU, I say it goes much deeper than that.  If I had to venture a guess the global elite is forming a world, a "new Map", around us that would make Orwell envious [3].  The global elite know peak oil is immanent and they are only forming a new MEANS OF CONTROL to evolve within the new environment.  An environment of diminishing returns....



Globalization does not come with a ruler -- it comes with rule. We extend rules, not our rule. The map I am talking about is a new map for the globalization for the new century. It is a new understanding of how nations come together. It is not the old balance of power that existed in the 19th century. It's different.

Remember, the key thing is that oil has to flow, investment has to flow, people have to flow, and security has to flow. Again, to emphasize that theme, war falls within that context of everything else. There are the four great flows, so to speak, that define globalization's ability to expand: They are the flow of energy, the flow of people, the flow of investment, and the flow of security. Without security, energy won't move, people won't move, money won't move. So the notion that if America pulls back its military from the world, this will somehow lead to less conflict and more stability is wrong.

Security that American military strength provides is as important as any of those other flows. If you remove that security, you will feed the disruption of the flow of people, investment, and energy. Walls will go up and globalization can be killed. That is one thing that the American public does not understand. Our export of security is one thing -- it does not mean exporting arms. It means paying attention to mass violence around the world. The Department of Defense is the world's largest consulting force. It goes to where the "client," so to speak, lives. The American public only wants to hear about the exit strategy. But "the boys" are not coming home until we make globalization truly global. People don't want to hear about that long-term effort.

[2] Meet NAFTA on steroids

[3] War is Peace

"How that problem could be addressed is something to think about - any ideas?"

Yes. The Rimini (or Upssala) Protocol. It's similar to Kyoto. Every importing country should decrease it's oil imports every year so as to match the world depletion rate.

It's the only way poor countries won't be priced out of the market, like it is already happening this year. (And to avert wars and profiteering)

I did not wish to imply "happiness" (maybe we need to define our terms) is correlated to progress or physical possessions.  People "feel good" when they attain possessions.  That is why enough is never enough.  It does not equate to "happiness" but genetic desires.  We are rewarded by dopamine whenever we do something that increases our "inclusive fitness"[1].

Human behavior can be described as GENES + ENVIRONMENT.  When people are collectively allowed to increase their fitness, i.e. physical possessions, they will tend to behave, such is represented by our current economic system [2].  When they are no longer able to attain these dopamine rewards human will behave like the scenes we have all watched unfold in New Orleans.  In other worlds people will behave "economically" when the environment dictates this behavior [4].  When the environment denies people the ability to increase their fitness will behave as what one may term, "animalistic".

[1] Inclusive fitness encompasses conventional Darwinian fitness with the addition of behaviors that contribute to an organism's individual fitness through altruism. An organism's ultimate goal is to leave the maximum number of viable offspring possible, thereby keeping their genes present within a population.

[2] The members of the sect, following Quesnay's lead, sought to explain the nature of men's relations in society and to describe the political form those relations should take. They assumed that a natural law determines the proper rules of life and that an essential political order follows logically. The physiocratic doctrine held that the roots of human social existence lie in the material conditions of life which provide for survival and physical well-being. The physiocrats usually insisted upon the dictates of nature, or material conditions, as the prime determinant of human behavior, but their rhetoric cannot obscure a fundamental commitment to the ultimate role of divine intelligence. Nature realizes the plan that first existed in the eye of God. Like their contemporaries in the Scottish historical school, the physiocrats never abandoned the notion of divine purpose behind man's most mundane actions.
The physiocrats insisted that the human animal, like all others, must eat, but that unlike the others, it stands unique in creation by its possession of an intelligence directly linking it to the deity whose purpose informs the universe. In other words, although they shared the physiological materialism of a Diderot, they supplemented it with an idealist conception of human intelligence (as distinct from animal intelligence) as an emanation from God -literally a divine light that informs the human mind.[pp. 46-47]
~ ORIGINS OF THE PHYSIOCRACY: Economic Revolution and Social Order in Eighteenth-Century France, by Elizabeth Fox-Genovese

[3] Murder and mayhem in New Orleans' miserable shelter

[4] ... and through this means commerce could elude violence, and maintain itself everywhere; for the richest trader had only invisible wealth which could be sent everywhere without leaving any trace ... In this manner we owe.., to the avarice of rulers the establishment of a contrivance which somehow lifts commerce right out of their grip.

Since that time, the rulers have been compelled to govern with greater wisdom than they themselves might have intended; for, owing to these events, the great and sudden arbitrary actions of the sovereign (les grands coups d'autorité) have been proven to be ineffective and ... only good government brings prosperity [to the prince].
~ Montesquieu quoted in p. 72, Hirschman, 1997

So which came first, "inclusive fitness" or gas stations?

I think you are confusing a modern mechanism with the underlying drive.  People, across all human cultures, persue status.  It just so happens that in an affluent industrial society "purhcase" is an easy way to acquire status.  It is not, even in our "material world" the only way.

... dumpy guy in a Ferrari pulls up at the same time as a lifeguard on a rusty bicycle, who gets the girl?  Depends on the girl, and her snap judgement of "inclusive fitness"

If we have less fossil fuel energy, "inclusive fitness" might tip back in the direction of that bicycle, and human fitness.

The fitness, the status seeking, those go back many more thousands of years than do fossil fuels.  They'll continue to run on whatever materials future civilizations provide.

"The fitness, the status seeking, those go back many more thousands of years than do fossil fuels.  They'll continue to run on whatever materials future civilizations provide"

Yes but the competition for these things is going to be severe...


odograph on Mon Sep 12 at 8:04 PM EST | Comments top

"So which came first, "inclusive fitness" or gas stations?
I think you are confusing a modern mechanism with the underlying drive.  People, across all human cultures, persue status.  It just so happens that in an affluent industrial society "purhcase" is an easy way to acquire status.  It is not, even in our "material world" the only way"

I am trying to apply it to our modern circumstance.  Yes everyone could get used to having less "stuff".  But nobody wants to take a step back and loose their current status relative to everyone else.  So in return severe competition will take place to acquire "items" to maintain that status.  If it means becoming the best hunter/farmer in your group so be it.  But in our modern society very few have what it takes to support their status in an energy depleted world.  So we will revert to any means necessary to maintain our fitness over others in the group....



It just seems to me that some "anti-materialistic" arguments end up sounding the most "materialistic."

You oppose materialism, and yet you defend materialism as a (as THE) path to status and happiness.

Remember the line:

"They say happiness levels have remained virtually the same in industrialised countries since World War II, although incomes have risen considerably."

You are defending the treadmill, even as you decry it.

Here's my personal theory. (Most) Human beings are only content when they perceive that they have more than the others around them.

Thus, if one's keeping up the Jones and the Jones are keeping up with one, then it locks the neighbors into a war of consumption in which they're both miserable. Or only have happiness when something has recently been bought.

I remember a study I heard mentioned a lot if psych classes (altho my google fu is failing me) where the results turn out that most people would be happier making a smaller amount of money if their friends/associates were making even less than making a larger amount of money and having one's friends/associates making a bit more.

This can perhaps be used in a similar way that "country" has become the new community. Distrust your neighbors, but love America or Canada. Well, after oil, North America will still have some energy, so expect the radios to start proclaiming that we have it a lot better than the folks in Europe and especially in Africa. As long as there are nations poorer than "us" I expect that there is a way to spin it so that people are accepting of life with less. And the less energy there is, the less info of the "big picture" there will be, and thus the media will find lies to be even easier to spread.

But perhaps I'm not seeing enough of the big picture. Perhaps people approximately 30 and up might be ok with it. But what about the teens coming up on 20? With the way that I've seen parenting attitudes change ("What, how dare you say that my kid can't take food from your plate." "In our house, \"No\" is a four-letter word."), angry youths which have come to expect the world to fall to its knees in worship might start expressing their anger/frustration.

I think age might have something to do with it.  We might have different tendancies in our 20s, 30s, and so on.  In my 40s I find it much easier to get off the treadmill a little bit, and just relax.  I feel much less need to stretch to what I can afford, and am much more likely to choose something simpler - that will make me as happy.

Now, could I convince my 20-something self to make the same sort of choices?

I don't know, but given the changes in fossil fuel availability, global warming, etc, I think it is worth at least floating the argument - that we can choose "happy things" without choosing "conspicuous consumption" etc.

"Because energy constitutes a small proportion of the nation's total expenditure on inputs, most statistical studies suggest that higher energy prices did not contribute much to the slowdown [in the 1970s]."

If you place price controls on energy (which I believe the US tried in the early 70's), you can correctly say that energy PRICES have no effect, yet lack of energy will still curtail the economy through shortages.

A quick back of the envelope calculation: US gas consumption ~10 million barrels per day = 420 million gallons per day x $3 gallon = $1.26 billion per day x 365 = $459 billion per year or almost half a trillion dollars per year spent on just one (very important) energy input.  (About 4% of GDP)

BTW, I think "physical work" contributes to human happiness ;-)

I want to say something about that quote from Stuart's macroeconomics textbook:
Because energy constitutes a small proportion of the nation's total expenditure on inputs, most statistical studies suggest that higher energy prices did not contribute much to the slowdown [in the 1970s].

To call this "nonsense" is a little presumptuous. There are in fact good theoretical reasons why high energy prices should not cause much of an economic slowdown. As far as whether "most statistical studies" verified that there is no such relation, it depends on when the book was written.

I think the current view in the economic community leans in the other direction. This 2001 paper by James Hamilton, author of the Econbrowser blog, What is an oil shock? describes numerous statistical studies which do seem to indicate a relationship between high energy prices and economic slowdowns, over the past few decades. So the Macroeconomics textbook may not be accurate on that point, but again it does depend on the time frame. Hamilton apparently was one of the pioneers who led to revision of this question.

Nevertheless the fact remains that these effects are much more complex than they seem at first glance. Simple economic models predict that higher oil prices will have only a small impact on production. A ten percent increase in oil prices should cause only half a percent less of economic growth, but the observed declines are something like 5 times greater. Economists have had to turn to relatively exotic models in order to try to explain these results.

It's not a simple matter, and for a non-expert to describe the current theory as "nonsense" is quite presumptuous. It's like people who say that the theory of relativity is nonsense while knowing none of the details.

I agree that there are currently much better economic theories that incorporate energy in a better way. I also think that it's rather odd that it's taking so long to get economics grounded in seventeenth century mechanics and nineteenth century thermodynamics. And I regularly see economists today, including the esteemed Dr Hamilton (who is obviously extremely smart and knowledgeable in many ways) say things which make it very clear that they don't know the relevant physics. No-one without at least a general understanding of physics is going to be in a good position to understand the role of energy in the economy.

As you point out, I don't know all the relevant economics, but I know some and I'm learning more at a great rate. If I am a little provocative in my comments, it serves to spark more debate which enhances my learning, and hopefully that of others also.

And the statement quoted does continue to strike me as, well, obviously highly implausible, how's that? If there are "good theoretical reasons" for why sharp reductions in available energy would not cause economic slowdowns, then the theories providing the reasons are physically naive.

I think it is important to see that oil prices are not same as energy prices. Energy prices are just prices, and physical energy is another matter. If oil prices rise for instance for increasing production costs or for a looming international crisis but the physical supply is not constrained we can assume that the economic effects are mainly or merely ordinary price effects, that is same as for any other commodity. This means mostly changes in resource and income allocation.

But if the physical oil supply is disrupted the effects are different. The physical oil use must go down and it must affect real economic activity. The prices might or might not go up in this situation (eg. rationing) and add a price effect on this. The physical effect has an oil specific component and overall energy component. Oil specific means here eg. the vehicle fuel usage  that cannot easily be substituted and overall component the amount of energy that is missing and is or is not substituted with another energy sources. Here the energy effect is dominant and real economic disturbances will occur only if the total energy available decreases (this was not the case on the first oil crisis). Because prices and supply are interconnected, but the relationship is complex, analysis is difficult.

The energy economists emphasize the physical energy, not prices. This is important because the classical theory doesn't really say much about the effects of the Peak Oil. Mainstream theory expects to see rising prices and tries to handle the situation in this context. It sees the physical supply only through the prices. It sees the supply-demand curves that behave like for any commodity.  

A lot of "economists" and other "analysts" are now pretending than the GDP is less dependent on energy compared to 30 years ago. Consequently, they are quick to say that the increase in oil prices is not that bad. However, some economists are trying to clarify the relationship between energy and GDP (Ayres and Warr: Accounting fro growth: the role of physical work, Dematerialization vs. Growth: Is it possible to have our Cake and eat it?). It seems that even if the total exergy vs. GDP ratio has greatly been reduced (which has been interpreted has evidence of the econmy dematerialization), the total exergy per capita is not declining.
Stuart, you write: "On the one hand, classical economics seems to have been developed with an almost complete lack of consideration of the role of energy."

As many economists would point out, economics tends to focus on scarce resources.  As long as energy was cheap, it was not necessary to model it in detail.  Same with other traditionally "cheap" resources such as water and clean air.  (Does anyone even know what percentage of GDP water is?  I guess it is at the noise level.)  The problem with many economists is that they do review the underlying assumptions of classical economics often enough.  So, when energy becomes a scarce resource and expensive, it takes quite a while for the orthodoxy to change their views.  However, when PO happens, I believe that economics does have useful tools to deal with structural changes that will happen in the economy.

A great quote I just saw by Byron King: 'And then, compounding peoples' misunderstanding of the whole situation, you have talking heads (as often as not, they are economists) saying really dumb things like, "But in dollar terms, the oil industry is only 4% of the U.S. economy." To which I say, "Try running the other 96% of the economy without it."'

Beta particles are a short range hazard. Strontium is chemically similar to calcium so in the highly unlikely event of a "dirty bomb" being produced using the few grams of strontium 90 each beta generator would need borders on the ubsurd. The reason a dirty bomb hasn't been used is that without a sophisticated manufacturing complex any terrorist just gathering the materials would die within days from gamma radiation.
It's interesting how this thread has degenerated from a discussion of the hard science of physics into a debate of the quasi-sciences of economics, sociology, and the so called political science. Changing the US constitution will not produce a single btu. Command economies and free market economies are all limited by the facts of hard science. How ownership of a well is construed makes no difference to how much is down there. A higher price on a barrel won't put one more drop of crude down that hole.  There are and have been hard science ways around peak oil that can replace petroleum. How about getting back to physical, chemical, and boilogical solutions to our economic, social, and political problems.
We have it easy when there are physical, chemical, and boilogical solutions to our economic, social, and political problems - because then of course we don't need to adapt.  In that beautiful case, we just "plug-in" a solution and continue on.

Unfortunately I don't think "peak oil" is such a beautiful case.  We've tried, tried, tried to find plug-in replacements for cheap oil with only partial success (oil sands, ethanol, etc.).

We'll need those sub-optimal replacements, as well as societal change.

Unfortunately we are stuck on that change being unpleasant, which I think reinforces the SUV-driving denial visible on Main Street, USA.

Stuart - I'm wondering if you're going to get into the thermodynamic side of things. People get very easily confused about energy - after all, the first law of thermodynamics is that energy is neither created nor destroyed (when all forms are counted). And you yourself have started to enter this topic by referring to the energy being conveyed from yourself to your vehicle as you push it up the hill.

The problem is that "work" is a subset of the physics definition of "energy", most readily identified (as far as I remember) with the thermodynamic concept of "Free Energy". I.e. Free energy is the energy in a system that is available to "do work". When we talk in ordinary language about the energy crisis, the need for new energy sources, etc. etc. we're really talking about sources of this free energy, sometimes referred to as "high quality" energy. There is obviously a lot of energy going around that ISN'T available to do work - the waste heat your body generates after it tries to push a car up a hill and fails to move it, for instance. All the vast stores of energy embodied in the average temperature of things on Earth, in our own relativistic mass-energy, in the infrared black-body radiation that is emitted by our planet and goes off into space.

On the other hand, this can get rather confusing: definition of free energy depends on the boundaries of the system. In fact, Earth's black-body radiation (and the energy embodied in normal thermal motion, and even our mass-energy) would be a source of high-quality energy compared to the cosmic microwave thermal background in space. Of course the sun makes a much better source, but one could in principle do work even where Earth shadows the Sun by taking advantage of the thermal difference between Earth's infrared glow and the cold of deep space. Etc. Etc.

So are our intuitive conceptions of energy really even amenable to hard and fast definitions? How do you draw those lines?

I'll get there - give me a few more posts :-)