In the previous post, I suggested that Jean-Marc Jancovici insists that economists ignore problems of energy availability, and this distorts their (and our) economic expectations.

As previously implied, we can add that life and economics exist on this planet because of the slow self-destruction of our Sun. If the Sun emitted too much radiation (or the planet received too much radiation) it is doubtful that sophisticated life could exist anywhere on the planet – although possibly some life could survive deep underground or near vents in the deep oceans. If we received too little radiation, life might be similarly constrained. Eventually in the far distant future the sun will die, but this is way too far in the future for us to bother about at the moment.

In this sense solar energy is fundamental to life and society. Manual labour (the basis of many economic theories) and human thought, experiment or design only exist because of the energy humans and creatures extract from food, and that ultimately depends upon the Sun’s radiation and self-destruction. Energy from the sun is stored by, amongst other things, coal and oil, and is released in fire.

As we know, forms of organisation can massively magnify the power of human thought and labour (and massively disorganise them, or waste then, as well). Putting these points together, Jancovici’s argument declares that the energy we can extract through the ways we organise burning fossil fuels massively overshadows the power of human labour in creating social ‘value’ and material goods.

To restate:
Energy consumption and its organisation and implementation through social organisations and other technologies (the social aspects) is fundamental for the kind of economies we have today.

We should note that we also adapt our economies to the kinds of availabilities of energy that we have to deal with. Power is currently cheap at night because coal fueled electricity has not been ‘dispatchable,’ or particularly variable, and much energy is wasted.

Changes in energy supply and availability will have economic and organisational consequences, and we currently need to change energy supplies because an unintended consequence of fossil fuel based energy supplies is climate change. There are other forms of ecological destruction happening which are as important, and which reinforce climate change, but I’m currently putting them to onside – not, I hope, ignoring them. The prime cause of climate change reintroduces the importance of entropy.

Entropy is one of those scientific concepts over which there seems a fair bit of dispute, and a relative ease of misunderstanding. I’m warning any readers that this may be all be wrong. Please let me know if you know better. ‘Entropy’ is a description of a process, rather than a thing, so it is possibly better to talk about ‘entropic processes’ rather than ‘entropy’. The point of entropy is that any use of energy, any ‘work,’ engages entropic processes alongside that usage. These entropic processes are usually dissipated as heat (random molecular movement) and/or through reduction of what appears to be constructive order or demarcation.

It is often postulated that entropic processes will lead to “universal heat death.” This is a state in which there is no more energy in one part of the universe than in another. Particles are completely randomly distributed. Whether this state is a state of total order or total disorder is up to you – the paradox is obvious and implies life is a ‘mess’ (or ‘balance’ if you prefer) of order and disorder.

At the extreme, this idea also implies that too much work will generate too many entropic processes and the planet will warm independently of what precautions we take. The use of air-conditioners in some Cities is supposed to increase the heat of those cities (as the heat involved in producing the cooling dissipates outside the area of cooling), and thus encourages more air-conditioning and more heating. The same may be true of automobiles (engines moving people around get hot, and dissipate that heat). An economy necessarily produces (semi-organized forms of?) dissipated heat.

We all hope that this extreme fate is ultimately avoidable or far off, or avoidable because we have spare energy to do something about it. We could develop more efficient engines or ways of cooling, or better ways of organising those processes (but this can never stop excess heat being dissipated). Ordering processes can always create disordering processes – and we should not ignore the disordering, or entropic, processes simply because we like, or are impressed by, the order. What we define as order and disorder come together. Another problem here is that the more complex the processes we use to prevent the entropy we generate from overwhelming our order, then the more energy the order may take to keep going, and the more prone the system may be to accident or collapse.

Entropy also suggests that, while we use energy to produce useful transformations, we also produce waste or pollution by breaking things down. This is furthered by forms of social organisation which make it acceptable to create waste, or allow waste and poisons to be allocated to ‘unimportant’ areas, and onto relatively powerless people, where the effects can be ignored. If you like, blockage of information (in this case about pollution) is as important a part of current economic life as is accurate and resolvable transmission of information.

Just as wealth gets allocated by patterns and processes of ‘social class’, so does waste, probably in an inverse form; waste and risk of harm gets distributed away from wealth. However, as waste tends to randomness, this distribution may not be quite as rigorous. Few will totally escape climate change.

So we may say that the implications of Jancovici’s argument suggests orthodox economists not only ignore the availability and organisation of energy as important to economy (other than as labour), they also ignore entropic processes and waste and their forms of organisation and disorganistion.

It therefore appears we need a new orthodox economics which deal with these things. So part of the next stage is to look at some criticisms of Jancovici and the work that has been done to factor energy and entropy into economics.

To restate, yet again:

Energy availability, its capacities, organisation, distribution, implementation and consumption through social organisations and other technologies, and the effects (both intended and unintended, such as entropy waste and pollutions etc) of its production and organisation (etc.) is fundamental for understanding the kind of economies we have today.

Energy cannot be ignored