[FoRK] Does economics violate the laws of physics?

[Jeff Bone]

My apologies if this was buried somewhere in the peak coal discussion,  
I'm a bit behind.

   http://www.scientificamerican.com/article.cfm?id=does-economics-violate-th&print=true

Despite the rather sensationalist title, the article indirectly gets  
to a point I've eluded to around here for some time:  namely that  
increased productivity and technology leads to increased carrying  
capacity, and inversely that carrying capacity is *deeply* dependent  
not just on a maintained but growing productivity and technology.  And  
when that growth in both productivity and technology occurs within a  
framework of nonrenewable constraints, then what you've got is a  
race.  Either you hit "escape velocity" such that your technology gets  
you out of those renewability constraints in time or... As is more  
likely [ modulo insert singularity-generating miracle-happens-here ]  
you crash and burn in any of a number of existential risk scenarios.   
These could range from the relatively tame die-back (losing 5/6ths of  
the worlds population over several decades in this century) to real  
enders (i.e., social disruption as the previous occurs, and as  
resource wars heat up, ends up in a true instant-doomsday scenario  
that ends the species entirely or knocks a few widely-scattered  
remainders, perhaps an inviable few or at some inviable density, to  
the Stone Age --- or maybe Junk Age.)

And during this race to either lift off or crash-and-burn, the  
critical stage is the part where you're increasingly using your energy  
resources to feed your demand for energy resources.  We've entered  
this phase now;  something needs to be done, soon, to start  
dramatically increasing rather than shrinking what these guys are  
calling the "EROI."

The thermodynamics argument's a bit weak, but they apparently "get"  
the problem, which is encouraging.  Their problem is that the products  
of energy use are (or have been) themselves ultimately physical and  
thus subject to entropy, but this problem can ultimately be resolved  
by the "virtualization" of most value, by the ability to reconfigure,  
reuse, and recycle product once its *value* (not physical integrity)  
has decayed beyond a certain point, and by smarter matter.  The post- 
production societies of the US and elsewhere already demonstrate that  
there is a declining desire for / value placed on "dumb matter"  
possessions by younger generations;  give 'em a laptop and a  
reasonable place to sleep and screw, and they'll spend most of their  
time hanging out in [ insert place here, doesn't matter ] consuming  
minimal physical goods (of course the coffee beans and food have to  
come from somewhere, ultimately) but many intangible services, doing  
knowledge work, living a virtual life, and so on.  If all you need is  
a laptop and a place to sleep, the entropy factor in EROI ceases to  
dominate quite so heavily.

OTOH, w/ accelerating change curves it does mean that physical  
infrastructure is obsoleted even faster, so this is a complicating  
factor worth thinking about:  does nonlinearly accelerating  
technological change (and thus nonlinearly accelerating obsolescence)  
worsen the EROI picture all the way across the curve, or is it somehow  
balanced out at some point?  (As a corollary:  is there some other  
declining-returns factor that serves as a negative incentive for the  
participants in change acceleration to even do so in the first place?   
I.e., despite certain metrics continuing to grow, we've actually seen  
some deceleration in other key metrics over the last few years ---  
probably because investing in the next "leap" that's only going to  
give you an edge over the competition for maybe 9 months ceases to be  
profitable enough.  Cf. recent Nvidia business model changes as just  
one example.)

Rambling.  At any rate, a worthy POV.  Keeping technological humanity  
going much longer is an interesting optimization problem in many  
dimensions, and one I don't think enough people are thinking about  
across the entire n-dimensional surface.  This article does show one  
interesting slice of the space, though.


jb