Watershed and Transition

Recommended Reading

Conservative view:    Niall Ferguson, The Ascent of Money

Antidote:                   James Galbraith, The Predator State

Prof. Galbraith's analysis generally parallels my thoughts on economic matters.

Prof. Ferguson's views are typical of Reagan-Thatcher conservatives.

Both of these books illustrate my notion that political-economy is the proper sphere of the abbreviation "economics."

Cars and Phones

In our time, getting a driver's license is coming of age. To drive is to attain freedom from parental, tribal and provincial control. It enables people to go wherever they want, whenever they want, quickly. In the United States, determined drivers can go from coast to coast in less than two days, taking nothing with them but the clothes on their back and cash, credit or chutzpah to pay for gas. It is even feasible to make the coast-to-coast trip in junkers, used cars on their last legs bought for few hundred dollars. Movies have been made about car trips. Out of pocket, cars are faster and cheaper than trains or planes. Driving has the great advantage that the driver is control, so the traveler can go wherever one wants on the spur of the moment. It is all that and more which made automobiles a global primary industry. Cars are mixed up with our freedom and the desire to be whatever one wants to be. They are particularly blessed in the United States where the Constitution guarantees a right of uninhibited travel and History enshrines the American trek "Westward, Ho!"

In the Twentieth Century, the automobile undermined family and tribal control. It underpinned the growth of huge cities filled with diverse, anonymous people. Oddly enough, telephones, television and, now, the Internet have had the opposite effect by homogenizing the population. When people use communication media, they communicate something, if only their contact with the medium, which feeds back into the sense of self. Just the fact of doing things together, even as a passive participant (as in watching television), regulates behavior. In its most potent form, mass market advertising has tamed the automobile, turning youthful adventure seekers into staid middle-class commuters. For a century and more, the car has been an advertised central feature of American life, a symbol and enabler of both anarchy and conformity. The car is a principal artifact of American culture.

Is it a coincidence that, a few years ago, there was a crisis in the IT industries which resulted in a stock market crash and a recession, and now there is a suburban real estate bust resulting in a stock market crash and recession? The interesting word in the question is "suburban," because that links the houses, computers, phone and cars. Following the collapse of the 1990s Internet bubble, the American middle class decided to live extravagantly on credit by offering homes as collateral. Home equity loans provided the cash for everything that could not be bought on meager salaries. Of course, the home equity bubble was encouraged by the party in power: friends of the Federal Administration made fortunes by paying themselves to write down large numbers on the paper balance sheets of their middle class clients. Of course this bubble had to end just as all those before it, in disaster for the bubbas who were taken in. What is important and symbolically different about the present economic disaster is the collapse of the American auto industry. Two underpinnings of American middle class life - the house and car - are crushing those trapped in them. That third leg of prosperity, the secure job, had already been gnawed away by financial parasites during the last two generations, so now there is nothing left to hold back the imploding shell.

American Myths

I think one of the most pervasive and pernicious myths propagated in and by the United States is Horatio Alger Capitalism. The notion that every man can be a King is deeply rooted in American culture, probably as a result of the European discovery of the New World 500 years ago. It is easy to think that way when presented with wide open spaces, thinly populated by seemingly lesser species. Until the post-World-War-II (generically, "post-war") period, the superiority of the White Man was demonstrated every day in American life. European immigrants and their descendants made themselves very comfortable in the Americas at the expense of Native Americans forced off their lands and imported Africans enslaved to work it. The evidence of the disparity between derived European and other populations is everywhere in the Americas (for those who care to see it).

The White American Dream seemed especially fulfilled after World War II, when women were sent to the suburbs, enclosed in brand new houses, and encouraged to birth and raise the Baby Boomers. Since their youngest days, Baby Boomers have been the darlings of Madison Avenue, obsequiously catered in each of their ages. It was the teenage Boomers, hearing the siren song, "turn on, tune in, drop out," who revolted in the 1960s against temperance, chastity and the draft. The Boomers are largely responsible for most of what happened in America since the 1960s, starting with the "flower children" of the 1960s, the "me generation" during the 1970s and ending with George W. Bush in the 2000s. They made and unmade booms and busts since 1980, particularly the IT boom and bust of the 1990s and the subsequent real estate boom and bust, because they believe "greed is good." They were addicted to getting rich quick and retiring before age 40. But, without fanfare, the desired retirement age went up and up as more and more aging Boomers failed to become millionaires. Their lack of success goaded them into taking ever greater risks. While they have been on both sides of every issue, Boomers could not and do not conceive their historic role as destroyers of the Great White American Dream. They drank the wine, sang the song and danced the beat; Aesop's summer grasshoppers all.

But now the jig is up. In 2008, the oldest Boomers, those born in 1946, turned 62, which makes them officially of retirement age. During the decade in progress, vast number of Boomers will turn into geriatric Busters. This is an historic watershed, probably marking the end of the celebrated American Century.

Capitalism

I believe Capitalism is just another fad afflicting humanity. It has all the attractions of casino slot machines because it promises great rewards for very little effort. Still, the fact remains that owners (capitalists), not players (workers), are the primary beneficiaries of slot machines. ("The house always wins.") This fact is also the greatest virtue of Capitalism: it concentrates capital in Capitalists' hands, thus allowing purposeful large projects. Capitalism is a way of determining what society will undertake by selecting and empowering decision makers; i.e., Capitalism is a social philosophy and mechanism.

A central issue of human life has always been making a living (see my The Graduate Student's Question). There is always the question, who will do the work? Throughout History, people have been subjected to various means of gathering the necessary forces to do the job. Early in History, slavery and other forms of compulsion (such as serfdom, indenture and conscription) became the standard forms of organizing the work force. Later, rarely and then more often in modern times, less forceful and restrictive methods of organizing and directing work were tried. Consequently, today most working people are "wage slaves:" there is still a coercive element inducing work. This may be the natural state of affairs because, even in the fabulous South Seas, you have to peel the banana that falls in your lap. Effort cannot be avoided in maintaining oneself. In modern times, the coercion required in the performance of socially desirable work is mediated by money. Capitalism is a system of using money to impress labor.

Although I consider my self an Utopian, I am also a practical one. I know that money and other social institutions are too deeply imbedded to disappear. I recognize that present-day national political-economies are the surviving results of long evolution, including many severe challenges and weeding-outs, so have considerable inertia (resistance to change) with respect to most aspects of their functioning. So, the Ergecological question is not how to implement some society I concocted in my dreams, but what will bring about practices which advantage everyone (or as many people as possible). Unlike Utilitarians, I do not believe efforts to improve cease merely because we arrive at a supposed 'greatest good for the greatest number.' (How would we ever determine this?) Good enough is a progressively harder standard when one's ultimate aim is perfection or when each participant demands as much as all the others. On the other hand, I am not a mere reformer, tinkering away at the inequities and injustices of an otherwise satisfactory system.

As I see it, the Capitalist system is permanently, structurally defective, so should be cast aside. At the least, it cannot be the dominant system, even if it has served well enough in the last two or three centuries to launch human societies based on machines. Instead, human society needs to rely on highly regulated (socialized) institutions to fulfill human needs and desires. The reason for the socialization of economic institutions is that such control takes into account social needs and limitations, not just individual wants. The fundamental, philosophical failure of Capitalism is the assumption that social needs are merely the integration (summing) of individual demands. This is a simplifying hypothesis because it ignores social interactions such as envy and copy catting; i.e., Capitalism assumes a linear model of human activity. When the secondary effects of political-economic activity are considered, as in fads, it quickly becomes clear that economic behavior is not linear.

Having both general standards and a commitment to meet individual needs, one is in a position to allocate available resources equitably. Of course, everything depends on the regulators acting wisely and fairly, which all too often does not happen. Capitalism has not solved this last problem, instead often making it worse, since it is the nature of the system to put Capitalists in opposition to regulators. In fact, the present global economic miasma is a direct result of the impotence and laziness of the regulators who, believing in Capitalism themselves, have become servants of Capitalists rather than their minders. Thus, one important systematic change in the present system of things must be this: those appointed to regulate cannot be friends of Capitalists or Capitalism. Business and government have always been two quite different things. They serve different masters and interests. This is unpleasant medicine for the laissez-faire crowd, but the alternative is dying of gangrene.

I think that any business which becomes essential to public welfare should be turned into a utility or a State enterprise. Whichever form the enterprise takes, social interests are strongly represented provided the "right kind" of overseers are appointed. The people themselves are responsible for taking care about those appointments, which is probably the hardest part of this problem. But the problem being hard is not a reason to put enterprises in whatever private hands are ready, willing and able to control them. This is exactly the same problem as choosing a doctor: is anyone willing to go to a quack? How do we know one?

Prices

Now, here is a truly difficult subject about which there is no general, theoretical agreement. Price - an estimate or expression of value - is a mental activity, not something physically inherent in nature. That is, the value called "price" is determined by intelligent creatures, even when price is considered as a relation among things in nature. But that description only tells us where to find instances of pricing, not what it is. (I always have difficulty in pinning down what something is. Who worries about what is? When there are such worries, aren't they really about what was?)

There are many theories of value which imply the nature of price. There is Marx's labor theory and J. S. Mills' utility theory. Most famously central to Capitalism (as taught) is the notion that price is the result of social processes in which individual preferences are expressed. Characteristic forms of Capitalist valuing are haggling in the public market and bidding at auction which conclude upon discovery of the price. There are also theories about the inherent value of gold, other metals or commodities. There are theories based on the notion of scarcity. There are theories which attempt to connect human biology with value. And there are relativist theories which perceive value in the eye of the beholder. All of those theories attempt to explain values, hence prices, by reference to, or as the result of something else. Even theories that propose absolute (inherent) values, such as worth measured in gold, have to say something about why that is so; otherwise, it would only be so by fiat (which lovers of the absolute detest). So, prices are always considered derivative from something else which justifies them. Because prices are derivative, they are always indicated by a sign, a marker, showing the result or settlement of whatever determines them.

I think theories of value are only somewhat sensible when they are not absurd. To claim that gold is worth exactly $35 per Troy ounce seems mystical except as someone's opinion. Why not $34.99 or $999.99? Nevertheless, the idea that the price of gold can be a standard of value is no more absurd than setting the standard meter stick, kilogram, second or other unit of measure. What can be said about such claims is that they establish referential units of measure, even if they beg "deeper" questions about the nature of the measure. (For example, what is mass, energy, space or time?)  We go about our business happily most of the time, buying loaves of bread and selling our wares without concern for what they are or how much they are truly worth. It is enough that we live another day, sometimes feeling better off today than yesterday.

Prices are a feature of human social behavior. I think human societies are layered, not just in the sense of class and caste, but also by the technologies and skills they practice. Silicon Valley is organized differently from Apple Valley just because silicon chip makers and farmers lead the different lifestyles demanded by their products, even if their homes and leisure time are otherwise similar. How we behave at home, on the job or on vacation is largely determined by our predispositions in those quite different situations; i.e., what we have in common is our personalities before the event. Prices are value judgements each of us makes as a result of our conception of ourselves and the situations in which we find ourselves. Thus, a quick snack is worth a lot more to a hungry person than to the well fed. Advertising people use this fact when trying to ensnare consumers into "impulse" buying.

Where the foregoing reflections lead is this: prices "in themselves" are generally incommensurate. In  principle, prices are unrooted; i.e., they are always relative, lacking any foundation. To the extent that prices have a meaningful structure, they belong to a network of values within an economic cell. Economic cells may influence each other in ways specific to the combination. The price of oil may make sense with respect to all of the efforts required to bring it to market. It may also make sense with respect to the value of energy. But how is the price of oil related to, say, the values of education or medical care? The prices of oil and courses in economics are arbitrary decisions dependent on the social connections of the participants. Providing oil is to some extent dependent on knowledge supplied by the academy, and academies use oil in their physical infrastructure. Oil (qua energy) is a factor in the price of education and medical care (as seen by those providers), but we are far more motivated to set values on the care and knowledge presented to us because of our social position and personal needs. Prices are relevant and relative to a certain cells or layers of economic structures, but are otherwise undefined. (This is not to adopt the preference theory of pricing underlying Capitalism.)

Money

On my view, money connects incommensurate prices. That is, money is a second order valuation or derivative relative to the first order valuation, prices. But we usually confuse price and money, as shown in the following.

To the extent that prices are stable, prices interlock due to feedback mechanisms. The existence of pricing strongly influences the values of those involved in economic transactions, both negatively and positively. Some people are attracted to restaurants that charge high prices for their offerings, while others are deterred by those prices. As humans are, this creates a division between the hoi polloi and a supposed elite (from whichever standpoint one cares to see it). Those who do not attend high priced restaurants often develop negative feelings about those places and their clientele, and vice versa. Rationalizations develop after the choice is made to participate on one side or the other of the price barrier, whatever the price may be. If a low priced restaurant develops a clientele, it will become identified by its clientele for its offerings and prices. The existing clientele represent a culture in which the product and price are artifacts. The particular culture is a collection of social behavior organized by prices (values) and products.

In the foregoing, "price" has a double meaning. It is most commonly used to represent the amount of money involved in a transaction, and then again as a subjective valuation. Accordingly, here is a  rewording of some of the previous paragraph:

To the extent that monetary values are stable, they interlock due to feedback mechanisms. The existence of monetary values strongly influences the price-values (price behavior) of those involved in economic transactions, both negatively and positively. Some people are attracted to restaurants that charge high monetary values for their offerings, while others are deterred by those monetary values.

Almost always, when we talk about "prices" we mean the assigned monetary values, not the valuations that we might hold privately, individually and separately. Putting the price on the menu is a way of tricking customers because it makes the menu writer's wish seem a reality; i.e., setting a monetary value is an attempt to objectify price. For most Americans, it is difficult to contest the value posted on a price tag, so that value becomes the price. When objectification succeeds, the entire process of valuation is turned on its head, since would-be buyers and sellers either assume the monetary value is the price-value or, minimally, the starting point of valuation. That is, instead of the valuing process occurring in the individual and flowing to the public, objectifying values makes them flow the other way.

In the sense proposed here, money (or, more exactly, monetary value) functions as a balance in measuring disparate things. A mass balance determines the relative weight (actually, mass times gravity, or W = mg) of objects placed in its weighing trays. The mass balance measures a property of things that is not directly observable, but can be compared with other things. The physically observable fact is the balancing of the different objects in the weighing trays. The balancing can be accomplished in a number of different ways: for example, by adding or subtracting stuff from the trays, or by setting the fulcrum point. Money accomplishes balance in trading in the same ways as things are made equal using the balance mechanism. So, money is also not one thing or method, but it is the observable result of a balancing process.

What money "means" to me need not be the same as what it means to you or anyone else. All that matters is that I will use a certain amount of it in this or that trade. In fact, as far as I am able to determine, this was the original purpose and use of money in ancient times. Money as a record of credits and debits, as advocated by conservatives such as Prof. Ferguson, is derivative from its more primitive use in balancing trades. Balancing is the ancient invention which objectifies monetary value.

The monetary value of gold cannot be directly assessed with respect to wheat or oil, even though the latter commodities may be involved in the production and holding of gold. The monetary value of gold is not determined by the relative abundance of the chemical element on Earth or anywhere else. Nor is its monetary value determined by its role as money (i.e., tokens representative of monetary value) or an ingredient of industrial products. What someone thinks gold is worth in the several situations in which it appears is not only subjective but highly variable over time. Thus, the monetary value of gold has varied by a factor of 10 during the last 30 years.

Traders need to have some means of coming to terms by exchanging things of perceived equal value. Money has accomplished this purpose for several millennia. The critical step in the use of money is the adoption of common standards. For example, we may accept Dollars, Euros, Pounds, Yen or Cowry shells as the common denominator, as money. Whatever my idea of value, I can usually assign prices in terms of money, even though prices are otherwise incommensurate. The price of gold is not the same thing as the price of wheat or oil, but I can relatively value those things in terms of the money I to allocate to each of them.

Money is the critical step in connecting disparate values; i.e., money is a way of anchoring prices. In determining price, there is no assumption that anything has any value other than one's subjective assessment. Using money does not require any repository of value other than one's willingness to see value in it. In the balancing process, mass and value are my concepts of what is being measured, but other concepts are possible. The trick is taking physical counters as representative of the diverse interests of the parties.

Therefore, all we have to do is accept that this is equal to that, regardless of what anything is and without attributing any meaning to the money put in service. Money, then, is a social artifact which can only be understood in its social context. In order to understand how money works, we have to observe human social behavior. Psychological theories of money, of economic behavior generally, are relevant only to the extent that they illuminate social behavior.

Crisis, Again

Sooner or later, wrong theories conflict with actual results. That is a peculiar claim, since only the actual makes the theoretical true or false, while the theoretical always claims to be true in the absence of actualities. In fact, almost every theory propounded by human beings has been found false. Even though we rely on modern chemical and physical theories in everything we do, we know those theories have limitations. So it is not an error to be skeptical about what is claimed to be true. Further, modern analysis supports, even encourages, skepticism about the meaning of truth. Skeptics should not be surprised when things go wrong: on the contrary, inefficiency and disorder (as measured by theory) should be expected.

I believe the present difficulties of the global political-economy are neither surprising nor unexpected, especially since the proponents of Capitalism have insisted for decades that nothing could go wrong. According to that dominant "economic theory," there will always be more and better. Unfortunately for those Pollyannas, the trend of the last few years is turning into an increasingly threatening depression, perhaps an economic black hole.

Here, I wish to introduce my historical view - another theory! - of the situation. I think an unprecedented global competition has been going on since the Victorian era. This competition is unprecedented exactly because it is truly planetary in scale. The competition got underway just as the British Empire reached its zenith during the rule of Victoria, Empress Regina. As the British saw themselves at the time, they were the successors to the ancient Roman Empire because their reach was global and their regulations universal. They believed Rule Britannia was more beneficial than the Pax Romana for all men, both because of its extent and its enlightenment. Accepting their claim, Great Britain was the last and most potent of the empires built on an ancient model using the same sort of tools (albeit much improved) available to the ancients.

The final phase of British expansion and control was made possible by the early adoption of industrial methods in the century before the Victorian period. Yet, the Industrial Revolution made possible the rise of other powers, such as France, Germany, Japan, Russia and the United States. During the last century, the competition between the Great Powers turned into a World War which ended only a few years ago, when the Soviet Union collapsed. Just as British subjects used to extol the virtues of Empire and trade (on British terms), the latest conquerors, Americans, tout similar virtues. Global Capitalism "works" because it is imposed and enforced by the American Empire. But, just as new forces began to take hold right under Victoria's nose, today's masters are already being supplanted by the rising dragons, tigers and elephants of Asia. There is something about dominance that provokes resistance and, eventually, its overthrow.

We should remember the famous lines in Annie Get Your Gun, "Anything you can do I can do better / I can do anything better than you." Improvement and one-upmanship are characteristic human abilities.

The United States became the global hegemon in the Twentieth Century, the American century. That accident of History was, in the first instance, a result of the Balance of Power, the British doctrine which justified Britain's position in the world. Until the United States intervened in World War I, that war was a bloody stalemate. On account of its intervention, the United States grabbed the role of arbiter from the British. Of course, usurping the British was not a new role for the United States, but the active recruitment of American assistance by both Great Britain and France simplified the rise to ascendancy of former colonials. American global domination was clinched in World War II, as North America held the only major industrial base left intact when the fighting ended. While the Soviet Union rebuilt its war-making industries out of reach of the Nazis during World War II, it did not have an extensive industrial complex such as that available to the United States. Moreover, as a result of the Cold War, the industrial capacities of Great Britain, Europe and Japan were rapidly rebuilt and interconnected with those of the United States, while the Soviet Empire and China languished. Although the Western Powers (including Japan) ended up short of critical natural resources which happen to be abundant in Russia and Siberia, needed resources were found in Africa, Australia and South America. This left the major oil supplies in the Middle East as the deciding factor in the success of the West and the source of contention with resurgent Islamic States and among the Great Powers.

Coming to the Twenty-First Century, the very resources and methods which catapulted the United States into global overlordship are now undermining the global environment which everyone requires. Carbon burning is causing global climate change with unpredictable results. Extracting, refining and manipulating industrial materials on a gigantic scale leaves behind unmanageable quantities of toxic wastes. Even when wastes seem under control, they are often accidents waiting to happen due to the long periods during which they must be controlled. For example, the relatively small volume of nuclear wastes must be supervised for at least 10,000 years to prevent massive environmental contamination. Even the shorter term management of major dams, bridges and other structures, as well as containment of industrial wastes, on a scale of hundreds of years is largely problematical and unconsidered. These are not problems confined to Capitalist countries, but, until recently, they threaten the richest countries more than others simply because the rich created more of the problems. So, the threatened global ecology now works against those previously advantaged by it. The principle is an old story: today's strengths often become tomorrow's weaknesses.

One of the most interesting aspects of History are the endlessly repeated instances of human gullibility. Historic periods of strength seem to last just long enough for most of those advantaged to acquire a firm belief in their worthiness to receive the benefits on offer. They feel, "I'm worth it!" In the final stage of their historic evolution, they do not feel any necessity to do something in order to receive benefits. The dominant ones come to believe rewards are due them on account of their intrinsic worthiness. It is usually not too long after this stage is reached that everything begins to fall apart. This cycle is illustrated by the Wheel of Buddha.

Factors

The Wheel of Buddha suggests - I think accurately - that every human system, not just Capitalism, eventually falls into crisis. As the wheel turns, new systems are born or versions of the same old system reappear. Birth, growth, maturity and death happen all at once, over and over, in different places, even if we arrange them cyclically in different times. The wheel can be followed as a locus of points in rotation, or seen at once as the whole.

I believe the attitudes people assume influence cyclic outcomes, if not absolutely, at least relatively. Attitudes can change the rate of progress during a cycle. They can also change dispersion from the mean - the peaks and valleys of a cycle. Buddha's Wheel can be made to spin faster or slower while also being stretched or flattened in various places. Thus, the cycle is like a wheel mounted eccentrically, so moves da-dum da-da-dum dum da ... not with a whir.

Capitalism is one of the more eccentric cycles in so far as it increases the highs and lows of cycles in both space and time. In doing so, it differs extremely from the socialist or Keynesian purpose of smoothing out irregularities. In effect, Capitalists are those who prefer thrilling roller coaster rides to a quiet stroll through the park. I put forward this simile because I have never been attracted to roller coaster rides; I don't even enjoy the thought of them. I think all of us have been put on those Capitalist rides during the last three or four decades. For some reason, many, perhaps most, of us were not asked whether we wanted to go along for the ride. We were just put in our places and sent on our (presumably merry) way. Even so, we cannot blame Capitalism for everything, just for making the ride more dangerous and nauseating than it had to be, and also for needlessly dumping us in the mud.

The important insight about our situation is not the greedy lust for money or the risky thrills of bungee jumping, but how the wheel and the road are changing. More and more people are being stuffed into the wagon riding on that wheel. The road is stretching under the weight of the carriage, and cracking from the pounding of lumpy wheels. Soon enough, the whole kit and caboodle will sink into the ditch of its own making.

The simple fact is that there are too many people on this planet, Gaia,  which is limited by nature in what it can support. Each and every person, living or dead, required of the natural environment sustenance in the form of water, food, clothing, housing, medical care and education. While the presently living account for more than half of all those who ever lived, every single human being has had a cumulative, irreversible effect of this planet. Unlike other creatures, even the elephants, what we use is not absorbed and recycled in a solar year or a century. Ancient monuments, Roman roads and Chinese walls and canals make their marks everywhere. History is a poetic, speculative subject exactly because clues abound suggesting many pasts. The past most of us choose is the one which fires the imagination, even if more sober historians present archaeology in a more reasonable, causal order.

H. sapiens has been busy rearranging Gaia for millions of years, but the most dramatic changes are only now visible. This is measurable as the ratio, resources used per person (symbolically, r/p). That ratio has been steadily advancing for at least ten millennia, and possibly for as long as fifty millennia. Since resource usage is cumulative, the total resources under management is an exponential function. Resource use always seems "explosive" at any given point on the growth curve, because exponential curves are self-similar. (This is explained in calculus textbooks.)

The most convenient way to determine the physical value of (r/p) is as joules/kilogram. In this formulation, "p" is represented as the mean weight of a person, suggesting that it is the mass of flesh which needs resources. There are many adjustments that need to be made, as, for example, adults and children differ in their needs and uses. But, on the whole, averaged over a family or tribe, I think the resources used are not very different when evaluated for near neighbors, even if there are worldwide regional differences. Because we can identify regions, sampling and weighted summation can provide an adequate indicator of resource usage.

Resources should be measured in joules (watts) - as energy - for two reasons. First, because of E = mc², all the matter people use can be converted to an energy equivalent. This makes it possible to compare the matter used with other forms of energy, such as sunlight. Of course, in assessing resources we are not interested in the enormous amount of energy trapped in atomic nuclei, but in the food or clothing value of energy. Sir Isaac Newton captured our meaning in the term "work." Second, almost all of the humanly useful energy on this planet has been supplied by our star, Sol. Every kilogram of coal and oil represents solar energy stored, for the most part millions of years ago. (Every year our industrial civilization burns a million years of stored solar energy.) The amount of solar energy available to Gaia is a well known constant, about 1366 watts / square meter (see http://en.wikipedia.org/wiki/Sunlight) as measured by satellite. Only a fraction of that power - maybe 10% - is available for human use due to diurnal and seasonal variations, absorption by the atmosphere and oceans and maintenance of the non-human ecology.

In English units, there is barely enough energy available to human beings in a square yard to light a 100 watt light bulb, assuming nearly 100% efficiency. Assuming 1800 square feet (200 square yards) is available for solar panels on top of the average American family home, that family's share of solar input is about 20,000 watts. That may seem a lot of energy, but present equipment can only capture 10-25% of it. Further, that energy share represents the energy cost of everything the family uses, such as the energy required to build the home, grow the food, etc. In fact, most residents of First World countries use far more than their fair share of available incoming solar energy.

Given that the ultimate standard of renewable resources is solar radiance falling on Earth, it should be clear that 7 or 9 billion people cannot be sustained indefinitely by Gaia at current standards of living. We might be able to sustain so many people, if almost everyone were reduced to an aboriginal, hunter-gatherer way of life. The contradiction is that the hunter-gatherers I know about could not feed so many people. Thus, one way or another, the human population needs to be reduced. I believe, one way or another, it will be reduced. The only outstanding question is whether we manage this difficult transition ourselves, or whether nature does it for us. (I believe it could be more humane, more ethical, to manage our own destiny.)

Fixing the Bust

I have no idea whether the industrialized world is in the midst of a recession or depression right now. I am not, however, surprised by events, particularly the inability of governments to adjust the problems.

If you do not understand what is happening, you have little chance of coping with it. You might get lucky, you might find a way out of your problems. In that case, it would be the luck of the monkey on the typewriter who writes a best-seller. But, what are the chances of that?

The various governments, including the newly elected Obama Administration, are committed to bringing back affluence and luxury. They want people to buy more, get more, and have more jobs. They want economic growth to resume. But what else would one expect of politicians concerned about getting elected? MORE is always an easy sell.

The fact is, the key word concerning today's problems is LESS, not more. In order to solve the problems, we need to figure out how to lead a reasonably satisfying life which uses fewer resources. I think that can be done. We can manage our way to a comfortable world with fewer than 2 billion people in a few generations.

My goad to readers is this: unless a politically effective consensus is reached, the sort of self-management I imagine will not be achieved. Until we do it for ourselves, the (natural) forces of destiny will prevail.

Posted 03/02/2009 07:28:39 AM                Last update: 03/02/2009        Originated: 12/05/2008

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