[p2p-research] Scientific American: Does Economics Violate the Laws of Physics?

Thu Oct 29 19:35:48 CET 2009

Hi Michel,

I don't mind playing the bad guy...but in fairness, I've never said peak oil
is bull. I've read the eponymous blog for 3 or more years and am definitely
a believer.

I do doubt Lovins on nuclear.  But I am increasingly of a mind that peak
uranium is a problem. Regardless, I remain pro-nuclear because the greatest
threat to humanity is climate change...I am starting to think seriously
about changing my number one threat to the loss of meaningful work...but I
make a poor luddite. There are more computers in my house than beating
hearts...and I have fish.

I don't know how to get at this big issue Paul has really brought to my
attention...but I think it is real.  It is really the obsolescence of
humanity.

I don't know of Hazel, but anyone who is a friend of ethical markets is a
friend of mine.

Ryan

On Thu, Oct 29, 2009 at 12:23 PM, Michel Bauwens <michelsub2004 at gmail.com>wrote:

> Interesting exchange here,
>
> Ryan says, Peak Oil is bull, because Amory Lovins has studied the issue;
> Stan said a few weeks ago, Amory Lovings is bull.
>
> If Amory is bull, then Peak Oil isn't,
>
> If Amory is not bull, then he is right about nuclear energy too, that he
> has studied even more
>
> My take: the difficulties in transitioning towards renewable energies are
> real and have been well studied, also based on the historical record of
> technological progress and energy conversion, so descent will likely go
> faster than re-ascent, leading to a series of crises in the transition
> period. We cannot have a simple magical belief that the market and
> technology will solve this in an easy way. And Amory Lovins, while right in
> my opinion about nuclear energy, is over optimistic on the capacity of
> capitalism to solve this fundamental problem.
>
> And indeed, neoclassical economics violates the laws of physics, because it
> assumes infinite growth in a context of unlimited resources, or, that the
> market will magically solve them, and both are fundamentally mistaken.
>
> So I must agree with the Scientific American and the author here, and I'm
> sure Hazel Henderson, who has deeply studied the limitations of neoclassical
> economics, would agree, though I think Hazel is quite optimistic about the
> potential of ethical green business, see her engagement with the Climate
> Prosperity Alliance
>
> (quote from Hazel: "
>
> *“Marking the 20th Anniversary of SRI in the Rockies offers more than an
> opportunity to review the hard-won progress of investors to prove that
> socially responsible investing is viable and now clearly out-performs
> traditional mainstream investing. Since the credit crises of 2008-2009, we
> can now assert with confidence that investing for long-term sustainability
> and taking ESG factors as material to asset valuation could have actually
> helped avert these crises. We investors are now winning the paradigm battle
> and cite the evidence to show that the Efficient Market Hypothesis (EMH) is
> bunk and by the same token show that the Modern Portfolio Theory (MPT), the
> Capital Asset Pricing Model (CAPM) and, yes, even the sacred tenets of the
> “rational investor” and the Black-Scholes Merton Options Pricing Model will
> soon be part of history.")*
>
> **
>
> *Michel*
>
> Michel
>
> On Thu, Oct 29, 2009 at 3:48 AM, Paul D. Fernhout <
> pdfernhout at kurtz-fernhout.com> wrote:
>
>> Ryan Lanham wrote:
>>
>>>
>>> http://www.scientificamerican.com/article.cfm?id=does-economics-violate-th
>>>
>>
>> Too bad I did not know in advance. It was only a couple hours from where I
>> live. It might have been interesting to go. Although I'd probably end up
>> arguing about abundance being more likely if we innovate in a Buck Fuller or
>> Jacque Fresco or other way, including move into space in the long term. :-)
>>
>> But yes, we need a better economics that reflects cybernetic principles,
>> and that includes some connection with real current resource limits, not
>> some mythical thing called "capital" which while including land and
>> machinery, also includes fiat dollars of which an infinite number can easily
>> be printed or magicked up in the computer.
>>
>> I totally agree with this from there: "For instance, if a squirrel burns
>> energy eating nuts, those nuts had better give the squirrel more energy back
>> then it expended, or the squirrel will inevitably die. It is a rule that
>> lies at the core of studying animal and plant behavior, and human society
>> should be looked at no differently, as even technologically complex
>> societies are still governed by EROI."
>>
>> The same thing can be said for tool wear, for energy going into making
>> solar panels, and so on.
>>
>> However, I would dispute the peak oil issue, as per my "Peak Whale Oil"
>> post a while back, which would cause endless arguments, no doubt, same as
>> here. :-) They are ignoring the *exponential* growth of alternative energy,
>> which is why Peek Oil will be a non issue, same as Y2K was a non-issue, even
>> if it in theory might have ended or greatly harmed industrial civilization
>> (like with exploding nuclear plants, or accidental weapons launches or the
>> collapse of the power grid and so on) had people not spent years working to
>> fix all those bugs before the year 2000. But, people did spend those years
>> and all that money, because all people are not totally stupid all the time.
>> :-) So, one can expect the same for energy alternatives, although it might
>> be rougher.
>>
>> But what is said in that article is:
>> ""
>> And no amount of technology can fix the problem. Hagens points out that
>> oil extraction has evolved by leaps and bounds since the early 1900s, and
>> yet companies must expend much more energy to get less and less oil than
>> they did back then.
>>  "It isn't that there's no technology," Hall said. "The question is,
>> technology is in a race with depletion, and that's a whole different
>> concept. And we think that we can show empirically that depletion is
>> winning, because the energy return on investment keeps dropping for gas and
>> oil."
>>  The most pessimistic of the biophysical economics camp sees the
>> oil-fueled world economy grinding to a halt soon, possibly within 10 years.
>> They are all working to get the message out, but not all of them believe
>> their peers in other professions will listen.
>> """
>>
>> And that's probably why it was a good thing I did not go. :-)
>>
>> So given that, the attitude Hall outlines there, like Catton's, is IHMO
>> dysfunction, harmful, and unreasonable given the facts if people really
>> studied the subject of renewable energy, like Amory Lovins' and Hunter
>> Lovins' work in Brittle Power.
>>  http://en.wikipedia.org/wiki/Brittle_Power
>> "Brittle Power: Energy Strategy for National Security is a 1982 book by
>> Amory B. Lovins and L. Hunter Lovins, prepared originally as a Pentagon
>> study, and re-released in 2001 following the September 11 attacks. The book
>> argues that domestic energy infrastructure is very vulnerable to disruption,
>> by accident or malice, often even more so than imported oil. According to
>> the authors, a resilient energy system is feasible, costs less, works
>> better, is favoured in the market, but is rejected by U.S. policy. the
>> preface to the 2001 edition, Lovins explains that these themes are still
>> very current."
>>
>> --Paul Fernhout
>> http://www.pdfernhout.net/
>>
>>
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Ryan Lanham
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