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

[Paul D. Fernhout]

Patrick Anderson wrote:
> On Thu, Oct 29, 2009 at 1:04 PM, Tere Vadén <tere.vaden at uta.fi> wrote:
>> Here's a great table on EROEI:
> 
> Hmm... "Estimated Return On Investment" is talking about Profit.

Actually, in this chart I assume it is referring to energy out compared to 
energy in, so it is being measured in "product" not "profit" in that sense.

> If we can overcome our psychological conditioning that leads us down
> strange (scarcity is good) roads based on the faulty assumption that
> Profit is more important that Product, then we can solve nearly every
> issue that has been discussed lately here about the 'trouble' caused
> by automation and finally view it as an increase in leisure instead of
> being muddled in the illogic that causes us to believe destruction is
> good.

I totally agree with this, and hope you can elaborate in this direction.

Although, again, I'd suggest thinking about alternatives to using the term 
"profit" because it could be thought of in physical terms (like you put in 
one barrel of oil to pump 30 barrels of oil or whatever). Even though 
everyone uses the term. :-) I feel you may be on safer ground talking in 
terms of "rents" and who gets them ("rent seeking"). Who gets the rent from 
oil containing lands? Who gets the rent from producing or using robots?

Another reason why profits is misleading is, as Tere points, out external 
costs. If you factor in the cost of guarding nuclear waste for 50000 years, 
there may be a net negative energy cost to using nuclear power. :-) 
(Although I have said before that dumping it in a wilderness area to keep 
people out might be a compromise to benefit wildlife habitat. :-)

Likewise, consider the oil EROI. If we are spending in the USA literally 
about a trillion dollars a year on extrinsic defense considering all costs, 
then how much "profit" really are we getting from oil? Consider gasoline, if 
an electric car could go further on the electricity used to refine a gallon 
of gas than an internal combustion engine car can go on a gallon of gas, 
then the net energy return on all that oil is negative.

--Paul Fernhout
http://www.pdfernhout.net/