Towards a Post-cynical Economics:

(Economy as Ecology)

I.   Introduction:

The initial question asked was: Could an economy could increase wealth -or only redistribute it?

As a result of the resulting discussion the question became slightly more complex (in the hope that a broader approach might help point towards a possible solution).

The rephrased question then became: "What might possibly form a non-monetary foundation for economics -how might it be increased (or possibly decreased) -and what might be its relation with culture?"

The main stumbling block (which unfortunately appeared right at the beginning) was the problem of defining (or even imagining) an "economy" which was free from (subjective) monetary values (and all the complications that these bring).


So what might we mean by "economy" in a world without prices (or equivalent exchange values)?

Human values are created by humans -so the solution to the above conundrum (in my view) is to try and imagine a world (or an area of world) without humans. This should not be too difficult if we imagine some form of natural wilderness.

The question then arises: Is there anything which looks like (or functions like) an "economy"?
 -Admittedly, a bit of a tricky question -because we haven't yet defined what an "economy" might be.


Sophia gave us a definition (which I rejected) "Economics is the study of how people produce, consume and distribute what they want".

 I objected to this because of the automatic involvement of "people" (which gets us stuck in "human value systems")
-but the concepts of production, consumption and distribution are indeed useful (and possibly essential).

So can we find in a natural environment anything involving production, consumption and distribution -without the participation of humans?



I guess we do -and the answer is an "ecology"!

This is perhaps a little bizarre, because from inside our traditional "economic" value system we tend to see "economy" as being opposed to "ecology" -even though they apparently have the same roots.

However, given the common root, it would seem reasonable to expect similarities -that ecologies function on economic lines and economies (in practice) function on ecological lines.

II.   Basic Principles and Metrics:

So, if an ecology does not run on the "production, consumption and distribution" of "money" -then what does it run on?

  Presumably the answer is "energy' -which we can define as "the capacity to do useful work".


Indeed, if we look closely at an ecology we see a few basic principles:

 a. That every organism modifies the environment in which it lives (often in destructive ways which are potentially life-threatening to the organism itself).

 b. That the waste products of an organism (or that organism self) form essential foodstuffs for other organisms.

 c. That if this all fits together nicely, then the system keeps going -but if some essential link in the (closed?) system breaks down -then the whole system is liable to collapse (possibly starting again, in a new composition -if some new form of equilibrium can be established in time).

 d. Diversity (specialization) is essential to the maintenance of equilibrium -because otherwise, the needs would be similar and the recycling of waste products by other organisms with different needs would break down.

 e. It would be unwise to interpret the complexity of eco-systems as simply reflecting survival of the strongest in a lifelong struggle for survival under the "law of the jungle". In practice, eco-systems involve cooperation and synergy as much as competition. Survival is dependent not on strength but on suitability of the individual (species) for each specific environment. As the organisms within any environment are constantly modifying that environment, they also need to adapt to the new circumstances which they themselves have created.

III.   Energy and Physics:

If energy is the central principle around which our ecology revolves (and evolves) then we would appear to have a problem if we would like to imagine that "wealth" is synonymous with "energy" and  that "wealth" can be created -because physics claims that energy can only change form and not be created or destroyed.


It would seem that this is a good point to introduce a fascinating "magic" trick:

"Energy" is "The ability to do (useful) work" so let us define "wealth" not as energy -but as the ability to do work.

It's the same -cries any logical person, and so it is, -except........... what happens if we discover some way to improve the efficiency of the system -i.e. to get more work out the system -for the same amount of energy?

If we define "wealth" as "energy" then the wealth probably remains constant (conform the second law of thermodynamics) -but if we define "wealth" as "the ability to do work" -then we can increase our wealth merely by doing our work more efficiently!

IV.   Wealth and Culture:

The above example, shows that if we accept the definition of wealth as being the ability to do useful work then "wealth" cannot be defined in purely material terms -there is also clearly an element of human skill involved.

Logically, one might claim that the ability to increase wealth by improving the efficiency of our use of energy requires the use of scientific intelligence. Indeed "scientific" (or technological) improvements are one possible way of doing more work with less resources. However -if we include the concept "useful" as a part of our definition of wealth -then surely if (for whatever reason) we decide that some tasks (such a making beds -or vacuum cleaning) do not need to be done -then we are increasing the amount of "useful" work that can be done with any given amount of energy -and so we are also increasing our wealth.

Communal agreement over the relative importance of various aspects of our lives surely comes under the definition of "culture" -so it would seem that "wealth" also has a cultural component. Possibly, just as we require physical diversity among the organisms that create a physical ecology -we may also require conceptual diversity (within a conceptual ecology) in order to provide different ways of dealing with problems and situations -presumably, expanding the chances of useful discoveries somewhere, which can be adapted or adopted as needed (elsewhere).
 

V.   Wealth and Synergy:

The political doctrine of the law of the jungle places the emphasis on competition between rivals -however in real life we see that sometimes cooperation can be more effective.

A trivial example can be given in agriculture. A culture based on the growing of wheat (or some other single crop) is likely to fail -as the crops continue to deplete the natural nutrients in the soil. Similarly, a culture based on cattle might well have problems in finding a continuous supply of suitable grass. However, for example, by combining cattle and grain -the yields of both systems can be increased. The cattle help to fertilize the grain and the stalks can be used to feed the cattle.

Apparently, the introduction of mixed farming in medieval Europe was a technological (and wealth increasing) revolution as great as the introduction of the computer in the twentieth century.

VI.   Physics and  Energy:

Physics claims that energy cannot be increased or decreased -but how do we know that physics has the last word?

During the European reign of religious terror known as the "Inquisition", those in Europe who were involved in what we would now call "scientific experiment" were extremely careful not to be accused of witchcraft. This probably explains why "Physics" was so careful to distance itself from any suggestion of "animism" in the inorganic objects and processes which it studied. The fear of being burned alive if accused of sorcery might well account for the strict division between the spiritual and the scientific, the material and the immaterial -and why "material", in western terms, generally means "dead material"!

It might also explain the rise of the secular state in the west -and why we have so much trouble relating to other cultures. The aggressiveness of the church in pursuing disbelievers may well have been an important factor in promoting disbelief.


Nevertheless, physics is based on the study of the interactions of inorganic materials. However, there may be other rules for organic systems.

Interestingly, the cosmos seems to be a complex machine for the recycling of matter -a process that often involves the construction of higher elements from simple helium.

One wonders if the amount of total energy does remain the same under all conditions. If diferent elements combine in synergetic ways within organic systems, then it may well be possible that energy does increse in totolity within the system. We have already shown that "efficiency" can improve the amount of work done -and this was our original definition of energy, so if we maintain our original definition, we surely must conclude that there has been an increase in energy if there has been an increase in output in terms of work.

Rumor has it that science is having difficulty matching the amount of matter believed present in the universe with the gravitational behaviour of the universe itself -so perhaps some form of "organic" process is active.

In any case organic systems tend to increase in "complexity" and "diversity" -characteristics which in "information theory" have traditionally been considered analogical to "entropy" in physics. Perhaps we could even define "organic" as being synonymous with "anti-entropic" (certainly in terms of information theory -and perhaps also in the sense physics uses the term within the context of the second law of thermodynamics).

VII.   Conclusion:

The question of energy conservation may (or may not) be a disputable point -but it does seem that if we define "wealth" in terms of the ability to do work -then it is possible to increase our total wealth by saving energy (either by increased efficiency or by not doing the work in the first place). This implies that health, psychological and cultural factors (including the skills available within society) should be factored into the concept of "wealth".

Although we have described our system in terms of a system without money -there no principle reason why a monitory system should be excluded. However, we need to reverse our normal assumptions and consider money as a form of energy (storage) and not energy as a form of (invested) money.

If we c0ncider  "economy" -which expresses the rules which we believe are operative, to be closely related to "ecology"  -this implies a more open discussion as to the nature of the system involved

 Perhaps then it is possible that human economic systems could behave in similar ways to a natural ecology (if we explore the matter sensibly and modify our rules to bring more consistency between the -logy and the -nomy).


Interestingly, as we have known since Thomas Malthus invented his pernicious theory of poverty -organic systems (in his case people) have a tendency to multiply. However, for some strange reason, economists have preferred to apply Malthus' ideas on population growth exclusively to the "demand" side (so that it is assumed to create poverty) -but not to the "supply" side (where it would presumably create wealth)!

A cake, once divided (and eaten) cannot be divided again -but a grain of corn, if planted and not eaten, can produce an ear of corn that can be both partly eaten and partly reinvested. Interestingly, in the dark days before consumerist capitalism dulled our senses -traditional economists used to talk about "capital investments" (which yielded new capital) and "consumer investments" which only brought (temporary) pleasure and therefore essentially destroyed wealth.

In traditional terms -capitalism is opposed to consumerism, but it seems that modern theorists have squared the circle and made capitalism  and consumerism synonymous!

One wonders if in practice they have been as successful as they claim in theory.


Nowadays, it seems that we only have consumer investment -and we can only imagine society and the rich scalar of human imagination in terms of customers and products for consumption.


Thanks to our blind insistence on defining wealth only in material terms -it seems we have only brought ourselves conceptual and spiritual poverty.

-We still have our bonus question: "How might answers to these questions affect the discussion on nuclear fuel cells? "  (but this is for advanced students).......

However, now that all our readers are advanced students -I'll leave it to them!

Dictionary com -nomy:
   <http://dictionary.reference.com/search?q=nomy>
Dictionary com -logy:
   <http://dictionary.reference.com/search?q=logy>
Dictionary com -eco:
  <http://dictionary.reference.com/search?q=eco>

Originally posted on the Yahoo group "Quiet Poly", Monday, 21 Apr 2003