Saturday, December 31, 2005

Economics can’t trump the laws of thermodynamics

Or, in MoQ terms, the higher levels exist on the basis of the lower, and when the lower levels hit a boundary, so do the levels above.

The inorganic level is about physics and chemistry, geology – this is the realm of Peak Oil analysis.

The social level is the realm of human institutions – eg agricultural systems and most commercial activity.

The highest level would include the ‘laws’ of economics.

Now if Peak Oil establishes a boundary at the foundation, then it doesn’t matter what happens ‘in theory’ for the higher levels – they’re going to hit a wall.

A quote from M King Hubbert:

"The world's present industrial civilization is handicapped by the coexistence of two universal, overlapping, and incompatible intellectual systems: the accumulated knowledge of the last four centuries of the properties and interrelationships of energy; and the associated monetary culture which has evolved from folkways of prehistoric origin”.

If you listen to the economists, there is no problem – an alternative to oil will be found once the price goes up.

The physicists and geologists say: there is no alternative.

Three men are shipwrecked and washed up on a desert island, a physicist, an engineer and an economist. Once they have dried out and come to their senses, rubbed the salty grime from their eyes and looked up at their surroundings, they see that there isn’t much on their island. Lots of rocks, the occasional palm tree, a passing bird, and – miracle of miracles – a crate of tinned food. But!.. no tin opener.

Each man comes up with a way of getting the food out of the tins, appropriate to their training.

The physicist says “I know from my study of the law of gravity that if I climb that tree and drop rocks onto the tin, that the force exerted will be sufficient to split the tins, and then we can eat the food.”

The engineer says, “No, no, I’ve got a much better idea. If we use the branches of the tree as a lever we can swing rocks against the tins, and that will make things much more accurate.”

Then the economist joins in: “Hold on a second. First, let’s assume that we have a tin opener…”

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