Tag Archives: Entropy

Toward a Living Economy: Cooperative Self-Organization

In the previous post I explored the inherent contradiction between the desire to protect and conserve the environment and the need for development within the current economic system based on a growth economy examining the current political situation in Bolivia as a microcosm of this tension on a macro level. At the end of that post I suggested that the solution was to find a way to transition to a new kind of economy and development. David Korten wrote an article in Yes! Magazine entitled “Living Economies: Learning from the Biosphere” in which he said,

In our species’ immaturity, however, our dominant cultures have forgotten that our individual and collective well-being depends on the well-being of the whole. We must now step to a new level of species maturity, redesign the culture and institutions of our economic system to mimic the structure and dynamics of the biosphere, and learn to live by life’s rules. 1

Korten lists three key ideas that he gleans from the natural world about how we should organize our economic life together: 1) Cooperative Self-Organization, 2) Self-Reliant Local Adaptation and 3) Managed Boundaries. First I want to look at his ideas, along with some others within the idea of a steady-state economy. Then we will have to talk about how to get from here to there.

Toward An Anarchist Economy?
The first rule of “Cooperative Self-Organization” has to do with the principles of biodiversity and cooperation. Korten explains,

Ecosystems have no central control structure. Their health and vitality depend on processes of cooperative self-organization in which each species learns to meet its own needs in ways that simultaneously serve the needs of others. The more diverse and cooperative the bio-community, the greater its capacity to innovate and the greater its resilience in the face of crisis.” 1

The idea of not having central control structures sounds very scary to humans accustomed to all the trappings of civilization with its institutions, organization and hierarchy, but this is an invention of the human intellect and not something inherent in the natural order or observable in natural ecosystems. While many libertarians and advocates of a completely free market profess to believe in such a decentralized state of affairs, I’m not sure they would allow it when the time came to really let go of the control. Most of the more moderate advocates of a free market turn that phrase into a misnomer, because there is incredible attempts to impose central control and regulation on the system. Usually the rules are rigged to the benefit of the rulemakers, which might fit some natural law, but is unsustainable and thus violates the most important natural law: that the system itself must survive.

All of this makes me wonder what an anarchist (which is the leftist version of the libertarian impulse) economy might look like. I don’t hear a lot of discussion about this among Christian Anarchists that I read. But if economy only means how we order our lives together, then in terms of how we exchange goods and services for our own survival, any community of people that is able to sustain itself has some kind of economy. If there is any possibility of a practical anarchism that can be lived out, then there must be some kind of anarchist economics that governs or guides the way that people live together.

Diversity and Cooperation
What creates stability, security and flourishing in ecosystems is diversity and cooperation. Of course there is competition within and among species for sources of food, but this assumes a scarcity that is not the case in stable ecosystems. If you out-compete all the other prey species in an ecosystem for food then your survival will mean that you are now the only target left for whatever predators there are above you on the sacred predator pyramid scheme. There is a delicate web of interdependence in healthy ecosystems that demands both diversity of species and cooperation.

Financial investors already understand this principal somewhat when they diversify stock portfolios to lower the risk and secure a steady rate of return, even if it’s lower than higher risk portfolios. On a broader scale, however, our economy does not support the broadest diversity in terms of the kinds of business and other economic actors that it supports and/or allows to exist. On the contrary the current system heavily favors large corporations. The larger and more multinational the corporation, the more advantages it has in the marketplace.

Everyone gives lip service to small businesses, but no one is serious about taking on the rules that allow Wal-Mart and others to easily put small companies out of business wherever they go. Therefore the rule in a living economy based on the rule of diversity and cooperation would be to give real incentives for small businesses and those that are active in creating a community in which other small businesses can thrive. Korten puts the tension between healthy ecosystems and the privileges of corporations in these terms,

“In a living economy, the rights and interests of living communities of living, breathing people engaged in a living exchange with the natural systems of their bioregion properly take priority over the presumed rights of artificial corporate entities that value life only as a marketable commodity and operate by the moral code of a malignant cancer.”

This puts a further clarification on the practical implications. It cannot simply promote any small business, but small businesses that understand, value and promote the values of diversity and cooperation. They should embody these principles within their own business structures by following worker-owned models in which there is the most possible transparency, openness and sharing of both the rights and responsibilities of honest work. They should encourage other business and the interaction, cooperation and interdependence of businesses of all sizes, from a single person selling produce from their garden to the largest local company in the area.

Monocultures of any kind, whether agricultural or business, are a direct contradiction to principles that govern natural systems. They will likely fail in the long term for the same reasons that natural systems cannot be supported where biodiversity is lacking. The answer is to learn from science and promote the interdependence of natural system that create flourishing, dynamic, vibrant and healthy systems of diversity and cooperation.

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Valuing the Earth: Ultimate Means and Biophysical Constraints

I’ve been enjoying reading Valuing the Earth: Economics, Ecology, Ethics so much that I thought I should try to review some of the main points and add my own thoughts and reactions. The book is divided into three sections covering the three topics in the subtitle: 1)Ecology 2)Ethics and 3)Economics. So, I will follow this format with an additional aside on property somewhere in there. This is an edited work that has gone through two editions. So, not all of the authors completely agree with each other. Some of the chapters are from the 1970s, while others were added to later additions. C.S. Lewis’ famous essay from 1944, “The Abolition of Man”, is included in the ethics section (which was mentioned recently by a former seminary professor on his blog related to a completely different topic, A much neglected basic choice in theology). The titles for my posts are taken from headings of chapters or sections in the book.

In the introduction by Herman Daly, he uses the ends-means spectrum to talk about a framework for understanding the essays in the book. On the bottom of the spectrum are “ultimate means” (low-entropy matter-energy). At the top of the spectrum is “Ultimate end (?)”. In between are two sets of intermediate needs. Each of the four areas of the spectrum have a corresponding field of study. Physics deals with ultimate means, the material physical stuff of this world and how it works. Close to the bottom are the intermediate means of stocks of artifacts and labor power. This field is referred to as “Technics,” in other words how to deal with the ultimate means in terms of getting the raw materials and using them. Then there is a large gap before the intermediate ends of health, education, comfort, etc. This area corresponds to the field of ethics which defines the things we should do and the good life. The field covering the vast gap between intermediate means and ends is labeled political economy. I think Maslow’s Hierarchy of Needs is helpful keep in mind in conjunction with this spectrum.

500px-Maslow's_Hierarchy_of_Needs.png

The author argues that typically economics ignores ultimate means and ends concerning itself primarily with this vast middle. “Absolute limits are absent from the economists’ paradigm because absolutes are encountered only in confrontation with the ultimate poles of the spectrum” (Daly 21). So, the first section of the book concerns whether or not ultimate means are limited. The second section concerns the question of ultimate means and the purpose towards which our economic activity moves us. The final section concerns the implications and interaction of these two poles of the spectrum.

Limited or Unlimited?

The growth economists’ vision is one of continuous growth in intermediate means (unconstrained by any scarcity of ultimate means) in order to satisfy ever more intermediate ends (unconstrained by any impositions from the Ultimate End). Infinite means plus infinite ends equals growth forever. (Daly 21-22)

So, the question is whether ultimate means are in fact unlimited. The essays consider two important aspects of this issue: availability and population. First, are the natural resources used to fuel our economy infinite? Second, how many people can the available natural resources support and at what cost to quality of life?

Availability
Natural resources are what fuels the economy, whether it’s vegetables, silver or oil. Even those who produce only ideas in our economy (e.g. a company that only makes brand names) still consume resources. They must eat, wear clothes and have a place to live which requires a lot of natural resources. They also certainly use equipment (computers, phones, etc.) that require lots of natural resources to produce. We are all dependent for our lives, lifestyles and work on the natural world no matter what we do for a living.

The economic process is solidly anchored to a material base which is subject to definite constraints. It is because of these constraints that the economic process has a unidirectional irrevocable evolution. In the economic world only money circulates back and forth between one economic sector and another (although, in truth, even bullion slowly wears out and its stock must be continuously replenished from the mineral deposits). In retrospect it appears that the economists of both persuasions (Marxist and orthodox growth economics) have succumbed to the worst economic fetishism–money fetishism. (Georgescu-Roegen 81)

We have been hearing about peak oil for some time now, and there seems to be a growing awareness that the resources we rely on, which once seemed to be infinite, are in fact finite. There are a couple responses that growth economists and optimists have to this fact of finite resources. First, they say we will simply be able to substitute different resources for the ones we’re currently using. So, we’ll turn to natural gas or something else and turn it into energy that will fuel our cars, homes and our economy. The assumption is that we will be able to substitute infinitely one resource for another, but once again the world is finite and we will eventually run out of material stuff or be unable to convert what’s left into energy. Remember that it takes energy to convert these resources into energy. Just as in the case of the Alberta Tar Sands we are expending ever more energy in order to extract resources than we are able to get energy out of those resources.

Which brings us to the next rebuttal that technology will save us. Unfortunately, this ignores fundamental laws of thermodynamics. The first law of thermodynamics says that matter can neither be created nor destroyed. Economists seem to recognize this with the oft quoted adage “There’s no such thing as a free lunch.” However, we ignore this law in the way we talk about economic consumption. In reality, nothing is ever consumed. It is simply converted into something else. Gasoline does not disappear when it is burned. Coal does not disappear when we turn it into energy to keep the fridge running. This is where the second law of thermodynamics comes into play. This is also known as entropy, “a measure of the unavailable energy in a thermodynamic system.” This is the law that states that energy always moves from low entropy to high entropy. The heat from a pot of boiling water when taken away from a heat/energy source will eventually equalize with the surrounding temperature of the room. It is impossible for the pot of water to boil again without an external source of heat/energy.

Economics in general has yet to catch up to the reality of physics.

Population
This is often a touchy subject and one many people are still uncomfortable even discussing. However, if our ultimate means are in fact limited, then this has a direct impact on the amount of world population that is sustainable. The quality of life on the planet is directly related to the amount of people we are trying to support. Just look at the biggest cities in the world and you will see that the amount of people crammed into one place has a direct impact on quality of life. As was mentioned several times in the book, claims that world food production could support 40-45 billion people sound good, but what kind of world would we live in if that many people existed on the planet. We are quickly approaching 7 billion people on the planet. In order to continue to sustain life on the planet and increase the quality of life for more people, we will be forced one way or another to address the population issue.

Terrestrial vs. Solar Energy
Another distinction that I found very helpful was between a “stock” and “flow” of energy. The majority of the resources now being used to produce energy come from the earth. This is a stock, because it is a finite supply of something. We can theoretically use it all up today and there would be no more tomorrow. The sun, however, is a flow of energy. We cannot tap into future stores of the sun’s energy. Even if we could harness the maximum amount of direct energy from the sun it would not take away from the flow of energy tomorrow. Georgescu-Roegen lays out an interesting comparison between the massive flow of free energy from the sun that only produces a waste product of escaping heat and the terrestrial stock of energy that requires energy to extract and process, not to mention the waste it produces. A comparison of only the amounts of raw energy produced is staggering. The sun produces 10^13 Q of energy annually where Q=10^18 BTU. Total world consumption at the time of the chapter (1975) was only 0.2 Q annually. The estimate of the total amount of fossil fuels available at that time was 200 Q (100). Even considering how outdated the numbers are the difference is staggering.

All of this might really be a long way of saying that we are still creatures and constrained by the limits of our creatureliness. As the people of God and followers of Christ we are clearly called to “keep and till” the earth (Gen 2:15). If it is our “dominion” then we will one day have to answer for what happened to it, because it is our responsibility. If our economics chooses to ignore the laws of nature then according to our Scriptures it is also in rebellion from God, or simply contrary to science, whichever you prefer. The result is the same.

Next… The Purpose of Wealth