Economics for the future – Beyond the superorganism

by Nate Hagens
Excerpted from Ecological Economics, Volume 169, March 2020

“We have paleolithic emotions; medieval institutions; and god-like technology.”

Industrial 0034 900x450Prologue:

Nate Hagens is a deep thinker in understanding the emergent Age of Limits. What follows is a digest of his longer article explaining the basic thermodynamics of our global predicament. Using a systems approach, Hagens examines the evolution of basic human behaviors, our  ‘unlocking’ of fossilized resources and the explosion of growth they allowed. The function of debt as a social contract that accelerates growth, the role of growth as the requirement of our industrial model, and the terminal phase of that model in negative returns on increasing complexity, resource exhaustion and climate catastrophe. This is heavy reading and not for the faint of heart. Hagens offers no easy “problems” or “solutions.’ Only the necessary first step of understanding where we are.   – Orren P Whiddon.


Highlights

• We lack a cohesive map on how behavior, economy, and the environment interconnect.

• Global human society is functioning as an energy dissipating superorganism.

• Climate change is but one of many symptoms emergent from this growth dynamic.

• Culturally, this “Superorganism” doesn’t need to be the destiny of Homo sapiens.

• A systems economics can inform the ‘reconstruction’ after financial recalibration.

Ecological Economics addresses the relationships between ecosystems and economic systems in the broadest sense.– Robert Costanza

“The real problem of humanity is the following: we have paleolithic emotions; medieval institutions; and god-like technology.” – E.O. Wilson

“We live in a world where there is more and more information, and less and less meaning.” – Jean Baudrillard

“Not everything that is faced can be changed, but nothing can be changed until it is faced.” – James Baldwin

1. Overview

Despite decades of warnings, agreements, and activism, human energy consumption, emissions, and atmospheric CO2 concentrations all hit new records in 2018. If the global economy continues to grow at about 3.0% per year, we will consume as much energy and materials in the next ~30 years as we did cumulatively in the past 10,000.

To avoid facing the consequences of our biophysical reality, we’re now obtaining growth in increasingly unsustainable ways. The developed world is using finance to enable the extraction of things we couldn’t otherwise afford to extract to produce things we otherwise couldn’t afford to consume.

In the fullness of the Anthropocene, what does a hard look at the relationships between ecosystems and economic systems in the broadest sense suggest about our collective future?  A coherent description of the global economy requires a systems view: describing the parts, the processes, how the parts and processes interact, and what these interactions imply about future possibilities.

2. Introduction

Around 11,000 years ago the climate began to warm, eventually plateauing at warmer levels than the previous 100,000 years. For the first time, groups of humans began to organize around physical surplus - production exceeding the group’s immediate caloric needs. Since some of the population no longer had to devote their time to hunting and gathering, this surplus allowed the development of new jobs, hierarchies, and complexity.

In the 19th century, this process was accelerated by the large-scale discovery of fossil carbon and the invention of technologies to use it as fuel. Fossil carbon provided humans with an extremely dense (but finite) source of energy extractable at a rate of their choosing, unlike the highly diffuse and fixed flow of sunlight of prior eras.

Fig. 1. 50,000 year History of Temperature of Greenland ice surface (C°) (Hansen, 2013).Fig. 1. 50,000 year History of Temperature of Greenland ice surface (C°) (Hansen, 2013).


This energy bounty enabled the 20th century to be a unique period in human history: 1) more (and cheaper) resources led to sharp productivity increases and unprecedented economic growth, 2) a debt based financial system cut free from physical tethers allowed expansive credit and related consumption to accelerate, 3) all of which fueled resource surpluses enabling diverse and richer societies.

The 21st century is diverging from that trajectory: 1) energy and resources are again becoming constraining factors on economic and societal development, 2) physical expansion predicated on credit is becoming riskier and will eventually reach a limit, 3) societies are becoming polarized and losing trust in governments, media, and science and, 4) ecosystems are being degraded as they absorb large quantities of energy and material waste from human systems.

Where do we go from here?

“We typically only value truth if it rewards us in the short term.
Rationality is the exception, not the rule.”

3. Human behavior

Humans are unique, but in the same ways tree frogs or hippos are unique. Our physical characteristics (sclera in eyes, small mouth, lack of canines etc.) are the products of our formative social past in small bands. However, our brains and behaviors too are products of what worked in our past. But our stone-age minds are responding to modern technology, resource abundance and large, fluid, social groups in emergent ways. These behaviors - summarized below - underpin many of our current planetary and cultural predicaments.

3.1. Status and relative comparison
Each of us is in competition for status and resources. As biological organisms we care about relative status.  Although most of the poorest 20% in advanced economies live materially richer lives than the middle class in the 1900’s, one’s income rank, as opposed to the absolute income, is what predicts life satisfaction. For those who don’t ‘win’, a lack of perceived status leads to depression, drinking, stockpiling of guns and other adverse behaviors. Once basic needs are satisfied, we are primed to respond to the comparison of “better vs.worse” more than we do to “a little” vs. “a lot.”

3.2. Supernormal stimuli and addiction
In our ancestral environment, the mesolimbic dopamine pathways were linked to motivation, action and (calorific) reward. Modern technology and abundance can hijack this same reward circuitry. Our brains require flows (feelings) that we satisfy today mostly using non-renewable stocks. In modern resource rich culture, the ‘wanting’ becomes a stronger emotion than the ‘having’.

3.3. Cognitive biases
We think in words and images disconnected from physical reality. This imagined reality commonly seems more real than science, logic and common sense. Beliefs that arise from this virtual interface become religion, nationalism, or quixotic goals such as terraforming Mars. Beliefs usually precede the reasons we use to explain them, and thus are far more powerful than facts.

Psychologists have identified hundreds of cognitive biases whereby common human behaviors depart from economic rationality. These include: motivated reasoning, groupthink, authority bias, bystander effect, etc.  Modern economics assumes the rational brain is in charge, but it’s not. Combined with our tribal, in-group nature, it’s understandable that fake news works, and that people resist uncomfortable notions involving limits to growth, energy descent, and climate change. Evolution selects for fitness, not truth. We typically only value truth if it rewards us in the short term. Rationality is the exception, not the rule.

3.4. Time bias (steep discount rates)
For good evolutionary reasons (short life spans, risk of food expropriation, unstable environment, etc.) we disproportionately care about the present more than the future, measured by economists via a discount rate. The steeper the discount rate, the more the person is addicted to the present.

Unfortunately, most of our modern challenges are ‘in the future’. Recognition that the future exists and that we are part of it springs from a relatively new brain structure, the neocortex. It has no direct connection to deep-brain motivational centers that communicate urgency. We have great intentions for the future, until the future becomes today. Our neocortex can imagine them, but we are emotionally blind to long-term issues like climate change or energy depletion. Emotionally, the future isn’t real.

3.5. Cooperation and group behavior
Those historic tribes that could act as a cohesive unit facing a common threat outcompeted tribes without such social cohesion. Because of this, today we easily and quickly form ingroups and outgroups and behave favorably and antagonistically towards them respectively. We are also primed to cooperate with our in-group whether that is a small business, large corporation, or even a nation-state - to obtain monetary (or in earlier times, physical) surplus. Me over Us, Us over Them.

3.6. Cultural evolution, Ultrasociality and the Superorganism
“Ultrasociality refers to the most social of animal organizations, with full time division of labor, specialists who gather no food but are fed by others, effective sharing of information about sources of food and danger, self-sacrificial effort in collective defense.”

Humans are among a small handful of species that are extremely social. Our ultrasociality allows us to function at much larger scales than as individuals. At the largest scales, cultural evolution occurs far more rapidly than genetic evolution. Via the cultural evolution that began with agriculture, humans have evolved into a globally interconnected civilization, ‘outcompeting’ other human economic models along the way to becoming a defacto ‘superorganism’. The needs of this higher-level entity (today for humans; the global economy) mold the behavior, organization and functions of lower-level entities (individual human behavior).  

Since the Neolithic, human society has organized around growth of surplus, initially measured physically e.g. grain, now measured by digital claims on physical surplus, (or money). Positive human attributes like cooperation have been co-opted to become coordination towards surplus production. Increasingly, the “purpose” of a modern human in the ultrasocial global economy is to contribute to surplus for the market (e.g. the economic value of a human life based on discounted lifetime income, the marginal productivity theory of labor value, etc.)

3.7. Human behavior – summary
Our behavioral repertoire is wide, yet informed, and constrained by our neurological heritage and the higher level of organization exhibited by our economic system. We are born with heritable modules prepared to react to context in predictable ways. “Who we are” as a species is highly relevant to issues of ecological overshoot, sustainability and our related cultural responses.

4. Energy

Ecological economics acknowledges that real economies are completely dependent on energy. However, orthodox economic theory remains blind to this reality. As a result, so do our institutions and our citizenry. The disconnect has massive implications for our future. This is so critical it deserves reiteration.

 1 s20 S0921800919310067 gr3 900Fig. 3. Global energy mix 1800–2018 (Source: BP, 2019, Likvern 2019).Fig. 3. Global energy mix 1800–2018 (Source: BP, 2019, Likvern 2019).


4.1. Energy in nature
Energy is and always will be the currency of life. Organisms utilize foraging strategies that optimize energy intake vs. energy expenditure adjusted for time and risk. A larger energy surplus gives an organism a competitive advantage for growth, reproduction, defense, competition, maintenance and repair. As such it is the ‘net energy’ after energy costs have been subtracted that is the enabler and driver of natural – and human – systems.

4.2. Energy and power
Biological systems maximize power. Metabolism is the rate at which organisms acquire, transform, and expend energy and materials. “Power” is energy accessed/utilized per unit-time. Organisms and ecosystems naturally structure themselves to maximize power via accessing energy gradients. Systems which maximize useful power generally outcompete those which do not (Odum, 1995).

4.3. Energy benefits
One barrel of crude oil can perform about 1700 kW h of work. A human laborer can perform about 0.6 kW h in one workday. Even if humans are 2.5x more efficient at converting energy to work, the energy in one barrel of oil substitutes approximately 4.5 years of physical human labor.

This energy/labor relationship was the foundation of the industrial revolution. Most technological processes requires hundreds to thousands of calories of fossil energy to replace each human calorie previously used to do the same tasks manually. This same principle extrapolates to most modern industrial processes: we save human labor and time by adding large amounts of cheap fossil labor. Although modern industrial output is energy inefficient it is extremely cost efficient because fossil energy is much cheaper than human energy. This is the “fossil subsidy”, that makes modern profits, wages and standards of living considerably higher compared to previous civilizations based on diffuse renewable flows.

4.4. Energy scale
In 2018, the global economy ran on a constant 17  trillion watts of energy - enough to power over 170 billion 100-watt light bulbs continuously. Over 80% of this energy was the 110 billion barrels of oil equivalents of fossil hydrocarbons that power (and is embodied in) our machines, transportation and infrastructure. At 4.5 years per barrel, this equates to the labor equivalent of more than 500 billion human workers (compared to ~4 billion actual human workers). The economic story of the 20th century was one of adding ancient solar productivity from underground to the agricultural productivity of the land. These fossil ‘armies’ are the foundation of the modern global economy and work tirelessly in thousands of industrial processes and transportation vectors. We didn’t pay for the creation of these armies of workers, only their liberation. Transitioning away from them, either via taxation or depletion, will necessarily mean less ‘benefits.’

4.5. Energy substitutability
Modern economic theory considers all inputs fungible and substitutable. If the price of one input gets too high, the market will develop an alternative. However, energy does not cooperate with this theory because different sources of energy exhibit critical differences in quality, density, storability, surplus, transportability, environmental impact, and other factors. Energy can only be substituted by a similar form/quality energy.

4.6. Energy primacy
Energy is so fundamental, that its availability sets the physical limits to our social scale. All life, commerce, work, or creation of order is enabled and limited by available net energy. As GDP increases globally, energy needs to increase in lockstep. Today, energy is still treated as merely another input into our economic system – $10 of gasoline is considered to have the same contribution to human output as $10 of Pokemon cards. This is in spite of the fact that: a) energy is needed to create and transform all material inputs and b) energy can only be substituted by other energy. This means that energy has a significantly greater role in our wealth and productivity than its nominal cost share signal. Alternative methods highlight that primary energy consumption is tied to accumulated global wealth via an energy constant of 9.7 ± 0.3 mW per 1990 US dollar. Rather than being an insignificant factor in productivity energy is the major factor.

Economists view capital, labor and human creativity as primary and energy secondary or absent. The opposite is, in fact, true. We are energy blind.

4.7. Energy and technology
Most modern technological advances are not stand-alone but powered by either liquid fuel or electricity. Technology is an expression of the available energy we can exploit. What we call “technological progress” at any time is mostly the development of the capital base to support an ever-greater throughput of available energy at a later time. With growing GDP as a global goal, extra energy allows for more inventions that in turn make our economy more complex. Furthermore, higher social/technological complexity itself requires higher energy consumption– resulting in the energy complexity spiral.

4.8. Energy Depletion
Using photosynthesis as a trickle charge, hundreds of millions of years of living biomass were stored as hydrocarbons in Earth’s battery. We are drawing down this carbon battery 10-million times faster than it was charged. Estimates of remaining oil and natural gas vary widely, but the cheap high quality oil, at scale, has largely been found and exploited.

Because of the steep decline rates of existing fields (shale and conventional), the International Energy Agency asserts that with no new drilling, world oil production would be cut in half by 2025 and to only 15% of today’s output by 2040. Of course, we will invest in new oil fields – but doing so will require a higher oil price, which would lead to lower economic growth.

Energy’s cost share of our economy, after five centuries of decline, reached a low in 1999 and has been increasing since. Earth’s geological battery of energy dense carbon is not unlimited, and we’ve already found and used the cheapest and easiest. Relative to 2008, debates about oil scarcity, and ‘peak oil’ have morphed into ‘peak demand’ and electrification of transportation as solutions. However, the net energy of remaining reserves, their affordability, and society’s ability to allocate capital to recover them remain central questions.

4.9. Energetic remoteness
Our natural subsidy of concentrated ores is declining along with the natural subsidy of fossil hydrocarbons. We don’t face ‘the end’ of oil, copper and water, but we do face increasing effort and cost to extract these resources from lower grade ores.

Energy enters the global economy via exploration, extraction, transformation of natural resources, and transportation. Energy is thus embedded in every industrial process, mineral and material in our economies. Raw materials — such as copper, phosphorous, or aluminum — are easier to extract and refine when they are concentrated. As energy becomes more expensive, and we deplete the concentrated, easy resources, many commodities become more “remote” for our use because they become more expensive to find and extract.

Fig. 5. Energy consumption and copper production (Copper Commission of Chile, 2018).Fig. 5. Energy consumption and copper production (Copper Commission of Chile, 2018).


Copper is a key industrial commodity for scaling renewable-based technologies such as electric vehicles.  Fig. 5 shows the annual copper production relative to 2001 (dark grey) for the country of Chile. The total energy used to process copper ore and overburden is shown in light gray. Lower quality ore grades require increased energy (and water), leading to less copper expected to be available in the coming decade at the same time demand for copper is increasing.

This same ‘energetic remoteness’ applies to many key resources, including water, lithium, and food. We use around two calories of fossil fuel to grow one food calorie in our modern agricultural system – but we use 8–12 additional fossil calories to process, package, deliver, store and cook modern food. In the natural world, this is unsustainable. Organisms that require more energy to find food than the food contains, will die.

4.10. Energy and money
Society runs on energy and materials, but most people think it runs on money. Indeed, money is the only part of our economies not subject to laws of thermodynamics because it is created as debt subject to mathematical laws of compound interest. Commercial banks are not intermediaries that lend out existing capital, but rather create money by loaning it into existence. Contrary to what is taught in economics textbooks, money is not lent out from existing wealth– it is created. This new money eventually gets spent on a good or service which will contain embodied energy. Money is a claim on energy yet its creation is not tethered to energy availability or cost.

Fig. 6. Hypothetical oil field production with and without using debtFig. 6. Hypothetical oil field production with and without using debt


4.11. Energy and debt
Since money is a claim on energy, then debt is a claim on future energy. Business schools teach that debt is neutral to the capital structure, an ‘intertemporal transfer of consumption preference.’ Thus, GDP generated with debt, or with cash, are considered equivalent. In an economy of perpetual growth opportunities, this might be appropriate. However, in every single year since 1965, both the USA and World have grown debt more than GDP. This makes debt more accurately an ‘intertemporal transfer of consumption’.

Debt is a social construct with physical consequences. Fig. 6 illustrates how debt pulls resources forward in time. In this hypothetical oil field, the differing shaded areas represent different cost tranches of an oil resource. Obtaining access to cheap financing allows a company to expand drilling into marginally commercial areas as long as new creditors believe in future prospects. This debt funding allows the oil company to ‘create a bigger straw’, to extract new higher-cost oil (dark black on right panel) and raise total field production. However, this results in steeper future declines because the temporary increase cannot be sustained: the next tranche available for development yields poorer well and financial performance often accompanied by higher decline rates and lower quality oil. Unconventional oil and gas typifies this phenomenon.

4.12. Energy and well-being
Despite the pervasive belief that more money and energy makes us happier, evidence suggests this is mostly not true. After basic needs are met, additional energy use yields a slower growth of the Human Development Index. Although Americans use 20 times more energy per capita than Filipinos, the percentage of ‘very happy’ citizens remains equal. Fig. 7.

Fig. 7. Energy Use per capita vs Human Development. After basic needs are met, the best things in life are free.Fig. 7. Energy Use per capita vs Human Development. After basic needs are met, the best things in life are free.


4.13. “Externalities’ and energy
Society may remain energy blind, but we are rapidly becoming aware of the negative consequences of the global human enterprise. Negative impacts for humans include: topsoil loss, endocrine disrupting chemicals, declining sperm counts, mounting inequality, water shortages, declining median incomes (in the developed world) , populism, depression, worry about the future, and geopolitical risks. Negative impacts to the natural world include: CO2 risks to climate, to ecosystems, ocean acidification, coral loss and other ocean impacts, deforestation, insect decline, bird decline, extinction of primates, decline of (wild) mammal populations, plastics in oceans, microplastics and airborne phthalates, loss of forests, and general risk of a 6th mass extinction. Most of these are enabled and worsened by cheap energy, but are absolutely internal to a fossil fuel based economy.

4.14. Energy – summary
Soaring GDP in the 20th century was tightly linked to soaring burning of fossil hydrocarbons. Society doesn’t yet recognize these links because we conflate the dollar cost of energy extraction (tiny) with the work value (huge). Energy is only substitutable with other similar quality energy. Increasingly, advanced technology is achieved with energy, and most technological advances increase future energy requirements. We can (for now) readily print money but we can’t print energy to give it value. We can only develop new sources or extract what exists faster or learn to use it more efficiently. We’ve papered over already visible declines in energy growth rates and resource quality by using credit in breathtaking volumes. Modern economic theory ignores or minimizes most of these points, as do our institutions, policies and plans. In the future, the scale, quality, and cost of energy will dictate what sort of human systems are possible. We remain energy blind.

5. Synthesis

5.1. Humans → superorganism
We expend energy to produce work because our brains seek emotional states similar to that of our successful ancestors – physical and emotional homeostasis, comfort, status, excitement, relaxation, etc. all modulated by hormones, neurotransmitters and endocrine signals. Our ancestors didn’t live with Instagram, Fortnight, Teslas, sushi or Netflix. Addiction to modern stimuli and comfort tethers to resource consumption.

Additionally, we do not choose to wait or defer consumption and experiences. Rather, we have a strong preference for positive experiences in the present moment. Even the ecologically literate will avoid ‘sustainable’ practices that accomplish equal goals but require more time. Since consumption requires energy, and we (generally) prefer immediate gratification, we can understand how our behaviors are linked to power (energy/time) in the real world. This seeking of ‘power’ by individuals, aggregated at the economy level, also explains the compulsion of debt, which pulls energy and material consumption to the present.

5.2. The Superorganism: blind, hungry and in charge
What began some 11,000 years ago as hunter gatherers cooperating to obtain physical surplus from land, has morphed into a globally connected human culture maximizing financial representations of physical surplus. In pursuit of economic growth, modern human culture appears as a self-organized, mindless, energy seeking Superorganism, functioning in similar ways to a brainless amoeba using simple tropisms. But why? How?

Today, most modern humans – as individuals – follow something like the following 3 simple rules:

1)    Execute optimal foraging algorithms by coordinating with other humans (families, small businesses, corporations, nations) towards acquiring financial surplus

2 )    Pursue culturally condoned behaviors

3)     Spend the financial surplus on comfortable, fun things or experiences (as long as culturally acceptable)

In a global culture maximizing surplus value, human brains are thus linked to energy use via the ‘pursuit of comfort’ and ‘avoidance of pain’. In aggregate, human economies require power just as animals eat food, or oak trees grow leaves. The emergent property of 7.7 billion humans going through their daily lives following simple rules like these is a ‘Superorganism’ with a 17 Tetra Watt/hour metabolism.

6. Implications

There are several key implications from humanity effectively functioning as a Superorganism.

6.1. Gross domestic product (GDP) → gross world burning (GWB)
Economic growth can only experience ‘absolute decoupling’ if we increase GDP while decreasing primary energy consumption. Relative decoupling occurs when total primary energy grows but at a smaller rate than GDP. Since dual statistics began in 1965, there has been no absolute decoupling globally and negligible relative decoupling.

Every single good and service in the global (or your own) economy started somewhere with a small fire. We cannot decouple this basic relationship on an absolute basis, and relative decoupling will be minor as long as GDP growth is our cultural goal. GDP is a poor metric of our well-being and cultural progress. It is however a reasonably good metric of how much energy humans burn: GWB – Gross World Burning.

In principle a superorganism could be super intelligent but ours is not. We are all caught up in the global growth imperative, which is immune from self-criticism. In the same way that ants pursue individual tasks for the growth of the colony, humans have outsourced our individuality to the ‘cloud’, which is itself devoid of an actual brain. The more people involved in a decision/process, the more our decisions resemble simple bacterial tropisms which unconsciously move towards energy acquisition. In the year 2019 C.E. the emergent result of 7.7+ billion hominids living their daily lives is an energy seeking Superorganism, out of control, yet still hungry. This superorganism is not human. It’s a thing-in-itself (Ding an sich) with its own survival instincts that override the individual humans that comprise it.

6.2. Climate change and ocean risks- the metabolism of the superorganism
Fig. 9 depicts CO₂ concentrations over time with highlighted major efforts to reduce emissions. Despite these efforts, 2018 marked the year with the most energy ever burned, the most CO₂ ever emitted by humans, and the highest atmospheric concentrations in over three million years. Because of the direct linkage of human economies to ‘fire’ and fire to carbon, climate change and ocean acidification are - and will likely remain - directly linked to the metabolism of human economies. A central finding in the AR5 climate assessment was that the single largest driver of emissions globally was growth in income. The tight power-law relationship described above infers that current levels of economic consumption would not be feasible without fossil carbon and hydrocarbon consumption. In an economic system dependent on energy to grow, motivating voters to choose to keep carbon in the ground is akin to arguing with a forest fire. Climate change and its mitigation are thus ‘downstream’ of the superorganism.

Fig. 9. CO2 concentrations vs human social mileposts.Fig. 9. CO2 concentrations vs human social mileposts.


6.3. Population
Overpopulation is also downstream of this Superorganism’s growth dynamic. The global economy and monetary systems are based on and require growth. Growth requires consumption. Consumption requires consumers. Additional consumers requires more babies. In countries with falling population growth (e.g. Denmark), governments now pay for advertising for couples to go on ‘sexy vacations’. Since the current economic system requires growth, we need someone to pay for toys, diapers, teachers, and pensions. A baby strike (unlikely) would eventually crash the financial claims on future energy. Climate and overpopulation are behaviorally downstream of the GDP-seeking emergent property of human cultures. We can ‘solve’ these issues, but not until the Superorganism a) shrinks b) changes direction or c) is overthrown.

6.4. Renewables
Environmental media have popularized the narrative we can completely de-carbonize the economy. Proponents point to the fact that since 2003, over 20 countries, including the USA and UK, have reduced GHGs while growing their economies. However, this accounting neglects that these economies exported their carbon-intensive manufacturing to cheap labor regions. China’s industrial sector alone uses almost as much energy as the entire US economy, and the USA now imports what it used to produce.

The Superorganism grows, and doesn’t (voluntarily) shrink. Under this logic we will have to change economic systems before we can meaningfully decarbonize the economy. Even the switch from wood to coal wasn’t really a ‘transition’ only an addition. We are consuming more forest biomass globally today than we were at the dawn of the industrial revolution. Likewise, renewables are adding energy, not replacing hydrocarbons. If this continues, renewables will continue to scale, but only as part of a larger energy dissipating, CO2 emitting structure.

“We are slowly figuring out the relationship between energy, technology and the economy.”

Additionally, between 1970 and 2010, estimated total global extraction of natural resources from Earth (fuels, ores, salts, biomass, etc.) grew 3.2-fold from 22 to 70 billion tons. During the same time period, the size of the world economy, adjusted for inflation, grew 3.4-fold from $18.9 to $65.6 trillion. For one additional unit of Gross World Product (GWP), we needed close to one additional unit of natural resources. If we remain at 17 TW, whether carbon intensive or carbon neutral, we’ll still need ~1 kg of minerals and materials for every $2 of global GDP. Physics suggests that this is not possible, and that our answers will primarily be found through social changes linked with contraction, not technical innovations resulting in long-term growth.

6.5. Credit and financialization
Although we currently witness emotional signals that injustice, wealth inequality, and climate change, are real and urgent issues, there appears to be little awareness of constraints concerning energy and finance. The modern system has used finance to obfuscate the fact that we have consumed beyond our means for at least the past 50 years. The energy/credit/growth dynamic is the least understood but most important phenomenon driving the current global economic and ecological situation.

Think of credit as a magic wand, that allows us to spend more than our income with a promise to pay it back in the future. This only works well when our economy is growing and there are enough untapped resources (e.g. 1950) to allow future growth to repay those debts.

Fig. 11. US GDP vs Debt 1951–2014.Fig. 11. US GDP vs Debt 1951–2014.


Fig. 11 indicates debt (black) vs GDP (green) for the USA. Much of our recent GDP growth has just been spending borrowed money. Globally, this ‘debt productivity’ (economic growth relative to debt growth) is now down to about 30-cents on the dollar. Should this ratio reach zero, we’d be adding debt just to keep the economy the same size. Globally, accessing our magic credit wand is dangerous and unsustainable, yet the Superorganism requires us to attempt it.

In 2018, global credit growth began to slow. Along with slower economic growth there are signs of deflationary impact — because many people can no longer afford basic things (inflation remains — but mostly in healthcare, education, real assets and financial assets). Global bonds that have negative interest rates (something unimaginable in the past) total $14 trillion and growing. In Scandinavia, a home mortgage may now carry a below-zero interest rate. This low cost of capital, which has incentivized homeowner loans, is also crippling return rates for savers, and posing significant risks to pension funds, which depend on 7–8% a year annual returns.

Despite massive credit injections, our productivity per unit of labor since 2011 is at 40 year lows. If you add all the unfunded liabilities on top of government and private debt, the USA currently has obligations of 1200% of GDP. As debt relative to GDP rises, the ‘debt productivity’ of each additional dollar declines, eventually reaching a limit requiring: write-offs, foreclosures, deflation, and a smaller economy at best, with currency reform and systemic risk at worst.

At its core our culture has a flawed macroeconomic model. We are slowly figuring out the relationship between energy, technology and the economy. It is yet to be seen if there can be such a thing as ‘credit decoupling’, (growth, but with decreasing global credit), but based on the correlation of the past 50 years and the direct link between money creation, and the spending of it, this seems unlikely. The next big questions revolve around ‘what is money’, en route to ‘do we have a goal?’ In the meantime, what’s relevant is that we cannot solve a credit crisis using more credit. Recall that debt is a lien on energy. If we are ever to honor our current debts, the amount of energy required will be immense. If the energy is not available, at cheap prices, those debts will never be repaid, something that has happened historically with debt again and again.

7. The great simplification

The 20th century experienced increasing energy quality and decreasing energy prices. The 21st century will be a story of decreasing energy quality and increasing energy cost. In tandem with some fraction of the best remaining fossil energy, we certainly could use intermittent renewable energy in ways that could power a great human civilization – but it would look quite different than the one we currently live in and are planning for. Unfortunately, the Superorganism cannot plan, only slough forward seeking more energy and growth.

“...short-term social pressures guide individual behavior in opposition to the best long-run interest of the individual and society.”

8. Social traps

Many challenges we face appear as classic social traps, whereby short-term social pressures guide individual behavior in opposition to the best long-run interest of the individual and society. Cognitively, the implications presented in this paper are understandable to most people fluent in the issues, but behaviorally remain almost the perfect storm for the human brain to ignore or deny. The issues are: complex, abstract, in the future, threatening to politicians and business owners, difficult to answer, largely ignored by leaders, and depressing to think about. Typically, a description of our biophysical reality is met with denial or nihilism.

Both denial and nihilism help the mind remove dissonance and thus emotionally absolve a person from working to make (uncomfortable) changes that might improve our chances. This and other social traps appear to mitigate against meaningful action. Our super sociality results in valuing conformity over science, and valuing fairness of process over quality of results. We attempt to use social sorting mechanisms (popularity/status) to solve complex problems. Perhaps the biggest social trap of all is that we don’t actually need all this energy and material stuff to be happy or healthy. Nevertheless, led by the emergent drive of the Superorganism, we let pecuniary metrics, social comparisons, and novel technology, drag us into unnecessary and wasteful consumption.

9. Discussion

“The major problems in the world are the result of the difference between how nature works and the way people think.” – Gregory Bateson

“When a system is far from equilibrium, small islands of coherence have the capacity to shift the entire system” – Ilya Prigogine

9.1. What next? Predictions for the superorganism
To avoid paying the societal debt bill we’ve amassed over past decades, we tend to keep kicking the can forward, with more financial guarantees, stories, and rule changes – all in increasingly less sustainable ways. With the backdrop of the Superorganism we might make some predictions:

• As more people recognize that energy underpins our futures, we’ll witness more schemes focusing on gross energy as opposed to its net contribution to society. Many technologies will be promoted that are viable, but not relevant, affordable or scalable.

• We will continue to create money and credit expecting their abundance to overcome physical world problems, until they too reach limits (no credit-worthy lenders, interest too high of % of growth, fiscal cliffs, etc.).

• To avoid social instability, we will remediate wealth inequality via programs like Universal Basic Income (f such ‘wealth transfers’ are direct, they will stabilize society but access more carbon as they are transfers of bank digits to direct calls on resources and energy. (Good for low income humans, bad for dolphins).(These transfers can be indirect e.g. ecological restoration, local public infrastructure etc.)

• Around the world, as economic prospects deteriorate, people will foster group cohesion by blaming their problems on outgroups, and tend to vote for leaders who promise better economic futures, or things to be more like the past, (linked to more economic growth, linked to energy, linked to carbon). Trump, Bolsonaro, Matteo, LePen, Morrison, etc. are but recent examples. (Conservative names listed, but most liberal types also promise “better economic futures.”).

• As USA and Brazil attest, one of the few remaining economic cans to kick is de-regulation and removal of environmental protection. As the economy gets worse, environmental initiatives (e.g. climate mitigation) will become less popular – not because people disbelieve or care less but because they’ll have less financial and emotional bandwidth to advocate for them.

• As a globally tethered economic system, we will likely do anything we can to kick the can further down the road. We are caught in a spiral of growth, limits to growth, response to limits, more growth, more limits, more response.

9.2. Cultural evolution and the superorganism
We are members of a social species collaborating at various scales to execute optimal foraging algorithms in a novel, resource-rich environment. This results in a persistent, collective pursuit of economic growth.

Humankind, as a species, circa 2020 C.E., is ecologically functioning as a mindless, energy dissipating structure.

Humans have unwittingly been ensnared in the Carbon Trap – whereby, to maintain our lifestyles and existence, we have to continue burning the ancient carbon that is inexorably destroying the natural world. No one is to blame for this trap but we are all complicit. We need to retire our ~500 billion strong fossil armies, but if we really did this, it will transform our way of life in ways we are likely to resist.

Understanding that humans in large numbers predictably self-organize by following simple energy scaling tropisms gives us a chance to visualize and prepare for what is likely to happen (financial recalibration, less energy and material throughput, more local economies, less carbon, etc.)

“The word ‘collapse’ imbues a finality. It also sounds binary – yes or no.
Our situation is much more nuanced, geographically dispersed, and actionable.”

Our biology is not going to change – but our culture and our economic system could. How will we use the coming financial/energy recalibration to move towards a slower, wiser, less damaging system?

1)    Societies need to physically and psychologically prepare for circumstances with less credit, complexity, energy/material throughput, and will need social support structures for those falling off the treadmill, and

2)    We need a science-linked blueprint describing how a new economic system based on biophysical reality might emerge from this Great Simplification.

The word ‘collapse’ imbues a finality. It also sounds binary – yes or no. Our situation is much more nuanced, geographically dispersed, and actionable. We face a complex challenge to avoid the ‘break’ by bending. This bending will comprise a ‘recoupling’ with nature and with each other, while using fewer non-renewable resources. Physically this is possible. For example, a 30% GDP drop in the USA would bring that nation back to a 1990’s level of per capita GDP and a 50% drop in GDP would bring the USA back to a 1973 level.

The real challenge will begin when growth ends. Eventually, we likely face a global depression and other challenging departures from our recent trajectory. The answers now are at least as much social as they are technical.

10. Conclusion

“There is science now to construct the story of the journey we have made on this Earth, the story that connects us with all beings. Right now we need to remember that story — to harvest it and taste it. For we are in a hard time. And it is knowledge of the bigger story that is going to carry us through.” –  Joanna Macy

A bunch of mildly clever, highly social apes broke into a cookie jar of fossil energy and have been throwing a party for the past 150 years. The conditions at the party are incompatible with the biophysical realities of the planet. The party is about over and when morning comes, radical changes to our way of living will be imposed. Some of the apes must sober up (before morning) and create a plan that the rest of the party-goers will agree to. But mildly clever, highly social apes neither easily nor voluntarily make radical changes to their ways of living. And so coffee and stimulants (credit, etc.) will be consumed during another lavish breakfast, but with the shades drawn. It’s morning already.

It is likely that, in the not-too-distant future, the size, complexity, and (literal) `burn rate’ of our civilization will be much reduced by forces other than human volition. This paper suggests that we will not plan for this outcome – ❧

Read the full article here:
https://www.sciencedirect.com/science/article/pii/S0921800919310067


Epilogue:

All life follows one rule, to grow as many copies of itself, using every resource available, in as short a time as possible, and through this process discover the physical limits to growth that define a future equilibrium state. This simple rule gives rise to evolution, and over deep time to the ever increasing complexity of life on our planet. Our species has followed this rule to become homo-colossus... we are very, very successful.

Now emergent is The Age of Limits to Growth, that period in our species’ thermo-dynamic cycle when growth reverses towards reaching balance with available resources. Unlike other species, our growth was contingent on one-time access to now depleted fossil reserves, their use catastrophically degrading the carrying capacity of the natural biosphere upon which our evolution has depended. Further, we citizens of the industrial empire have lost our cultural skills of living meaningfully without the comforts of that empire, while societies not directly benefiting have been made dependent and stripped of resources by that same industrial system. The system is global, its simplification will be global and difficult for societies making the journey to thermo-dynamic equilibrium. As for the individual...

2,400 years ago a small city of 75,000 souls created art, literature and architecture that inspire us today. They lived in rude homes without windows or heat, wore sandals in winter and subsisted on boiled barley when fresh food was unavailable. This was the Athens of Pericles. About the same time a man sitting under a Bodhi tree in India was asked, “Why is there suffering?” -Because you have a body and its needs drive your actions. In meeting its needs you must of necessity impose suffering upon other living things... “Then how can we escape suffering?” -We cannot escape suffering when we live. We can only live every day in a way that reduces the suffering that we, of necessity, cause others...

It is not about how much ‘stuff’ you have, it is about the joy and beauty that has always been around you. It is not about escaping the process, but rather engaging it by reducing the damage you cause at every opportunity. You are the ascendant of people who survived ice ages, famine, war, drought, epidemics; who were called to shield the flame and pass it on to you in your time. A time approaches when you and yours will be called upon to shield that flame. Pass it on! – ❧


Nore: This digest was origially featured in the 2020 Wheel of the Year – COVID-19 Edition.