Category Archives: Natural systems

scientific methods & principles for natural systems research

among best, Natural Economy, Natural systems, Research & Measures, Scientific theory

Three Wider Scientific and Economic Implications

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The new scientific method presented in Systems Energy Assessment (SEA) allows economic systems to be studied by physical science methods,

so that our accounting method can match nature’s.

The first major practical finding is that the total energy demands of businesses have been undercounted, with the standard LCA method commonly fining only ~80%.   It does not count the outsourced energy uses for the scattered services businesses hire to operate, or their environmental impacts.

  1. Realistic Life Cycle Financial Accounting & business balance sheets
  2. Discovering how much of nature’s systems are hidden from view
  3. Study of complex systems as both natural objects and abstract concepts

These three main wider scientific implications of the method are found on the SEA resource page with other notes and resources. Each of which would take more explaining, but might also be helpful for suggest the intriguing challenges for learning how to apply science to the task of making the earth work for us, and us to work for the earth at the same time.

Continue reading Three Wider Scientific and Economic Implications →

Natural Economy, Natural systems

What GDP & the Dow measure

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Originally “Where I’ve gotten so far”, A somewhat better summary of my work that Rex Weyler found helpful started from a discussion titled “Are Stock Markets Ponzi Schemes or Real Wealth?”. Rex wrote back: “This and the SEA presentation on your site are helpful. Thanks.”

To me and I think to most economists “the stock market” is not seen as directing the economy, just in the news.

In reality it’s a game of mutual pick-pocket
played by the rich, that helps banks measure the credit worthiness of businesses

I added a line for US GDP to the nice graph of US Quads of energy use & Dow Jones prices done by Charlie Hall (1).   It’s remarkable.

It seems to expose a bit of a “fraud” in what people have been told of the role of the stock market. Clearly both GDP and energy use have generally followed smoothly progressive curves.  Clearly the Dow doesn’t track or lead either.

There’s a lot more to why US energy use stopped growing and GDP kept growing, but the DOW really seems to be just sailing off on its own.  It reflects no aspect of either of the consistent indicators of economic wealth.
(1)Dow Jones, US energy & GDP

Continue reading What GDP & the Dow measure →

Natural systems, Scientific theory

Seminar on my work at June 2011 Foo Camp

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Aleks Jakulin is a systems scientist, entrepreneur and professor at Columbia University, a very interesting guy, who was invited to present at the June 2011 Foo Camp meeting information space hackers and scientists. The invitation is to present the work of someone else, a nice twist, and Aleks chose to present my work, also incorporating some of my years of discussing our approaches to general systems theory with our mutual friend Stan Salthe.

We chose the working title:
System archetypes & anarchitypes… because my interest has always being in the natural processes that are “model breaking”, like the enduring eventfulness of change and how events are reliably individualistic. Below are some of the notes and images he’ll be working from as he builds a conversation on the subject.

Once you have a reliable image for something, an impression, a belief, an equation or rule, how can you keep clear in your thinking that it’s something of your own invention? Failing to do so seems to be central to the “curse of knowledge” that people can only look into the past, and our rules for things often leave us horribly unprepared for the future. Continue reading Seminar on my work at June 2011 Foo Camp →

among best, Natural Economy, Natural systems

The telling mental gap at “Gapminder.org”

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There’s a now famous study of progress in human welfare, with a common glaring flaw.

The flaw interestingly betrays how humans are dazzled by positive information, and quite forget what we’re looking at.

Hans Rosling has traveled the world, presented at the TED talks many times and raised huge amounts of money for his work, based on the beautiful data animation videos he has produced, like the one on world progress in human welfare over the past two centuries.

It displays the remarkable course of human progress, as proof positive of the soundness of the capitalist approach to economic development and the universal value of creating wealth for all that is evident in the data. It is indeed a remarkable history.

Gapminder image of the modern world

Continue reading The telling mental gap at “Gapminder.org” →

Natural Economy, Natural systems, Scientific theory

Using net-energy system boundaries to study working units of nature

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Important new tool for understanding businesses as physical systems AND measuring their total resource demands

The research paper Systems Energy Assessment (SEA) now published as of Oct 2011, with Charlie Hall’s special collection of Biophysical Economics papers New Studies on EROI in Sustainability (MDPI).  The pre-publication copy can be found at the Cornell physics archive, and at the references site www.synapse9.com/SEA, along with other notes.

There are two main findings. One is that if you consider physical causation as a way to trace how energy uses are connected, a business needs to be considered as a whole organization of working parts. At present statistical measures of business energy use treat businesses as just a collection of technologies with no operators or environments. That difference can be measured, and seems to call for a typical increase in the environmental energy use impacts and risk exposures of businesses by about fivefold.

The other main finding is that it seems generally possible, for the first time, to use objective methods to locate the natural organizational boundary of individual net-energy systems in the environment. That allows traditional thermodynamic and net-energy physics analysis and to refer to organizational units of the environment as subjects of natural science.

 

Mail & Comment, Natural Economy, Natural systems

What’s one thing everyone could do, to slow climate change

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An exchange with John Baez on his Azimuth blog.

Phil Henshaw says: May 28, 2011 at 1:54 am

I think the actual problem, and why it’s so intractable, is that our “resource management system” is designed to serve our financial system,… not the reverse.

Our financial system is designed to create stable positive financial returns, so people can keep adding their winnings to their bets, and have an ever multiplying “free lunch”. The critical energy management decision necessary for doing as best one can at that (allowing punctuating the endless boom with enough busts all the time…) is to accelerate the economy’s use of inexpensive energy as fast as economically feasible, forever.

What results when people model their implementation of physical law following rules they happen to like for financial law, is it creates a simply enormous explosion of wealth that produces a completely unmanageable society and economic system (instead of a comfortable home on earth).

I think that’s a big part of what is so self-defeating in the human intention to “tame nature” to behave like we think it should. We haven’t seen the value of watched nature to see how it works first.

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Reply, John Baez says: May 28, 2011 at 8:56 am

Can you translate these insights into an answer to the question: “What is the one best thing everyone could do to slow down climate change?”

If so, would the answer be some version of “think differently”? Or is there a concrete action that you can propose?

Reply, Phil Henshaw says: May 28, 2011 at 9:27 pm

The theoretically necessary step, that no one seems to understand when stated in abstract terms, is for the net-energy surplus that was first applied to growing the system, now be applied to adapting the system to a finite and fragile planet. The world’s institutional economic models and planning assumes there will never be a need for that, and money can keep compounding forever.

The practical means of changing that comes from J M Keynes, and what to do with money when the economy can’t grow. It follows from how the surplus resources for growing the economy were managed to start with, by the use of profits from investment to proliferate more investment.

To keep investment funds from becoming worthless when the economy can’t grow, and make the system manageable again, you’d need to deflate that money spiral. As a personal matter it means the people whose money it it need to stop growing it, and be careful to invest it in good purposes.

That would involve a)devoting investment funds to sustainable development rather “fast money” and b)stop adding investment profits to expand total investment, divesting net profits for some other good purpose. There would be a lot of negotiation as to how to achieve that, of course, as all our institutional plans assume it’ll never occur.

“That would involve a)devoting investment funds to sustainable development rather “fast money” and b) stop adding investment profits to expand total investment, divesting net profits for some other good purpose.”

I’ve been getting traction with some of the leading thinkers in the ethical investment community (John Fullerton, Hazel Henderson and others) by saying it’s a matter of combining “green investment” with “green divestment”, redirecting the savings in the “giant pool of money” for good purpose, to reduce the absolute scale of our demands on the earth.

Keynes actually wrote a whole chapter of his big book on it, Chapter 16 in The General Theory, though due to the cultural belief in perpetual growth his entire profession ignored it completely. I have a scanned copy on my site fyi. It’s readable, but you have to fight through his discussing it in terms of the aggregate variables of the world economic system, entirely ignoring any social or political debate… To find my references to that, and to “the widow’s cruse” parable he first discussed in in terms of, you can browse my blog posts mentioning Keynes –http://www.google.com/search?sourceid=chrome&ie=UTF-8&q=site%3Asynapse9.com%2Fblog%2F+keynes.

Phil

p.s. Yes, now it would seem that the business people of the time took the magical secrets Keynes offered for how to stabilize the growth system for making more and more money, and have now successfully run it completely into an impenetrable wall of natural complications and resource exhaustion, just as Keynes predicted and explained clearly how to avoid. So, the one thing everyone can do is start reducing appetites and investments, while divesting their profits and making that a new truth for society, as they begin to study and understand why.

For teachers, Natural systems, Transformation

Wild Resiliency – thought is an ecological experiment too

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A post to Wild Resiliency on The Seven Keystone Processes – adding that thought is an ecological experiment too.

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I liked the statement at the top, that:

“we too easily believe ourselves to be the center of the universe and the measure of the world”.

How we somehow manage to conjure up the notion that the flickering images of our minds as the facts of nature, actually placing each human at the center of “their” universe, has long been a puzzle to me. I see its power often enough.

It’s a great deal of fun to have a quite believable universe to live in, much as a fantasy, where we each can have everything we see or experience mean anything we like to fit the other beliefs we happen to like. Continue reading Wild Resiliency – thought is an ecological experiment too →

among best, Natural Economy, Natural systems

big news from (Henshaw, Grantham &) the earth

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My article in New European Economy describes the 10 year global price spiral in natural resource markets as a true “Decisive Moment for Investing in Sustainability” (local PDF copy).  It shows the world is now pressing natural limits for affordable resources, in a way as potentially explosive and dangerous to a growth economy as a global financial bubble, with more lasting effects.

The long expected “big crunch” at the end of growth has a surprising shape.

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For a growth economy shifting from having ever cheaper to ever more unaffordable resources is the long expected “big crunch” at the end of growth.   We just didn’t know what it would look like, or that it would be a bigger and more urgent dilemma for prosperity than climate change.

A major business leader, Jeremy Grantham, recently issued confirming report on the future of natural resources from his view Wake Up! The Age Of Cheap Natural Resources Is Over (200k) .   It’s a critical new issue, marking conclusive evidence of a change in the natural environment’s response to us.  How people respond now matters a great deal.

The popular effort is likely to be to accelerate our depletion of resources rather than relieve our growing demands  Continue reading big news from (Henshaw, Grantham &) the earth →

Mail & Comment, Natural systems

Is our “explanation world” how the “natural world” works by itself?

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I commented yesterday on a Brian Lehrer radio show with Francis Fukuyama, discussing his recent book on The origins of political order.  You may recall Fukuyama’s previous book from 2006,”The end of History”, which caused some stir. though history continued in any case.

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Francis Fukuyama seems to do a good job of tracing the implications of modern social science theory back toward the origins of society.  He represents the natural process of human cultural evolution as a cultural historian naturally might, in terms of the history of cultural explanations.

That describes the evolution of “the explanatory world” of our attempts to represent history in terms of our cultural values.  It doesn’t seem to reflect any consideration how the “the natural world” would have evolved to create the features we then attempt to explain. Continue reading Is our “explanation world” how the “natural world” works by itself? →

among best, Mail & Comment, Natural Economy, Natural systems

The economic meaning of “steady state”

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Herman Daly offers his view of what a “steady state economy” is and how to use the term in a guest blog post on the Capital Institute website. I agree that understanding the meaning is more important than exactly what name you use, but there are important types if “steady states” not yet being discussed.

My comment, posted there and below, is for helping distinguish between the “lively” and “lifeless” forms of steady states that are possible for economies in nature. Of course, I raise the curiously overlooked concise meaning that Keynes would have given the type of lively and conflict free stable state of healthy economies too, as he discussed in “The General Theory…” but was misunderstood.

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Finding the Fitting Name

I’d agree with Daly that ultimately what you call the ideal kind of steady state for an economy matters less than whether what you achieve is something close to an ideal steady state. I study the physics of “open systems”, a.k.a. natural economies, and there are clearly discernible “ideal” steady states one might seek to achieve.

There are the ecosystems that while relatively stable and full of competing populations also display such deep and diverse complementary relationships between populations that the whole system operates with a relatively low level of internal conflict. Continue reading The economic meaning of “steady state” →