Chapter II, Section D. All wealth is ultimately derived from
the Sun
As discussed in Part I, nuclear chemist Frederic Soddy summarized
that the wealth of nations is derived from energy. All wealth, then,
is ultimately derived from the Sun. Even Soddy’s radiogenic isotopes
that store nuclear energy were forged by the Sun’s furnace during
the formation of the solar system. Most of the wealth we tap today
is prehistoric solar energy stored in the form of fossil fuels.
Soddy championed the technocratic idea to base currencies on energy
units. Most economists scoff at the suggestion that the complex
modern economy can be based on a commodity. But is energy only a
commodity?
Energy is currently conceived only as a commodity: energy resources
fetch a price in the market, and energy is bought and sold in
kilowatt hours, gallons of gasoline, and cubic feet of natural gas.
Thus wouldn’t an economic system based on energy, then, only further
empower those already with the most economic power in the United
States, the energy providers? Is the pursuit of this commodity
already wreaking havoc on the environment like some 19th century
gold rush? The answer in this paradigm is yes, very definitely. But
the current paradigm is an energy economy that only embraces the 1st
law of thermodynamics. In addition, it is coupled to the notion that
value lies in unlimited, or at least fixed, resources converted into
value. What is missing in the current paradigm is the economic
realization that it takes energy to maintain existing order, and
thus order itself has intrinsic energy value...and that is the core
of the second law.
Rifken provides a summary of why the modern economies fail, “The
overall resource base is considered inexhaustible and always
available, in some form, for the right price. The entropy bill, on
the other hand, is considered, if at all, as an externality of doing
business and marginal to the overall costs of conducting
commerce.”(p. 52). Rifken’s “entropy bill” is the 2nd law expense of
the energy required to maintain order, an expense that grows with
the increasing complexity of the system, “...the more evolved and
complex the social organism, the more energy is required to sustain
it. This simple reality flies in the face of orthodox economic
theory. In fact, neither capitalism nor socialism is capable of
accommodating the harsh ‘real-world’ realities imposed on society
and the environment by the first and second laws of
thermodynamics.”(p. 51). Modern economies eventually fail because
available energy is finite, and energy is dispersed.
A complete energy economy would take into account the energy value
of our other environmental resources–clean air, clean water, and
sustainable agriculture--as well as the energy value of order, quite
literally in the same units by which energy is sold. A complete
energy economy would thus not just reward energy providers, but also
order providers. If the true value of our goods and services were
properly assessed in terms of energy, it would, in fact, cure our
environmental woes, or at least strike the proper balance between
our traditional economic values and the value of the environment,
and it would decrease wage disparity. For a true energy economy to
work, the currency of this economic system would need to track
energy in its entirety, including entropy: the measure of spent
energy, and the measure of energy inherent in order. Currently the
energy of our valued economic production is provided predominantly
by our traditional energy resources, whereas the energy that
maintains the order of our life-sustaining ecosystems is provided
predominantly by natural solar radiation, and is largely taken for
granted.
As we shall see in the next essay, the hindrance to completing the
energy economy stems from a lack of comprehension of the second law,
a lack too often leading to fallacy in both our economic and
environmental reasoning. Choices must be made, and the energy assets
of order and debits of disorder, described by entropy, must be
accounted to realistically move toward sustainability.