Chapter III, Section B, Item 2. The “No Disorder” Fallacy
Even if energy resource limitations can be ignored, at least for
now, the omission of the continuing cost of disorder is the most
flagrant flaw of our economic models. Disorder is readily
quantifiable in terms of energy, and thus quantifiable in terms of
both money and energy resource limitations. But all of our economic
models fail to account fully for disorder, and its exclusion becomes
a fallacy of denial: there is no disorder.
Although most economic models recognize and account for the cost of
creating order from disorder, they fail to acknowledge the constant
universal tug toward disorder of our ordered assets. Though the
devaluation of assets within an economic system may be expressed in
terms of the depreciation of its basic components, i.e. depreciation
of the basic goods and services exchanged, and though operation and
maintenance costs can be factored into the “life” of these goods and
services, the analysis ends with the end of the “life” of the
product, not to a completed “life-cycle.” Any further responsibility
for the net output of an "economic asset," including the effects of
its disorder onto the rest of the economic system–waste disposal the
most salient example–cuts directly into the profit to the
asset-originating economic entity: "the business." Thus
an incentive exists for a single economic entity (a business) to
deny the reality of any disorder it creates, or to at least to
promote a tacit assumption that the order (its product assets) is
worth the cost of the disorder. The cost of dealing with the
disorder cuts right into the profit. Thus for example, there is
often a backlash from business interests against the costs of
environmental regulation. The true cost of the disorder is
eventually assumed by the economy at large. Environmental
cleanups are enforced for matters related to public health, and at
times, sustainability. But for the environment for its own
sake, work (energy) is donated: the Boy Scouts are deployed to
clean-up a roadside or waterway, the activity ostensibly designed to
engender community service and instill green consciousness.
Meanwhile, it is assumed that an investment will grow, profits will
be made, and that the value of a corporation will grow, or at least
hold its own, as it is assumed the economy will grow.
Nowhere is the “no disorder” fallacy more apparent than in attempts
to initiate recycling programs, or rather, the excuses not to. Full
life-cycle analysis is leading to activism to impose cradle-to-grave
responsibility for any economic output (product) onto the
originating economic entities (businesses), but to do so fully and
end up with anything other than Rifkin’s “red ledger” is impossible
by the second law. Recycling takes energy, and although a company
can realize significant cost savings using recycled raw materials,
there is still a waste stream, if from nothing else, the carbon
footprint, or other environmental impact, of the energy consumed in
the recycling process. Some recycling, particularly of metals, is
sustainable in the current economic model, at least so long as the
cooperation of consumers to “dispose of properly” can be depended
upon. Other recycling can hardly work, even with the most urgent
cooperation of the most green-conscious consumers, the most
egregious example: plastic recycling.
Plastics have long been the target of environmental concern, enough
that most plastics are now categorized so that recycling can at
least be initiated, funded or mandated by local governments. The
problem with plastics environmentally is precisely what they were
designed for economically: they are not biodegradable. In the
environment, most substances are broken down into their constituent
elements or compounds by micro-organisms; most of the remainder,
including plastics and glass, are pulverized to microscopic pieces,
leaving their molecular structure intact. Plastics and other human
created debris washes up on all of the world’s beaches, including
those in remote polar regions. Recent discovery of an accumulation
of plastic trash and microscopic plastic particulates in the
Pacific, the
Garbage
Gyre a.k.a. Pacific Trash Vortex, has rekindled concerns over
plastic, while exposing the harsh realities of waste management and
recycling. A quote from Jared Blumenthal, Director of San
Francisco's Department of the Environment, summarizes the problem
from our current economic perspective, which disregards the costs of
the 2nd law, “There's harsh economics behind bag recycling: It costs
$4,000 to process and recycle 1 ton of plastic bags, which can then
be sold on the commodities market for $32.” This reflects the
economic perspective of the limited return value of the plastic
resource itself to the plastic manufacturer, versus the enormous
costs of recycling plastic to the solid waste manager. Plastic
manufacturing profits not from plastic, rather from the “order”
inherent in a plastic bag, but there is no accounting for the cost
of the disorder, the degradation to the marine ecosystem ultimately
absorbing any non-recycled plastic.
It does not take an environmental example to expose the economic “no
disorder” fallacy. The need for maintenance of existing
infrastructure in perpetuity, or rather the deterioration of
infrastructure lacking in maintenance, is a classic example of the
effects of entropy. The
Mackinac Bridge, connecting the Lower and Upper Peninsulas of
Michigan across the Straits of Mackinac, provides an example of
maintenance in perpetuity. Completed in 1957, among other
maintenance, it has been continuously painted ever since, with the
time required to complete the job equal to the life of the paint.
Maintenance or replacement of infrastructure is generally paid with
tolls or taxes. But with tax reductions and insufficient budgets
comes maintenance reductions, or delays in the replacements of
structures deemed “structurally deficient.” The recent (2007)
collapse of the
I-35W
bridge over the Mississippi River near Minneapolis, Minnesota
is a reminder of the ASCE
estimated $1.6 trillion needed for infrastructure repairs or
replacement. Completed in 1967, it was deemed “structurally
deficient” in 1990, again in 2005, and was slated for replacement in
2020 before it collapsed on August 1, 2007.
All growth comes from the consumption of energy, but so does mere
sustainability. The current economic system rewards growth, but
views sustainability as a burden. An economic entity (business)
treats energy input, including the meager energy contribution of
human work, as a raw material to produce an output. The additional
energy inputs to sustain the economic system are needed in
perpetuity, and thus can go way beyond the initial energy
consumption of GDP, recorded in the creation of its products. With
maintenance viewed as a burden to the economy, the human work
devoted to sustainability is less rewarded economically. Currently,
the whole economic system is supported by a constant influx of
energy such that entropy can be overlooked. The basic fallacy of
modern economics is the assumption that this energy is always
available, and always will be.