UMKC’s economics department is avowedly “heterodox,” giving weight to perspectives beyond the neoclassical model that dominates most graduate education in the field (you can get a flavor at the New Economic Perspectives blog, which features work of faculty and grad students from the UMKC program). The most prominent piece of that heterodoxy is Modern Monetary Theory, which is an outgrowth of a school of thought known as post-Keynesianism. (It’s also an approach that’s had a significant impact on my own thinking in the last few years.) There’s also interest there in environmental issues, though that isn’t as thoroughgoing a concern as is the understanding of what money is and how it works.
As Brian saw it, he and his classmates were thoroughly versed in money, and also interested in environmental issues, whereas I’ve started from an ecological perspective on the economy and worked my way toward the role of money. The result was a conversation that left me with a lot to consider.
A particular point of discussion centered on scarcity and the idea that it is socially constructed—that is, not an immutable fact of life, but a function of human action. I recall two aspects of this coming up in the conversation: a demand side, and a supply side.
It seemed to me that of those, the attendees put more weight on the demand side. This challenges the conventional assertion that human wants are insatiable. In place of that idea, it posits that culture cold foster a sense of “enough,” in which case the demand for consumption—and for the resources supporting consumption—would decline, alleviating scarcity from that side.
There was also a reference to the supply side of the equation. This argument points out that resources are not inherently useful; rather, human action and ingenuity is what puts them at our service. One example would be oil, which in its raw form is a not particularly useful black gunk. But if you invent and build refineries, you can turn it into fuel, and if you invent and build internal combustion engines, you can use that black gunk to greatly increase people’s mobility.
An even more powerful example is sand. It has some useful roles as a construction material, but the invention of fiber optics it became an input that massively increased our ability to move information.
I’d like to get to the demand argument as well, but for now I’ll limit myself to that second argument, the supply one. The reason is simply that I think I have a better handle on the supply argument than I do on the demand side, so I’m giving myself a little more time for my thoughts to settle out.
Let’s start from a point of agreement, which is that almost nothing in its raw form is directly useful to people. Sure, there are some plants that can be picked and eaten, and a cave is better shelter than the open sky. But even “primitive” societies have relatively sophisticated ways of transforming the materials at their disposal. Near one end of the human cultural experience, bone isn’t useful as a material for making needles until you know how to sharpen it. And near the other end, coal only becomes useful as an input to ferrous metallurgy once people have worked out a new smelting technology to replace the one that had worked with wood-charcoal.
At its most simple-minded, an emphasis on natural limits could look at nature as being an undifferentiated storehouse of useful stuff, from which we simply take. And that view is pretty clearly wrong. There is an important sense in which resource supply is not something simply determined by nature, but is a product of our effort and invention.
But that is only part of the story, and the concept of a gradient can be useful in sorting this out. Dorian Sagan and Jessica H. Whiteside write that:
A gradient is a measurable difference across a distance of temperature (the classic thermodynamic gradient which runs heat engines), pressure, chemical concentration, or other variables.
Some examples can help illustrate the concept’s range:Dorian Sagan and Jessica H. Whiteside, “Gradient-reduction theory: thermodynamics and the purpose of life,” in Scientists debate Gaia: The next century, MIT Press, 2004, p. 174
- The arrangement of atoms in a lump of coal represents a gradient compared to the ash, water, and dispersed heat that will be left after the coal is burned.
- Wood is a gradient in a couple of senses. First, the material can be burned just like coal, with similar results. Second, the organization of those atoms creates something that can be used as a building material.
- Plants in general represent non-random arrangements of molecules that are potentially useful either to humans or some other animal.
- Animals themselves represent gradients, sources of energy and useful molecules (e.g., proteins) for whatever eats them.
- A dam creates a pressure gradient between the water behind the dam and the water below it.
- Fertile soil is a non-random arrangement of matter that supports stronger plant growth.
- Ore deposits represent a gradient between the relatively high concentration of, say, iron or copper in the ore and the much lower concentration of those metals in a random piece of the earth’s crust.
- For almost all terrestrial ecosystems, the ur gradient is the solar one, the energy carried by photons radiating from the sun, compared to the background experience of something not similarly in the path of light from a nearby star.
Humans are similarly dependent. If we go far enough back in our biological history, we are pretty much devoid of “technology” outside of our bodies. But as early as the control of fire and its application to food, we were using technology to improve our ability to use the gradient in the animals we hunted. In we effect, we moved some of the process of digestion outside our bodies, making it an exosomatic process, meaning that less of the energy in the meat had to be used for endosomatic digestion and more was available for everything else our bodies needed to do.
And tools from traps to spears allowed us to hunt more easily, or hunt animals we could kill with just our bodies.
These prehistoric technologies set the pattern. Cooking fire improved our utilization of gradients. Hunting tools made more gradients available to us. But first, those technologies did not call into being the gradients involved: they didn’t create the meat to be cooked, or the animals to be hunted. And second, they depended on access to some other gradient: fire required wood to burn; tools depended on the wood or bone of which they were made.
The same is true today. Fiber optic technology means that we can build our communications infrastructure using something as simple as sand; without it, we’d be running up against massive difficulties finding enough copper to accomplish even part of the internet revolution. But we still need some other gradient to provide the energy that allows us to turn the sand into glass.
And it’s those gradients we use for energy where it’s easiest to see some meaning of scarcity independent of human invention. The more concentrated an energy source is, and the more its rate and timing of flow is subject to our control, the more things we can do with it. As we moved from plants as our energy source to fossil fuels, we were moving from fairly dispersed gradients to concentrated ones, and from gradients where bad weather could lead to crop failure and thus unavailability, to sources whose flow was independent of the weather.
Today we face oil prices that are stubbornly at four to five times their 20th-century norm, and it seems that if we want to avoid climate catastrophe, we won’t be able to turn to coal and gas as replacements.
Ingenuity and effort should continue to improve our ability to capture and use wind and solar power, but the underlying physical reality is that these sources are more diffuse than fossil fuels and require either novel means of storage or a massive change in our willingness to use power when it’s available, rather than our present paradigm of making it available whenever we want it.
That is, there is a fundamental, exogenous scarcity of gradients that store as much concentrated, controllable energy as fossil fuels and that we can use without wreaking havoc on our descendants.
At his blog Do the math, UC San Diego physicist Tom Murphy has a very useful series of posts on what he sees as feasible options given contemporary scientific understanding and engineering ability (see the sections on “Alternative energy” and “Easier said than done” at his Post Index). The long and the short of it is that, from a physicist’s perspective, there’s a qualitative difference between the energy sources we’ve been relying on and the ones that are currently visible as alternatives.
It’s not that a resource pessimist can prove that we’re doomed. But if there’s an argument that we’re going to be able to release our current resource constraint on the supply side, I think it has to start by recognizing that past expansions of resource supply haven’t just been a substitution of one resource for another, but have generally been moves to more powerful gradients than what people had previously been using.
We may yet discover some powerful gradient that we’re currently overlooking. We may find ways to make significantly better use of the ones we already know about. But supply-side relief of our resource constraints can only come in one of those two ways, and neither one is something we can really count on.
If we do succeed along those lines, there’s the risk that we’ll use our increased power to further crowd out any plant or animal that isn’t something we can eat or wear. And the only thing then that would stop us from doing that would be a culture that had a sense of “enough.” But that’s the subject for a subsequent post.