February 27, 2020

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Economic Sustainability: Ultimately about Energy

Continual renewal and regeneration of both physical and social energy are essential for economic sustainability.


The recent global financial crisis has raised widespread concern for the sustainability of the global economy and much has been written concerning the negative impacts of economic development on natural ecosystems and civil societies. Unfortunately, few viable alternatives to the prevailing economic paradigms have been suggested for consideration. Those that have been are typically little more than suggestions for fine tuning capitalist or socialist economies.

In his new book The Essentials of Economic Sustainability, John Ikerd addresses the basic principles and concepts essential to economic sustainability. Some of these concepts are capitalist, some are socialistic, and others are general principles validated by philosophy or common sense. What results is a synthesis: something that is neither capitalist nor socialist but fundamentally different. In part seven, he outlines the basic principles driving economies and what they mean for sustainability.

The Basic Nature of Energy

Economic sustainability ultimately depends on the sustainable use of energy. Meeting the needs of the present without diminishing opportunities for the future will require widespread understanding and acceptance of the basic nature of energy.

All physical things that are of use to people – food, lodging, clothing, transportation, – require energy to make and energy to use. In fact, all material things are simply concentrated forms of energy. In addition, all useful human activities – working, managing, thinking, creating, – also require energy, The Essentials of Economic Sustainabilityspecifically biological energy. About one-fifth of the total energy used by the human body is required just to fuel the brain.

Things have economic value only if they are functional or useful to people, and all things that are useful to people are derived from energy. Economies are not capable of creating anything of value; they simply facilitate the process of extracting useful energy from natural and human resources. Economic sustainability is ultimately about energy.

Entropy And The Economy

According to the first law of thermodynamics, energy can neither be created nor destroyed. Thus, sustainability might seem inevitable. However, each time energy is used to do anything useful, some portion of its usefulness is lost. This is the second law of thermodynamics – the law of entropy.

The loss of usefulness to entropy is inevitable and unavoidable. Whenever energy is used to do something useful, which physicists call work, it invariably changes in form. Specifically, it changes from more-concentrated, more-organized forms to less-concentrated, less-organized forms, as when gasoline is ignited in the engine of an automobile.

When the gasoline explodes, energy is simply expressing its natural tendency to dissipate and disorganize whenever it is disturbed. Sequential explosions power the engine and move the automobile down the road. This natural tendency to change from concentrated, organized forms to dispersed, disorganized forms gives energy its ability to perform work – to be useful to people.

Energy isn’t destroyed by use as stated in the first law of thermodynamics. However, eventually all energy becomes useless; it loses its potential to do anything useful and thus to produce anything of economic value. This is an inevitable and undeniable result of the physical law of entropy. 

An economy that depends on non-renewable sources of energy, most notably fossil energy, is not energy and entropysustainable. Beyond some point, its ability to produce things of economic value will diminish and eventually will be lost. Even as such an economy continues to grow, the energy needed to meet the needs of future generations is unavoidably diminishing and eventually will be depleted.

Solar Energy Offsets Entropy

The only source of energy available to offset the unavoidable loss of useful energy is solar energy, the daily inflow of energy from the sun. Thus, a sustainable economy must capture and store sufficient quantities of solar energy to offset the loss of useful energy, including the unavoidable loss of usefulness due to entropy. 

Currently available forms of solar energy include heat captured by various types of passive solar collectors as well as electricity generated by photovoltaic cells. Generation of electricity by wind and water is also sustained by solar heating of the earth’s atmosphere. The solar energy captured and stored by photosynthetic processes of green plants and other living organisms is of specific concern for sustainability, as it is essential for life. Life on earth, including human life, cannot be sustained without adequate provisions of energy from biological sources.

Economic productivity depends on the capacity of people to transform the physical energy available from nature into forms that are functional and useful to humans. The amount of economic value a solar energysociety is able to extract from a given amount of physical energy ultimately depends on the capabilities of its people – its human resources.

Energy use can be reduced, energy-based materials can be reused, and energy currently wasted can be recycled. However, no amount of human imagination, creativity, or innovation can eliminate the ultimate reliance of economic value on physical energy. People cannot create energy; they can only make whatever energy is available, including solar energy, more useful to humans. The economy is simply a means of facilitating this process.

Social Energy Builds Human Capital 

In addition, people are not economically useful when they are born; they are helpless infants. They must be nurtured, educated, socialized, and civilized for many years before they reach their full capacity as economically productive individuals. Many of these capacity building functions are beyond the capabilities of individuals. They must be performed by families, communities, and societies. It takes energy to produce productive people, specifically societal or social energy.

Social energy may be defined as the energy expended in maintaining positive, productive, human relationships. Positive relationships require physical and mental energy. Humans, being fallible beings, invariably degrade and deplete the quality of their social relationships through unavoidable mistakes, unintentional neglect, and avoidable abuse – a kind of “social entropy.”

Thus, relationships within families, communities, and societies require energy to maintain, energy to restore, and energy to replace.

An economy that fails to invest sufficient energy in the renewal and regeneration of society is not sustainable, no matter how much physical energy it may conserve, renew, or regenerate, as explained in The Essentials of Economic Sustainability.

Continual renewal and regeneration of both physical and social energy are essential for economic sustainability.


Part 6: The Essential Characteristics of Economies -- And How They [Could] Drive Sustainability

Part 5: The Three Economic Principles of Sustainability

Part 4: From Utilitarianism To Ethics: The Social Principles of Economic Sustainability

Part 3: The Three Ecological Principles of Economic Sustainability

Part 2: The Hierarchy of Economic Sustainability: Getting The Principles Right

Part 1: Ethics & The Challenge of Economic Sustainability

The opinions, beliefs and viewpoints expressed by CSRwire contributors do not necessarily reflect the opinions, beliefs and viewpoints of CSRwire.

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