The Truth is out there…

[Austrokiwi]

Growth economics



Imaginary future growth is needed to service yesterdays debt



The free market or the individual consumer, getting sick of it?

Debt can be written off as the credit crunch shows. Banks and other financial institutions that have to mark to market have written off money as their assets 9 including debt are revalued downwards, and financial performance predictions are being reassessed.

As Bob Kane states physical limitations do not necessarily limit the worls economic system ( though it would be very foolish to state that the two are completely disconnected) do not necessarily go together. A change in technology can render one industry defunct while a new one takes its place. Look at the process that occurred when refrigeration took over from ice houses and ice box's the ice industry disappeared while the refrigeration industry took over. In transportation: the pollution problems that threatened large cities disappeared when the car took over from the horse. Like wise some thinkers are pointing out we may be starting to see the switch from fossil fuel based transportation to more sustainable forms (electric and biofuel).

The dot com boom reflected the hopes for the information economy though it did not meet all hopes{yet}. It demonstrated that Growth can spread to resorces other than purely physical. In the end, I believe it is the transactions between people that create the opportunity for growth. With increasing populations and the increasing penetration of information technology the potential for transactions has steadily increased. For a world wide economic collapse to take place I would think that the potential for transactions would have to be reducing.

Yes physical resouces are limiting but economies function through the imagination and actions of people and with all the possibilities that people can create growth can continue.

[Badger]

The debt is serviced by society in the end, one way or another *there is no free ride*

What resources and energy are required to run Bob's 10cent downloads?

Electric and bio-fuel have negative EROEI, so those thinkers arnt thinking their tinkering

Ice - a friend of mine had a Ice business and it was a rather lucritive niche business

The information economy happened with the advent of the printing press 1439

Energy and resources are interlinked with a means of exchange to facilitate smooth transactions of goods and services where they are required

[Gatekeeper]

Yes physical resouces are limiting but economies function through the imagination and actions of people and with all the possibilities that people can create growth can continue.

That's a very strange contradictory sentence Austro.

Here's a new one for you -

INMR - irreplaceable natural material resources – natural capital

No amount of wishful thinking or imagination will suffice.
We can't live on a download!

I know there will be new technologies, but the third law of thermodynamics rules ultimately. Did you know that in energy terms one barrel of oil replaces eight years of one single mans labour. How do you replace that?

Nothing has the bang for buck of oil.

The IEA (Intl Energy Agency) recently changed their tack on where we are heading:

After some six months of leaks and previews, the long-awaited World Energy Outlook report from the International Energy Agency (IEA) is finally out.
The agency struck a new tone of urgency in the report, as it sharply reduced its outlook for the growth of world oil production.

The opening paragraph was blunt and on the mark:

The world's energy system is at a crossroads. Current global trends in energy supply and consumption are patently unsustainable - environmentally, economically, socially. But that can - and must - be altered; there's still time to change the road we're on. It is not an exaggeration to claim that the future of human prosperity depends on how successfully we tackle the two central energy challenges facing us today: securing the supply of reliable and affordable energy; and effecting a rapid transformation to a low-carbon, efficient and environmentally benign system of energy supply. What is needed is nothing short of an energy revolution.

Well I don't see any energy revolution! I'm a keen watcher of the progress we are making and a keen investor in new technologies, but i have no doubts that we are headed into a lower energy using society, we will have no choice.
How does the needed "growth" for this current financial system fit in?
It doesn't. Energy will go where it is needed most and the "growth" mantra will be gone. You may laugh at sustainability (maybe you don't), but that is where we are heading like it or not.

You will see growth in certain areas, but shrinkage in others for an ultimate "No Growth" society. Nature has a way of sorting these things out. Just best to be prepared.

(Austro - have the Ruskies turned the gas pipe back on yet?)

[Bob Kane]

How does the needed "growth" for this current financial system fit in?
It doesn't. Energy will go where it is needed most and the "growth" mantra will be gone. You may laugh at sustainability (maybe you don't), but that is where we are heading like it or not.

You will see growth in certain areas, but shrinkage in others for an ultimate "No Growth" society. Nature has a way of sorting these things out. Just best to be prepared.

I still don't get it so I'll try another approach:
1. We have a 'growth mantra' financial system.
2. We have limited resources.

If we change the financial system to a 'no growth' system - will our resources become sustainable?
How would moving to a gold-backed system (as an example) help our oil and coal reserves? Would our trees would grow faster and our sheep fatter?
Or are you meaning that a 'no growth' system would limit the demand for resources?
Or would it put a limit on the resources available?

How do you handle a population increase in a 'no growth' system?

I appreciate the lessons you're giving me - just keep them simple so I can follow.

[Austrokiwi]

That's a very strange contradictory sentence Austro.

Here's a new one for you -

INMR - irreplaceable natural material resources – natural capital

No amount of wishful thinking or imagination will suffice.
We can't live on a download!

I know there will be new technologies, but the third law of thermodynamics rules ultimately. Did you know that in energy terms one barrel of oil replaces eight years of one single mans labour. How do you replace that?

Nothing has the bang for buck of oil.

The IEA (Intl Energy Agency) recently changed their tack on where we are heading:

After some six months of leaks and previews, the long-awaited World Energy Outlook report from the International Energy Agency (IEA) is finally out.
The agency struck a new tone of urgency in the report, as it sharply reduced its outlook for the growth of world oil production.

The opening paragraph was blunt and on the mark:



Well I don't see any energy revolution! I'm a keen watcher of the progress we are making and a keen investor in new technologies, but i have no doubts that we are headed into a lower energy using society, we will have no choice.
How does the needed "growth" for this current financial system fit in?
It doesn't. Energy will go where it is needed most and the "growth" mantra will be gone. You may laugh at sustainability (maybe you don't), but that is where we are heading like it or not.

You will see growth in certain areas, but shrinkage in others for an ultimate "No Growth" society. Nature has a way of sorting these things out. Just best to be prepared.

(Austro - have the Ruskies turned the gas pipe back on yet?)

ON the Ruskies: A few years ago Wien energy tried to push us to changing to natural gas. They told us it was wonderful and it would only cost us €1500 to create a connection from the middle of the street to our properties boundary; a distance of 1.5 metres!! As the house is a further 15 metres from the boundary and we would have to up date our furnace...........we decided it wasn't such a wonderful idea.............over the winter 2007/2008 the oil prices were a bit punishing ( thankfully we had the solid fuel furnace as well), but this year we are laughing!!! ( swings and round abouts!).

I am all for sustainability ( I can recall my tramping days on the west coast and the maxim always leave the hut well prepared (firewood ) for the next group).

I don't argue that the world is going to have a rough time weaning its self off Fossil fuels. I worked 7 years for the interantional Atomic Energy Agency and I was surprised to see what Nuclear energy can do ( and the waste though long lasting is considerably less that of a fossil fuel plant ( 1-2 years waste =the size of an Ice hockey puck). Please don't declare NZ is nuclear free: the sign ( if it still exists) on the way from Wellington Airport that said welcome to NZ nuclear free capital was a very bad joke: where is NZs main radiation lab located? NZ recently had to dispose of nuclear waste, at sea, after some material containers were damaged ( medical radioactive sources).

However the real possibility, if these international groups stop fantasizing, and get on with it is fusion..............problem is one fusion reactor would supply more power than NZ would need in the foreseeable future (I say fantasizing as some of the people I met involved with fusion technology were all going Sci fi and planning the development of autonomous robots that could repair plasma reactor walls while surviving neutron blasts and temperatures higher than the centre of the sun. It struck me that Fusion is more obtainable than the robots they were talking about.

I still don't accept that energy is a necessary component of a definition of money, so those who do will just have to accept I have a very different frame of reference. I see energy as a commodity.

I go back to my example of transportation and horses, intially the combustion engine was a poor replacement but in the end it had far more potential than the horse ( eg Farming technology) I don't doubt there will be disruption but there must be change.

The worlds economy I just can't see it collapsing ...........it seems to me that to do so would see us all back in a modern repeat of the dark ages. As for gold and silver these two commodities, as money, were seen as a brake on economic growth in the late 19th century.

[Austrokiwi]

By the way Wien energy did do something interesting. To dispose of rubbish they have a massive incinerator, its a Tourist attraction ( having been designed by Hundertwasser). The waste heat from that incinerator is turned to steam which is piped around the city heating houses and business's (unfortunately our area isn't supported).

[Badger]

As for gold and silver these two commodities, as money, were seen as a brake on economic growth in the late 19th century.

*Natures Money* it limits the amount of destruction in the enviroment and the pilage of resources.

Gold and Silver are a natural check and balance for other resources and there uses...

[Bob Kane]

1. The debt based currency system NEEDS growth so that more currency can be created to pay the interest on the previously created currency. (That sounds suspiciously like a Ponzi scheme).

To ignore the biggest Ponzi scheme ever. The current worldwide fiat system.
The system that has a very good chance of collapsing.

Steve, you seem to hold strong views on the fiat system.
I'm trying to understand your (and Badgers) point of view.
I've asked a few questions and I'm not seeing any replies.
Are you simply trying to preserve our resources and the fiat system threatens that?

Growth economics

Badger, I googled 'growth economics' and couldn't match what was returned with your post. Can you explain what you mean in a bit more simple detail?


Austrokiwi - since no-one is answering my questions feel free to comment and add to my understanding.
What do you think is meant by 'energy' in the financial system?

[Gibber]

What do you think is meant by 'energy' in the financial system?

Bob,
I'm not sure this will help. Steve Netwriter has previously pointed to chris martenson's crash course at http://www.chrismartenson.com/crashcourse

There is a chapter titled "The Three E's"
The Economy, Energy and the Environment.

http://www.chrismartenson.com/crashcourse/chapter-2-three-es

Then there is Chapter 17 which deals with Peak oil, Energy Budgeting, and Energy and the economy.

After taking Steve Netwriter's recommendation I have downloaded the course and gone through it. I believe the whole course is worth while. But the specific parts of the crash course I've just mentioned (Chapters 2 and 17) may give you some more information in the areas you have been asking questions about.

Hope that helps.

Regards,
Gibber

[Gatekeeper]

Sorry Bob, been real busy and haven't had time to reply.
Gibber's links are a great place to start. I wish something like that was available when I first started to look into the "sustainable growth" mantra, and our current monetary systems.

I still don't get it so I'll try another approach:
1. We have a 'growth mantra' financial system.
2. We have limited resources.

If we change the financial system to a 'no growth' system - will our resources become sustainable?

It wouldn't be a no growth system, but would be regulated (how I don't know)so we didn't get ahead of ourselves (as is the case now), where we have created money far ahead of production (borrowing from the future production with all the associated skimming by the paper pushers). If that future production fails to eventuate, well, look where we are now. The thin air money created must then be destroyed, and this is happening via de-leveraging, throwing the world into turmoil. Like a manic depressive! Highs and lows. This encourages misallocation of capital into non-productive areas. A wastage of very precious INMR - (irreplaceable natural material resources – natural capital).

eg: if one barrel of oil does the equivalent work of one man's labour for eight years, what is it's real value, and should it be used to make plastic doodags, that break the following week? Are we really looking out for our future generations?

How would moving to a gold-backed system (as an example) help our oil and coal reserves? Would our trees would grow faster and our sheep fatter?
Or are you meaning that a 'no growth' system would limit the demand for resources?
Or would it put a limit on the resources available?

I don't know if a gold backed system is what we need, still mulling that one, but I do realise that something needs to rein in the creation of new money and misallocation of capital. Maybe a new system would help limit the wastage of INMR. Of course you also have RNMR - replenishable natural material resources - natural income. So growth could be achieved in that area. There is your sheep and trees.

How do you handle a population increase in a 'no growth' system?

It's not a "no growth system", it's a "grow within your limits system". The "no growth" part will come naturally, nature puts the brakes on.

I appreciate the lessons you're giving me - just keep them simple so I can follow

.
I'm a learner too Bob.

[Badger]

Bob...

Steve, you seem to hold strong views on the fiat system.
I'm trying to understand your (and Badgers) point of view.


Badger, I googled 'growth economics' and couldn't match what was returned with your post. Can you explain what you mean in a bit more simple detail?

David Suzuki on the nonsense of economic growth, very simple, far better than any Badger babble....

...and Bob where all learning thats a good thing...I know I am...

Driving much of this destructive activity is the economy itself. Years ago, during a heated debate about clear-cutting, a forest-company CEO yelled at me, “Listen, Suzuki: Are tree huggers like you willing to pay to protect those trees? Because if you’re not, they don’t have any value until someone cuts them down!” I was dumbstruck with the realization that in our economic system, he was correct.

You see, as long as that forest is intact, the plants photosynthesize and remove carbon dioxide from the air while putting oxygen back—not a bad service for animals like us that depend on clean air. However, economists dismiss this as an “externality”. What they mean is that photosynthesis is not relevant to the economic system they’ve created!

Those tree roots cling to the soil, so when it rains the soil doesn’t erode into the river and clog the salmon-spawning gravels, another externality to economists. The trees pump hundreds of thousands of litres of water out of the soil, transpiring it into the air and modulating weather and climate—an externality. The forest provides habitat to countless species of bacteria, fungi, insects, mammals, amphibians, and birds—externality. So all the things an intact ecosystem does to keep the planet vibrant and healthy for animals like us are simply ignored in our economy.

No wonder futurist Hazel Henderson describes conventional economics as “a form of brain damage”.

For more information type into google *david suzuki economic growth*

[Gatekeeper]

No wonder futurist Hazel Henderson describes conventional economics as “a form of brain damage”.

That really made me smile

It's like watching "Dawn of the Dead" zombies!

[Steve Netwriter]

Steve, you seem to hold strong views on the fiat system.
I'm trying to understand your (and Badgers) point of view.
I've asked a few questions and I'm not seeing any replies.
Are you simply trying to preserve our resources and the fiat system threatens that?

Bob,
Apologies for the delay in replying, which is purely lack of time to get on here

I think Gibber's suggestion of the Chris Martenson videos is an excellent start. They are great for explaining the problems, but they do not go into solutions.

Can I suggest you splash out $35 and buy the book I have mentioned here:

http://www.propertytalk.com/forum/showthread.php?p=158942

I cannot think of a cheaper more complete answer to all your questions than that.

Steve

[SmallBrain]

I think it is not the fiat system itself the problem, but the way it's used and governed.

This piece from Bruce Sheppard is a good read...
http://www.stuff.co.nz//blogs/stirri...ions-on-banks/

[Steve Netwriter]

I think it is not the fiat system itself the problem, but the way it's used and governed.

This piece from Bruce Sheppard is a good read...
http://www.stuff.co.nz//blogs/stirri...ions-on-banks/

Yes, it's quite a good article. I had to scan through quickly.
But, It appears to suffer from several flaws.

1. It assumes that central banks are malign, and act in the people's good. This is not always the case. Take the US Fed, a private company, as an example.

2. It does not seem to mention interest (usury). The act of creating money and charging interest on it, but not creating the money to pay the interest, has fundamental repercussions. Namely the need for constant growth in order to create more money to pay the old interest.

3. Fractional reserve banking can be regulated. But Roger Douglas deregulated the NZ banks in 1980, allowing them to set their own fractional reserve !!!! The Reserve Bank of NZ does not even know what fractional reserve is being used now.

IMO this article misses the main points, as most do.

It is interesting that there has been an increased number of articles like that though. There must be something in the air.