Yesterday, I pondered on what would have happened if the insane reality of Net Zero could have been forced on humanity. That will never happen, so it was just an entirely theoretical situation. However, I was intrigued by the idea of virtuous and vicious technology cycles. A virtuous cycle is one where we do something that then makes it easier to do the same thing. So, things get easier and easier, or to put it another way, more and more resources become available. A vicious cycle is one, where we do something that makes it harder to do the same thing again, and then it become harder and harder.
A simple virtuous cycle is working out ways to get cheap energy from fossil fuels. That enabled technology to be developed that made it even easier to get cheap fossil fuels, and, we have been living through that virtuous cycle for the last several hundred years.
Traditional economics … using money as the measure of an economy, doesn’t work well with technology. The reason for this is explained with this scenario. A company buys the mining rights to a mineral, whose reserves are worth £1billion. They buy it as £100million and expect to spend £600million extracting and refining the mineral. But, as they begin mining the mineral, someone else is also mining the same mineral, but at a fraction of the costs. The result is that the market is flooded with that mineral, the value of the mineral plummets, the figures no longer add up and the mine goes bust.
This kind of scenario is particularly problematic with energy, because energy is so intrinsic to everything that happens in an economy. So, as the availability of energy changes, the cost of energy changes, and the cost of everything changes because everything in an economy depends on energy.
In simple terms, if you have twice the energy availability, it doesn’t matter how much money you have, you have twice the size of economy, so long as energy is the main constraint on the growth of the economy. The value of money will adapt to match the real economy, whose main constraint is energy. So, I invented “enerconics” to measure economic activity via energy flows, and not via the fiction of money.
The reason enerconics works, is because energy is one of the main constraints on economic activity. So, for an economy to grow, there has to be a virtuous energy cycle … we invest energy to get even more energy availability. For an economy to shrink, we enter a vicious energy cycle … we waste energy creating a situation with even less energy, which then leads to less investment in energy and less and less energy in the future. Less energy means a smaller economy means economic decline.
But, energy is not the only constraint on an economy.
But, first an aside … the efficiency with which we use energy can increase economic output for the same energy usage. But, because energy efficiency is extremely hard to improve there is not a lot of growth that can be achieved by energy efficiency – and often, all we do is invest a lot of energy upfront to reduce demand over time … often causing an INCREASE in overall energy (like Photo voltaics). PV might look good as it appears to create economic growth (when measured using money), but when we look at it in terms of enerconics it’s utterly mad to spend more energy building PV than it ever produces.
Back to the point … energy is not the only constraint. All minerals, and even skills and for example availability of land are to some extent constraints on the economy. Some constraints, such as the lack of land in a city, can be “got around” by measures like building up, down, or out. By improving transport infrastructure to enable larger cities. So, they are not hard constraints, because there are “ways around them”.
But, something like energy, is a total constraint, because you cannot have an economy without energy. However, one particular form of energy is not itself a constraint. Because one type of energy (oil) can replace another (coal), but often not easily. For example, whilst it is relatively easy to replace a coal fire with an oil fired boiler, coal is used to producing coke which is used to smelt steel. It would be much harder to smelt steel with oil.
But, the same may be true of things that few people realise are critical to an economy. One example is ball bearings. In WWII, the allies realised that if they hit the ball bearing factories that were critical to all moving machinery in Germany, then the Germans could not produce any moving machinery. Whilst the ball bearing was a relatively inexpensive item, without the ball bearings, none of the equipment would function. So, taking out the ball bearing factories of Germany would destroy the TOTAL armament production of Germany.
Today, the same might be true of certain minerals. I am not familiar with modern usage, but it may be that a mineral like Gallium, used in semiconductors, used in most computers, is critical to all modern equipment. Or, it may be that Gallium is only replaceable by a couple of other minerals, and, as a group they are critical to all modern equipment. If so, these minerals are also an utter constraint on the modern economy. As, such, it would be possible to reframe “enerconics” to use these minerals as a measure of economic activity, because they constrain economic activity. As such, there will be vicious and virtuous cycles.
How can there be two constraits: Energy and Gallium? The answer is there cannot. So, there is not one thing that determines the size of an economy. But think of it this way. If the allies had halved German ball bearing production in WWII, that would have halved the available machinery. But, if the Germans had doubled ball bearing production, that would not have doubled the available machinery, because so many other things are also needed to make machinery. So, constraints hold back and economy, but they often stop being a constraint if they are in abundance. So, we only notice energy is an economic constraint during times of energy shortage. So long as we have virtuous cycles increasing availability we do not notice critical constraints … but we do when they become critical and that is when we enter vicious cycles when it is far harder to do anything.
But, for the purposes here, I will assume the one key mineral is Gallium. Then if it takes one tonne of Gallium to create the economic infrastructure necessary to mine two tonnes of Gallium, then we have one tonne in, for one tonne out … if some of the equipment can be reused, then we have a virtuous cycle as the total amount of Gallium in the economy grows. But, if we get less Gallium out and cannot reuse the Gallium in the equipment that was used to mine the Gallium, we have a vicious cycle and decline of Gallium. Eventually, if that situation continues the economy must collapse.
Picking the Easy Fruit
It is inevitable, that when people go out to look for resources such as energy or minerals, that they pick the easy fruit first. So, the Romans, when they went out to look for lead, they exploited the easily mined deposits, These then ran out … the Roman empire collapsed, and it was not until the availability of cheap energy to run mine pumps that deeper deposits could be exploited. Then the easiest of these were exploited, then the more difficult = costly = energy costly. But, as the price of energy came down, and the efficiency of mining increased we didn’t see the costs rising.
The problem with mines, is that unlike fruit, they do not regrow (at least not over human timescales). So, having picked the easy fruit available with the 17th century economy, we cannot now go back to a 17th century economy and use the same mines … they just do not exist. The mineral resources the 17th century economy needed have disappeared. Likewise the Romans picked all the easy fruit using Roman technology.
The only reason we still have mineral resources, is that we kept getting cheaper and cheaper energy, which allowed bigger and deeper mining, which EXPANSION of energy use has expanded our ability to mine and that has kept making another mineral resource available …. SO LONG AS ENERGY USAGE CONTINUES TO EXPAND.
But, if we attempt to go back to a lower energy usage economy … we have mined out the mines that could be easily mined with that lower energy usage. They went … that is why we needed to invest more and more energy to get the minerals.
Now, what happens, when we exploit all the Gallium mines (to use it as a possible example of a critical mineral), and there is no Gallium left, except by a much much greater investment … and we do that, at a time that the morons in government are reducing energy availability? The answer is economic collapse, not because the big things like energy disappear, but because a “small thing” like Gallium become unobtainable.
And, I use Gallium, because I know it is part of III-V semiconductors, but I know there will be other ways to do the same thing. But, the more complex an economy, the more “small things” like Gallium there become, which, like the German ball bearings, seem not to matter to the moron politicians, until they are not available … and then the whole economic infrastructure of the globe crashes.
Replacability
Here is a theoretical question … to what extent are the small things like ball bearing replaceable? As a technologist, I know a lot. I know far more than most people about what is used in an economy … but I still know very little about the modern technology. But, I know a LOT LOT less about what could replace the modern technology we now use, if the need arose.
Energy cannot be replaced … that is why it is so useful as an economic measure. It cannot be replaced, because the laws of physics do not allow it to be replaced.
Ball bearings, are very hard to replace, but there have been other ways to do the job that bearings now do. For example, wheel axles used to just fit into a hole and turn. A lot more energy was lost, the top speed was much reduced, the speed of wearing out was a lot higher and so breakdowns and reliability was a lot lower. But, it is possible to do without ball bearings. But it isn’t possible to have modern equipment and machinery without ball bearings. So, as a class ball bearings are hard to replace. But, we can replace one type of ball bearing with another.
Gallium is a mineral that is used in modern semiconductors. It too is hard to replace, but usually there is an alternative way that doesn’t use something like Gallium, but the cost (energy used) goes up. If the cost goes up, it means we push the economic scales from “virtuous” cycles toward “vicious” cycles. The economy does not come to a grinding halt. But, if the economy, as a whole, moves from the virtuous cycle we’ve seen for the last few hundred years, into a vicious cycle, then we get economic collapse. Not economic collapse, in the sense people now use the phrase, to mean a few years with growth. Instead economic collapse in the sense we move from a virtuous growing phrase, into a vicious declining phase where we lose the ability to mine the key resources needed for the modern economy, and we are unable to go back to a previous state of the economy, because we’ve exploited all the mines and resources that could be exploited in that previous state of the economy.
The Tree analogy
I am trying to think of an analogy … the best I can do on the spur of the moment is to liken our situation to a man climbing a tree (daft I know … but needs must)
Imagine a man who begins to climb a tree. As they climb, they cut off the branches to create handholds etc. to help climb. As such, they use all the “easy fruit” from the lower branches to help reach the “higher fruit”. But, as they climb, they get more and more material to help climb. So, they continue easily up the tree.
Then, imagine … for some reason that material rots, or in some other way becomes unavailable … perhaps they burn it for fire. Whatever … they have climbed up easily, but now they have exploited all the wood, and they want to come down the “technology tree”.
Except … they have removed all the lower branches. Whilst there was more and more resources so long as they were moving up, there are no resources if they want to move down the technology tree.
That may be the situation of modern humanity. We can progress and progress, meaning we use more and more energy, but, we cannot regress, because we’ve used all the resources that would be needed for a “lower state” (previous lower energy usage state) of the economy. Now, an economy is probably more like climbing a cliff, and then trying to climb down, because there may be other routes down than the one climbed up. But there are still going to be key resources, like copper, that have been entirely exploited using simpler states of technology. We cannot go back to a simpler way of mining … because we’ve exploited everything that could be mined with a simpler state. There might be other ways to do the same thing, but earlier generations did a pretty thorough job of exploiting all they could get hold of using their simpler economies … and we would find it extremely hard to do better than them.
So long as humanity was “progressing” up the tree, we were using more and more energy to reach resources that no one could tap before. But, if we attempt to go back to a lower energy economy, we will be competing for resources, not just with the rest of the globe, but with the past … the past, that had the advantage of being first and got to almost everything before us.
That is the thought I had today … to what extent will there be resources, that were not discovered by previous generations, that could still be utilised by humanity if .. indeed, when, we go into a vicious cycle of declining energy availability? To what extent is modern mineral exploration dependent on high energy availability for items like planes and satellites. To what extent do we need to invest more energy to find new resources?
To what extent is the climb down “difficult” or a precipitous fall?
Don’t think “Someone is thinking about it …”
Somewhere, someone, may have considered what happens when something runs out. And, they will have reassured themselves that “someone is thinking about it”. Let me assure you. NO ONE IS THINKING ABOUT IT. In particular, the last few years of covid and teh climate bs, has shown that Government is not some well functioning body of intellectuals that have our wellbeing at heart. They can hardly make a credible decision about a coffee machine. Government is full of infighting, fads and stupidity.They can barely make a credible decision about the things that matter to them … let alone things of which they have absolutely no knowledge or interest.
There is no way on earth that “Government” is thinking about anything so utilitarian as what happens when critical economic resources run out.
Academia are worse. Politicised nut cases with NOT A CLUE about manufacturing. They are the ones creating the government fads into meaningless woke nonsense. They have NO INTEREST in the real economy of real things. The couldn’t care less about current mining and manufacturing … they have ZERO interest in the real economic future.
The simple reality, is that there might be … is it 8billion people? But I doubt anyone else (at least in the west) is considering what I’m considering. My views are based on my own uniquely personal analysis of the critical parts of an economy. The only places people might be considering what I’m considering, is in countries that still value manufacturing.
And particularly don’t believe the US fairy-story of “cost of technology always reduces … so there is no need to plan for increasing costs”. Costs have been reducing for the last few centuries … that is true, but that isn’t a law. There are good reasons for that, and some of those reasons, like the steady increase in energy availability are not a given. Technology costs can and will go up. The question is not “if” but when and where and what and by how much … because it will not be all technology costs that increase. Even during the collapse, some things will still be getting cheaper … even if no one can afford them.
What brings about the end of civilisation?
The end of civilisation occurs when the numerous small and big virtuous cycles that have dominated the economies of the west for the last centuries get swamped by vicious cycles. As resources get used, that pushes us more toward vicious cycles, but we also stumble on ways that create new virtue. We cannot see what we will stumble upon in the future, but we can see we have done so in the past. All we can see, all we know about for sure, is that the resources we currently have will run out. So, looking at what we know, it appears that the end of civilisation is inevitable, even nearly upon us. But, it has always looked like that. For the last few hundred years, increasingly available energy has allowed us to constantly find new resources to solve the “resources are running out” problem.
Indeed, we have done so well at finding new resources, it is now almost a religious doctrine that new resources will always be available to fulfil out needs … as if “science” were some omnipotent god always giving us the next tranche of resources we need. That idea is total codswallop. The past availability of resources is not a law of the future inevitability of resources.
The question is this: what is the topology of the future. What new ways are there to do things, and will that topology have a pathway that is a virtuous cycle, or will the only pathways be vicious cycles of economic decline? So far, luck has given us a few centuries of virtuous pathway … but that is just luck. The Romans also had the same virtuous pathways … but they too came to an end.
Likewise, our luck will eventually run out. But only a soothsayer can predict when that will be. It could be this generation … or a thousand.
The only certainty, is that the morons in government and academia don’t have a clue about the reality when it runs out.