Just a little thought

If economics was a science, and if economists paid any attention at all to the basic laws of physics and to what they might say about the size of the world economic system then they would realise that, sooner or later, it’s fixed. It may oscillate a little about an average level of activity but, to all intents and purposes it won’t alter — unless some amazing new, and very large, source of energy can be somehow injected into the system.  This is called the Law, or Principle, of Least Effort.  It’s when all of the variable factors within the system — some pushing it forward, some holding the system back — are in balance.

It’s therefore nonsensical to talk of a growing world economy — apart from temporary surges — because we don’t know where our present one is at.  It may be less than it might ultimately be.  On the other hand, it may already be too large.  We just don’t know at present because the industrial revolution, which started with a bang in Manchester at around 1780, is still far from played out in the advanced countries. We have yet to see the characteristics of a service economy when automation has gone as far as it can.

3 thoughts on “Just a little thought

  1. Keith,

    The energy stored in fossil fuels represents accumulated solar energy over very many millennia. There is another theory (abiotic oil) which holds that petroleum is being made deep within earth from natural minerals under great pressure. This is not taken seriously today. see:

    My point is that demand for produced fossil energy is currently lower than supply. Petroleum is at $ US 35/ barrel, and natural gas at $2 per 10,000 million British thermal units (mmBtu). It seems that energy is not the governor of economic growth at this time.

    1. Steve, — Slightly more oil was used last years than 1912/13. Energy inputs will always be directly correlated with physical activity unless during a period when a new more efficient method is being substituted. Keith

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