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Milton Friedman on Mineral Resource Theory (remembering a giant of social thought)

Editor note: Milton Friedman would be 98 this Saturday July 31. (He died on November 16, 2006.) This exchange with Robert Bradley–when Dr. Friedman was 91 years old–is testament to the mental powers of one of the greatest social thinkers of modern time.

Friedman had not met Bradley but was in the habit of actively communicating with scholars until his final illness.

I had heard that the great economist and social thinker Milton Friedman (1912–2006) was a prolific communicator with those who posed worthy questions to him. So when I got interested in mineral resource theory, which would culminate with my 2007 essay, Resourceship: An Austrian Theory of Mineral Resources, I asked Dr. Friedman in August 2003 about his views on the late Julian Simon (1932–98), specifically whether Simon’s work on resources, and his conception of the ultimate resource, merited a Nobel Prize in economics.

The discussion continued from there as I tried to flesh out his views of whether “depletable” minerals such as oil were somehow different from “nondepletable” resources. I believe Friedman agreed with Simon that there is no difference from a social science/business perspective. But Friedman disagreed with Simon’s assessment of the contribution of Harold Hotelling, who mathematically proved that the cost and thus price of a fixed resource in a world of perfect knowledge was ‘good’ economics. Read on….

FRIEDMAN TO BRADLEY, 9-4-03
—– Original Message —–
From: “Milton Friedman” <friedman@hoover.stanford.edu>
To: “Rob Bradley” <iertx@swbell.net>
Sent: Thursday, September 04, 2003 10:59 AM
Subject: Re: Questions for Milton Friedman

Dear Rob Bradley:

1. I doubt very much that Julian Simon would have been considered for a Nobel Prize in Economics if he had lived longer.

2. I think he probably should have been considered for a Nobel Prize.  He took a very independent position with little backing, dug deep and provided very good evidence for his predictions and expectations.

Sincerely yours,
Milton Friedman

BRADLEY TO FRIEDMAN, 9-6-03
Dear Dr. Friedman:

As a follow-up question relating to the below, I would like to better understand your view of natural resources and whether you think there is a separate economics of natural resources compared to general economic theory.

But first some background.

I have just completed writing a history of natural resource thought.  I summarize depletionism by looking at W.S. Jevons’ The Coal Question, Harold Hotelling, and other theories such as the bell curve of M. King Hubbert (a geologist) showing the life cycle of fossil fuel production.  Much of this is known at least peripherally by economists.

More originally, I also traced expansionism–a school of resource thought that has not been appreciated or formalized as such.  My “breakthrough” was discovering the writings of an institutional economist who was at North Carolina and then the University of Texas, Erich Zimmermann.  In his 1933 treatise, World Resources and Industry, he offered a “functional theory” of resources that argued that resource exist in the mind, not the ground.  That resources are dynamic concepts and come from subjective appraisals and changing technologies.  Instead of resources as a noun, think of the verb “resourcing” (my word, not his).  Zimmermann, anticipating Julian Simon by many decades, made the point that the greatest resource is the human mind–human ingenuity.

Thus Zimmermann (theoretically–see below) breaks out of the depletionist trap since resources are not seen as a blob.  If you think of resources as a fixed supply, you are caught in the depletionist trap.

Methodologically, his breakthrough is employing subjectivism rather than objective (fixed or given quantity) analysis–giving credence to a point Hayek once made that major advances in economics have come from new applications of subjectivism.

Thus Zimmermann to me deserves his place in the history of economic thought (very few know about him).  But his problem was going on to worry about overproduction and depletion in later chapters of his book, not understanding discount rates and capital values and that sort of thing.  So Zimmermann began a new paradigm of thought–expansionism–for others (Morry Adelman, Julian Simon, etc.) to independently advance.  I now am grappling with how to “close the loop” on this alternative view of the natural resource world.

Now to my questions.

Back around 1978 you wrote an essay, “The Energy Crisis: A Humane Solution” where you questioned the distinction between “renewable” and “nonrenewable” resources since oil, gas, and coal are “producible … at more or less constant or indeed declining cost because of the improvements in the technology of drilling and exploring and so on.”

This statement, during a time of record high oil and gas prices, was bold. It also predates most of the thinking of Julian Simon.  The person making the point was Morry Adelman of MIT who remained focused on production costs unlike so many Hotelling-inspired economists of the period.

1) How did you come to this view?  Was it because of Adelman, your own reflections given a number of studies that came out from the Paley Commission (1952) and books from Resources for the Future in the 1960s, or both?

2) do you believe there really is a natural resource economics in the sense that “depletable” resources have a fundamental difference from reproducible goods?

3) Do you believe, pending more research, that there might be an opposite “paradigm” (from depletionism) of resource expansionism where, indeed, natural resource prices on average can rise less than the rate of inflation because of the cascading effect of new knowledge and technology and expanding capital for mining?  There is a lot of evidence right now that resource prices from the 19th century to the present have increased less than the general basket of goods, but I am wondering if there is something systemic that can be theoretically anchored in the “nondepletable” and indeed expanding nature of knowledge and capital (in capitalistic settings).

4) Regarding #3, I wonder if there should be a prominent place in the economics Hall of Fame for Zimmermann, Adelman, Simon, and maybe a few others for helping to solve one of the riddles of economics, why “depletable” resources do not deplete, and maybe why “depletable” resources expand–or at least can expand over great periods of time.

I have a presentation at the annual Southern Economic Association meeting in November where I will outline these two “natural resource paradigms” in a history of thought speech, and everyone would be most interested in hearing your thoughts, your time permitting.

Best wishes, and many thanks, Rob Bradley

P.S. I have attached a PowerPoint illustrations of two heuristics–one of the “depletionist” bell curve and “expansionist” resource pyramid as a very simple way to contrast the two schools of thought.  Have you ever seen this heuristic?  Is it useful?

image

FRIEDMAN TO BRADLEY, 9-8-03
Dear Mr. Bradley:

The basic point I believe in your natural resource discussion is that the economic product in question is not coal or oil or natural gas but energy.

The question is, what is the supply curve of energy? The use of coal or oil is a simply a means of producing energy. The stock of coal, of oil, etc., is certainly in some sense finite, but that doesn’t mean that the potential amount of energy capable of being produced by whatever source is to be considered finite.

Energy will be produced in whatever way is cheapest at the time and as new means of producing energy are discovered the particular mode of producing energy will change from coal to oil to natural gas to atomic sources. That is the view expressed in the statement of mine that you quote.

In answer to your questions about that statement, I have absolutely no idea what led me to think of it except that it is straightforward simple economic analysis.

Re your second question, I do not believe there is a natural resource economics.  I believe there is good economics and bad economics.

Three, I do not believe what is involved is an obvious “paradigm.” The question is a factual one whether the long-run supply curve of energy (or other natural resource output), whether it is upward or downward sloping, is trending down.

I have not seen before the heuristics you attached. I do not find it particularly instructive.

Wish you luck at the November meeting.

Sincerely yours, Milton Friedman

————————————–2004————————————

BRADLEY TO FRIEDMAN, 10-5-04
Dear Dr. Friedman:

….  On a related matter, I must ask another favor and draw your attention to an important history-of-economic-thought matter.  It concerns the “mineral resource problem” (depletion) that has given rise to so much pessimism and alarmism.

Here is a simple four page article I wrote

http://www.energyrealism.org/running_out_oil.pdf

where I present a different way of viewing mineral resources.  I champion an institutional economist who was part of the University of Texas institutional school, Erich Zimmermann, who offers a different view of viewing resources from the Harold Hotelling “fixity” view and the “bell curve” of oil production of the late M. King Hubbert.

Two questions:

1) is the “functional theory of resources” (Zimmermann) a sound way to view the “mineral resource problem” (aka depletion) in your view.  Restated, is it “good economics”?

2) F.A. Hayek once remarked that major advances in economics have come from new applications of subjectivism.  I see the above as a challenge to the seductive objectivist, fixity view of minerals, whereupon each extraction reduces supply for the future.  Do you agree with Hayek’s methodological insight in general or in this instance in particular?

Your opinion will be important to share with other economists, and with your permission I will do so.  I feel there is some work to do in this area, even if it is just using the history of thought to get to a sounder base of thinking to address what is, once again, a major public policy issue.

Thank you so much, Rob Bradley

FRIEDMAN TO BRADLEY, 10-11-04
Dear Rob:

Mr. Zimmerman’s views are perfectly sensible  but I do not see in Mr. Zimmerman’s view an application of subjectivism. Indeed it is an implication of the Harold Hotelling analysis. On the Hotelling analysis a resource that is finite will exhibit increasing relative prices over time. In fact, oil has not done so; its price has been falling.  Hence, the Hotelling analysis implies that oil is not from an economic point of view a finite resource, that it is a producible commodity like most others which has an elastic supply curve, more elastic in the long run than in the short run. This point has been understood for a very long time.

This is good economics. I cannot see that it justifies a new category such as a “functional theory.”

I guess I do not agree with Hayek’s insight. I believe that most advances in economic theory come from attempting to explain phenomena which either were not important before or were not recognized as important before rather than from applications of subjectivism. Indeed, in this case, I do not see that subjectivism plays any special role in the correct analysis of the supply and price of oil. I have long argued that there is good economics and bad economics and that that distinction is basic much more so than distinctions between Austrian economics, classical economics, Chicago economics, etc., and I would add functional economics.

Sincerely yours, Milton Friedman

BRADLEY TO FRIEDMAN, 10-14-04
Dear Dr. Friedman:

The categories “good” and “bad” economics may not go far enough in my view.

I propose to take an additional step to delineate between technically correct (and worthwhile) economics and economics that is superior for real-world understanding and policymaking.  There is a lot of economics that is technically correct but misleading, even diversionary.  Such economics must be handled with great care, particularly with students and policymakers who need to get the big picture.

I believe that at least in an Economics 101 sense, “good economics” as you define it can be at odds.  Here is my example returning to Zimmermann versus Hotelling.

Harold Hotelling in his 1931 article complained that standard economic theory was “plainly inadequate for an industry in which the indefinite maintenance of a steady rate of production is a physical impossibility, and which is therefore bound to decline.”  He did not qualify this statement elsewhere in the article and even brought in the real world relevance of his demonstration.

Hotelling was wed to the fixity notion of resources, and not surprisingly, a whole literature developed in the 1970s looking for the depletion signal.

The collateral damage went further.  Some economists at Resources for the Future, previously a bastion of expansive-resource thought, fell into the depletionist trap of predicting that oil and gas prices had to rise.  And you know what James Schlesinger and others in government were saying.  This came out of the seductive demonstration of Hotelling in part, maybe large part.

Zimmermann’s “good economics”–which would have interpreted the 1970s price behavior in institutional terms–was completely lost in the debate, although M. A. Adelman and others brought in some of his ideas through the back door.

Thus as we return to a 1970s-type mentality, I am trying to resurrect Zimmermann’s approach as “better economics” to Hotelling’s “good economics.”

I am trying to get the profession to not look for a “depletion signal” and focus on property rights and other institutional factors to explain the change in petroleum scarcity.

I believe that you see the approaches of Hotelling and Zimmermann both as good economics.  Forgetting labels such as Zimmermann’s “functional theory” and Hotelling’s “fixity theory,” would you go so far as to say that Zimmermann’s approach is “superior” economics to Hotelling’s “good economics.”  Perhaps there are two answers: one as a theoretical economist and one as a historian of economic thought.

My answer is the same: I see better theory as real-world oriented and then can look back to see examples like the above (and like Schumpeter’s attack on equilibrium competition theory) as bad in practice as far as education and policymaking go.

Perhaps from the above there could be three rather than two categories: bad economics, correct economics, and good economics.

I appreciate this exchange and believe it will be a contribution to the history of economic thought.

Sincerely, Rob Bradley Jr.

FRIEDMAN TO BRADLEY, 10-15-04
Dear Rob:

If you use a tool that is designed well for one purpose for a purpose for which it is not suited, that does not detract from the goodness of the tool for its purpose. The same thing goes with economics.  Hotelling’s analysis is good economics. If it is applied properly to the case of oil it produces the right result, namely that oil is not as an economic matter an exhaustible resource. That result follows from the Hotelling demonstration that an exhaustible resource will have a price that is rising over time.

Since the price of oil was not declining over time, it is not economically an exhaustible resource.

Zimmerman’s using Hotelling properly and drawing the right conclusion rather than the wrong conclusion is good economics and to be applauded, but it is not a different kind of economics and it does not mean that his economics is superior to Hotelling’s economics.

I must confess that I tend to stay away from this kind of methodenstriet. I have always said that I would prefer to do economics to talking about how economics should be done or was done or is done.

As a matter of full disclosure, I should note that Harold Hotelling was my teacher. I took both mathematical statistics and mathematical economics from him. He was a great teacher and had a good deal of influence on me. I have no doubt that if he himself had applied his study of exhaustible resources and looked at the data, he would have come to the right conclusion from it.

Sincerely yours,

Milton Friedman
Senior Research Fellow
Hoover Institution
434 Galvez Mall
Stanford, CA 94305-6010

—————————-

A Look Back

What can I say about the opportunity to exchange such as scholar? And note the depth of his knowledge at such an advanced age. Milton Friedman died with his spurs on, as they say in Texas.

Friedman helped me in another way by endorsing a primer written by Richard Fulmer and myself, Energy: The Master Resource (Kendall-Hunt, 2004). He provided a quotation that was too late for the printed copy, but in the brochure we had his following words:

This splendid book effectively debunks the widespread predictions of energy doom. Its factual base is comprehensive, its exposition clear and straightforward, and its economic reasoning sound.

I think of these words on my rainy days. My, what a great scholar wrote them. And what a scholar I aspire to be having received them.

Long live Milton Friedman who would be 98 this July 31!

24 comments

1 Matteo { 07.30.10 at 7:04 am }

How is a discussion on energy possible without considering thermodynamics? Dr. Friedman’s statement “but that doesn’t mean that the potential amount of energy capable of being produced by whatever source is to be considered finite” is in fact wrong. Energy is only useful to the extent it is able to do work, and I suppose that’s what we are looking at here. (See “In the sciences, TANSTAAFL means that the universe as a whole is ultimately a closed system—there is no magic source of matter, energy, light, or indeed lunch, that does not draw resources from something else, and *will not eventually be exhausted* [1].) The art of interconnected thinking is hard, but economists need to look more at the facts coming from the physical sciences.

[1] http://en.wikipedia.org/wiki/There_ain%27t_no_such_thing_as_a_free_lunch

2 rbradley { 07.30.10 at 7:40 am }

Matteo:

I invite you to peruse the linked essay on resourceship. Your view is the natural science view; my view (and that of Friedman and Erich Zimmermann) is business and economics.

From the social viewpoint, minerals are ‘reproducible’ because they can be found and conserved to increase effective supply. The historical record supports the expansionist view of “resources are not, they become” and “resources come from the mind, not the ground,” as Zimmermann stressed.

Human ingenuity, the ultimate resource as Julian Simon said, is an expanding resource, not a depleting one, making minerals in human time frames not on a Hotelling-like increasing cost curve.

3 Matteo { 07.30.10 at 7:54 am }

Robert,

I really do appreciate your separation of views and while I’m not an expert in either, my point is that to formulate correct statements we need to integrate both views (and possibly others).

(I’ll give a read to the essay.)

4 Ferdinand E. Banks { 07.30.10 at 8:28 am }

Very few things that Milton Friedman said about anything made any sense to me. When it came to minerals and energy he was almost always completely wrong. In fact the saddest sight I remember in economics was when he gave a talk at the centennial of the Nobel prize, which included some of the most absurd statements that I have every heard about anything – to include those ridiculous statements that the little lefties were making whén I came to Stockholm, and which were mostly about the wonderful futures that stone age countries were going to enjoy. What made that centennial especially painful was that Kenneth Arrow was in the audience. Milton Friedman up front, saying every nuthouse thing that he could think of, and a giant in the audience. Needless to say, the real scientists who were present could hardly believe their ears, but as I have pointed out many times, they saved their laughter for later in the evening.

About thermodynamics and economics. I like to think that we hear so much craziness about nuclear because even economists who have studied engineering, have forgotten the value of thermodynamics. Those people who make fools out of themselves and their audiences know this. I was first in my thermodynamics class, but have no problem admitting that I have forgotten almost everything, however the little that I remember goes a long way. I tried to explain this “little” to my energy economics class in France a few centuries ago, but was informed during a break that it was “confusing”. That was when I became a dedicated teacher of finance.

5 Jon Boone { 07.30.10 at 11:44 am }

In any practical sense, energy supplies are infinite and they are always in motion, which is why energy is associated with heat or “thermo” dynamics. The trick is converting them to power, where, in any conversion process, there is a continual loss of pattern (entropy) that eventually chokes off the conversion process, thereby ending the supply of power.

The 2nd Law of Thermodynamics describes this process, which, ultimately, does require a “closed system.” There is much subtlety about this, however, both as a function of mathematics and in terms of the real nature of our cosmos, for current informed speculation posits that our local universe (I know, this seems paradoxical) may be infinitely expanding, and therefore may not be the “closed” system we once thought.

But in terms of machine power performance over any reasonable time horizon, the systems are closed and the 2nd Law must prevail.

We can, though, move from one energy source to another as Friedman suggests, limited by the laws of physics and our creative imaginations, which have moved us from the plow to the moon, from horses to photons, from bearskin to Givenchy. Among other things….

Nice post, Matteo.

6 Ferdinand E. Banks { 07.30.10 at 1:30 pm }

The only thing that I can remember Friedman suggesting about energy was that OPEC would collapse, and the price of oil would fall to about $5/b. Better check out some of my books or articles to get the exact quotation, Mr Boone. As for our creative imaginations, the less said the better.

7 rbradley { 07.30.10 at 1:35 pm }

Milton Friedman may well have been wrong on OPEC, as were other free market scholars, but who knew that US-side government intervention (price and allocaiton controls) would have subsidized OPEC in the 1970s?

The drop in oil prices beginning in late 1981 and the crash of 1986 (from around $28 per barrel to under $10 per barrel in a matter of months) was the delayed response that could have come sooner under a US-side free-market energy policy.

P.S. If Friedman said $5 per barrel in the mid-1970s, that might not be far off from the what actually occurred around March 1986, the nadir.

8 John Droz { 07.30.10 at 1:42 pm }

For anyone interested in vintage Friedman, they should watch this fascinating interview of him by Phil Donahue, where Friedman speaks out against Ralph Nadar (and environmentalism) “http://www.youtube.com/watch?v=E1lWk4TCe4U&feature=related&fmt=22″.

9 Ferdinand E. Banks { 07.31.10 at 3:12 am }

I don’t see any point at all in pretending that Friedman knew anything about energy or natural resources. On those topics I’d rather listen to Nader, because although Ralphie doesn’t know anything either, he might provide my good self with a laugh or two.

10 Ferdinand E. Banks { 08.03.10 at 10:29 am }

I never heard of Erich Zimmerman. I have held visiting professorships at 12 universities, and was a foot soldier at two or three others, which means that I spent a lot of time in university librairies working on my books, since my family was not always with me. I never heard of the guy, and on the basis of what I have read here, I don’t want to hear of him.

I have of course heard of Hotelling, and read his famous article from 1931, and derived his result using the calculus of variations and dynamic programming. I don’t know of anyone who did the latter, however I don’t worry about that because the result is trivial no matter who derives it, or what mathematical technique they use. Incidentally, the OPEC people once cursed Hotelling because they thought he said that the price of oil would always increase – which….

As for King Hubbert, I don’t see how anyone can fail to accept his reasoning about the behavior of oil production, assuming that they are as familiar with it as I am. At the same time I am ready to accept that he was lucky to get the year for the peaking of oil in the ‘lower 48′ correct, just as I was lucky to predict of the price of copper at some point in the past.

11 GM { 08.04.10 at 8:10 am }

The curious case of Milton Friedman and energy is the best demonstration for a number of things:

1. That a Nobel prize does not mean you are competent to speak about, much less have authority, on issues outside you are of expertise.

2. That economics is a fatally flawed wannabe-science discipline because the majority of people practicing it live in a fantasy world in which the laws of nature do not exist

3. That there shouldn’t be such a thing as a Nobel prize in economics to begin with

How anyone can have the temerity to say with a straight face that “limits only exist if you look at it from the scientific point of view, from an economic perspective resources, including energy, are infinite” is beyond me. News flash – in the real world it is the scientific “point of view” and the laws of nature it is based on that determine what happens. You can’t eat money (much less the ones that aren’t even printed) and as much demand as there is for an immortality pill, nobody has developed one so far.

If people actually understood the second law, they would have never come anywhere close to the absurd views promoted on this website. You shouldn’t even think in terms of energy, you should think in terms of entropy, it is more or less the same, but it helps see the problem with the “resource pyramid” much more clearly. Yes, energy isn’t lost, but the total entropy of the of a closed system always increases, and you need to constantly fight that entropy increase if you are to maintain any complex system that is not in thermodynamic equilibrium such as your human bodies, infrastructure, and human civilization in general. But the further you go down the “resource pyramid”, the higher the entropy of the resource. It should be obvious to everyone, but it somehow isn’t, because this is seen as another “point of view”. It is not, it is how things work in the real world and how they have been working for 13 billion years before Adam Smith was born…

12 rbradley { 08.04.10 at 9:43 am }

GM:

This is a revealing and a not-all-surprising comment from the physical science viewpoint. You are missing the real world of economics and business where human ingenuity is the ultimate resource.

I would urge you to read and study my “Resourceship” article:
http://www.politicalcapitalism.org/aboutrb/Resourceship.pdf

13 GM { 08.04.10 at 9:45 am }

You can’t argue with people who have lost their mind.

It has no doubt been explained to you numerous times (and I just did it briefly too) why the whole “ultimate resource” thing is complete BS, yet you are so brainwashed that you can’t understand why this is so

14 rbradley { 08.04.10 at 9:52 am }

GM

Anger and emotion works against you and is not what this blog is about. Empirically, what minerals have failed the human ingenuity test in free-market settings as far as cost, price, or quantity?

(Data, not emotions please)

15 GM { 08.04.10 at 10:01 am }

Every single one, the most important being oil, topsoil and water.

At the very least, if human ingenuity had never failed us, there wouldn’t have been dozens of civilizations who collapsed due to ecological overshoot.

16 Jon Boone { 08.04.10 at 12:17 pm }

GM:
In my previous post to this article, I discussed entropy a bit. The concept as embedded in the 2nd Law does require a closed system and it does require, for every energy to power conversion, ever increasing entropy. So, yes, one can–and does–run out of particular fuel sources. But since the ability to do work (energy) can neither be created nor destroyed, there will ALWAYS be energy sources around that can be converted to power, even if this going back to axes and oxen.

Our ingenuity as a species has been honed by hard experience. After depleting the land through ignorant agricultural techniques (think, Fertile Crescent), after devastating millions of acres of forests (the USA, Canada, Europe), after poisoning thousands of aquifers, etc, etc, we’ve more recently sought “fuels” with greater energy density, allowing much more bang for the buck while attenuating the risk. Hence, our love affair with coal, natural gas, and oil. Given our desire for prosperity, I daresay that the future will be bound up with nuclear technology, after a long wallow in ideological purgatories and some scares over depletion of fossil fuels, since nuclear, in terms of human time spans, seems to defy the 2nd Law–or at least holds it at bay.

As for economics, I agree it is a wannabe discipline and, for many reasons, its practitioners should not be given (who’s best) prizes, for the same reason that subjectively judged sports should not be awarded gold, silver, and bronzed medals. On the other hand, I don’t think you should throw this baby out with the muddied bath water, despite its voodoo qualities.

For me, the value of economics stems from its analytic methods, which allow for a rational means to share ideas and evaluate them in a variety of ways across a range of values. Economics, broadly applied, is a kind of metaphysics, but one that should, ultimately, engage the empirical world of evidence. To test its hypotheses, one can make probabilistic predictions. However, given all the complex factors that must be incorporated and properly assessed, including the cultural/political/social, it is not at all clear that economics can achieve anything beyond being an assessment tool.

Much like climate “science”….

17 GM { 08.04.10 at 2:45 pm }

In my previous post to this article, I discussed entropy a bit. The concept as embedded in the 2nd Law does require a closed system and it does require, for every energy to power conversion, ever increasing entropy. So, yes, one can–and does–run out of particular fuel sources. But since the ability to do work (energy) can neither be created nor destroyed, there will ALWAYS be energy sources around that can be converted to power, even if this going back to axes and oxen.

It is strange that that kind of statement comes out of the mouths of economists (I guess you lean towards that kind of animal, if you aren’t officially). Ignorance of physics, geology, biology and ecology are among the defining characteristics of the species, but innumeracy is typically not, while that’s exactly what you are displaying here.

How much power exactly do you think can you get from axes and oxen and how does it compare to the energy needs of humanity? Given that the power of axes and oxen is really derived solar energy passed through many transitions and dissipations….

18 Jon Boone { 08.04.10 at 4:33 pm }

I’m not an economist or an ideologue, GM. But I have a pretty fair idea of the 2nd Law and its implications, and nothing I have stated is innumerical. Everything “needs” energy, including humanity. But energy is simply a given, no matter what species of flora or fauna, no matter what photon phase at question. Energy IS. What people (and everything else) especially seek, though, is power, an improved ability to do more work faster and more efficiently. There was a time not that long ago (certainly not 13.7 billion years) when axes and oxen did satisfy a large portion of humanity’s power “needs.” And for a large portion of people today, they still do. There is indeed a not insignificant number of so-called environmentalists who think that a return to this level of power usage is the only means to save the planet–and point mystically to the 2nd Law as justification.

So, when southern plantation owners depleted the carrying capacity of soil by rapaciously growing cotton and when the Civil War took away their slaves, the cheapest possible human power sources, people there had to cultivate other sources of energy, and convert them to power in order to keep up their–uh–standard of living. So they now mine coal and pump oil and natural gas, trading these for other sources of energy by which to convert into power.

Frankly, I’m not sure what your point is. Yes, the 2nd Law, which assures that even Black Holes can’t maintain their “closed” systems, will also assure that, if we use certain fuels beyond their replacement capacity, we will reach a point where they will no longer be available for power conversion. But we already know how to avoid reaching this point.

The power from the energy density of nuclear fission will buy humanity a lot of time from the imperious limitations of the 2nd Law, and allow all of humanity to share in the prosperity we in the West now take for granted. And, perhaps, one day, the knowledge of how to harness nuclear fusion at relatively low thermal energies, will give us access to power undreamed of today.

None of this provides any assurance that humanity won’t one day, sooner or later, achieve the fate of the Australopithecines. On Mondays, Wednesdays, and Fridays, I’m convinced it will. But on the other days, mostly, I’m hopeful that human ingenuity ingenuously will allow us, in some way or another, to prevail. It would be a grace note if this could be achieved while preserving individual freedoms across a range of activity, in the process extending our potential for ingenuity.

19 GM { 08.04.10 at 4:40 pm }

To put it as briefly as possible – agriculture driven by axes and oxen and without fertilizers can not feed 7 billion people, simple as that. Much less 10 billion. Which means that the difference between those 7 or 10 billion, or whatever the peak number is, and the number of people that can be fed on a planet with dead oceans, degraded soils, collapsed ecosystems and depleted fossil fuels and minerals ores, will have to be made up by what is usually called “excess deaths”. Since nobody dies voluntarily, this has certain unpleasant consequences…

20 Ed Reid { 08.04.10 at 5:24 pm }

GM,

There is little doubt that we could not return to functioning as a hunter/gatherer society unless we began by hunting each other first.

21 Jon Boone { 08.04.10 at 6:40 pm }

Perhaps. But what a strange elliptical conversation. There is no NEED to return to such an existence, and not much of a desire, fortunately. It may eventuate, perhaps because of some impulsive masochism (a la Lord of the Flies), or asteroid impact, or other sort of disastrous clysm, such as a huge volcano. According to the DNA record, there was a point around 75,000 years ago when the number of homo sapiens evidently crashed to only a few hundred individuals, clinging precariously to existence along the west coast of Africa.

There may be cultures so noxious that people within them will ignore signs of overuse, such as may have happened on Easter Island and the great Mayan city-states. Draining the aquifers of the country to provide water for golf courses and retirement communities in Arizona may have hubristic consequences. But I hope not.

Although there are environmental cultists who preach a Calvinistic strain of eschalology, in the process weirdly comforted by the notion that billions of people deserve to die because of the way their lifestyles have so rudely treated Gaia, I’m not one of them.

Humanity has developed over the last 100,000 years standards of conduct that provide for values I cherish, not least ones that ennoble what we can do by helping release the best, most civic potential in every individual. This is not idle chatter. Contrast the fate of a woman born in Hastings, England in 1067 with the fate of a woman born in Lincoln, Nebraska today.

Human ingenuity, for all of its ability to wreak havoc, is also wonderfully poised to serve as a steward for, literally, a more enlightened world. And it is quite capable of learning from the 2nd Law (economists notwithstanding), in the process converting energy into power in ways accessible to and affordable by all while minimizing the impact to the most sensitive ecosystems and wild nature.

Best wishes, GM.

22 Indur M. Goklany { 08.05.10 at 10:16 pm }

GM { 08.04.10 at 10:01 am }

Every single one, the most important being oil, topsoil and water.

At the very least, if human ingenuity had never failed us, there wouldn’t have been dozens of civilizations who collapsed due to ecological overshoot.

RESPONSE:
Please illuminate us as to which civilization has collapsed because of lack of oil? I am not aware of any. And if any failed because of loss of topsoil or water, they failed not because of human ingenuity but rather because they lacked enough human ingenuity, which includes not just technology but
trade as well.

Finally, we don’t know for certain that human ingenuity will always come to the rescue, but we can be confident that if human ingenuity won’t, nothing else will. That’s why we should be open to human ingenuity, and its possibilities. And that is why rejecting technological possibilities such as genetically modified crops or nuclear energy based on religious or environmental taboos only makes it harder for civilizations to be sustained.

23 GM { 08.06.10 at 11:07 pm }

Indur M. Goklany @ 22:

Those are words of people in desperate need of mental hospitalization.

24 Milton Friedman on Energy | Resourceful Earth { 07.31.12 at 2:36 pm }

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