Any thermodynamic critiques of capitalism?

[Cheese Guevara]

Is anyone familiar with any economists or scientists who've attempted to mount a thermodynamics based critique of capitalism? Frederick Soddy, Herman Daly and Nicholas Georgescu-Roegen come close, but I haven't seen anyone go further. Adrian Dragulescu and Victor Yakovenko are doing some work as well.

My feeling is that you can make a case for "money" being unethical simply by using the laws of thermodynamics (Peter Victor's computer models of capitalism do much to prove that capitalism rigidly obeys energy conservation laws, both literally (in terms of resources) and money (money as joules) ).


These laws are essentially this:


1. you cannot create or destroy energy, just move it from here to there.
2. energy flows from high energy to low
3. when you keep recycling stuff, you always get less and less energy back from the stuff until the stuff beomes inert and useless.
4. entropy, inefficiency and heat loss mean you always get less back than you put in. In aggregate, profit is impossible.
5. For any order to be created, there must be a corresponding and GREATER disorder somewhere else.


That's just basic physics. It's why stuff like perpetual motion machines are impossible. Capitalism, of course, pretends it's a perpetual motion machine. But physics says this is nosense. Indeed, physics says you can think of money as being a loose symbol for "energy". Money thus obeys the above laws. Things like subjective value and the velocity of money mean that money isnt an exact representation of energy, but it comes close.


You can demonstrate all this simply by modeling a debt based monetary system. Under such a system, like ours, banks and central banks create money at interest when they make loans. Here one eventually ends up with a situation in which, if X money enters the system, the system will owe X+interest back to the system's Source. This is a kind of paradox: already there is not enough money in the system to pay back debts owed to the Source. Akin to a Ponzi scheme, wealth must thus flow, or tend to flow, one way. To the Source.


On a purely macro-economic level, the Source wants more than it puts in and more than is available. It wants profit. On a micro level, individuals behave the same way. The end result is that for every human being to stay out of debt, another must go into precisely the same amount of debt. So on a purely micro level, money is unethical; you use money, you harm your fellowman. You stay out of debt under capitalism, you put debt onto others. It's not his choice. To me this is a key moral point: money is inherently unethical.

Some claim that abandoning debt/interest issued money will solve this problem. Most Marxists believe the sheer concept of profit will perpetuate the above problems and contradictions.

What I'm interested in is the relationship between the system's profit and its debts. I want to know if money is energy, then what is debt? What is the physics equivalent of debt?

Say Sam does 10 amounts of physical work with a piece of wood worth 5 amounts of work (whereby work is literally joules expelled by Sam, taking into account the food he must eat and indeed all the energy needed in aggregate to produce him and indeed even the piece of wood). After he's finished, he produces an object which is worth 15 minus entropy amount of work. So Sam spends 15 to produce less than 15. Physics says he cant produce more than 15. Lets say the commodity he produces is worth 10 amounts of work


So on the most fundamental level, no worker under capitalism can produce more value than they expel. Forget subjetive value. On purely objectively physical terms, a worker produces something worth less work than they put in.


But then Sam sells his commodity, worth 10 amounts of work, for 20 amounts of work.


So Sam does 10 work upon 5 work to produce 10 work which he sells for 20 work to a second party.


This is a typical transaction under capitalism. You have two parties, one who is selling/profiting and one who is buying.


But look at the energy equation between them. We see in this equation that 15 joules has become worth 20. The universe cannot allow this. Energy must always be conserved, so somewhere else, 5 joules is being "taken". Every two party transaction under capitalism, is connected to (at least) a third party from whom the owed energy is extracted. Keep adding more and more players to such a system and you eventually recrate the trophic triangle of Mother Nature, everyone dependent on someone who they are in turn extracting from. Keep zooming out, and debt itself must exponentially increase. For though profit is impossible, and physics is zero sum, the system claims its profiting. Claims it is getting more energy back than it puts in. These claims necessitate an increase in debt, whereby debt is the energy/money owed back to the universe, a form of bondage which is shunted further and further down the system, burried in dark corners, extracted from or pushed onto the flesh of future generations, until the system admits, occasionally, bashfully, that all profits come from, not stollen energy, but energy that does not even exist.


I forgot what my point was. What I'm mostly interested in is knowing if there are any economists who can prove that capitalism is more or less zero sum, that money literally is zero sum (aggregate money increases, but so does debt, inflation etc) or that have written about profit and value creation being "impossible" in the strict physics sense.

[Remus Bleys]

Capitalism isn't real the same way physics is.
And yeah, value is created. And it is destroyed.

[BIXX]

Also we shouldn't be critiquing capitalism from an ethical standpoint.

[Sabot Cat]

The Second Law of Thermodynamics only applies in an isolated system. Earth is not an isolated system, as it exists within the broader context of other astronomical systems; the universe is the only isolated system that we know to exist. Thus, criticizing capitalism on this basis is a rhetorical dead-end because of how large the universe is, as it's wildly improbable that the bourgeois could command the resources of the entire known cosmos for the second law of thermodynamics to be applicable.

[Cheese Guevara]

Okay, let's say the Earth is not a fully isolated system, but money is. Money is zero sum, and it is impossible for one person to stay out of debt whilst not pushing the corresponding debt onto another.

I wish I could post links (im a newbie- i need 20 more posts before I can post links). There are actually computer models which map money flow and show how capitalism functions as a giant heat engine, with money flows obeying thermo-laws.


"Capitalism isn't real the same way physics is."

It is, but it denies this truth.


"Also we shouldn't be critiquing capitalism from an ethical standpoint."

Why not? I, personally, came to Marxism backwards from physics and my belief in rigid ethics.

[Dave B]

I think you can use examples of thermodynamics to explain value, value can be compared to energy and likewise it is preserved in the production process.

Just as kinetic energy can be transformed into thermal energy and then potential etc etc.

The value embodied in cotton can be transferred as same value into the value of cloth and that same value can be transferred into a shirt.

With admittedly extra value being added to it along the way.

Also the value of a piece of linen is the same as a coat because the share an equal amount of a common property, embodied labour time etc.

And are thus different manifestations of the same thing.




[an expression used by a bod in a lecture on the higgs bosun that I went to this week at the institute of physics in Manchester.]


Just as kinetic and thermal energy are different manifestations of the same thing ie abstract energy; although they don’t know what that is yet and thus just denominate as a type of gold standard ie a joule.

It is the same with a “piece of iron and the sugar loaf”; they weigh the same because they have the same amounts of baryonic matter embodied in them eg neutrons and protons etc.

Although Karl didn’t know that at the time.

[argeiphontes]

with money flows obeying thermo-laws.


Banks are always putting more money into circulation. (Not just cash, but new money.)



"Capitalism isn't real the same way physics is."

It is, but it denies this truth.


He's right, it isn't. It's just a metaphorical critique. Maybe it has some pedagogical value but it's not an actual critique like Marx made.

[tallguy]

The first and second laws of thermodynamics are, ultimately, incompatible with capitalism due to the ignorance of the collateral damage done to the environment plus the massive external (but finite) inputs of fossil fuels. Indeed, fossil fuels are the main means by which the [temporary] denial of these laws has been possible.

First Law of Thermodynamics: energy can be changed from one form to another, but it cannot be created or destroyed.

Second Law of Thermodynamics: in all energy exchanges, if no energy enters or leaves the system, the potential energy of the state will always be less than that of the initial state. Otherwise known as "entropy".

In other words, the system is not internally sustainable. Although, I should add, the first and second laws of thermodynamics are arguably incompatible with civilisation...period. Hell, even life itself is incompatible, in the end, with those laws. However, as long as the sun shines, life can carry in as if that's not true.

Capitalism just happens to be the most egregiously flagrant example so far of the incompatibility with those laws.

[Cheese Guevara]

You have a whole field of ecophysicists attacking capitalism from new grounds. Tim Jackson has a computer simulation of capitalism which shows that money flow obeys thermo laws. Adrian Dragulescu and Victor Yakovenko have math models which show that money is "conserved" akin to energy. Yes banks print more money, but this is always counterpointed by more debt. There is no net gain.

"I think you can use examples of thermodynamics to explain value, value can be compared to energy and likewise it is preserved in the production process."

Yes. If we ignore subjective value and stuff like price fluctuation etc, the objective value of labour, sales, products and the overall movement of energy within the "free market" obeys thermo-laws. I think most will agree with this.

What I'm also saying is that money itself obeys these laws, and it has a tendency toward being zero sum. When I rack up enough posts I hope to post links and scans of books I have on these subjects.

"Banks are always putting more money into circulation. (Not just cash, but new money.)"

Yes, but print X money on one end of the table, and you create X+ debt on the other.

"Maybe it has some pedagogical value but it's not an actual critique like Marx made."

Well, Marx has only 1 line which homes in on money creation and he did not write much on environmental limits. I think most contemporary, middle class people hear Marx and dismiss him outright. They just can't fathom how Marx relates to their lives. Hit them with post neo-classical attacks on capitalism, however, and they are much more receptive. Tell someone how the monetary system works, how it has to propogate debt, or hit them with some Herman Daly, and you've turned them into a communist who doesnt know it. Yet.

"The first and second laws of thermodynamics are, ultimately, incompatible with capitalism due to the ignorance of the collateral damage done to the environment plus the massive external (but finite) inputs of fossil fuels. Indeed, fossil fuiels, are the main means by which the [temporary] denial of these laws has been possible."

Yes, but explain this to "capitalists" and they go on about "exploring space" for "minerals". Or using "nuclear energy".

What I'm obsessed with is money and debt though, their relationship, how they move and accumulate within the system.

[tallguy]

What I'm obsessed with is money and debt though, their relationship, how they move and accumulate within the system.You and me both mate.

Follow a dollar, any dollar and eventually you will end up in a field somewhere.

[Cheese Guevara]

Marxists dont like to talk about this for some reason. But if you simply prove that money is zero sum, people will jump to communism fast. People do not believe class-conscious arguments. They don't care. But they will listen when you explain capitalism must perpetuate debt and that profit has the same effect across the system as interest.

[Dave B]

Well, Marx has only 1 line which homes in on money creation...........


Karl Marx: Critique of Political Economy 1859

C. Theories of the Medium of Circulation
and of Money
http://www.marxists.org/archive/marx/works/1859/critique-pol-economy/ch02c.htm



Karl Marx: Critique of Political Economy

c. Coins and Tokens of Value

http://www.marxists.org/archive/marx/works/1859/critique-pol-economy/ch02_2c.htm

[Ocean Seal]

Value is a concept that exists within the human mind, thermodynamics is not.

[argeiphontes]

People do not believe class-conscious arguments. They don't care.

Class consciousness isn't merely about belief. There's this whole theory called "historical materialism" ;)

[Paul Cockshott]

check these out
http://arxiv.org/abs/cond-mat/0001432
http://arxiv.org/abs/1301.5974
http://spiritofcontradiction.eu/rowan-duffy/2013/02/06/interview-paul-cockshott-on-econophysics-and-socialism
http://arxiv.org/abs/cond-mat/0401053

[Dave B]

There are two types of value.

One is an array of essentially relative subjective, cultural, aesthetic, sociological; or ‘concepts that exist within the human mind’ etc.

The other is mathematical or scientific and is;

“An assigned or calculated numerical quantity”

An example, sticking to thermodynamics, would be “energy value or calorific value”


http://en.wikipedia.org/wiki/Heat_of_combustion

The question is then whether [or not] Marx’s value is an “An assigned or calculated numerical quantity”, of something ‘real’.

[I a find it hard to believe that paul cockshott is actually computer programmer; does ‘he write code’ or is he just a ‘systems analyst’ or something.]

For Karl at any particular point in time the value of a product is the amount of ‘effort’ measured in time that is required to make it.


it is a kind of 'LET' command thing.


Products ARE labour, as Karl shouts in Grundrisse, and labour can be measured in time.

That is not to deny that subjective human experience and time dependent or historical caveats leap in immediately even at the beginning and even before the manifestation of the effects of labour time value or ‘exchange value’.

Thus 5 hours of intense or skilled labour can equal 10 hours of general abstract human effort or abstract labour.

Socially necessary labour time mere makes cognisance of the fact that historically the value embodied in objects changes with time.

If you want to abandon the idea that a product, or commodity can be assigned or calculated, even hypothetically or theoretically as a diagnostic tool or model, as a numerical quantity of ‘abstract’ labour; then so be it.

We however should have an advantage over thermodynamics.

In thermodynamics ideally and imperfectly in practice potential energy exchanges of kinetic energy etc etc.

In fact it is that ‘exchange’,‘commensurability’ or equality, as observable phenomena that leads us to the ‘Greek’ Aristotelian logic and scientific conclusion that equalities are merely different, hidden and not fully understood manifestations of the same thing.

‘Thermodynamics’ with their “energy value or calorific value” have no idea of course what energy is and hasn’t even catalogued them all.

As a famous bio-chemist said these theoretical physicists have it easy; when they don’t understand something they call it ‘dark’ and move on.


We Marxist with our ‘value’ have an advantage however as we know what it is; it might be a bit fuzzy around the edges but at least it is a ‘concrete’ idea.

We also have an admittedly elemental and reductionist underlying explanatory mechanism of how and why the process oocurs.



For the simple commodity producer, the difference in the conditions of production in two different branches appear as different conditions for the engagement of labor in them. In a simple commodity economy, the exchange of 10 hours of labor in one branch of production, for example shoemaking, for the product of 8 hours of labor in another branch, for example clothing production, necessarily leads (if the shoemaker and clothesmaker are equally qualified) to different advantages of production in the two branches, and to the transfer of labor from shoemaking to clothing production.



Assuming complete mobility of labor in the commodity economy, every more or less significant difference in the advantage of production generates a tendency for the transfer of labor from the less advantageous branch of production to the more advantageous. This tendency remains until the less advantageous branch is confronted by a direct threat of economic collapse and finds it impossible to continue production because of unfavorable conditions for the sale of its products on the market.

http://www.marxists.org/archive/rubin/value/ch11.htm

How it carries over into capitalism as C-M-C, as ‘the starting point of capitalism’ morphs into M-C-M or capitalism proper is another matter.

I said the same thing as Rubin long before I read it.

I used blue suede shoes and goose eggs, it is online and dated somewhere.

There is of course in modern capitalism no complete mobility of labour, transferability of skills and for that matter mobility of fixed capital; otherwise it wouldn't be fixed.


All flies in the theoretical ointment.

[Cheese Guevara]

Galactic-Scale Energy
by Prof Tom Murphy


Since the beginning of the Industrial Revolution, we have seen an impressive and sustained growth in the scale of energy consumption by human civilization. Plotting data from the Energy Information Agency on U.S. energy use since 1650 shows a remarkably steady growth trajectory, characterized by an annual growth rate of 2.9% (see figure). It is important to understand the future trajectory of energy growth because governments and organizations everywhere make assumptions based on the expectation that the growth trend will continue as it has for centuries—and a look at the figure suggests that this is a perfectly reasonable assumption.

Growth has become such a mainstay of our existence that we take its continuation as a given. Growth brings many positive benefits, such as cars, television, air travel, and iGadgets. Quality of life improves, health care improves, and, aside from a proliferation of passwords to remember, life tends to become more convenient over time. Growth also brings with it a promise of the future, giving reason to invest in future development in anticipation of a return on the investment. Growth is then the basis for interest rates, loans, and the finance industry. Because growth has been with us for “countless” generations—meaning that everyone we ever met or our grandparents ever met has experienced it—growth is central to our narrative of who we are and what we do. We therefore have a difficult time imagining a different trajectory. This post provides a striking example of the impossibility of continued growth at current rates—even within familiar timescales. For a matter of convenience, we lower the energy growth rate from 2.9% to 2.3% per year so that we see a factor of ten increase every 100 years. We start the clock today, with a global rate of energy use of 12 terawatts (meaning that the average world citizen has a 2,000 W share of the total pie). We will begin with semi-practical assessments, and then in stages let our imaginations run wild—even then finding that we hit limits sooner than we might think. I will admit from the start that the assumptions underlying this analysis are deeply flawed. But that becomes the whole point, in the end. A Race to the Galaxy I have always been impressed by the fact that as much solar energy reaches Earth in one hour as we consume in a year. What hope such a statement brings! But let’s not get carried away—yet. Only 70% of the incident sunlight enters the Earth’s energy budget—the rest immediately bounces off of clouds and atmosphere and land without being absorbed. Also, being land creatures, we might consider confining our solar panels to land, occupying 28% of the total globe. Finally, we note that solar photovoltaics and solar thermal plants tend to operate around 15% efficiency. Let’s assume 20% for this calculation. The net effect is about 7,000 TW, about 600 times our current use. Lots of headroom, yes? When would we run into this limit at a 2.3% growth rate? Recall that we expand by a factor of ten every hundred years, so in 200 years, we operate at 100 times the current level, and we reach 7,000 TW in 275 years. 275 years may seem long on a single human timescale, but it really is not that long for a civilization. And think about the world we have just created: every square meter of land is covered in photovoltaic panels! Where do we grow food? Now let’s start relaxing constraints. Surely in 275 years we will be smart enough to exceed 20% efficiency for such an important global resource. Let’s laugh in the face of thermodynamic limits and talk of 100% efficiency (yes, we have started the fantasy portion of this journey). This buys us a factor of five, or 70 years. But who needs the oceans? Let’s plaster them with 100% efficient solar panels as well. Another 55 years. In 400 years, we hit the solar wall at the Earth’s surface. This is significant, because biomass, wind, and hydroelectric generation derive from the sun’s radiation, and fossil fuels represent the Earth’s battery charged by solar energy over millions of years. Only nuclear, geothermal, and tidal processes do not come from sunlight—the latter two of which are inconsequential for this analysis, at a few terawatts apiece. But the chief limitation in the preceding analysis is Earth’s surface area—pleasant as it is. We only gain 16 years by collecting the extra 30% of energy immediately bouncing away, so the great expense of placing an Earth-encircling photovoltaic array in space is surely not worth the effort. But why confine ourselves to the Earth, once in space? Let’s think big: surround the sun with solar panels. And while we’re at it, let’s again make them 100% efficient. Never-mind the fact that a 4 mm-thick structure surrounding the sun at the distance of Earth’s orbit would require one Earth’s worth of materials—and specialized materials at that. Doing so allows us to continue 2.3% annual energy growth for 1350 years from the present time. At this point you may realize that our sun is not the only star in the galaxy. The Milky Way galaxy hosts about 100 billion stars. Lots of energy just spewing into space, there for the taking. Recall that each factor of ten takes us 100 years down the road. One-hundred billion is eleven factors of ten, so 1100 additional years. Thus in about 2500 years from now, we would be using a large galaxy’s worth of energy. We know in some detail what humans were doing 2500 years ago. I think I can safely say that I know what we won’t be doing 2500 years hence.


Some readers may be bothered by the foregoing focus on solar/stellar energy. If we’re dreaming big, let’s forget the wimpy solar energy constraints and adopt fusion. The abundance of deuterium in ordinary water would allow us to have a seemingly inexhaustible source of energy right here on Earth. We won’t go into a detailed analysis of this path, because we don’t have to. The merciless growth illustrated above means that in 1400 years from now, any source of energy we harness would have to outshine the sun. Let me restate that important point. No matter what the technology, a sustained 2.3% energy growth rate would require us to produce as much energy as the entire sun within 1400 years. A word of warning: that power plant is going to run a little warm. Thermodynamics require that if we generated sun-comparable power on Earth, the surface of the Earth—being smaller than that of the sun—would have to be hotter than the surface of the sun! Thermodynamic Limits We can explore more exactly the thermodynamic limits to the problem. Earth absorbs abundant energy from the sun—far in excess of our current societal enterprise. The Earth gets rid of its energy by radiating into space, mostly at infrared wavelengths. No other paths are available for heat disposal. The absorption and emission are in near-perfect balance, in fact. If they were not, Earth would slowly heat up or cool down. Indeed, we have diminished the ability of infrared radiation to escape, leading to global warming. Even so, we are still in balance to within less than the 1% level. Because radiated power scales as the fourth power of temperature (when expressed in absolute terms, like Kelvin), we can compute the equilibrium temperature of Earth’s surface given additional loading from societal enterprise.

The result is shown above. From before, we know that if we confine ourselves to the Earth’s surface, we exhaust solar potential in 400 years. In order to continue energy growth beyond this time, we would need to abandon renewables—virtually all of which derive from the sun—for nuclear fission/fusion. But the thermodynamic analysis says we’re toasted anyway. Stop the Madness! The purpose of this exploration is to point out the absurdity that results from the assumption that we can continue growing our use of energy—even if doing so more modestly than the last 350 years have seen. This analysis is an easy target for criticism, given the tunnel-vision of its premise. I would enjoy shredding it myself. Chiefly, continued energy growth will likely be unnecessary if the human population stabilizes. At least the 2.9% energy growth rate we have experienced should ease off as the world saturates with people. But let’s not overlook the key point: continued growth in energy use becomes physically impossible within conceivable timeframes. The foregoing analysis offers a cute way to demonstrate this point. I have found it to be a compelling argument that snaps people into appreciating the genuine limits to indefinite growth. Once we appreciate that physical growth must one day cease (or reverse), we can come to realize that all economic growth must similarly end. This last point may be hard to swallow, given our ability to innovate, improve efficiency, etc. But this topic will be put off for another post.

[Cheese Guevara]

"Each time a loan is taken out there is an increased demand for money in circulation to repay the interest on the loan. Before the loan was taken out this interest was not due, after the loan is taken out the interest is then due. Thus there is must be an increase in the supply of money now required to repay interest.

This means that someone else somewhere else in the system must take out another loan if this demand for money to repay interest is to be met.

Thus more debt = more interest = more demand for money = more debt.

Interest is repaid at a % rate and thus this is why our economic system requires growth at a % rate. The amount of money in supply and our economic activity must likewise grow at a % rate.

As our economy grows at a % rate the amount of resources we use of course also grows at a % rate; the amount of oil we are using, for example, has been growing at an exponential rate.

Earth is finite and our resources are finite. Even renewable resources have a limit to how much we can use at any one time, they require time for renewal. There is a limit to growth. This is not an opinion, it is a mathematical fact." - Lara Iriarte

"It proved extraordinarily difficult for economists to recognise that bank loans create deposits. Even in 1930, when the large majority had been converted and accepted the doctrine as a matter of course, some of the more important aspects remained misunderstood." - Schumpeter

[The Garbage Disposal Unit]

George Caffentzis (of Midnight Notes (http://www.midnightnotes.org/)) grapples with thermodynamics as a model for industrial capitalism pretty extensively in some of the essays in In Letters Of Blood and Fire (Free on LibCom! (https://libcom.org/library/george-caffentzis-letters-blood-fire)). I recommend it highly, except that some of Part II drags due to repetition. Dig.

[Cheese Guevara]

Thank you very much Garbage Disposal Unit.