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New sand

March 21st, 2011

Here’s a new sandpit for lengthy side discussion, rants on idees fixes and so on.

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  1. Ikonoclast
    March 21st, 2011 at 14:39 | #1

    Energy Collapse of the World Economy

    Recapping the Bet

    I have bet Professor John Quiggin that world gross product of 2020 will be less than world gross product of 2010. Prof. J.Q. has suggested that world income be used as the measure. I am happy with this amendment. The bet IIRC is for $100 Australian, inflation adjusted, payable to the winner when the official figures are known. The bet is only valid if both parties are alive when the bet is determined by the release of official figures and if Australian currency is still legal tender. Payment should be made within 30 days of proof of a winning bet. The bet is not cancelled by any form(s) of force majeure* provided the above conditions are met.

    *In other words, the black swans are on my team.

    Summary of My Argument

    The collapse of the global world economy is now inevitable and probably imminent. This conclusion is based on the following considerations. There are limits to growth in any finite system. Energy (as total energy available for economic work) is the ubiquitous and near limit of the global economic system. A positive feedback system (the global economy in this case) with large stocks and low replenishment rates demonstrates a marked tendency to go into overshoot followed by collapse.

    To demonstrate the argument, I would need to establish the following;

    1. There are physical limits to growth in any finite closed system.
    2. The earth functions as a finite closed system with respect to the economy.
    3. The economy depends on and is limited by the availability of physical resources.
    4. Energy is the ubiquitous master resource. All economic processes and the utilisation of all other resources depend on the availability of energy for useful economic work.
    5. The world economic production in terms of growth (and negative growth) shows a close correlation historically with trends in energy utilisation.
    6. Peak Energy (meaning peak energy “production” in economic terms) will attain a physical limit and then decline.
    7. The Peak Energy limit and subsequent decline will be a complex function of the exhaustion of non-renewable energy sources (stocks) and the introduction (and re-introduction) of renewable energy sources (flows) .
    8. The peaks of all current major non-renewable energy sources (oil, coal, gas, uranium occurred in 2010 plus or minus 5 years in each case.
    9. Introduction of renewable energy, to the levels required to compensate for the decline of non-renewable energy, is not physically feasible in growth terms nor in peak limit terms. The Sustainable Energy peak will prove to be much less than the overall Peak Energy limit.
    10. A decline in energy available for useful work will cause negative economic growth and the decade 2011 to 2020 will exemplify this.

    At the moment, the above can stand as assertions. To be honest, I pretty well know I’ll be proven right sooner or later. Whether I’ll be proven right by 2020 is the moot point. I’m willing to argue any of the above 10 assertions but will only do each one if specifically requested by debate. I’m kinda sadly tired of the argument because it’s so depressing and if I convince anyone else my only “reward” is depressing them too.

    I do suggest though, that Prof J.Q. could publish annual updates on the bet when the official World Income figures are published after each calendar year. (I assume somebody does publish “official” figures?)

  2. jquiggin
    March 21st, 2011 at 15:47 | #2

    I agree with you as regards Peak Oil, but you’re way off on coal – there is much more than we can burn given the CO2 contraint. Point 5 is also problematic. The link between energy and output is much weaker in an economy that predominantly produces services rather than goods.

    Most importantly the earth is not a closed system as regards energy, so points 1-3 are irrelant. Your argument relies critically on point 9 which is far from obvious.

  3. paul walter
    March 21st, 2011 at 16:44 | #3

    I suppose all of this means that the price for a packet of smokes will go up again.

  4. Ikonoclast
    March 21st, 2011 at 16:45 | #4


    I will answer (as best I can) these objections over a few posts. This post will deal with your objection to points 1, 2 and 3.

    We are both right on the “closed” system argument at first glance because it is a definitional issue. I was following a basic definition from thermodynamics. I am not qualified in that field but I have felt it better to follow basic thermodynamic definitions as the energy (or exergy) argument is basic to the whole line of reasoning.

    By definition, a system is separated from its surroundings by a boundary. More on boundaries later (perhaps).

    There are three main types of system in thermodynamics:

    • Open – exchange of both Heat and Mass with Surroundings
    • Closed – exchange of Heat but not Mass with Surroundings
    • Isolated – exchange of neither Heat nor Mass with Surroundings

    Earth (or the biosphere very broadly defined as the global ecological system integrating all living things and their relationships and also including all non-biological elements of the lithosphere, hydrosphere and atmosphere as environment) is a “closed system” by this definition provided we ignore phenomena like meteors, comets, gaseous escape to space and volcanic eruptions.

    You are correct that insolation and infra-red radiation back to space mean that the earth is not a closed system with respect to energy. However, the fact that the earth (or the biosphere) is a finite materially closed system (apart from those exceptions relatively minor compared to the overall mass involved) means that the growth of highly physically ordered masses like human bodies or extended economic infrastructurer must have a real limit.

    So points 1,2 and 3 whilst pedantic do establish the basic limits to growth principle from which Meadows et al could say;

    “Limits to growth include both the material and energy that are extracted from the Earth, and the capacity of the planet to absorb the pollutants that are generated as those materials and energy are used.” – Donella Meadows, Jorgen Randers, Dennis Meadows.

    Whether these are near limits or not is another question. Points 5 and points 9 are critical as you point out as is the issue of exogenous energy (insolation) and its energy density for energy harvesting purposes. I’ll post again on this.

  5. Alice
    March 21st, 2011 at 16:51 | #5

    @paul walter
    Paul – what should be taxed even more is the price of Dom Perignon.

  6. paul walter
    March 21st, 2011 at 16:56 | #6

    Fancy taxing horse piss?

  7. paul walter
    March 21st, 2011 at 17:02 | #7

    btw, Alice, some thing up your ally. If you want a geck at a really good cartoon, catch Martin Rowson, from the Guardian at “Public Opinion”, where Sauer Thompson uses it for a thread starter on Libya.

  8. Sam
    March 21st, 2011 at 17:33 | #8

    The usual thermodynamic definition of a closed system is that neither energy nor mass can be exchanged with surroundings.

    The second law of thermodynamics:-”That the entropy of a closed system must always increase, and never decrease” would be false if your definition of “closed” was used.

  9. Freelander
    March 21st, 2011 at 17:35 | #9


    I imagine we could transform the earth, physically into a cylindrical shaped object keeping gravity at the surface at about 1g, and then we could get material from elsewhere and keep extending the cylinder forever, keeping the 1g surface gravity. That would get around the apparent physical limitation. Material density and other things might pose problems but I imagine we or our ancestors could solve them. If there are limits to the size of the cylinder we just build some more.

    When the sun gets bigger we just move to higher orbits. And if it loses its puff or is expected to explode we just move the earth elsewhere and find a more hospitable sun.

    All fairly surmountable problems I think?

    We might then, be able to keep growing until the more serious problems befall the universe.

    By that time who knows what we might be able to do?

  10. Alice
    March 21st, 2011 at 17:39 | #10

    @paul walter
    Id like to tax the hell out of polo horse p*** and sticks Paul. Thats exactly where they horse around.

  11. John S Cook
    March 21st, 2011 at 18:28 | #11

    I have written at some length on some of these issues in a working paper that I posted to QUT eprints on 13 March 2011. It is available at http://eprints.qut.edu.au/40727/

  12. Chris Warren
    March 21st, 2011 at 18:49 | #12

    I bet that Quiggin will close this blog soon.

    Quiggin will do an Andrew Leigh if he is elevated to the Reserve Bank Board vacancies.

    But who really understands the money-debt capitalist system anyway – certainly not the RBA.

  13. paul walter
    March 21st, 2011 at 19:09 | #13

    Its ok Alice, nod’s as good as a wink…

  14. Ikonoclast
    March 21st, 2011 at 19:44 | #14


    I stand by the definitions I gave. What is often colloqially or loosely called a “closed system” (intending the meaning that no transfers of matter or energy occur) is more precisely called an “isolated system”.

    “The second law of thermodynamics states that the entropy of an isolated macroscopic system never decreases, or, equivalently, that perpetual motion machines are impossible.” – Wikipedia.

    The definitional difference between “closed systems” and “isolated” is significant. Justification for the category “isolated system” is given as follows;

    “An isolated system is more restrictive than a closed system as it does not interact with its surroundings in any way. Mass and energy remains constant within the system, and no energy or mass transfer takes place across the boundary. As time passes in an isolated system, internal differences in the system tend to even out and pressures and temperatures tend to equalize, as do density differences. A system in which all equalizing processes have gone practically to completion is considered to be in a state of thermodynamic equilibrium.

    Truly isolated physical systems do not exist in reality (except perhaps for the universe as a whole), because, for example, there is always gravity between a system with mass and masses elsewhere. However, real systems may behave nearly as an isolated system for finite (possibly very long) times. The concept of an isolated system can serve as a useful model approximating many real-world situations. It is an acceptable idealization used in constructing mathematical models of certain natural phenomena.”


    and scroll down through article.

  15. Alice
    March 21st, 2011 at 20:01 | #15

    @paul walter
    a nod is as good as a wink to a blind horse Paul?
    Its all been under wrapps but I think more than a few big shots have given us a backshot backhand swing in the last chukkah. Id say we have been made ponies of.

  16. Alice
    March 21st, 2011 at 20:02 | #16

    chukker that is – well you can tell I dont hang out with the mallet heads…

  17. Alice
    March 21st, 2011 at 20:10 | #17

    @Chris Warren
    Whhhat ? the only reason Prof would be / could be elevated to the RBA board is to shut him up..but for gods sake Prof if they do… take the money and tell them what idiots they are about inflation.

    Bleeding obvious economic problem is staring them in the face (jobs for the kids and jobs for more hours and hogh household debt while they ramble on about inflation which doesnt exist and if it does – give it a short sharp wahck and be done and stop moaning year in and year out about it, when we havent seen it for damn near two decades).

    The RBA are supposed to be taking care of full employment (its in the RBA rules), not lying to us that we are already there (for the last twenty years or so).

    I know the oil shock was a shock but its really time to move on.

  18. paul walter
    March 21st, 2011 at 21:01 | #18

    Alice we’ve made a mares nest of a nightmare. But we havent done as badly as the shockjocks bagging climate change, en masse.
    I type, Jones is in the process of calling Garnaut a “dunce” whilst others eulogise the likes of Plimer, to the rafters. Mercifully, at least Holmes has included some comment from legit scientists to leaven the lies.

  19. Sam
    March 21st, 2011 at 21:35 | #19

    Ok. It’s more semantics I guess. When I did thermodynamics a few years ago my textbook (Callen) used “closed” to refer to both energy and matter. What you call “closed,” Callen called “impermeable.”

  20. Ikonoclast
    March 21st, 2011 at 22:55 | #20


    With reference to my point 5, I’ll make some general points and then get more specific.

    The general consensus among those making a scientific analysis of peak production theory is that claimed, estimated or stated reserves are a poor guide to actual recoverable reserves. The reserves issue is an open ended problem as we do not have perfect geological assay knowledge of the entire accessible crust of the earth. Estimates of remaining reserves based on assay sampling and some (but not all) statistical models are subject to all kinds of errors and biases. In many cases, nations and corporations have an incentive to overstate reserves so reserve estimates are often doubtful. For example, the IAEA Red Book estimates of Uranium desposits are highly dubious as I posted and linked in recent nuclear blogs. Cornucopian and optimism biases seem common to corporate propaganda and layperson boosters alike. In short, speculative reserve estimates should simply be ignored.

    The only real determination of any resource production peak will be an after-the-event assessment (significantly after) based on the empirical production data series. Before the event, one of the best guides is the graph of the historical discovery rate of proven reserves. Reserves can be accepted as “proven” in retrospect once each field is adequately assayed, tapped and producing (or even exhausted). As JQ will be aware, the discovery rate (initial discovery date) of subsequently proven reserves for oil shows a pretty typical Hubbert curve dipping to alarmingly low levels. This indicates a high likelihood that few reserves of note are still to be discovered. A statistical assessment placing the likely production peak can be made. The scientific consensus (where science is not distorted by corporate agendas) is that oil has peaked and JQ accepts this. Uranium has also likely peaked. Discussion and links in the recent nuclear threads.

    A recent paper also indicates that coal has peaked. The current issue of the scientific journal Energy contains “A global coal production forecast with multi-Hubbert cycle analysis,” by Tad Patzek and Gregory Croft. This report states;

    “The global peak of coal production from existing coalfields is predicted to occur close to the year 2011. … After 2011, the production rates of coal and CO2 decline, reaching 1990 levels by the year 2037, and reaching 50% of the peak value in the year 2047. It is unlikely that future mines will reverse the trend predicted in this BAU scenario.”

    One thing to remember with thermal coal production is that peak coal tonnage is not peak net energy from coal due to the falling EROEI for coal. This is due to disproportionate depletion of high grade anthracite early on and subsequent exploitation of lower grades right down to brown coal.

    Gas is likely to follow the oil and coal story very quickly but verification of that in this blog must wait due to my time constraints.

    In a sense, we should not be surprised that all these peaks will come close together about in the band 2005 to 2015. The phenomenon of first exploiting the “low hanging fruits” probably explains it, especially where energy sources are substitutable (for example in electrical generation).

  21. Ikonoclast
    March 21st, 2011 at 22:59 | #21
  22. rog
    March 21st, 2011 at 23:08 | #22
  23. Ernestine Gross
    March 21st, 2011 at 23:21 | #23


    “The link between energy and output is much weaker in an economy that predominantly produces services rather than goods.”

    This is not obvious to me for the world economy.

    For example, the term ‘output’ is not well defined for the purpose of aggregating across a huge number of different physical things that are produced from physical things and this production is not possible without services (eg scientific knowledge, technical knowhow embodied in humans).

    There are only two primitives in ‘the economy’ (ie the world economy), namely the number of people and total ‘resources’, ie resources is the name of the natural environment that may be sub-classified such that various measurements of quantities can be applied.

  24. Freelander
    March 22nd, 2011 at 00:16 | #24

    @Ernestine Gross

    When it comes to one of those ‘primitives’, people, some are more primitive than others. Same might be said for natural resources. This can make aggregation more of a problem.

  25. Ernestine Gross
    March 22nd, 2011 at 08:59 | #25


    O.K., Freelander. I admit, even the proverbial Robinson Crusoe may have an aggregation problem.

  26. TerjeP
    March 22nd, 2011 at 09:02 | #26
  27. Fran Barlow
    March 22nd, 2011 at 09:44 | #27


    It’s especially impressive that he has chosen this of all moments to do so. That shows not merely insight, but courage.

    Well done him.

  28. Ernestine Gross
    March 22nd, 2011 at 09:51 | #28

    Fran Barlow :@TerjeP
    It’s especially impressive that he has chosen this of all moments to do so. That shows not merely insight, but courage.
    Well done him.

    Or being close to retirement.

  29. Peter T
    March 22nd, 2011 at 10:06 | #29

    I would bet against Ikonoklast – not because I think the basic reasoning is incorrect, but because 2020 is too soon. As Adam Smith is reputed to have said, there is a good deal of ruin in a country, and people display an amazing ingenuity in keeping things going. Also, world income in money terms is only a proxy for welfare. If I had to guess, I would put the point where decline is undeniable and advancing somewhere between 2030 and 2050. But I suppose neither participant is confident of their ability to collect their winnings in 2030.

    And by the way, would it not be more sensible to make the stake a crate of baked beans?

  30. TerjeP
    March 22nd, 2011 at 11:20 | #30

    I posted this in the other thread but what the heck. Andrew Bolt does a good job showing why Kerry OBrien is a shock jock who interviews unqualified cranks. Quite amusing really:-


  31. sam
    March 22nd, 2011 at 11:35 | #31

    @Fran Barlow
    I once saw a doco about an apocalypse cult. All the usual stuff, a big charismatic leader taking sexual liberties with his young nubile followers. An isolated ranch far from civilisation and dissenting ideas. Elaborate preparations for the End of Days. Anyway, the appointed date and time for the world’s end came and went without incident (of course).

    The next morning, cult followers were being interviewed by the BBC. They all said “After what happened last night I am even more sure that we are right. We just got the days wrong, that’s all.” Not one of them could learn from an experience, and update their beliefs in the light of new evidence.

    Well done them.

  32. Fran Barlow
    March 22nd, 2011 at 11:52 | #32


    Andrew Bolt does a good job …

    Oops … there’s your problem. Here’s a tip: never start a proposal with an obviously absurd claim.

    Blot has never done a good job, even at trolling, because just as you have here, he nearly always starts with an absurd claim.

  33. Jim Birch
    March 22nd, 2011 at 11:56 | #33

    Discussion of whole thermodynamics and closed systems is a bit blah blah when you are comparing the solar energy budget of the earth 174,000 TW with the current 15 TW used by humans. (Ratio like 1:12,000.) It’s a question of cost and ability to convert and store the solar energy, not it’s availability.

    A fairly large area would be needed to produce 15 TW but it’s completely achievable: I think it’s area is something like the available roof area. It would be a massive project, perhaps similar in scale and cost to the provision of paved roads, ie, a big transformation but doable. It’s the matter of getting the drivers and technology right that’s the problem, not thermodynamics.

  34. Fran Barlow
    March 22nd, 2011 at 11:57 | #34


    Amusing analogy. Now all you need to show is that Monbiot has been a longstanding member of a cult based around the promotion of nuclear power.

    I’ll be fascinated with your citations.

  35. sam
    March 22nd, 2011 at 12:22 | #35

    @Fran Barlow
    The first paragraph was setup. It’s this phenomenon of saying “I’m more sure nuclear is safe now after Fukashima,” that I draw parallels to.

  36. Fran Barlow
    March 22nd, 2011 at 12:47 | #36


    Doubtless … but the necessary data to sustain the analogy was missing. The article shows that Monbiot’s position is reasoned rather than an expression of faith. You may wish to dispute his data or modelling, but it is not cult-like, unless one is borrowing from the Crichton school of argumentation.

  37. March 22nd, 2011 at 13:55 | #37

    @Peter T
    Agree with you entirely, humans are resourceful and adaptive under the worst of conditions. By 2030 baked beans may be far more valuable than the bet currently stands and anyway by then strictly for the nobs.

  38. jakerman
    March 22nd, 2011 at 14:27 | #38

    I cringed at Monbiot’s conflation of acute radiation exposure with safer cumulative long term acquired dose. This is similar to ignoring the difference in biological response to receiving your annual UV does in [a year as distinct to a lump sum in one day.


    Monbiot’s second gaff was to say that:
    >*[50 mSv] is half of the lowest one-year dose clearly linked to an increased cancer risk*

    This is 5 times higher than the level of utero exposure clearly linked to an increased risk of childhood cancer.


    “In the case of in utero exposure (exposure of the fetus during pregnancy), excess cancers can be detected at doses as low as 10 mSv.15 For the radiation doses at which excess cancers occur in the Hiroshima and Nagasaki studies, solid cancers16 show an increasing rate with increasing dose that is consistent with a linear association. In other words, as the level of exposure to radiation increased, so did the occurrence of solid cancers.”

  39. Ikonoclast
    March 22nd, 2011 at 15:28 | #39


    Can renewables take up the slack?


    The above graphic shows the area of desert (in one yellow block) required to solar power 300 million USA residents at the rate of 250 kWh/d per person. This area is a little larger than the entire state of Arizona. This assumes solar power supersedes all other power needs including all fossil fuel power. It is an area 600km by 600 km. This gives an idea of the size of the renewables problem and the amount of area and infrastructure that needs to be given over to renewable energy needs. I have my doubts that we can convert to this in time and that we will not have enough structural materials from ever scarcer minerals to build this massive infrastructure.

    The whole article views the renewables problem from a UK perspective.


    Given that non-renewables have peaked about now (my contention), we have an enormous conversion program and problems ahead of us. So we have possibly;

    1. a rate of conversion problem (can we convert fast enough?);
    2. a feasibility of conversion problem (do we have all the energy and materials to fully convert?)
    3. a new energy limit problem (will there be a sustainable plateau above, equal to, or lower than the non-renewables peak?)
    4. a stabilisation and steady state problem (can our economy stablise and run steady state in terms of sustainble plateau energy use?).

  40. Ikonoclast
    March 22nd, 2011 at 15:40 | #40


    This paper “Accounting for growth – the role of physical work” (physical work in the physics sense not the manual labour sense) illustrates the close connection between useful work from energy and total economic production. The de-coupling referred to by JQ is partial and minor. Any large scale reduction in energy sources for physical work will send the world economy into recession or depression. Really, you only have to think of the effects of a major oil shortage or of persistent brownouts to convince yourself of this fact.

    But for those who want full graphs and formulas here ya go! :)


  41. jakerman
    March 22nd, 2011 at 15:45 | #41


    Correction, 600×600 is the size to provide 500 million (not 300) people with 250kWh/day.

    Its import to recognise the economy can grow (via intellectual value adding) while efficincey dereases the kWh/ per person consumed. Mackay suggest 80 kWh/day per person provides a European level of consumption.

  42. jakerman
    March 22nd, 2011 at 16:29 | #42

    Considering the often wheeled out lament that our emissions are small compared to other countrys, other than doing our bit to play a leadership role bring forward a global mitigation agreement, is this suggestion a way we could have an even greater impact?

    In the scheme of things, Australia produces one sugar lump of carbon for every 100 produced by China. If we are really concerned about doing something about the global carbon problem we should be taxing the coal we send to China, because whatever we do here will not have the slightest effect on total world carbon production.


    Its another argument for upping the MRRT.

  43. John S Cook
    March 23rd, 2011 at 05:34 | #43

    Ernestine Gross :
    There are only two primitives in ‘the economy’ (ie the world economy), namely the number of people and total ‘resources’, ie resources is the name of the natural environment that may be sub-classified such that various measurements of quantities can be applied.

    Some suggest that production – by living things including humans – depends on three ‘primitives’ or basic factors of production:
    * code, information, recipe,
    * energy
    * physical things

    This leads to the idea that ‘land’, ‘labour’ and ‘capital’ are social constructs capable of being invented and reinvented. They owe their origins to the kind of measuring and accounting that has evolved around things that can be counted and measured.

    Somewhere, people got the idea that ‘money’ works and that unemployed money is a bad thing. But the compounding and the paying of interest on interest contains the roots of instability. The idea of money to facilitate exchange can tend to stabilise a system; but the idea of money compounding and being regarded at the same time as a store of wealth is inherently destabilising. Instability increases as the rate of interest increases.

  44. Ikonoclast
    March 23rd, 2011 at 07:06 | #44


    Thank you, correction noted. An area 600km × 600km is the size to provide 500 million (not 300) people with 250kWh/day. Perhaps we could survive well on say 50 kWh/day per person (and I suspect we will have to within ten or twenty years). This would be a very different world but still very liveable IF we make the transition successfully.

    I think one transition problem (of many) will be the shortage of hydrocarbon fuels for transport. Oil provides 90% of our energy for transport. The collapse of the automobile industry (in terms of providing personal vehicles for the masses) is a given in this scenario. The amount of unemployment and recessionary pressure caused by this change will be very significant.

    Overall, people are saying we can transition but nobody has come up with a concrete transition plan. It is being left to the market and the market will fail in this task. Markets do not plan long term, they simply flow to the easiest near term pickings. The path to easiest near term profits is not necessarily the path to long term sustainability. In fact, it has a very low probability of being the path to long term sustainability.

    You say, “Its important to recognise the economy can grow (via intellectual value adding) while efficiency decreases the kWh/ per person consumed.”

    This is true to a point but this process also has limits. Intellectual value adding entails an increase in complexity, ie an increase in complexity of information in material media (including the human brain) if not a great increase in the order of infrastructure on the gross material scale. Any increase of complexity or order and maintenance of that increase takes energy. Efficiency gains also have limits.

    I guess my overall argument is that we are responding badly to the looming transition crisis. We are squandering current stocks (non-renewables) on excess masses of consumable “junk” (all automobiles rapidly become junk for example) while failing to build the massive renewables infrastructure we need.

  45. Ikonoclast
    March 23rd, 2011 at 07:13 | #45

    @John S Cook

    I couldn’t agree more. This approach (biophysical economics) holds real promise for making economics a genuine science at the basic level. Of course, it will still be political economy (which is a form of moral philosophy) as you go further up the ladder so to speak.

  46. jakerman
    March 23rd, 2011 at 07:55 | #46


    I agree with most of your points, and don’t disagree with any. Your bet date of 2020 for economic demise seems plausible, if radically soon.

    In the crazy world of dominant narratives, its seems impossibly soon, but we have made our economy so hungry and fragile I think it possible even if I can’t yet say likely.

  47. jquiggin
    March 23rd, 2011 at 08:35 | #47

    Ikonoklast, taking jakerman’s 80kWh/ for European consumption “Perhaps we could survive well on say 50 kWh/day per person” is an understatement. Let’s break it into two parts
    (i) Clearly we can survive well on European energy consumption levels, since the Europeans do so
    (ii) Clearly there’s room for a 30 per cent efficiency improvement in energy efficiency in Europe

    So, we could reduce your calculated area by a factor of 10, at which point the intended reductio ad absurdam becomes a demonstration of practicality – all the energy needs of the US could be met by sensible energy conservation and an area of solar equivalent to 10 per cent of Arizona.

  48. Fran Barlow
    March 23rd, 2011 at 09:45 | #48


    Clearly we can survive well on European energy consumption levels, since the Europeans do so

    That may well be so, though as Sheldon Cooper* might say: I’d like to do the math

    We aren’t counting embedded energy in imports, and the configuration of cities in Europe and Australia. Iceland uses enormous energy per capita, largely because it exports lots of (low CO2) aluminium. If this energy was attributed to the jurisdictions importing it and removed from Iceland, the picture would be different.

    * The Big Bang Theory — one of the more amusing sitcoms I’ve seen

  49. jakerman
    March 23rd, 2011 at 10:49 | #49

    Fran Iceland can contine to use enormous energy per capita, largely because it exports lots of (low CO2) aluminium.

    Australia could do likewise if we harness out huge renewables capacity.

  50. Ikonoclast
    March 23rd, 2011 at 12:53 | #50


    I’m not sure where jakerman got the 80kWh/day per person from in that large document. Perhaps it’s the average for all of Europe though I doubt even that. My 50 units was a concession which I don’t retract. However, we should note that Romania appears to use about 50 units a day, UK 125 units a day and Australia 190 units a day. This is from the scatter graph on;


    I think we can infer that 50 units a day would be a modest but still comfortable existence with the energy savings and efficiencies JQ mentions. Perhaps my ideas diverge from JQ’s not on this point per se but on how we get there, can we get there and can we get there without massive economic disruption?

    It’s pretty clear from the energy hunger of personal transport (automobiles) that said automobiles are out of the question for the average person at 50 units a day. I would be happy with this. I hate automobiles and the automobile culture. However, how do we take automobiles out of our economy without massive unemployment in the auto industry from manufacturing through to selling and servicing? How do we fund the construction of mass transit and mass renewables collection infrastructure if we keep making autos for too long and thus exhaust those resources which should be underwriting the changeover?

    I am not an economist so I am not expressing this well. But I see that the transition will be a great challenge at all levels; socially, economically and energetically. Further we have to achieve it while the population continues to grow and the current economic system demands growth in all sectors even in sectors like coal and automobiles (to take two examples) which should be being wound down and replaced. With all of these bounding conditions (is that the right term?) aren’t we in danger of botching the transition?

    I think we are particularly in danger of botching the transition if we leave it to the undirected free market. We are at the point now (I believe) where we need a dirigisme style planned and directed transition. I could be wrong but JQ seems if not blase, at least very sanguine, that a purely market directed transition (albeit assisted by cap and trade systems for negative externalities) will do the job on its own. JQ does not seem to anticipate any major problems like a transition squeeze, a lower plateaued-out renweable economy or an oil shortage induced extended depression for example.

  51. jakerman
    March 23rd, 2011 at 13:03 | #51

    Ikonoclast :@jquiggin
    I’m not sure where jakerman got the 80kWh/day per person from in that large document.

    Sorry I should have cited p.235

    Redoing the calculations for the world
    How can 6 billion people obtain the power for a European standard of
    living – 80 kWh per day per person, say?


  52. Ikonoclast
    March 23rd, 2011 at 13:06 | #52

    I might add that any sanguine view of an orderly transition ought to be at least shaken by the notion of overshoot (if that case is proven). Various calculations show we are alreadybadly into overshoot. I would cite;

    Limits to Growth – Beyond the Limits and The 30m year update;


    Various assays at Footprint calulations.


    Does JQ give any credence to claims that we are already in overshoot?

  53. jakerman
    March 23rd, 2011 at 13:07 | #53
  54. Ikonoclast
    March 23rd, 2011 at 13:09 | #54

    Oops, I mean the 30 year update. I suspect at the 30 million year update it will be difficult to find any traces of homo sapiens.

  55. Ikonoclast
    March 23rd, 2011 at 13:13 | #55


    That is a great chart and provides further good evidence that economic production is a function of energy use.

  56. Peter T
    March 23rd, 2011 at 14:33 | #56

    I would put it differently. I think abstract thermodynamic calculations are beside the point. We could generate (and comfortably live on) 80KW a day – if we re-engineered our cities, infrastructure, transport, modes of life…..This would require both large social shifts and enormous expenditure of energy. More to the point is that surplus energy (energy left after that expended getting it) is what expands the height and the number of niches in the socio-economic structure. As surplus declines, the structures come under stress. They adapt until adaptation is no longer possible, and then shed height and the niches that cannot be supported (usually dropping by around a third). This usually happens quite suddenly, but also quite unpredictably. Still, the stresses look to reach maximum sometime after 2030 – not just energy but water, absorption of nitrates, fisheries, land degradation, major climate change impacts….

    The classic study is Joseph Tainter, but the broad outline is familiar to any student of systems under stress – military history has a lot of examples. There are also examples in ecology.

  57. Fran Barlow
    March 23rd, 2011 at 15:47 | #57


    Fran Iceland can contine to use enormous energy per capita, largely because it exports lots of (low CO2) aluminium. Australia could do likewise if we harness out huge renewables capacity.

    You’re missing the point. If you are going to work out how much energy people need to consume per day to have a European lifestyle, what Europeans currently use is only a very rough guide. To take an absurd example, if a country were to produce no goods at all, and function purely as a banking capital with a bit of tourism, but import 100% of its goods, it might have very high GDP per capita and very low emissions and energy use per capita. This would be especially so if all of the populace lived in one or two big conurbations very close together and near the entry points for goods.

    That jurisdiction wouldn’t be a good benchmark for how much energy the whole world could live on and enjoy a similar lifestyle because someone ultimately has to use energy to produce the finished goods that under pin the lifestyle. A better measure would be to look at the total energy usage of the country including the lifecycle energy cost all goods being consumed in the jursidiction and to assess all other jurisdictions in the same way. Thus, if Australia exports aluminium to some place, they get credited with the energy usage rather than us. If we import flat screen TVs and cars, then those are our energy usages.

    We could then look at what the LCO2e of those goods were and get a more accurate picture of the true contribution per capita and per jursidiction of each country to rising atmospheric CO2.

    It is hard to imagine in such circumstances that deniers could claim that Australia was only contributing 1.4% to world emissions. I suspect it would be probably double or even tripple that. Given that China is a major exporter, the gulf between our per capita emissions and theirs would be even greater than now. It would be nice to be able to lance this old trope.

  58. jakerman
    March 23rd, 2011 at 20:15 | #58

    @Fran Barlow

    I don’t see how you deduce I’m missing the point. Iceland etc does heavy industrial scale lifting with low CO2 energy to allow other economy’s to do lower energy low CO2 value adding.

    I think this is the point you missed.

  59. Ernestine Gross
    March 24th, 2011 at 07:06 | #59

    @John S Cook

    @43, p1, you write:
    “Some suggest that production – by living things including humans – depends on three ‘primitives’ or basic factors of production:
    * code, information, recipe,
    * energy
    * physical things”

    I am not sure how your suggestion is related to my post or to Ikonoclast’s bet with Prof Quiggin (Ikonoclast has accepted income as a measure of ‘output’.)

    1. ‘Primitives’. It seems I may have been a little too cryptic in my usage of this term in my original post addressed to JQ. The discussion (Prof Q and Ikonoclast) on ‘limits to growth’ takes place in the context of the contemporary conceptual framework of macro-economics. See reference link provided by Ikonoclast. This in turn presumes an ‘institutional environment’ (legal framework) and associated data collection and storage. But this is very limiting. It is limiting regarding the past of one society, it is limiting regarding the history of other societies, and it is limiting the research questions that can be asked. Still, I believe, Economics deals only with a limited number of questions. I am saying, when one wishes to deal with economic questions but without the limitation of the said conceptual framework, then there are 2 ‘primitives’, people and the natural environment (‘resources’). I’ll probably attract snarky and silly comments (essentially from people who can’t think of anything else than their current political aims) when I now illustrate my point by inviting a comparison of ‘the economy’ of the Aboriginal people with ‘the economy’ of the UK around 1800.

    2. Without further information, I could interpret your :”*code, information, recipe,
    * energy, * physical things” without requiring a new theoretical model. (Not sure so how or why biological organisms – such as humans – would come up with a ‘social construct’.)

  60. Ikonoclast
    March 24th, 2011 at 11:03 | #60

    Initially, I was much taken by Cook’s list (and I still think it is useful);

    “Production – by living things including humans – depends on three ‘primitives’ or basic factors of production:

    * code, information, recipe,
    * energy
    * physical things”

    However, perhaps it would have been best if Cook had stayed with “three basic factors of production” and not brought the term “primitives” (in the economic-technical sense) into it.

    On reflection, Cook’s list seems to me to be too reductionist and incomplete if it claims to represent “primitives”. (Not that I can really claim to understand Ernestine’s terminology as economics it is not my discipline).

    Ernestine’s characterisation of people and the natural environment as the two “primitives” is minimally reductionist. It implicitly includes all that people and society are and it implicitly includes not only matter and energy but the systems of the environment.

    Cook’s “matter and energy” could equal the environment if systems were not excluded. “Code, information and recipes” leaves too much out to be considered a “primitive” in the sense that Ernestine uses the term. I can understand geneticists or systems programmers highligting code, information and recipes. However, any code needs an interpreter, a fabricator and even a developer or innovator to be made and used to its full capacity to guide fabrication.

    The notion of the agent (“agency” encompassing perhaps volitional agency, innovative agency and even the necessary physical apparatus of agency) appears to left out of Cook’s list. Am I on the right track, Ernestine?

    At the same time I want to emphasise in relation to my bet with JQ, I am not just invoking (classical?) macroeconomics, I am invoking biophysical economics and putting a very strong emphasis on environmental and even thermodynamic limits to the increases of size and complexity which characterise the modern economy.

  61. Ernestine Gross
    March 24th, 2011 at 15:57 | #61


    1. “Am I on the right track, Ernestine?”


    “It implicitly includes all that people and society are and it implicitly includes not only matter and energy but the systems of the environment.”

    Lets put it this way, the formulation of the 2 ‘primitives’ does not exclude ‘all people and society’ and it does not exclude ‘systems of the environment’ by research program design. (IMHO, this is the power of the axiomatic approach to economic theory rather than the results of specific models. Isn’t that having an open mind to new scientific knowledge as well as alternative moral philosophies? In this sense, is it wrong to say that economics, as a field of inquiry, intersects with both, natural science and philosophy? Doing a Rudd, my answer to the last question is NO. Hence debates on whether or not economics is a science, are, IMHO, irrelevant. But what is important is that those who work in economics don’t have a closed mind to science. )

    2. Hint regarding your bet: Withdraw the reference you linked to (it is straight macro-economics) and adopt payoff in ‘baked beans’ (or some other thing, specified in quantity not value). Also, you could try to argue that output (as in macro-economics) has to be wrong for otherwise ghg emissions (AGW), human induced nuclear pollution of air water, soil, flora and fauna wouldn’t be a problem. After all this, you may still be stuck because you linked your idea to a macro-economic notion, namely ‘recession’.

  62. John S Cook
    March 24th, 2011 at 17:33 | #62

    @Ernestine Gross
    Perhaps I missed the meaning you attached to the term ‘primitive’. I have been working for a long time on the information processes associated with government; and needed to get as close as possible to the idea of ‘nature’ to see where humans started to do things with the resources at hand to secure their own survival. These three factors of production have been suggested by other people with far more stature than I have. Nonetheless, it is a useful starting point for thinking about basic human needs – even though they may be satisfied in a variety of ways.

    Accounting at the level of the enterprise includes an activity statement and a balance sheet – the reference to flows and stocks. It doesn’t take long to run into problems of assigning value and return on investment in the macro economy or even in large enterprises that survive over periods of say 70 or more years. I agree that it may be better to talk about baked beans if it helps the monetary system retain some touch with reality.

    Trying to see if people leave the place better or worse off when they die is important to notions of sustainability and intergenerational equity. A glance at the Table of Contents in my work at http://eprints.qut.edu.au/40727/. You may find more points of similarity than difference. The section on ‘Financial accounting and auditing’ led me to wonder whether economic growth figures could say much that was useful. I suspect that far more work needs to be done in trying to establish economic stability and retain employment; and I;m not encouraged by the standard of debate on these things.
    However as a septuagenarian, I become more impressed each day about how much I won’t be able to learn in what’s left of a lifetime.

  63. SJ
    March 24th, 2011 at 19:38 | #63


  64. SJ
    March 24th, 2011 at 19:56 | #64


  65. Ikonoclast
    March 25th, 2011 at 10:02 | #65

    @Ernestine Gross

    I’ll stick with my bet parameters. In good wholistic economic accounting, the value of outputs should be decreased by the damages caused by negative externalities. However, as my bet implicitly rides on a nag called “Overshoot”, the negative externalities are factored in as limits which will send us down the slope after “peak everything”.

    I for one find it difficult to believe that industrial and food production in 2020 will match 2010. Surely, this will have a concomittant effect on world income? Ponzi scheme “wealth creation” is inflationary and reaches a collapse point when it is not backed up by real material production of goods and services. (Services have a physical component and/or a complexity cost but I won’t digress.) Provided world income is expressed in 2010 inflation adjusted purchasing power equivalents (is that too much to ask?) I should be OK.

  66. Alice
    March 27th, 2011 at 10:53 | #66

    Seems the sandpit (Botany bay sandpit?) might be the best place to discuss NSW labors burial. Seems they still have Richo as resident ex ex expert on labor policies and thats part of the problem isnt it? Even when he left politics he was happy to take a position on the board of one of Australia’s nastiest polluting companies who have known but done nothing for twenty or more years about a monumental toxic mess they made in Botany Bay.

    Good one Richo but I suppose he still thinks someone like Orica may pay him to be a political lobbyist into the future. Thats whats wrong with labor. The mates insider trading club.

    Just toddle off to the old folks home Richo. Youve made more than enough from politics.The lack of real action to repair this mess in Botany Bay and the weasel words in the below link tells us how far the power mates club in NSW labor had sunk…… and they thought we didnt notice what they did, during and after politics.


  67. Alice
    March 27th, 2011 at 17:42 | #67

    Oh and on transport ane electricity which the NSW definitely needs some solutions to – hey guess what?
    We cant fix public transport till we fix the grid. They have already tried putting more trains on and it blew the gris.
    We cant fix electricity and the need fo renewable ebnergy until we fix the grid and the privatisation of electricity.
    Apparently the government abandoned solar rebates for the simple reason they were getting too much electricity into the grid and the electricity companies (or BBEs or whatever semi private model they have been following) was burning off the excess. Ill bet my bottom dollar they were burning off so they could keep their no renewable electricity prices high.

    If we dont get that power is a public good and you simply cant entrust the private sector with it – we wont fix power and we wont fix Sydney transport.

    Doh – the system is integrated (transport and pwer)…and yes we can have a better gris and yes we can have solar renewable energy and yes we can have a train system but the government needs to own and invest in the grid and see it as a long term investment in infratructure that will save everyone – houesholds abd business money (and jobs and growth) ie a publuc good not a hsort term profit based enterprise. Thats whereNSW Labor has failed. They couldnt look outside the short term profit market model box. They couldnt look into the future. They couldnt see what needs to be done.

    But if we mess this up we are doomed to another thirty years of inaction and incompetence and that looks like hell to me.

  68. Ernestine Gross
    March 27th, 2011 at 17:42 | #68

    @John S Cook

    Thank you for your reply and the link to your work. It seems to me your work is in the area of sustainable development within the broad framework of the Earth Summit 1992. My reference to the 2 primitives in economics (people and the environment) is, on the basic research methodology level, compatible (I noticed you reference a paper by Kenneth Arrow). In this regard, I concur with your suggestion that we might be closer than what is apparent after the usage of terminology (‘primitives’ vs ‘factors of production’) has been sorted out.

    I’d be happy to hear more about your ideas on what is wrong with accounting-national acounts-monetary economy and I’d like to hear what you think of a new definition of money but I suspect this forum is not suitable – everybody else might be bored.

  69. Alice
    March 27th, 2011 at 17:45 | #69

    Thats grid. We need the grid fixed.

  70. Alice
    March 27th, 2011 at 17:48 | #70

    Oh and London is burning.

  71. John S Cook
    March 27th, 2011 at 19:20 | #71

    @Ernestine Gross
    Thanks for your note. I have watched the global environmental monitoring movements since the 1972 UNCHE and the foundations of UNEP. I became interested in system theory and the cybernetics movement; and completed a PhD in cybernetics applied to natural resource management in 1994.

    My approach has been to trace the origins of money as a symbol or token used in lieu of barter in commodity transactions. The social sanctions against interest on money – and later controls on interest rates – survived over a long period of history; and separation from the gold standard is of recent origin. At p.189, I borrowed from a 19th century comment on usury laws and converted a numerical example to show the effects of compounding interest.

    In terms of modern measurements, the earth’s mass approximates 5.98 × 10^24 kg and an
    Australian one dollar coin weighs 9 grams. One dollar invested at 5% compound interest
    for 1266 years would weigh more than the earth. At 2000 years, the mass would be 2.15
    × 10^41 kg — the earth’s mass multiplied by an astronomical number.

    Various institutional arrangements intervene to prevent the appearance of something that would otherwise be absurd. Systemic inflation is one; and fiddling with the coins and notes to reduce the physical volume while the numbers keep escalating is another. Holding and inventory costs are also absorbed into the system – a problem if we try to use tins of baked beans in lieu of money. The abstraction from reality becomes more complete with digitized transactions where it become easy to add zeros to numbers or accounting statements. However, a time of reckoning occurs when people begin to doubt the meaning that attaches to the numbers.

    I don’t pretend to know the answers but I do see other options without knowing whether or not they would be workable in practice. I believe I can deduce many of Steven Keen’s conclusions using simple ideas from the linguistics of money as a symbolic token and simple arithmetic of compound interest.

  72. Freelander
    March 27th, 2011 at 19:54 | #72

    John S Cook :

    In terms of modern measurements, the earth’s mass approximates 5.98 × 10^24 kg and an
    Australian one dollar coin weighs 9 grams. One dollar invested at 5% compound interest
    for 1266 years would weigh more than the earth. At 2000 years, the mass would be 2.15
    × 10^41 kg — the earth’s mass multiplied by an astronomical number.

    All that suggests, that when you turn up at the bank to withdraw it all, they will say: “Can you take a cheque?”

  73. John S Cook
    March 27th, 2011 at 19:59 | #73

    To which you might ask – ‘Are you sure it won’t bounce?’

  74. Freelander
    March 27th, 2011 at 20:17 | #74

    “Safe as a bank”…

    I agree with what seems your basic thesis that there is a limit to growth. Question always is where is that limit? Personally, I believe it wiser to stop long before folly demonstrates what that limit might be. The problem is that stopping would require some limits on having kids which is something that would be very difficult to get people to agree to.

  75. John S Cook
    March 27th, 2011 at 20:44 | #75

    I agree with you summation. Curbing population growth is difficult – but perhaps it is possible; and better than some alternatives.

  76. Alice
    March 27th, 2011 at 21:45 | #76

    @John S Cook
    Maybe we should really be wondering why we dont have more solar energy… we have a lot of warmth and a lot of space.
    Can solar crash the grid? These articles are interesting because what they imply is that solar is workable but that the electricity industry doesnt like it. Hmm interesting.



  77. Hermit
    March 27th, 2011 at 22:23 | #77

    According to UK energy guru David Mackay the Brits use 125 kwh of energy a day. Divided by 24 hours that’s a bit over 5 kilowatts continuous average or the power of a small ride-on mower running around the clock. I’ve mislaid the ABARE figures but Aussies rate about the same. That total power consumption has thermal, electrical and mechanical fractions which may vary if we convert from petrol to electric cars. That’s ‘if’. This average applies to everybody since in theory even a yurt dweller is partly responsible for aluminium smelters; it’s part of the broader society. Advocates of simpler living suggest we can make significant cuts to our 5kw lifestyles but population growth, air conditioning and upward social mobility all put relentless pressure on energy demand. I don’t see a happy outcome to attempts to cut energy use. Perhaps the NSW election result partly reflects this.

    Since Aussies each emit about 20 tonnes of CO2 a year if 7 billion people were as fossil energy gluttonous then total man-made emissions would be 140 billion tonnes a year. Fortunately world anthropogenic emissions are a mere 30 billion tonnes or so a year. We want to get that 30 down to about 6. Thank God the rest of the world is not as selfish and irresponsible as Australia.

  78. John S Cook
    March 27th, 2011 at 22:31 | #78

    We should have been developing solar and other renewable sources of energy years ago. I suspect that much of this generation needs to be site-specific and requires a bit of ingenuity in using resources at hand more intelligently. We need some decent engineers and some decent economists who can understand more completely the nature of investments in energy production.

  79. paul walter
    March 27th, 2011 at 22:32 | #79

    Family planning…birth control…good grief, how can you have big pop development (and fat contracts and tenders) without an increasing population?
    Worse still, no big pop globally, no way of keeping wages down by playing off the pool against itself. And so on.
    Surely we can do better than this?

  80. Freelander
    March 27th, 2011 at 22:51 | #80

    Even if we make most of them slaves we would need some restrictions before we get to the point that we are unable to feed them all (or get them to do the work to feed themselves and us, and keep us in the style to which we aspire).

  81. Alice
    March 28th, 2011 at 05:42 | #81

    @John S Cook
    I agree John – because when I find out that new trains are capable of crashing our grid, and when I hear that solar rebates were wound back due to the same risk (in fact too much energy was being generated if they had to resort to burning some off) then that refers to a grid problem and I cant even imagine that electricitu companies are going to be willing to invest in the grid for their own industry let alone what may be in effect a cheaper substite / competitor….which then brings us back to the issue that when it comes to infrastructure we need an integrated approach and privatisation may not be the best solution in terms of getting an integrated approach (if every industry is protecting its own patch somewhere).
    We do need good engineers and designers and we do need decent economists working independently of any particular private sector patch (and that includes the banks) on getting the grid able to handle both solar and more trains and we simply cant leave it to the existing power companies to achieve this. They wont. There are no reasons for them to do so….so even more woe is me for KK and Roozendahls mindless sell off of electricity assets.
    John S you are right – the investment in renewables whould have started years ago instead of leaving it the power companies to come up with very ugly solutions like nuclear.

  82. Hermit
    March 28th, 2011 at 06:36 | #82

    I might add that while other countries not in the OECD have higher average emissions than Australia they don’t pass themselves off as moral exemplars. Qatar and Bolivia don’t send large delegations to climate conferences then wag their finger at others. Australia should s.t.f.u..

  83. Alice
    March 28th, 2011 at 14:40 | #83

    LOL Hermit – its a bit like that when we keep shovelling coal into the worlds furnances isnt it?.

  84. bill
    March 28th, 2011 at 18:28 | #84

    A man is known by the company he keeps – Mungo MacCallum takes on Abbott at The Drum.

  85. Fran Barlow
    March 28th, 2011 at 18:36 | #85


    Qatar and Bolivia don’t send large delegations to climate conferences then wag their finger at others. Australia should s.t.f.u

    QATAR, fair enough but as Australia emits about 14 times the output per capita as Bolivia (17.95 v 1.38 in 2007) I can’t imagine what you were thinking typing this. FTR Bolivia ranks 89th by jurisdiction as opposed to Australia which is about 15th. I daresay Australia in historic terms would have emitted even more relative to Bolivia over the last 100 years.

  86. Freelander
    March 28th, 2011 at 19:02 | #86

    As a matter of interest, there should be some ranking by consumption as well as by production. Australia is producing things that use a lot of energy or emit a lot of CO2 in their production. I doubt if looked at from the consumption side, that Australia’s consumption would be any greater, in terms of CO2 that was emitted in the production of those goods, than any other typical country with the same income per capita. On the consumption side, the big consumer is likely to be the USA. Unfortunately, it is impractical to try to fix the problem from the consumption side. It is unfortunate that the mix of products Australia produces happen to currently involve heavy CO2 emissions. That fact alone makes it all the more important that adjustments are made sooner rather than later, if only for our own benefit. If Australia continues to delay, when the rest of the world finally forces those adjustments it could be extremely costly and disruptive to our economy.

  87. BilB
    March 28th, 2011 at 19:40 | #87

    Hermit @ 27,

    That would 43 thousand kilowatt hours per annum. The bulk of that will be gas consumption for heating. UK households pull as little as 4800 Kwhrs per annum electricity, but use 16,000 Kwhr equivalent gas. The other 20,000 Kwhrs will be transport and industrial share per house hold.


    Australia’s energy mix is quite different as we do not heat with gas, but cool with electricity (13,000 Kwhrs Australian average household consumption) , and commute further by car rather than train and bus.


    what is the weight of all of the money in the world currently converted to 9 gram one dollar coins?

  88. Ernestine Gross
    March 29th, 2011 at 05:38 | #88

    John S. Cook,
    I like your compounding interest example in terms of physical quantities. Surely, it provides food for thought to those who want both, interest on ‘their capital’ and a metal (or any commodity) based currency.

    BilB asks “what is the weight of all of the money in the world currently converted to 9 gram one dollar coins?”

    How long is a piece of string, BilB?

  89. BilB
    March 29th, 2011 at 07:00 | #89


    Oops, that was John Cooks calculation. I took a punt at there being 1000 trillion $ in circulation which came out to be 9 billion tonnes of coins. Nowhere near as impressive as John’s calculation.

  90. BilB
    March 29th, 2011 at 07:05 | #90

    When in fact there is less that 5 trillion US dollars in circulation.


  91. Ernestine Gross
    March 29th, 2011 at 10:35 | #91


    The dollardaze site you referenced contains M0 measures of money and a little life box on national debt. Surely, some questions arise as to what is money.

  92. John S Cook
    March 29th, 2011 at 17:45 | #92

    @Ernestine Gross
    Yes Ernestine, I agree – what is the nature of money, what purposes do we want it to have, are there conflicts in trying to serve more than one purpose, and what policy implications does all that have? That could be a new and worthwhile way of looking at macroeconomics and economic stability problems.

  93. SJ
    March 29th, 2011 at 18:00 | #93

    Testing again.

  94. SJ
    March 29th, 2011 at 18:01 | #94

    Works. Thanks John.

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