Many thanks for this video, Dr. O'Neill! I read a book on this subject but I didn't understand it very well. You managed to explain very clearly and succinctly!
Thanks for this! I would have liked a fuller description of defining value in such an energy-based paradigm of economics. I am guessing it has to do with information (ie we produce order that yields the energy needed to do stuff). But what is the numeraire? Calories? Calorie-bytes? I am guessing you have developed this more fully somewhere? Thank you!
"Precision is not Accuracy", and wave-particle coordination-identification positioning is subject to the Uncertainty Principle, Absolutely all about the aspect-versions of Singularity-point Lensing Partitioning of Superspin Modulation Mechanism for time duration timing, which is why Euler's e-Pi-i 1-0-infinity sync-duration Unit Circle is a set of Mathematical symbols to precisely self-define thermodynamical real-time superposition Fluxion-Integral Temporal superposition Logarithmic logic. Good presentation, near enough for most practical purposes in Economics and science references to Ecology.
The laws of economic thermodynamics 101: You can't win; The best you can do is draw; The game is rigged; You can't get out of the game; It's a long game!
“In any system of energy, Control is what consumes energy the most. No energy store holds enough energy to extract an amount of energy equal to the total energy it stores. No system of energy can deliver sum useful energy in excess of the total energy put into constructing it. This universal truth applies to all systems. Energy, like time, flows from past to future” (2017).
Dan, if you do the math for EROI in your graphic, "Measuring EROI at Different Points" It shows 63 MJ available after refining but it took 37MJ to deliver it. That means EROI is 63/37=1.7!!!! Correct? If you go to the end of the chain, "Oil Remaining as Consumer Ready Fuel" there is remaining 20.5MJ but it cost 79.5 MJ to get there, 20.5/79.5=0.25!!! Less than one! Does that mean we are almost out of NET ENERGY to Society???
Not much. Price is a reflection of the combination of the costs of the use of the 3 (Adam Smithian) factors needed to produce something, namely Land, Labor and Durable Capital Goods. The monetary returns for these 3 are Rent, Wages and Dividends on investment. Most economists today seem to think that Rent and Dividends are part of the same activity because the landowner is also a capitalist. This can be true but the specific activities they do in the production make them separate entities.
ISSUES: The presentation is very good in providing a summary, but there are a couple of major anomalies in the presentation that are common in ecological economics. The first anomaly is that the economy is described as an "open system" but how can this be formalised in terms of the boundary's location in X,Y,Z and time? Indeed, nobody has so far defined the actual location of the "open system boundary" for the economy, and this indicates a lack of formalism. The other issue and problem is related to the first problem - and this is the highly subjective use of the term "entropy". Ecological economists frequently use the term "entropy" to describe the consumption of low-entropy resources and production of high-entropy waste. In order to provide a true formalism around the use of entropy, there needs to be the delineation of the system boundary and a recognition that the "observer" is not objective because the observer in this case is defining what kind of matter is a "resource" and what kind of mater is "not a resource". This biased worldview is not explained by ecological economists and they assume that entropy can refer to whatever material they want without defining a true system boundary and the information context that is of a social origin. Entropy as a concept does not in itself differentiate between different material types and so the term "entropy" is being used out of context. Entropy (as originally defined) does not have a social context, and so the relationship between the observer and the boundary needs to be explicitly defined so that the observer is *outside* the system boundary. This problem is linked to the absence of a true system boundary when referring to "resources". Furthermore, the breakdown of resources can be physical and mechanical, and this can be explained using probabilities that are not manifesting at the atomic or molecular level - and thus this mechanical dispersion is not "entropy". This misunderstanding is related to the messy office metaphor in the video. The messy office is not an example of "entropy" because it is just a metaphor. These problems have troubled the field of ecological economics ever since the time Georgescu-Roegen tried to include entropy in economics. His ideas were rejected by physicists, and these problems have not been resolved and ecological economists have failed to address them still. This is one reason why ecological economics has not progressed very far in the past 30 years. en.wikipedia.org/wiki/Nicholas_Georgescu-Roegen
"Let's aggregate historical data and deduce principles from it." - someone who doesn't understand statistics, the scientific method, nor economics Economic data IS historic data. There are too many factors involved to ever have reproduceable data; thus there cannot be logically sound deductions of that data. Real economics has to start from fundamental axioms and make deductions from there.
This is missing key parts of any real economy 1. Capital can be improved, like Americans have been actually been burning less carbon per capita. It cannot be the case that the sum is zero, no real economy works like this. 2.Entropy would be an issue if the earth was not getting new energy and innovations from humans. Otherwise Evolution by natural selection would not work, you're slipping into an economic creationism. The economy under your model is a closed system (save bit of space-junk). But it is still getting more energy from other sources. With nuclear and solar, we will have plenty energy to keep the earth a good habitat for humanity.
@Dan O'Neill While this channel is economics focused I couldn't help but interject and say that matter and energy are not the same. Matter has been widely observed to be created and destroyed. The energy in matter however is what is conserved. We live in a finite world after all in which all matter is finite. Energy and light however are the two things in nature which are eternal.
I'm not sure if I quite get your point, but I think he explicitly stated that energy and light on earth stem (largely) from the sun, which will eventually also deplete (just on a very loooong timescale). They are not eternal - or do you mean something else?
@@Raketensofa1 I'm just an average guy who enjoys expanding his knowledge on anything. yeah I'm not understanding anything that he's saying.... From my understanding matter and energy are intrinsically entwined.. Matter is nothing but stored energy. Which takes equal to or greater than energy applied to said matter to release that stored energy.. therefore changing matter from one form to another. You see this in the splitting of uranium..
These things are not eternal, and one day in the future our decedents will need to live close to another star, which is also becoming a high entropy source of energy, too.
The idea of our economy being a system has not been explained. In thinking about it, the social business part of it is clearly a system with the entropic features so described above. This does not get us very far until one realizes that the natural resources which are low entropy, get transmitted into a mixture of even lower entropy produce plus some higher entropy ones continuously by our productive activities. But because we do not all have equal rights for access to these resources, our productivity becomes varied and those who own these resources have an advantage over those who merely have the right to use some of them as tenants and as hired employees, in the situation where the lower entropy produce is sold. Surely it would be more socially just if we all had equal rights and benefits from these resources and the control of high entropy waste were properly allocated.
Thank you so much for this enlightening video.
You are a legend brother
Many thanks for this video, Dr. O'Neill! I read a book on this subject but I didn't understand it very well. You managed to explain very clearly and succinctly!
Thanks for this! I would have liked a fuller description of defining value in such an energy-based paradigm of economics. I am guessing it has to do with information (ie we produce order that yields the energy needed to do stuff). But what is the numeraire? Calories? Calorie-bytes? I am guessing you have developed this more fully somewhere? Thank you!
Wonderful explanation. Thank you very much
Thank you so much, you made it so easy to understand
Aside from my comment about matter and energy I do enjoy your lectures.
"Precision is not Accuracy", and wave-particle coordination-identification positioning is subject to the Uncertainty Principle, Absolutely all about the aspect-versions of Singularity-point Lensing Partitioning of Superspin Modulation Mechanism for time duration timing, which is why Euler's e-Pi-i 1-0-infinity sync-duration Unit Circle is a set of Mathematical symbols to precisely self-define thermodynamical real-time superposition Fluxion-Integral Temporal superposition Logarithmic logic.
Good presentation, near enough for most practical purposes in Economics and science references to Ecology.
i think it was pretty clear and insightful
Commenting for the algorithm. Thanks, teacher.
The laws of economic thermodynamics 101:
You can't win;
The best you can do is draw;
The game is rigged;
You can't get out of the game;
It's a long game!
“In any system of energy, Control is what consumes energy the most.
No energy store holds enough energy to extract an amount of energy equal to the total energy it stores.
No system of energy can deliver sum useful energy in excess of the total energy put into constructing it.
This universal truth applies to all systems.
Energy, like time, flows from past to future” (2017).
Are, there any reading you would recommend to understand this in more depth?
Dan, if you do the math for EROI in your graphic, "Measuring EROI at Different Points" It shows 63 MJ available after refining but it took 37MJ to deliver it. That means EROI is 63/37=1.7!!!! Correct?
If you go to the end of the chain, "Oil Remaining as Consumer Ready Fuel" there is remaining 20.5MJ but it cost 79.5 MJ to get there, 20.5/79.5=0.25!!! Less than one! Does that mean we are almost out of NET ENERGY to Society???
what does any of this have to do with the origin of price
Not much. Price is a reflection of the combination of the costs of the use of the 3 (Adam Smithian) factors needed to produce something, namely Land, Labor and Durable Capital Goods. The monetary returns for these 3 are Rent, Wages and Dividends on investment. Most economists today seem to think that Rent and Dividends are part of the same activity because the landowner is also a capitalist. This can be true but the specific activities they do in the production make them separate entities.
ISSUES: The presentation is very good in providing a summary, but there are a couple of major anomalies in the presentation that are common in ecological economics. The first anomaly is that the economy is described as an "open system" but how can this be formalised in terms of the boundary's location in X,Y,Z and time? Indeed, nobody has so far defined the actual location of the "open system boundary" for the economy, and this indicates a lack of formalism.
The other issue and problem is related to the first problem - and this is the highly subjective use of the term "entropy". Ecological economists frequently use the term "entropy" to describe the consumption of low-entropy resources and production of high-entropy waste. In order to provide a true formalism around the use of entropy, there needs to be the delineation of the system boundary and a recognition that the "observer" is not objective because the observer in this case is defining what kind of matter is a "resource" and what kind of mater is "not a resource". This biased worldview is not explained by ecological economists and they assume that entropy can refer to whatever material they want without defining a true system boundary and the information context that is of a social origin. Entropy as a concept does not in itself differentiate between different material types and so the term "entropy" is being used out of context. Entropy (as originally defined) does not have a social context, and so the relationship between the observer and the boundary needs to be explicitly defined so that the observer is *outside* the system boundary. This problem is linked to the absence of a true system boundary when referring to "resources". Furthermore, the breakdown of resources can be physical and mechanical, and this can be explained using probabilities that are not manifesting at the atomic or molecular level - and thus this mechanical dispersion is not "entropy". This misunderstanding is related to the messy office metaphor in the video. The messy office is not an example of "entropy" because it is just a metaphor. These problems have troubled the field of ecological economics ever since the time Georgescu-Roegen tried to include entropy in economics. His ideas were rejected by physicists, and these problems have not been resolved and ecological economists have failed to address them still. This is one reason why ecological economics has not progressed very far in the past 30 years.
en.wikipedia.org/wiki/Nicholas_Georgescu-Roegen
Cash flows in economics = Energy flows in physics
Economic inequality = Disorderness in enthalpy
Hence entropy works fine in both subjects
But equilibrium in economics seems farcical
Plus, who owns financial and productive forces? Capitalists
All the Chinese stuff I buy the days develops high entropy pretty quickly.
Economics is a branch of thermodynamics!!!!
"Let's aggregate historical data and deduce principles from it."
- someone who doesn't understand statistics, the scientific method, nor economics
Economic data IS historic data. There are too many factors involved to ever have reproduceable data; thus there cannot be logically sound deductions of that data.
Real economics has to start from fundamental axioms and make deductions from there.
This is missing key parts of any real economy
1. Capital can be improved, like Americans have been actually been burning less carbon per capita. It cannot be the case that the sum is zero, no real economy works like this.
2.Entropy would be an issue if the earth was not getting new energy and innovations from humans. Otherwise Evolution by natural selection would not work, you're slipping into an economic creationism.
The economy under your model is a closed system (save bit of space-junk). But it is still getting more energy from other sources. With nuclear and solar, we will have plenty energy to keep the earth a good habitat for humanity.
@Dan O'Neill While this channel is economics focused I couldn't help but interject and say that matter and energy are not the same. Matter has been widely observed to be created and destroyed. The energy in matter however is what is conserved.
We live in a finite world after all in which all matter is finite. Energy and light however are the two things in nature which are eternal.
I'm not sure if I quite get your point, but I think he explicitly stated that energy and light on earth stem (largely) from the sun, which will eventually also deplete (just on a very loooong timescale). They are not eternal - or do you mean something else?
@@Raketensofa1 I'm just an average guy who enjoys expanding his knowledge on anything.
yeah I'm not understanding anything that he's saying....
From my understanding matter and energy are intrinsically entwined..
Matter is nothing but stored energy. Which takes equal to or greater than energy applied to said matter to release that stored energy.. therefore changing matter from one form to another. You see this in the splitting of uranium..
These things are not eternal, and one day in the future our decedents will need to live close to another star, which is also becoming a high entropy source of energy, too.
The idea of our economy being a system has not been explained. In thinking about it, the social business part of it is clearly a system with the entropic features so described above. This does not get us very far until one realizes that the natural resources which are low entropy, get transmitted into a mixture of even lower entropy produce plus some higher entropy ones continuously by our productive activities. But because we do not all have equal rights for access to these resources, our productivity becomes varied and those who own these resources have an advantage over those who merely have the right to use some of them as tenants and as hired employees, in the situation where the lower entropy produce is sold. Surely it would be more socially just if we all had equal rights and benefits from these resources and the control of high entropy waste were properly allocated.