In?managing?how?the?world?should?work,?an?influential?article?in?Nature led?with?the?statement?that?“Gross?Domestic?Product?is?a?misleading?measure?of?national?success”?and?urged?countries?to?“embrace?new?metrics”.1?As?reported?in?this?journal,?there?has?indeed?be?a?move?by?many?countries?and?provinces?to?seek?more?realistic?data?on?sustainability.2?A?solution?to?identify?key?factors?serving?wellbeing?is?in?the?combining?of?science?and?economics?to?measure?all?activities?by?the?changes?in?chemical?bonds?made.?From?the?simple?act?of?breathing,?up?through?the?refining?of?metals,?to?complex?manufacturing?and?what?a?whole?country?produces,?the?aggregate?of?oxygen-oxygen?bonds?exchanged?for?an?oxygen-carbon?bond?is?an?insightful?indicator?of?work?done.?As?shown?in?the?graphs?leading?this?article,?the?poor?performance?in?production?in?the?US?2001-2010?can?be?identified?objectively?in?science?but?was?hidden?in?dollar-based?National?Accounts?until?after?the?crises?of?2008.
The?wealth?of?nations?has?been?mused?since?the?reign?of?Solomon.?Chests?of?gold?and?silos?of?grain?were?the?early?measures,?and?the?advent?of?national?accounting?in?the?USA?80?years?ago?soon?led?to?a?movement?within?each?country?having?buildings?of?staff?working?on?their?GDP.?Leaders?across?the?spectrum?of?polities?hope?to?placate?constituents?with?news?of?GDP?growth?even?if?not?reflected?in?infrastructure?and?social?fabric.?GDP?data?shines?even?with?and?especially?if?reckless?growth?results?in?more?pollution?cleanups?and?increased?health?costs.?Money?management?becomes?unhinged?from?the?real?goods?and?services?that?money?is?supposed?to?represent,?and?“making?money”?sinks?into?to?“making-up?money”.
Backlash?in?the?form?of?a?search?for?a?new?economic?paradigm3?has?led?to?attempts?at?Green?GDP?and?the?Genuine?Progress?Indicator.?China?published?Green?GDP?data?in?2006,?embarrassing?provincial?leaders?to?the?extent?that?it?was?not?published?in?subsequent?years,?even?though?an?army?of?public?servants?collect?data?and?present?a?Green?GDP?Report?which?is?not?released.4?The?Genuine?Progress?Indicator?(GPI)?can?show?what?many?people?feel—that?they?are?no?better?off?in?general?wellbeing?than?twenty?years?ago,?even?though?GDP?would?suggest?otherwise.?The?GPI?is?now?an?official?instrument?for?policy?planning?and?management?in?some?regional?governments,?and?is?proving?a?useful?tool.5?However?the?basis?for?the?index?relies?on?surveys,?interviews,?and?people’s?perceptions,?and?not?on?the?hard?facts?of?financial?records.
To?tie?financial?accounting?down?to?what?is?really?happening,?attempts?are?made?to?link?to?science.?The?First?Law?of?Thermodynamics?can?be?comprehended?as?the?conservation?of?matter?and?energy.?In?practice?a?good?representative?of?finite?matter?is?gold.?Various?attempts?at?linking?a?nation’s?money?to?gold?have?been?tried,?most?responsibly?by?Great?Britain?and?then?the?USA,?but?no?country?has?been?willing?to?try?in?the?last?50?years.?Energy?is?a?more?malleable?concept,?yet?said?to?be?conserved?(indestructible)?and?therefore?applied as?a?measurement?of?economic?activity.?During?the?energy
crises?of?the?1970’s?it?was?popular?to?look?on?manifestations?of?energy?as?a?currency.
In?the?past?half?century?there?have?been?earnest?studies?to?link?economic?activity?to?energy?in?some?way.?Odum’s?“emergy”,6?Szargut’s?exergy7?and?Georgescu-Roegen’s?entropy?analysis8?all?have?intuitively?potential?insights?into?the?science?of?economic?production?and?consumption?processes.?This?paper?critically?reviews?the?concept?of?energy?and?its?relevance?to?the?physics,?chemistry?and?engineering?that?are?the?basis?of?primary?and?secondary?industries.
“We Have No Knowledge of What Energy Is”
Richard?Feynman?exclaimed?that?we?do?not?know?what?energy?is,?adding,?“we?do?not?have?a?picture?that?energy?comes?in?little?blobs”.9?And?if?the?purer?sciences?need?care?with?the?concept,?even?more?so?in?accounting?for?economic?activity.?Coal?mining?in?England?around?1750?provides?an?enlightening?case?study?in?energy?economics?before?the?term?“energy”?had?been?introduced.?Coal?mining?is?the?provision?of?a?resource?formed?by?nature?but?requiring?socio-economic?inputs?to?extract?and?deliver.?The?phenomenon?of?“energy”?resides?both?in?the?coal?and?in?the?work?done?on?it.?In?Ricardo’s?economics,?in?situ?coal?is?“virgin?land”?and?(especially?if?you?do?not?know?it?is?there)?has?no?cost.?A?major?cost?in?coal?mining?operations,?however,?is?the?vertical?lift?to?the?surface,?not?only?of?coal,?but?disposing?of?water?threatening?to?flood?the?mine.?Before?the?term,?“energy”,?was?coined?by?Thomas?Brown?in?1804,?James?Watt?had?already?popularized?the?notion?of?“horsepower”?which?he?defined?as?180?pounds?lifted?181?feet?in?1?minute?(rounded?to?33,000?foot?pounds).
The?idea?of?lifting?1?pound?weight?1?foot?high?is?elegant?and?practical,?set?in?the?equation?“work?equals?force?times?distance”,?W?=F?x?d,?only?enunciated?in?physics?in?1829?by?Coriolis.?It?should?go?without?saying?that?force?is?the?vertical?force?needed?to?overcome?gravitational?force.?The?“energy”?term?entered?wider?discussion?with?Joule’s?experiments?reported?1845?linking?mechanical?work?to?heat.?The?idea?of?convertibility,?and?of?the?conservation?of?energy?(in?some?form)?evolved?into?the?field?of?Thermodynamics?and?the?First?and?Second?Laws,?impacting?on?chemistry,?electricity?and?public?imagination.
Joule’s?presentation?of?his?results?as?“The?Mechanical?Equivalent?of?Heat”?was?an?exciting?advance,?discrediting?caloric?theory,?but?also?lent?itself?to?future?confusion.?In?hindsight?a?more?precise?naming?on?his?discovery?could?have?been,?“The?link?between?work?done?by?gravitational?force?and?the?maximum?heat?that?can?be?derived?from?that?work”.?That?title?is?not?as?catching,?but?does?not?pretend?any?energy?forms?are?“equivalent”.?The?force?of?gravity?can?be?harnessed?to?churn?water?and?raise?its?temperature,?but?warm?water?will?not?lift?weights?back?up?with?the?same?efficiency.
Gravitational?force?is?special.?It?is?directional?and?constant,?and?though?we?have?no?idea?of?what?it?really?is,?for?all?practical?purposes?in?everyday?life,?its?source?is?the?massiveness?of?planet?Earth.?Other?forces—a?push?or?pull,?the?force?of?wind,?come?from?diverse?sources?of?energy,?and?can?manifest?themselves?in?various?forms.?There?is?no?universally?agreed?list?of?forms?of?energy,?though?most?texts?list?about?six?groups?which?may?overlap?depending?on?user?perspective.?Discounting?the?force?of?gravity?because?it?is?free?and?the?strong?force?inside?nuclei,?the?only?one?force?left?to?drive?action?(including?economic?activity)?is?the?electromagnetic?force?(emf).10
If?we?return?to?Watt’s?comparing?of?steam?engines?against?horse?power,?a?joule?is?lifting?102?grams?one?meter?against?the?force?of?gravity.?But?the?link?to?gravity?was?dropped?in?the?1946?world?conference?on?measurements?because,?quite?reasonably?for?scientific?exactness,?gravitational?force?varies?by?0.7?percent?between?the?extremes?over?the?surface?of?the?Earth.?The?replacement?definition?requires?us?to?imagine?a?mass?of?1?kilogram?with?no?gravitational?forces?acting?on?it?experiencing?some?force?that?will?accelerate?it?at?1?meter?per?second.?That?is?hard?to?imagine,?in?high?school?physics,?and?in?professional?economic?research.?The?upshot?is?confusion?in?energy?analysis?of?economic?activities.
The?energy?concept?gets?only?general?treatment?in?economics,?as?if?the?details?are?taken?care?of?in?science.?Reference?to?the?relationships?water?has?with?food,?energy?and?environment11?has?firmed?into?discussion?of?a?“water-energy-food?nexus”.12?The?natural?water?cycle?is?now?almost?always?augmented?with?construction?of?storage?facilities?and?channeling?and?with?pumping.?That?is,?humans?must?intervene?with?energy?investments,?that?can?just?be?a?dollar?value,?with?the?details?left?to?engineers.?Simply?put,?energy?“inputs”?are?monetized?and?commodified.13
Yet?big-picture?accounting?of?physical?economic?activities?provides?a?useful?backdrop?to?dollar?cost?benefit?analysis.?It?can?identify?misunderstandings?in?double?counting,?counting?line?items?that?don’t?belong?and?failure?to?count?“externalities”?which?do?count?in?the?big?picture.?Energy?is?not?just?another?commodity,?another?input?to?an?ecosystem?and?is?not?some?single?digit?percentage?of?a?country’s?GDP.?In?science?there?is?only?matter?and?energy,?and?economics?never?counts?“matter”?as?a?generic?input.
Economics?needs?to?reverse?engineer?some?ecological?science?and?reassemble?it?in?a?new?approach?more?useful?to?economic?analysis.?Energy?in?economics?is?more?mysterious?than?rocket?science.?The?scientists?have?left?key?problems?unsolved.?As?a?case?in?point,?gasoline?prices?figure?prominently?in?economic?scenarios,?and?yet?how?science?relates?gasoline?combustion?to?the?environment?seems?unimportant?in?engineering?and?a?mystery?in?economics.
Fueling the Economy— Chemistry’s Hidden Debt
In?chemistry,?the?reactants?in?gasoline?combustion?are?accounted?as?having?bond?strengths?totaling?16?kj/mol?and?the?products?as?21?kj/mol.?The?change?in?enthalpy?is?-5?kj/mol?and?it?is?this?negative?number?that?consumers?demand?and?countries?go?to?war?over.?Chemical?engineers?ignore?the?minus?sign?and?convert?this?to?Mj/liter,?and?then?for?a?family?car,?16?miles/gallon?or?7?liters/100?km.?The?chemistry?gives?us?the?magnitude?of?the?number?accurately?but?hides?what?needs?to?be?recognized?for?modelling?in?ecological?economics.?It?does?not?make?economic?sense.?If?the?energy?units?were?dollars?it?would?seem?that?the?gasoline?costs?$16?and?emissions?$21?and?as?well?allows?$5?worth?of?energy?is?released,?available?for?human?use.?From?an?economic?sense?it?would?be?expected?to?start?with?a?certain?investment?and?portion?be?directed?for?beneficial?use?and,?due?to?imperfect?efficiency,?the?remainder?emitted?as?waste.?In?chemistry?the?numbers?seem?the?wrong?way?around.?It?just?does?not?add?up.
Over?the?past?hundred?years?chemistry?has?established?tests?for?the?energy?cost?of?separating?the?bonds?that?hold?atoms?in?molecules.?It?is?impossible?to?manually?separate?an?individual?bond?between?two?atoms?but?practicable?to?do?it?between?large batches?(6?x?1023?molecules).?The?published?results?serve?the?purpose?of?showing?that?when?a?fuel?combusts?with?oxygen,?the?difference?in?bond?energies?in?resultant?molecules?is?the?amount?of?energy?released?and?“available”?for?economic?use?(heating,?driving?a?car,?etc.).?Table?1?summarizes?this?lab?test.
&nbps;
An?attempt?is?made?here?to?venture?between?chemistry?and?economics?to?provide?an?explanation?of?the?system?at?work.?An?atom?is?a?structure?unlike?anything?in?macroscopic?engineering,?but?obeying?strict?quantum?mechanics?laws.?The?rearrangement?of?valence?electrons?seeking?tighter?bonds?in?neighboring?atoms?occurs?against?a?backdrop?of?the?total?energy?in?each?atom.?Chemistry?text?books?refer?to?the?“internal?energy”?by?the?symbol?“U”?and?deem?it?unknowable.?Given?the?complexity?of?the?Schrodinger?equation?and?acknowledging?we?cannot?pin?down?electrons’?positions,?it?seems?clear?that?there?is?no?exact?answer.?This?should?not?bother?economists,?and?guessing?internal?total?emf?as?the?sum?of?bond?strengths?of?valence?electrons?comes?up?with?an?estimate?that?can?be?improved?on?later.?See?Pull-out?Box?1?Where?does?bond?strength?come?from??for?this?approach?to?understanding?the?relevance?of?bonding?in?the?context?of?“total?energy”?in?a?single?diatomic?oxygen?molecule.
&nbps;
Figure?1?displays?the?conventional?approach?and?a?new?approach?that?recognizes?what?happens?when?energy?is?tapped?from?the?overall?ecosystem.?The?conventional?approach?has?been?used?for?many?decades?because?it?gives?the?correct?magnitude?of?energy?released?from?a?mole?of?gasoline?(except?it?has?a?minus?sign).?The?alternative?approach?provides?a?new?and?humbling?understanding?of?the?bigger?picture.?The?energy?made?available?is?about?2?percent?of?the?internal?energy?of?the?reactants,?and?once?done?the?products?are?locked?in?tighter?bonds?where?there?is?no?more?energy?available.
This?pattern?is?demonstrated?using?the?chemistry?lab?situation?of?a?mole?of?gasoline?(octane,?C8H18).?But?the?pattern?is?the?same?when?graphing?just?one?molecule?of?octane,?or?a?liter,?ton?or?million?barrels.?Furthermore?other?hydrocarbons—methane,?propane,?exhibit?the?same?pattern?with?the?energy?released?being?2.1?percent?of?the?internal?energy?(as?calculated?in?the?Supplementary?Material).?The?energy?released?from?coal?is?less?because?of?impurities?with?the?representative?bituminous?coal?compound?in?the?Supplementary?Material?calculated?as?1?percent.?The?value?for?carbohydrates?is?1.6?percent.?In?general,?for?pure?hydrocarbons?the?energy?released?is?1.5?percent?of?the?internal?energy?(as?estimated)?of?the?oxygen?combusted.
Carbon Exchange with Oxygen as Objective Measure of Economic Activity
This?approach,?at?any?scale,?serves?as?a?model?for?the?realistic?appreciation?of?purposive?release?of?energy?in?any?economic?activity.?It?answers?Feynman’s?cry?for?what?that?energy?“is”.?It?is?indeed?the?“little?blobs”?he?sought,?in?the?form?of?electron-proton?pairs?within?atoms,?that?can?rearrange?combinations?of?atoms?to?save?about?2?percent?of?their?required?internal?structural?maintenance?forces.
The?right?hand?half?of?Figure?1?is?replicated?in?Figure?2?with?the?bond?exchanges?shown?occurring?as?the?reactants?become?products.?In?Figure?2?and?its?right?hand?half,?the?purposive?act?of?extracting?energy?from?the?reactants?can?be?shown?in?the?exchange?of?bonds?that?results?in?the?slightly?tighter?arrangement?of?products?with?the?difference?being?what?we?perceive?as?the?energy?released.?Only?2?percent?of?the?energy?internal?to?the?reactants?is?made?available?for?economic?use.?This?is?a?humbling?surprise?for?economic?actors?and?for?analysts?of?economic?behavior.?An?explanation?of?the?reaction?in?the?center?of?Figure?2?is?set?out?in?Pull-out?box?2.
&nbps;
Work as Lifting Against Gravity
Rather?than?Joule’s?comparison?of?weights?falling?with?water?temperature?rising?(and?referring?to?their?“equivalence”)?the?notion?of?lifting?is?a?useful?way?of?presenting?economic?activity.?It?is?like?lifting?the?stone?blocks?to?make?a?huge?pyramid,?and?the?test?can?applied?to?how?much?you?lifted?today,?in?a?year,?or?lifetime,?and?the?same?for?companies,?countries?and?the?globe.?The?sobering?realization?is?that?all?of?human?endeavor?is?an?aggregate?of?this.?Financial?calculations?need?to?match?the?physical?reality.
&nbps;
In?the?stark?example?of?a?forklift?rated?at?44?kw?lifting?a?4.488?ton?item?1?meter?high?in?1?second,?this?is?the?result?of?15?x?1021?molecules?of?C3H8?combusting?with?75?x?1021?molecules?of?O2.?In?that?1?second?each?of?45?x?1021?carbon?atoms?trades?up?from?its?bond?with?hydrogen?and?locks?in?between?two?oxygen?atoms.?The?swap?results?in?a?saving?of?about?6?electron?volts?(ev)?in?the?required?internal?structural?maintenance?in?each?of?the?product?molecules.?That?6?ev,?times?45?x?1021,?is?the?energy?released?in?all?directions?at?the?level?of?atoms?that?can?be?directed?and?harnessed?in?an?engine?cylinder?to?lift?4.488?tons?1?m?high?against?the?force?of?gravity?(theoretically?44,000?joules?or?2.7?x?1023?ev.).?This?calculation?is?for?full?throttle?(1?gram?propane?per?second)?and?empirical?tests?would?present?a?lesser?result.
Forklifts?also?transport?items?horizontally?but?if?the?combustion?rate?was?the?same?as?when?lifting?then?the?work?done?horizontally?including?against?friction?could?be?deemed?equivalent?to?a?weight?lift.?All?and?any?work?done,?based?on?calculation?of?oxygen?molecule?bonds?broken?and?exchanged?for?oxygen-carbon?bonds?can?be?represented?as?an?equivalent?“lift?against?gravity”.?A?weightlifter?may?lift?50?kg?2?meters,?and?unlike?the?forklift,?there?is?not?direct?instantaneous?register?of?bond?exchanges,?but?there?is?no?doubt?it?does?happen?and?there?is?an?objective?link?between?daily?intake?of?carbon?atoms?(in?carbohydrates?and?proteins)?and?work?done,?not?only?in?lifting?but?all?forms?of?work.?It?is?observed?that?heat?results?from?work?done?at?the?scale?of?atoms.
The?solution?this?approach?delivers?is?that?it?gives?a?closer?picture?of?contributions?to?economic?activity?than?GDP?or?income?dollars.?Speculation?is?a?zero?sum?game?and?has?zero?net?production.?Stimulus?packages?do?add?to?production,?stirring?economic?activity?where?there?was?none.?Millions?of?economic?actors?can?sense?that?their?oxygen?intake,?direct?and?indirect,?results?in?work?done.?The?more?that?that?fact?is?considered,?with?its?implications?and?the?chain?of?indirect?processes?that?combust,?the?clearer?it?becomes.?Even?in?tertiary?industries?with?seemingly?sedentary?work,?there?are?distant?but?vital?links?to?physical?activity?that?can?be?related?to?lifting?work.?This?serves?as?an?antidote,?if?not?a?solution?to?investment?whisperers?who?portray?that?they?can?“make?money”?by?paying?high?returns?drawn?from?the?investments?latter?hopefuls?have?made.?Mere?manipulation?of?money?in?such?practices?performed?by?Madoff?and?such?operators?detailed?in?the?documentary?film?“Inside?Job”?could?not?occur?if?required?to?show?what?work?was?done.
An?all-perceiving?alien?sweeping?by?our?planet?20,000?years?ago?would?see?the?natural?Earth?with?imperceptible?human?economic?activity.?Today?a?similar?sweep?would?see?pyramids?and?skyscraper?cities,?traffic?clovers?and?large?swathes?of?land?radically?transformed?for?better?or?worse?by?farming,?deforestation,?polluting,?and?in?the?past?decade,?proliferation?of?solar?panels.?A?glance?at?the?globe?could?be?encapsuled?in?the?sum?of?diatomic?oxygen?molecules?broken?since?the?start?of?the?Industrial?Revolution,?1750,?up?to?2017.?The?various?engines and?facilities?that?capture?the?flows?of?released?energy?were?manufactured?and?their?history?from?extraction,?processing,?assembly?and?transport?is?the?history?of?past?bond?trades.?Figure?3?graphs?the?estimated?number?of?oxygen-oxygen?bonds?broken?by?human?volition?1750?up?to?2017?and?projected?onward?to?2040.?The?period?starts?with?most?work?done?by?heavy?panting—labor?fueled?by?food?and?fodder,?supplemented?by?fires?fueled?by?wood?and?lamps?flickering?on?oil?from?animal?fat.?Coal?supplanted?firewood?as?main?fuel?mid?nineteenth?century.
Progress?made?through?capital?formation?can?be?modeled?by?application?of?an?inverse?version?of?Figure?2?to?the?timeline?of?Figure?3.?The?process?depicted?in?Figure?2?represents?an?engine?of?growth?inhaling?oxygenoxygen?on?the?right?and?the?bonds?broken?by?trading?for?an?oxygencarbon?bond?to?reduce?the?need?for?internal?structural?maintenance?of?the?atoms?involved.?The?emf?released?is?directed?out?the?left?side?to?“do”?something?such?as?heating?or?moving.?Humans?have?evolved?complex?organizations?and?systems?that?produce?goods?and?services?that?can?then?be?built?on?for?further?gains?in?perceived?wellbeing.?It?is?like?a?rolling?railway?operation?that?lays?line?and?peripheral?infrastructure?as?it?progresses.?In?Figure?3?the?chemical?reaction?depicted?in?Figure?2?represents?all?the?technical?processes?that?trade?an?oxygen?atom?for?a?carbon?bond?“profiting”?3.2?ev.?It?can?be?conceptualized?as?a?juggernaut?climbing?the?slope?of?human?progress,?being?able?to?rise?higher?through?the?benefits?of?highorder,?low-entropy?capital?that?has?been?laid?out?up?to?that?point.?The?red?arrow?is?not?quantified?in?this?paper?but?suggests?an?avenue?of?insights?for?further?research.?It?represents?high?entropy?inexorably?produced?from?the?reaction?and?can?lead?to?the?choking?of?further?progress.
The?almost?flat?line?along?the?X?axis?is?a?record?before?the?“sharp?rise?in?energy”?shown?in?such?graphs?as?presented?in?by?the?International?Energy?Agency?(IEA)14?and?the?World?Bank.15?The?IEA?uses?as?units,?millions?of?tons?of?oil?equivalent?(Mtoe)?and?the?World?Bank,?terawatt?hours?(Twh)?to?unify?various?forms?of?energy.?In?so?doing?the?concept?of?energy?becomes?even?more?abstract?than?dollars.?Money?feels?real,?even?though?it?is?an?abstraction,?yet?what?it?is?supposed?to?represent?is?subject?to?misunderstanding?and?manipulation.?Oxygen?molecules?are?real?and?we?die?without?them?in?minutes.?The?oxygen-oxygen?bond?is?real?and?fixed.?Oxygen?is?an?invisible?gas,?but?the?bond?between?atoms?is?strong?and?real?like?the?bonds?between?atoms?in?a?bar?of?iron.?The?bonds?and?the?matrix?of?charges?in?electron-proton?pairs?that?makes?them?are?Feynman’s?“little?blobs”.?Unlike?money?they?cannot?be?magically?conjured?up.?Though?tricky?at?the?level?of?macroeconomics?or?enterprise?cost-benefit?analysis?they?are?an?aggregate?of?the?number?of?breaths?made?by?workers?and?the?oxygen?flow?drawn?in?by?engines?and?furnaces.?The?more?complex?the?process?the?greater?the?distance?and?time?in?the?cost?chains.?But?unlike?economics?in?money?terms,?micro-economic?activity?adds?up?to?macro-economics.?The?model?is?an?advance?on?the?currently?promoted?textbook?“circular?flow?of?the?economy”?that?draws?inspiration?from?farming?in?France?around?1750.?The?model?does?not?address?nuclear?energy?drawn?from?the?entirely?different?strong?force?inside?nuclei.
A?caveat?needs?to?be?assigned?to?the?key?word,?“growth”.?This?paper?makes?no?comment?on?what?the?aggregate?of?goods?and?services?in?a?nation?should?be.?Apart?from?producing?“goods” there?are?also?“bads”?produced,?but?they?are?driven?by?the?same?technologies?as?goods?and?therefore?show?up?on?Figure?3.?The?critique?of?this?paper?is?that?leaders?become?possessed?of?growth?mania?and?encourage?professionals?in?economics?and?finance?to?come?up?with?dollar?values?that?are?supposed?to?reflect?good?leadership,?even?if?there?are?no?material?benefits.?The?US?Treasury?$700?billion?stimulus?concocted?on?19?September?2008?required?no?material?reality.?It?cannot?show?up?on?a?Figure?3?graph.?In the two bar charts at the top of this article the problem is hidden in dollar accounts until 2010, but in physical economic activity (and lack of it) the signs begin in 2001.
Summing up
This approach delivers a model of economic activity on a scale in time and magnitude from Adam Smith’s example of hunters trading deer and beaver up to the existing global economy. The knowledge that grand activities consist of real atoms and their real bonds means that cursory material flow analysis can highlight errors that supposed “due diligence” by financial accountants may miss. Anomalies draw focus and any entropy error, by ignorance or design, will unfold. Investors who care about their money will want this approach applied to any project targeted.
The current reliance on conventional economic models as a basis for financial analysis may lead to an assumption that any big amount of money is an aggregate of the small amounts most people are familiar with in daily activities. But devious manipulation of the money numbers in large activities is endemic. A stimulus package is a game with key players arguing wild, huge numbers. In high-profile sales, the prices can be outlandishly contrived through collusion to alter market dynamics. A quick assessment of the “weight of work” in any activity and transaction is a wholesome reality check. Ultimately, any goods or service item can be traced back to the work done and its equivalent weight lifted (this makes more sense than calories of heating, and much closer to reality than linking big dollars to the price of apples or a week’s wages). In any item the trail of oxygen bonds must add up. It relates to work done. Machines or people worked for it.
In short:
- This approach jolts analysts of economic activity to acknowledge cost require work and work can be traced to aspirated engines, biological and mechanical.
- Production, including GDP, requires economic action, and the cost of that activity has a scientific basis.
- GDP measured as trading chemical bonds cannot be conjured up.
- The raw and earthy truth is hard work requires heavy breathing and in modern major projects that work is embodied in resources, capital equipment and infrastructure as well as direct human labor.
- In the two bar charts at the start of this paper, had analysts used the first chart, they would see sluggish activity beginning 2001 would lead to a financial crisis.
It is the aspiration of this paper that scientists and economists can work together to refine an objective numerical scoring system to assess the costs of human activity. One direction to be developed, to be understood and accepted by analysts of economy and society is to estimate (as referenced in an article in the journal of the China Ministry of Ecology and Environment, opening depicted Figure 4) for an individual the general observed benefits contributed (numerator) and also the draw-down on the environment imposed by such activities (denominator).
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