MC22: The Coming Energy Crisis
Elon Musk is obsessed with the Kardashev Scale. Conceived by astronomer Nikolai Kardashev to measure a Civilization’s technological progress based on total energy use, the Kardashev scale appears core to his mission.
But there is also a Kardashev paradox.
I wager that the total energy use of an empire is greatest just before its fall. At the point where a civilisation maximizes its entire energy output, it experiences an energy crisis of another kind. At its most powerful it is powerless.
The energy crisis that takes down a Kardashev civilization is not planetary, stellar of galactic, it is energy crisis in its social form - a collapse in value and it’s Elon producing opposite - counter-value.
This post considers the great collapse and its antecedents. Some black swans are just too big to see.
The essence of usefulness is change. Without useful things, change is something that tends to happen whether we like or not. Useful things are needed to make a good change.
But what makes a change good?
Good means what Benedict De Spinoza meant. In Ethics, published in 1677 shortly after his death, Spinoza defines good in terms of usefulness:
By good I shall understand what we certainly know to be useful to us.
Ethics, Part IV , Def
With one important caveat, if a thing is accessible and available to a system (social, natural or otherwise) to do the work of change it’s likely to be good and useful.
In this sense, value is best understood not as a substance (as Marx thought), nor as a preference (as most economists think) but as a property of a system that can generate good change. In my work, value is defined as energy in its social form. And it is value that is transformed to produce a positive difference within a system.
This property, when applied in physics to formally represent the energy available to do work is represented by phi Φ (Chaisson 2001). Surprising there universal symbol for value.
Likewise, there is no symbol for the opposite of value. In fact, as far as I can tell there is no word to describe the opposite of value. If words are the fundamental expression of external reality, you could be excused for thinking that there is no opposite for value or never considering that the opposite of value exists and is being generated without societies noticing until it is too late.
If something can't produce good change it's not that useful. It’s the opposite of value in use. Polyani, called it counter-value. But it's also called antivalue (Harvey, 2018) and I recall someone called it unvalue (but I can’t remember who).
Let’s stick with Counter-value. Mostly because I read Polyani before Harvey. Forgetting the name, the most important thing to know counter value is that as Harvey explains it can be “infinitely bad”.
Polanyi describes counter value in these terms:
”Everywhere, a significant expenditure of labor effort creates use values whose rank ordering is inferior from a social perspective, or which even amounts to a counter-value [Widerwert]
If value in use represents the capacity to effect social change, counter value is the opposite – a system wide incapacity to do the work of change. Change is something that happens to a system not something the system directs.
You will recall that I said, if a thing is accessible and available to a system to do the work of change it’s likely to be good and useful. Things that generate counter value are the exceptions. Polanyi identified weapons and alcohol as sources of counter-value. Though today, the greatest source of counter- value might be economists, tech bros and their co-dependent theories.
The simplest way to understand counter-value is to imagine the cutting down of a large Acacia or Gum tree. Counter-value is not the felled tree. Timber is useful. Counter-value is the useful things that will not be available in the future because the tree does not exist as a tree. The soil less fertile because there will be less nitrogen. A few less bees because there will be less pollen. A few less koalas because they are now homeless. A few less of everything that relied on the shade to protect them from the sun. A few less moments of peace listening to eucalyptese – the language of the trees. Sung when the wind passes through the leaves and branches. And a few less seeds to do it all again, and again as it has for millennia. But sadly, a few more haemorrhoids. First nations using Acacia fibre as an alternative to Metamucil. You get the bleak and barren picture.
The two points to take away from the concept of counter value are, no good comes from counter-value and no price can be put on the infinitely bad.
The Black Theta
If value can meaningfully be represented by phi - Φ - the obvious symbol for counter-value would be theta - a circle with a horizontal line - Θ.
But I would not be the first to associate theta with the idea of counter value. Sixth century scholar Isidore of Seville wrote that Θ was used to indicate a deceased soldier or gladiator in military records
Called the theta nigrum or black theta, the symbol Θ can clearly be seen in the mosaic below indicating that the gladiators had not passed out after a big night but were in fact dead. Death being the one thing we know with almost universal certainty is not useful to us.
A more contemporary example of counter value provided by Thanos, the evil villain of the Marvel universe. Whose name (perhaps not co-incidentally) looks a lot like Thanatos who the was the personification of death in ancient Greece.
Counter-value is the core premise of Avengers: Infinity War. At the end of the movie, while wearing the Infinity Gauntlet, the “evil” warlord Thanos clicks his fingers and wipes out half the planet's human capital. A world of less people and a future without everything useful they might have done.
Thanatos, Thanos, and Theta all connected through mythology, comic books, and an ancient symbol of our times.
The battle between life and death, Thanos and the avengers, value and counter value all just another way to think about good and evil. And, by evil I mean what Spinoza meant:
By evil, however,I understand what we certainly know prevents us being masters of some good.
Ethics, Part IV , Def2
And by good, Spinoza means useful.
The Great Collapse and Its Antecedents
I started a list of useful things that are in serious decline. In fact, it’s no exaggeration to say that the planet has experienced what can be described as a collapse in useful things in the last 50 years. The number and variety of things available and accessible to do the work of flourishing are in decline and counter-values are in the ascendancy. We have a lot more stuff but we can do less with it.
This is concerning for two main reasons:
when there's more counter-value in a social system than value in use, crises tend to form; and
once a crisis forms, our choices depend almost entirely on the value in use that’s available and accessible to that system that can be transformed into change.
Leaving aside telekinesis or the popular management idea that a change of mind and purpose is the primary way to influence physical systems, the obvious solution to a great collapse would be to start producing more value in use. A new era marked by the great supply of useful things and life.
But that's a monumental challenge for any society that relies on the idea of exchange value for the production and supply of its things. That is the belief that if everyone produces something they can’t personally use and don’t actually want to keep in order to exchange it with some one who has done exactly the same thing, it all works out.
A system based on exchange value relies on the unnatural proposition that the mutual co-incidence of unwanted things leads to the wealth of nations.
But consider, under this model of capitalism, the business of business was never intended to produce useful things. Rather the system is explicitly designed to produce value in exchange, ignore the production of value in use and treat the production of counter value as a problem for the legal system to resolve (but curiously not corporate law). If value in use is created and supplied it’s more by accident than by management intent.
This notion might seem counter-intuitive or even foolish. After all, if things were not useful they would not be bought. But likewise, if consumer preferences were a proxy for real world usefulness there would never be a crisis of useful things. It’s quite the paradox.
The reality is that there’s a tenuous relationship between supply and usefulness. First, suppliers have long put all their weight on the demand side of the scale - (it’s called marketing among other strategies). Second, and more importantly, under a supply vs demand model, usefulness is a marginal quality of a thing. To the extent something is useful, it just needs to be a little more useful than something else in the market including their own products (the increments of a unit of 1 built into the branding - the galaxy s24 or the iPhone 15). The world of useful things is not measured by the bounds of imagination but constrained within the meek boundaries of profitability. Third, it’s important to remember that the enterprise called nature does not supply according to demand for lower temperatures, fewer droughts, fresh water or more insects.
It’s no coincidence that, in the same time that it's taken for the all pervasive economic style of reasoning to take hold, the planet has gone from brimming with useful things to running closer to empty. And with it, the capacity to change when confronted with crisis. And though it's impossible to deny that a great many useful things have come in and out of existence in that time, past performance is not a reliable indicator of future performance.
The Black Swan too Big to See
The most obvious reason for the great collapse is that modern economies were not designed with the objective of supplying useful things. Lots of things - yes. Useful things - if we’re lucky.
By insisting that the purpose of business and corporations was to make the greatest profit (even within social and legal constraints) (and hyper efficiency for governments ) economists had, more or less, guaranteed a future with less useful things in it.
Profit driven supply vs preference driven demand turns out to be recipe for less value in use and more counter value:
By ensuring that the supply of useful things was not the responsibility of business. In theoretical economics, the real world usefulness of things plays surprisingly little to no part in the production decision. Supply decisions are a question of weighing the economic costs and benefits.
By ignoring the useful things destroyed in the process of supplying things that generate a profit. If counter value is generated outside boundaries of the firm they’re not included in production equation. Instead they're called “negative externalities”. A “cost” that the firm does not have to carry or attenuate for. But counter values are not really costs. There is no market for useful things that no longer exist. And no one can be compensated for that which can't be bought in the market. There is only a void in which to pointlessly throw money.
By nominalising the firm and treating the concept interest and profit/shareholder value synonymously. Under the standard economic model, firms can have no welfare interests of their own other than eventual profit. Production decision, like the supply decision are a question of weighing the economic costs and benefits that again theoretically neglect considerations of value in use vs counter value within the firm. Firm's end up with more profits but are starved of more useful things - social license, sustainable suppliers, new ideas etc.
By vocationalising learning. Education has shifted from the supply of individuals that are useful to themselves and society in the broadest sense to a very narrow concept of usefulness in the pursuit of profit.
By promoting firms that create little to no value in use (the financial services industry) or, in a net calculation, dangerous counter value (fossil fuel companies, weapons manufactures and social media companies) have increased over the past 50 years.
By reducing the impact of government. Institutions that once inefficiently produced useful things, now efficiently produce less useful things. Through a combination of privatization and the widespread adoption of the economic style of reasoning, it often seems that the production of useful things has ceased to be the role of government.
The Coming Energy Crisis
Whatever the moral and ethical arguments against the profit-maximizing objective of the corporation (and efficiency for government), there is a practical flaw with the economist's supply vs demand reasoning.
When the production of things is motivated by profit maximization:
more things are supplied but their usefulness is almost accidental;
useful things tend to cease to exist; and
counter values or the things that can't produce good change start to out "number" values in use or the things that can produce "good change".
The net outcome is an energy crisis. Though we tend to think of energy crisis in relation to physical forms of energy, the concept applies equally to energy its social form - value.
It may have taken a few decades but the collapse in value in use is happening across a class of things which are not just useful to humanity but are also existentially useful - biodiversity, food, accessible and available clean water and air, a climate compatible with life. All recorded in the alternative scientific sets of accounts.
To be clear, my criticism of the economic style of reasoning is not a normative one. It's not a question of ought or ought not. I’ve just followed a kind of old fashioned "a priori" approach to the problem of "lessness". Following the economist's own supply side logic and arriving, 54 years later, in a world with less useful things in it. Deducing from the antecedent axioms of mainstream economics the necessary (because it happened) but avoidable (because it didn’t need to) conclusion- the great collapse. A logic so inescapably simple that, but for the crisis of usefulness and the great collapse, it would otherwise go unnoticed. Some black swans are just too big to see.
To repeat, I'm not so silly as to suggest that useful things are not produced under a supply vs demand model of economics. Or, even that the new enlightened demand models of economics promoted Susan Raworth (Doughnut Economics) and Alex Edman's (Pieconomics) are not useful n their own way. It’s more a question of balance.
How much value in use and how much counter value is being produced by a system at any given time? Whereas, economists are fond of talking about trade offs between incommensurate things, from a value in use perspective, there are trade ups and trade downs within a given system. By converting everything into the single currency of change the equation is one of one of whether a given supply produces (or is more likely to produce) more or less capacity in that system to bring about positive change now or in the future.
In this regard, the difference between economics and modern value theory could not be more clear. Modern value theory argues that all value is that which is useful to life when faced with a crisis. Whereas the pastry economist, Alex Edman’s, persuasively argues that “Pie-economics argues that, in the long run, almost all value becomes financial value”. And he’s horrifyingly right.
Which bring me back to the start.
Losing the Power to Change
Absent useful things we become less powerful or even powerless to change when confronted with crisis. That’s bad. And by bad I shall understand what we certainly know to not be useful to us.
When faced with a social energy crisis it’s not much use reaching for your bulging wallet if there’s no way of buying your way out of it. Money cannot but what money has destroyed forever.
A sentiment that was ironically captured best by Milton Friedman:
“Only a crisis - actual or perceived - produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes the politically inevitable.”
Which makes the economic style of reasoning perhaps the most dangerous example of a counter value ever imagined.
What the Nobel Laurette failed to imagine is what would happen if all the other ideas died was the one idea that kept causing the crisis. A prime mover or engine that keeps transforming what is left of the world into everything that’s not right with the world. The root of collapse baked in at the start of the fall.
Not only is the mode of thinking he pioneered not useful in a crisis of usefulness because it it is completely ambivalent to the concept but, when hardwired into the DNA of the modern corporation, tends to shrink everything the neoclassical idea comes into contact with.
By keeping Friedman’s neoclassical legacy alive for so long, what will become politically inevitable will eventually become bio physically impossible. Even if there is a will to change, without useful things, there is simply no power to change. And more urgently given the number of elections this year, it’s worth remembering that the wicked take power by promising it to those who think they have none.
A conclusion that should make understanding how useful things get supplied a global priority. And, if they care about their jobs, on the top of every politician’s to do list.