failure. Principal among these are the monetary and financial system, accessible energy flows, transport infrastructure, economies of scale and the integrated infrastructures of information technology and electricity.
Our Freedom to Change Can Be Limited by Lock-In
Lock-in can be defined broadly as an inability to deal with one problem by changing a sub-system in the economy without negatively modifying others upon which we depend. For example, our current just-in-time food system and agricultural practices are hugely risky. As the current economic crisis tightens, those involved in food production and distribution strive for further efficiencies and economies of scale as deflation drives their prices down. The lower prices help maintain welfare and social peace, and make it easier for consumers to service their debts, which in turn supports our battered banks, whose health must be preserved or the bond market might not show up at a government auction. As a result, it is very hard to do major surgery on our food systems if doing so required higher food prices, decreased productivity and gave a poor investment return.
However, the primary lock-in process is the growth economy itself. We are attempting to solve systemic ecological problems within systems that are themselves dependent upon increasing resource depletion and waste. We are embedded within economic and social systems whose operation we require for our immediate welfare. But those systems are too optimized, interconnected and complex to comprehend, control and manage in any systemic way that would allow a controlled contraction while still maintaining our welfare.
The problem of lock-in is part of the reason why there is no possibility of a managed degrowth.
The Global Economy’s Adaption to Ecological Constraints Displaces and Magnifies Stresses
Peak oil is expected to be the first ecological constraint to impact significantly on the advanced infrastructure of the globalized economy. However, it is only one part of an increasingly integrated web of constraints including fresh-water shortages, biodiversity loss, soil erosion and reduced soil fertility, shortages of key minerals and climate change. As a result, it makes little sense to compartmentalize our focus as we do through the UN Framework Convention on Climate Change, for example. The interwoven nature of our predicament is clearly shown by the Green Revolution of the 1960s that supposedly “solved” the increasing pressure on food production from a growing population. Technology was marshalled to put food production onto a fossil-fuel platform, which allowed further population overshoot and thus a more general growth in resource and sink demands. The result is that even more people are more vulnerable as their increased welfare demands are dependent upon a less diverse and more fragile resource base. As limits tighten, we are responding to stress on one key resource (by, say, reducing greenhouse gas emissions or getting around fuel constraints by using bio-fuels) by placing stresses on other key resources that are themselves already under strain (food, water). That we have to do so demonstrates how little adaptive capacity we have left.
Our Local Needs Depend on the Global Economy
Our basic and discretionary needs are dependent on a globalized fabric of exchange. So too is our ability to exchange our labor for the means to pay those needs. The conditions that maintain our welfare are smeared over the globe.
We have adapted to the stability of globalizing growth over the decades. Our skills and knowledge have become ever more refined so as to contribute to the diverse niches within the global economy. The tools we interact with — computers and software, mobile phones, machines and payment systems — maintain our productivity. So too do the supply-chains that feed us, provide inputs to our production process and maintain the operation of the systems we depend upon. Our productivity also depends upon the global economy of scale, not just those reaped by our direct customers, but also the conditions that support their economic activity in the wider economy. We are all of us intertwined. For this reason we can say that there is no longer any wholly indigenous production.
Money and Credit Integrate the Global Economy
If one side of the global economy is goods and services, the other side is money and credit. Money has no intrinsic value; it is a piece of paper or charged capacitors in an integrated circuit. It represents not wealth, but a claim on wealth (money is not the house or food we can buy with it). Across the globe we exchange something intrinsically valuable for something intrinsically useless. This only works if we all play the game, governments mandate legal tender and monetary stability and trust are maintained. The hyper-inflation in Weimar Germany and in Zimbabwe until it adopted the US dollar shows what happens when trust is lost.
The Thermodynamics of the Global Economy
Like human beings and life on earth, economies require flows of energy through them to function and maintain their structure. If we do not maintain flows of energy (directly, or by maintenance and replacement) through systems we depend upon, they decay. Humans get their energy when they transform the concentrated energy stores in food into metabolizing, thinking and physical labor, and into the dispersed energy of heat and excreta. Our globalizing economy is no less energy constrained, but with one crucial difference. When humans reach maturity they stop growing and their energy intake stabilizes. Our economy has adapted to continual growth, and that means rising energy flows.
The self-organization and biodiversity of life on earth is maintained by the flows of low-entropy solar energy that irradiate our planet as it is transformed into high-entropy heat radiating into space. Our complex civilization was formed by the transformation of the living bio-sphere and the fossil reserves of ancient solar energy into useful work, and the entropy of waste heat energy, greenhouse gases and pollution that are the necessary consequences of the fact that no process is perfectly efficient.
The first law of thermodynamics tells us that energy cannot be created or destroyed. But energy can be transformed. The second law of thermodynamics tells us how it is transformed. All processes are winding down from a more concentrated and organized state to a more disorganized one, or from low to higher entropy. We see this when our cup of hot coffee cools to the room’s ambient temperature, and when humans and their artifacts decay to dust. The second law defines the direction in which processes happen. In transforming energy from a low-entropy to a higher-entropy state, work can be done, but this process is never 100% efficient. Some heat will always be wasted and be unavailable for work. This work is what has built and maintains life on earth and our civilization.
So how is it that an island of locally concentrated and complex low-entropy civilization can form out of the universal tendency to disorder? The answer is that more and more concentrated energy has to flow through it so as to keep the local system further and further away from the disorder to which it tends. The evolution and emergence of complex structures maximizes the production of entropy in the universe (local system plus everywhere else) as a whole. Clearly, if growing and maintaining complexity costs energy, then energy supply is the master platform upon which all forms of complexity depends.9
The operational fabric evolves with new levels of complexity. As integration and codependency rise, and economies of scale become established, higher and higher fixed costs are required to maintain the operational fabric. That cost is in energy and resource flows. Furthermore, as the infrastructure, plant and machinery that are required to maintain economic production at each level expand, they are open to greater depreciation costs or, in thermodynamic terms, entropic decay.
The correlation between energy use and economic and social change should therefore come as no surprise. The major transitions in the evolution of human civilization, from hunter-gatherers through the agricultural and industrial revolutions, have been predicated on revolutions in the quality and quantity of energy sources used.
We can see this through an example. According to the 1911 Census of England and Wales, the three largest occupational groups were domestic service, agriculture and coal mining. By 2008, the three largest groups were sales personnel,
