Watching the markets and cryptocurrencies explode upwards lately for little or no apparent reason, it seems more and more like it may be in the nature of money to eventually be driven to hallucinatory status by speculation, fantasy, regulatory capture and limitless debt. It is invented out of nowhere by the trillions of dollars for the benefit of the ultra rich and the ultra large companies.
Thermodynamics or energy-based accounting is unbiased in principle, having as it does some sort of grounding in physical laws, and it seems to offer an alternative to the money-centered view, but it is essentially impossible to straightforwardly apply it to a process as complicated as a whole economy.
So what is real? What do we look at as an indicator of societal robustness? Of diminishing returns? Perhaps none such exists; as long as there is new stuff to dig out of the earth and new things to covet, the growth continues, and money flows are simply a rationalization or fig leaf for the deeper trend.
Given these bafflements, it may be that the only system we know of that is complex enough to be usefully comparable to an economy, or any sort of guide to it, is the metabolic/genetic life of a growing organism (probably not ecosystems, as these don’t grow and multiply or have distinct pathways comparable to economic sectors). Call it the econo-organism.
In this view, money is not the source of change nor the energy that propels it, only a kind of anabolic hormone that tells the econo-organism, “make more stuff”. (There is no catabolic hormone, or if there is, it appears to be a Thing That Must Not Be Spoken Of.)
Moreover, because many resources are essential to the econo-organism (non-substitutable), higher prices are not a given if such prices threaten the organism. For the resource MUST continue to be produced “economically” for the economy to survive.
So the price will be kept low, if necessary by money infusions to the producers. But by that point money has, again, become meaningless, or at least now reflects reality in a completely unintentional way. The signal has become pathological, rather like runaway inflammation.
Growth is a reflexive urge of the econo-organism. Only when every last pore of ground has been scoured will the econo-organism tip from triumphal log-growth into profound illness or quiescence.
Or equivalently, there may be a hidden threshold where a given resource becomes too dilute for even new technology to exploit it to net advantage, even with invisible subsidy. Then something like a vital cofactor deficiency will take hold, despite adjustments by the system.
For example, copper, an indispensable and largely non-substitutable element for the econo-organism, is now mined from porphyry deposits that may contain as little as 0.15% copper. The first deposits to be exploited on the other hand were up to 10-30% copper, but have since been depleted.
It is impressive on the one hand that the econo-organism has evolved or deployed a way of getting enough copper from deposits that seem rather dilute.
But on the other hand, that also means it now has to move and crush and chemically treat about 660 parts rock to get at 1 part copper (probably more since extraction isn’t totally efficient), versus 3-10 parts rock in the old days. At what point does diluteness, with its costs in energy and environmental damage, overcome the combined powers of cleverness and increased scale?
(Similarly with fracking and wind power: the econo-organism manages to keep up with its energy needs, but at the expense of much larger land use.)
This is analogous to an organism that begins to express higher levels of a high-affinity transporter to absorb a trace mineral it’s not been getting enough of through the usual lower-affinity one (or perhaps a goiter where the iodine-absorbing organ becomes disproportionately expanded due to iodine deprivation). The organism may switch on pathways that let it conserve and reuse more of the mineral. Or there may even be a mutation (innovation) that increases the transporter affinity even more.
These are all clever and helpful responses on the part of the (econo)organism. Yet eventually, if there is just no mineral at all, or not enough to sustain the pathway it is needed for, the organism will die–or at least stop growing.
The earth is mostly dilute, but it is also quite big. That is what makes it hard to tell whether there is a big problem, or a minor problem, or no problem at all. However the econo-organism is quite different from a natural organism not only in lacking a catabolic signal, but in having apparently no ability to switch to a quiescent state. Either it grows, or it begins to fall apart.