Why we should think....Part 2

[Flyfisher]

Wow, there is just soooo much rubbish being written. I love the idea that money = energy. We could increase the amount of energy just by increasing the money supply - printing banknotes, allowing banks to increase lending . . . .

Hmm . . . I wonder why didn't Northern Rock think of that?

Money equates to energy. Think about the big picture, not small, isolated examples. When you spend money, energy gets used as a result. The more you spend, the more energy is used down the line - maybe not directly in producing whatever it is you buy but perhaps by maintaining the seller's lifestyle, contributing more tax for the government to spend etc etc.

How about a moratorium on complete crap?

How about offering an example where 'money = energy' doesn't hold true instead of just deriding the idea as crap?

 

[Penners]

How about a moratorium on complete crap?

Is that possible in the Party Conference season?

 

[Nemesis]

http://www.davidpbrown.co.uk/jokes/monty-python-arguement.html

:wink:

 

[biffvernon]

Money = Energy = Money.

and then later

Money equates to energy.

a subtle difference that eludes me.

How about offering an example where 'money = energy'

The Turner painting was given as an example. The buyer may have made his money by earlier dealing on the art market. A great many occupations, including mine, earn a wage without using much energy.

 

[Penners]

A great many occupations, including mine, earn a wage without using much energy.

And a great many of us, like me, expend a great deal of energy without earning a wage.

 

[MdB]

Money = Energy = Money.

and then later

Money equates to energy.

a subtle difference that eludes me.

There isn't a difference. If you want to be exact then the equation is:
Money = Constant x Energy
The constant value will vary slowly over time but will generally hold true.

How about offering an example where 'money = energy' - (MdB edit - I think money does not equal energy is meant here)

The Turner painting was given as an example. The buyer may have made his money by earlier dealing on the art market. A great many occupations, including mine, earn a wage without using much energy.

As in everything, there are exceptions to the rule if you look hard enough. Using the example of the Turner painting, the following situation will use little or no energy though there will be a lot of money involved.

(1) Mr Turner paints a master piece in a couple of hours.
(2) Mr Luck E. Pursun digs a hole a finds a large amount of gold ore just below the surface.
(3) Mr Pursun buys the painting from Mr Turner a pays with the gold ore.
(4) Mr Turner takes the gold ore and buries it back into the ground.

Very little energy was used in getting the gold and very little energy was used in disposing of the gold so the above is a good example which disproves the money = constant x energy argument. However, both stages are very unlikely to happen in real life. In real life the process is much more likely to be as follows:

(1) Mr R. Dewerker plies his trade for many years. In this process of activity he uses energy himself, he buys stuff made with energy to live on and to trade with and sells the results. Most of the money he uses himself but some goes into a savings pot.
(2) Mr Turner paints a master piece in a couple of hours using little energy as before.
(3) Mr Dewerker buys the painting from Mr Turner and pays with his savings.
(4) Mr Turner uses the money from the sale to pay for his lifestyle. This includes using energy directly himself and through buying products that required energy use in their production.

As you can see both processes (generating the money and spending the money) use a lot of energy and the more money the painting costs, the more energy that is required to fund the sale and the more energy that will potentially be used after the sale.

I hate the argument that money is equivalent to energy, I really do but unfortunately, the more I think about it, the more I think it is a good first order model. It describes well what happens when looking at processes overall.

 

[Penners]

The constant value will vary slowly over time.

Can constants vary? Surely the word implies the opposite.

 

[Flyfisher]

Money = Energy = Money.

and then later

Money equates to energy.

a subtle difference that eludes me.

How about offering an example where 'money = energy'

The Turner painting was given as an example. The buyer may have made his money by earlier dealing on the art market. A great many occupations, including mine, earn a wage without using much energy.

I thought you were taking 'money = energy' too literally, given your reply about printing more money to make energy.

Your occupation may well involve little direct energy but that's only part of the picture. Assuming you spend your income then that expenditure will involve the use of energy down the line. If you have a good year and earn twice as much as last year then - again, assuming you spend it - then your doubled expenditure will involve double the energy down the line. Obviously, if you don't spend the money, then there is no associated energy usage.

 

[biffvernon]

And Mr Turner did his painting long before the first oil well was sunk.

It is quite conceivable that we could have a society that does not use fossil fuels (in fact we'd better develop one or we're doomed) but money will still lubricate the transfer of goods and services.

 

[Flyfisher]

As in everything, there are exceptions to the rule if you look hard enough. Using the example of the Turner painting, the following situation will use little or no energy though there will be a lot of money involved.

(1) Mr Turner paints a master piece in a couple of hours.
(2) Mr Luck E. Pursun digs a hole a finds a large amount of gold ore just below the surface.
(3) Mr Pursun buys the painting from Mr Turner a pays with the gold ore.
(4) Mr Turner takes the gold ore and buries it back into the ground.

OK, perhaps we need to clarify that money must be spent for it to equate to energy usage. If I win £10m on the lottery (or find a hoard of gold) but don't spend it then my personal 'energy footprint' won't change. But if I spend it . . . .

As you rightly say, your second scenario is more typical of the 'big picture' of real life transactions.

I hate the argument that money is equivalent to energy, I really do but unfortunately, the more I think about it, the more I think it is a good first order model. It describes well what happens when looking at processes overall.

I'm curious about hating an argument that you concede is a good one but I do agree with your conclusion, being a recent convert myself. It could form an interesting 'guiding principle' for people wishing to reduce their 'energy footprint', but in the modern world circumstances seem to drive people to want more and more of the stuff.

 

[Flyfisher]

It is quite conceivable that we could have a society that does not use fossil fuels (in fact we'd better develop one or we're doomed) but money will still lubricate the transfer of goods and services.

Yes, and those goods and services will involve the use of energy.
The 'money = energy' idea is not confined to fossil fuels. When you use money you use energy, whether it comes from oil, nuclear, wind, hydrogen, pv or xyz.

'xyz' being a yet undiscovered, but unlimited, source of totally clean energy emanating from human aura and catalysed by a combination of resonant crystal and homeopathic alchemy

 

[MdB]

I hate the argument that money is equivalent to energy, I really do but unfortunately, the more I think about it, the more I think it is a good first order model. It describes well what happens when looking at processes overall.

I'm curious about hating an argument that you concede is a good one but I do agree with your conclusion, being a recent convert myself. It could form an interesting 'guiding principle' for people wishing to reduce their 'energy footprint', but in the modern world circumstances seem to drive people to want more and more of the stuff.

I don't like it because of the direct and indirect conclusions you can draw from it. The direct conclusions are that Biffs wonderful windows cause more energy to be used than horrible plastic ones (at least in the short term - if Biffs windows last twice the length of plastic ones but cost twice as much then it works out evens). Also fitting a thatched roof causes four times as much energy to be used than a cement tiled roof (as per the previous discussion on this subject). The indirect conclusion is that for me to lower the energy usage I cause, I need to earn less money and spend less money. I think of myself as not being a big consumer but I "spend" all my money even if most of my money goes into investments. Those investments end up being used by other people which causes more energy use. I like my standard of living and would find it hard to give it up and this would be required if I was to reduce my impact on the environment.

The alternative solution is to come up with a renewable energy source which is as cheap as the non renewable sources currently are. This way we could keep our current energy usage and hence our current standard of living. Lets hope Nuclear Fission works out one day soon.

 

[skier-hughes]

OK, perhaps we need to clarify that money must be spent for it to equate to energy usage. If I win £10m on the lottery (or find a hoard of gold) but don't spend it then my personal 'energy footprint' won't change. But if I spend it . . . .

But if you put it in the bank to earn interest, to live off, your footprint will enlarge somewhat as the bank use your money to make more money.

 

[Flyfisher]

I like my standard of living and would find it hard to give it up and this would be required if I was to reduce my impact on the environment.

I entirely agree, and I suspect this is the real problem. It's one thing to start thinking about changing our behaviour to reduce our environmental impact but it's quite sobering to consider it in terms of simply spending less money, even though that would do the trick.

Asking people to change their light bulbs, recycle their rubbish, maybe even take the train instead of the car, use a cooler wash, only half-fill the kettle etc etc is likely to elicit a reasonably positive response (I think), but imagine asking the same people to take a 25% salary cut!

The alternative solution is to come up with a renewable energy source which is as cheap as the non renewable sources currently are. This way we could keep our current energy usage and hence our current standard of living. Lets hope Nuclear Fission works out one day soon.

I think you mean Fusion, but I certainly agree with the sentiment.

 

[Flyfisher]

OK, perhaps we need to clarify that money must be spent for it to equate to energy usage. If I win £10m on the lottery (or find a hoard of gold) but don't spend it then my personal 'energy footprint' won't change. But if I spend it . . . .

But if you put it in the bank to earn interest, to live off, your footprint will enlarge somewhat as the bank use your money to make more money.

Hmm. Quite right. So Granny keeping her savings under the mattress was way ahead of the greens :wink:

 

[Nemesis]

You never heard of downshifting then?

 

[Flyfisher]

Yes. I know a few people who have 'down-shifted' but in all cases they were downshifting from highly paid positions, had paid off their mortgage, had no debts and were looking for an easier life. More a case of early retirement, really, so probably not what you had in mind.

Do you think the population could be persuaded to downshift to save the planet?

 

[Nemesis]

It might eventually have to.

 

[Flyfisher]

Can't see it as a vote winner myself.

 

[MdB]

It might eventually have to.

Agreed. The Americans think that technology will get everyone out of this hole. I'm not so sure myself but the pressure to come up with an alternative is there already - crude oil is now $82 a barrel 30% up from a year ago.