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The Economic Implications of The M aximum Power Principle For a Sustainable Society

This article explores the concept of the Maximum Power Principle and its implications for creating a sustainable society. It examines the evolution of energy transformation, conflict over resources, and the rise of global corporations. The article also discusses the Goldilocks Curve and its application to human economic systems.

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The Economic Implications of The M aximum Power Principle For a Sustainable Society

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  1. The Economic Implications ofThe Maximum Power PrincipleFor a Sustainable Society A GOLDILOCKS CURVE ISBPE 2016, 28 June By: Garvin H Boyle Email: Orrery@rogers.com Website: Orrery-software.webs.com Evolution of Energy Transformation Towards Maximum Power at an Intermediate Level of Efficiency

  2. Warring Nations, Blocks of Nations, and Empires European Colonialism Conflict Between The Great Religions of the Middle East Sampling of Theories Why Global Affairs are NASTY, UNJUST, AMORAL AND UNSUSTAINABLE. Conflict Between The Great 20th Century Political Ideals – Fascism, Communism, Naziism, Democracy, Capitalism American Hegemony Conflict Over Resources By: Garvin H Boyle Email: Orrery@rogers.com Website: Orrery-software.webs.com A MODERN COHORT OF SUSPECTS NeoClassical Economic Theory NeoClassical Economic Theory Globalization Multi-National Corporations

  3. The explosive emergence of algal blooms, locust swarms, or contagious epidemics And The explosive spread of telephones, televisions and, now, iPhones! The intense emphasis of all species on growth and reproduction And John Kenneth Galbraith’s “Theory of the Firm”! What is the Common Thread? THESE CANNOT ALL BE MERE COINCIDENTAL ANALOGIES. --- THESIS: THERE MUST BE A COMMON DEEP ENERGY-DRIVEN DYNAMIC THAT ANIMATES ALL OF THESE PHENOMENA. The emergence of life from the seas onto the barren land And The emergence of our dependence on fossil fuels! Adaptive radiation of species And Technological innovation! The evolution of large dinosaurs, and large mammals And The evolution of large empires, and large multi-national corporations!

  4. A.J. Lotka’s Maximum Flux (1922) … natural selection tends to make the energy flux through the [organic] system a maximum, so far as compatible with the constraints to which the system is subject. Natural Selection  Rising energy flux “Generation” versus “Selection” … in evolution two kinds of influences are at work: selecting influences, and generating influences. The question was raised whether … man has been unconsciously fulfilling a law of nature, according to which some physical quantity in the system tends toward a maximum. This is now made to appear probable; and it is found that the physical quantity in question is of the dimensions of power, or energy per unit time … . Application to Human Economic Systems SOURCE: A.J. Lotka(1922) 'Contribution to the Energetics of Evolution', Proceedings of the National Academy of Sciences of the United States of America, Vol. 8, No. 6 (Jun. 15, 1922), pp. 147-151.

  5. H.T. Odum’s Maximum Power (1955) “Power” versus “Efficiency” Our proposition is that natural systems tend to operate at that [intermediate] efficiency which produces a maximum power output. Generates Variation GOLDILOCKS EFFECT Application to Human Economic Systems Let us make the following postulate: Under the appropriate conditions, maximum power output is the criterion for the survival of many kinds of systems, both living and non-living. In other words, we are taking "survival of the fittest" to mean persistence of those forms which can command the greatest useful energy per unit time (power output). Selection Among the Variants SOURCE:Odum, H. T., Pinkerton, R. C., “Time’s speed regulator: The optimum efficiency for maximum power output in physical and biological systems”, American Scientist, Vol. 43, No. 2 (APRIL 1955), pp. 331-343.

  6. MPP – At the Nexus of Many Concepts Natural Selection & Evolution SYSTEMS DARWIN LOTKA, ODUM Hypothesized as Broadly Applicable: physical, chemical, biochemical, biophysical, social, ECONOMIC ENERGY PATHWAYS Power SPECIES LOTKA, ODUM DARWIN ODUM, PINKERTON Efficiency 0 ------------------------------ 1 Intermediate Efficiency, Maximized Power Hierarchy of Persistent Forms Access to Energy of Suitable Type and Availability ISSUES OF ACCESS BOLTZMANN, LOTKA, ODUM Access to Matter of Suitable Type and Availability

  7. Two Definitions of Power(Biophysical Setting – ENERGY TRANSFORMATION AND CONSUMPTION EVENT) • Useful (or Profitable) Power • Waste (or Operations and Maintenance) Power WASTE ENERGY FLOW ENERGY INPUTS USEFUL ENERGY FLOW Puseful= Euseful/ T T = time Pwaste= Ewaste/ T EFFICIENCY DEFINED AS  = Euseful / Etotal

  8. Two Definitions of Power(Economic Setting – COMMERCIAL PRODUCTION AND SALES EVENT) • Useful (or Profitable) Power • Waste (or Operations and Maintenance) Power TOTAL INCOME (I) BENEFITS (B) COSTS (C) Puseful= B/ T T = time Pwaste= C/ T EFFICIENCY DEFINED AS  = B / I

  9. Antithetic Dynamics Of The MPP HIGHER LEVEL - Overall process effects • Selection For: • Maximal overall Pw • Maximal overall entropy production • Maximized flux of matter and energy Lotka • Selection For: • Maximal average Pu • Minimal average Pw • Minimal average entropy production per event LOWER LEVEL - Per event effects Odum and Pinkerton

  10. The Goldilocks Hypothesis(A key component of the MPP) • Assumption: For every flow of benefits, there are inputs which are consumed in the process of producing that flow. (E.g. # of workers) • Hypothesis: For every such input, there is an optimum rate of consumption for which the rate of production of benefits is optimized, the consumption of all other inputs being held constant.

  11. The Goldilocks Hypothesis(A key component of the MPP) EXAMPLE: • In a city of 1 million people, crime has a daily cost. • Police officers reduce the crime daily, creating a daily flow of benefits from reduced crime. • One police officer is not enough. • 10,000 police officers is too many. • There is an optimum number of police that will optimize the rate of flow of benefits (the USEFUL power). BENEFITS  1 10,000 POLICE 

  12. Goldilocks Curves(Plot of Puseful versus ) INCOME COSTS BENEFITS USEFUL POWER & POWER INDEX EFFICIENCY PLOT: POWER INDEX VS EFFICIENCY PLOT: I,C&B VS WORKERS

  13. Goldilocks Curves(Plot of Puseful versus )

  14. Gallery of Goldilocks Curves(Plot of Puseful versus )

  15. Co-Evolution of a Trophic Web • Selection For: • Maximal average Pu • Minimal average Pw • Minimal average entropy production per event LOWER LEVEL - Per event effects Odum and Pinkerton

  16. POWER  BIOMASS OF THREE PATHWAYS CONSIDER 3 ENERGY PATHWAYS

  17. THE MPP – CO-EVOLUTION AT MANY LEVELS THE ENTIRE SYSTEM EVOLVES SYSTEM LEVEL MAXIMUM WASTED POWER COMPLEXITY PROVIDES VARIATION IN POWER OF ENERGY PATHWAYS POWER DETERMINES FITNESS OF ENERGY PATHWAYS END-TO-END ENERGY PATHWAYS EVOLVE PROCESS LEVEL INTER-SPECIES ENERGY TRANSFERS EVOLVE MAXIMUM USEFUL POWER INTER-SPECIES GOLDILOCKS CURVES DETERMINE FITNESS OF ENERGY TRANSFER GENETIC DIVERSITY PROVIDES VARIATION IN GOLDILOCKS CURVES AGENT LEVEL ORGANISMS EVOLVE

  18. Galbraith’s Theory of the Firm(As explained by the MPP) • The neoclassical theory of the firm concludes that … firms attempt to maximize profits. • According to Galbraith: • this may be true in the market sector, where owners of small firms actively manage their enterprises, but • does not describe the far more important planning sector – the 2000 or so largest firms that produce over half of society's output. • The central protective purpose of the firm is survival: • to earn a profit sufficient to keep most stockholders relatively happy, and • to provide sufficient retained earning for investment and growth. A B Excerpted from: http://economistsview.typepad.com/economistsview/2006/04/john_kenneth_ga.html

  19. Galbraith’s Theory of the Firm(As explained by the MPP) B) Staffing level with maximum flow of returned benefits (Max Power) A) Staffing level with maximum efficiency

  20. Complexity Enhancing Effects of the MPP(Adam Smith’s Invisible Hand Revealed) • Innovative Variation: sophisticated and innovative business models may enhance the power of an entire supply chain • Such complex supply chains will persist and grow, increasing the flow of energy and the average complexity of the business milieu. There seems to be some sort of positive feedback between power and complexity. COMPLEXITY POWER

  21. THE MPP AND RISING COMPLEXITY  EXAMPLE – A MONETARY SYSTEM Risks, Futures, CCOs, CDSs E&$ Electronic Trading E&$ Bills, Stocks, Bonds E&$ RISING COMPLEXITY AND COST OF MAINTENANCE  Gold and Silver Coins E&$ Commodity Money E&$ Barter E&$

  22. THE MPP AND FALLING COMPLEXITY  EXAMPLE – A MONETARY SYSTEM Risks, Futures, CCOs, CDSs E&$ Electronic Trading E&$ Bills, Stocks, Bonds E&$  FALLING COMPLEXITY AND COST OF MAINTENANCE Base Metal Coins E&$ E&$ Commodity Money E&$ E&$ Barter E&$ E&$

  23. Teleology and Science • Teleology – The consideration of purpose, intention or plan as a causative agent. • As part of the Renaissance, at the birth of science, in the 1500s, it was decided that all exogenous teleological causes would be excluded from consideration.

  24. Teleology, Science and Business • NCE ASSUMPTION: People succeed in business because they intend to, and make plans to succeed. • THIS IS CLEARLY A QUASI-RELIGIOUS TELEOLOGICAL, BUT FALSE, ASSUMPTION – Who among us plans to fail? The old “free will versus predestination” conundrum.

  25. Pruning Effects of the MPP(Adam Smith’s Invisible Hand Revealed) • Business Model Pruning: those supply chains that consume matter and energy at the greatest rate (at maximum power) will persist, dominating existing markets and expanding the most quickly into new markets, driving others out. • Teleological Pruning: those purposes, intentions and plans that align with the effects of the MPP will persist, while those that do not so align are pruned away. NCE TREE OF GOOD INTENTIONS AND GREEN BUSINESS MODELS

  26. MY POINT IN ALL OF THIS? • Our global economic system is NOT REMOTELY CLOSE TO SUSTAINABLE. • We are captured and being dragged along by a complex, powerful and remorseless dynamic that automatically thwarts all attempts to stop it. • If we don’t put time and energy into understanding it, we are doomed to go with it, right to the final curtain.

  27. Questions? Email: Orrery@rogers.com Website: Orrery-Software.webs.com

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