Energy Technology and Money - From Lens of the Superorganism

Energy, Technology,
Money and the Human
Superorganism
Nathan John Hagens
KAUST 1/22/2018

Energy, Technology, Money and
the Human Superorganism
1.Introduction/framework
2.Energy and Economy Basics
3.The Human Superorganism
4.Conclusions and Implications
5.“What to Do”?

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Virtual World Physical World

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Our minds create orders of magnitude more
possibilities than can manifest in physical world

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P.S. scientifically trained minds are still
susceptible to this but less so

Accuracy/Precision
Scope/Relevance

Accuracy/Precision
Scope/Relevance
Reductionist expertise leads to jobs and profits (in a growing economy)

Accuracy/Precision
Scope/Relevance
If everyone focuses on current quarterly earnings, will future ‘earnings’ naturally arrive?
This talk

A time of paradox
**12 Year plateau in conventional oil production and
price is still only ~$60
** US “oil” production about to hit all time high
**For majority of people in developed world, growth (in
income) ended a decade ago, yet stock markets are at
all time highs.
**Widespread recognition of human caused climate change,
massive investments into renewable energy but globally CO2
increasing at highest rate in history
**Everyone is somewhat worried but no one talks
about the real issues on TV or in public.

A time of myth
** Demand for oil will dry up in next 20 years due to self-driving Uber taxis
** We will begin manned space colonies by 2030 (Musk)
** The global economy will be growing at 20% per year by 2060 (World Bank
chief economist)
** We will grow economies, mitigate climate change, AND solve global poverty
and inequality using solar, wind and smart grid tech. (IPCC and others)
** Humans will be extinct from climate change by 2025 (Guy McPherson)

A time for (urgent, relevant) Questions
**What should we be doing to meet the challenges of the future?
****In order to arrive at the appropriate answers: our first and
critical task is to be asking the right question(s).

At the London School of Economics in 2008, Queen
Elizabeth questioned: “Why did no one foresee the timing,
extent and severity of the Global Financial Crisis?” The
British Academy answered a year later: “A psychology
of denial gripped the financial and corporate
world… it was the failure of the collective
imagination of many bright people… to
understand the risks to the system as a whole”.

…..some energy and economy basics
1. Energy underpins natural systems and human economies

1a. Energy underpins natural systems

Trophic
cascade
1
300
90,000
27,000,000
1,000
Tons
Three hundred trout are needed to
support one man for a year. The trout,
in turn, must consume 90,000 frogs,
that must consume 27
million grasshoppers that live off of
1,000 tons of grass.
-- G. Tyler Miller, Jr., American Chemist (1971)

1b. Energy underpins human systems
~Irrespective of technology, every single good and service in
our economic system first requires an energy input

WORLD GDP
Economic growth is highly correlated with ‘more primary energy’ added to human systems

….some energy and economy basics
2. Fossil sunlight underpins modern economies

150 Horse 1/8 Horse
1 Horse45 Horse
1 barrel of oil  5,700,000 BTU 1,760 kWh converted to work 700kWh
1 human  0.6kWh/day of work 700/0.6=1167days  4.5 YEARS OF HUMAN WORK

150 Horse 1/8 Horse
1 Horse45 Horse
1 barrel of oil  5,700,000 BTU 1,760 kWh converted to work 700kWh
1 human  0.6kWh/day of work 700/0.6=1167days  4.5 YEARS OF HUMAN WORK
1/7 Horse

Average human laborer
Average wages of $57 per day

How many man-days of work can you get
on the average global daily wage of $57?
Average
human
1

Average
human
Average
American
1 0.2

Oil at $80 per barrel
Average
human
Average
American
5,912 1 0.2

Average
human
Average
American
5,912 1 0.2
21,679

….some energy and economy basics
2. Fossil energy underpins modern economies
3. Industrialization is the result of massive inputs of low cost fossil labor

Industrialization
Applying large amounts of
fossil energy to processes
humans used to do manually,
Made processes ‘energy
inefficient’ but increased
returns to human effort/time
dramatically

180x
400x
The ‘Trade’ resulted in massively higher benefits to most humans

Reference: http://nautil.us/issue/1/what-makes-you-so-special/gasoline-and-fertility
At over 210,000 kcal per day, the average person in USA (or KSA) has the metabolic equivalent of a 30+ ton animal

The Unwinding of the “Trade”

First, some energy and economy basics
3. Industrialization is the result of massive inputs of low cost fossil labor
4. Cobb Douglas –the greatest flaw in economic theory

Energy matters vastly more than other economic inputs
The Cobb Douglas function used to explain growth treats labor
and capital as the (only) 2 relevant inputs. Energy is ignored.

Energy does all the work needed to combine other inputs
-it cannot be substituted other than with other types of energy

Standard circular economy model

SOURCE SINK
We don’t pay for the creation of nor the pollution from the most
valuable input to our economies ~only the cost of extraction
The biggest Flaw in Economic Theory

…some energy and economy basics
3. Industrialization and low cost fossil labor
5. Money has no biophysical backing –but is merely a marker for real capital

The majority of money in the modern
economy is created by commercial banks
making loans.
Money creation in practice differs from some popular
misconceptions — banks do not act simply as intermediaries,
lending out deposits that savers place with them, and nor do
they ‘multiply up’ central bank money to create new loans and
deposits
Whenever a bank makes a loan, it
simultaneously creates a matching deposit in
the borrower’s bank account, thereby creating
new money.
The reality of how money is created today
differs from the description found in
economics textbooks.

The majority of money in the modern
economy is created by commercial banks
making loans.
Money creation in practice differs from some popular
misconceptions — banks do not act simply as intermediaries,
lending out deposits that savers place with them, and nor do
they ‘multiply up’ central bank money to create new loans and
deposits”
Whenever a bank makes a loan, it
simultaneously creates a matching deposit in
the borrower’s bank account, thereby creating
new money.
The reality of how money is created today
differs from the description found in
economics textbooks.
http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q102.pdf
“Money Creation in the Modern Economy”
-Bank of England

Banks do not loan money, they create it
Money is created from thin air. Since 1971 there has not been a
single currency in the world with a link to physical resources

Debt productivity – or how much GDP we get for an additional $
of new debt, is in decline globally
Source: Federal reserve, Citibank research Source: Peoples Bank of China, Citibank research

?
We don’t think of it this way – but when we take on debt – as a nation, as a company or
as an individual, the debt someday has to be paid back with energy.

Our society views the
world solely through a
Money lens
Money
Non-renewables
Renewables

5. Money has no biophysical backing –but merely a marker for real capital
6. Technology is mostly a vector for increasing primary energy use

Human Labor
Replacement
New resource
Conversions
Resource/Energy
Efficiency
New
Energy
Tech
Most technology is a vector for more primary energy demand
There are two general types of technology. Type 1 finds ways to use energy more
efficiently or finds new energy sources. Type 2 tech increases demand for energy via
doing tasks humans used to do manually (or inventing new tasks). Currently Type 2
dominates human technology inventions, and increases total global demand for energy.
T1 T2

Source: On Global Electricity Usage of Communication
Technology: Trends to 2030 Anders Andrea et al 2017
Even ‘digital’ consumption requires energy 13% currently and increasing rapidly
*
Actual

5. Money has no biophysical backing –but merely a marker for real capital
6. Technology is mostly a vector for increasing primary energy use
7. We’ve used a large % of our fossil stocks – there is plenty left but it will
be more costly, which means lower benefits to society

In USA, the cost to extract oil has increased ~350% since 1999. Oil prices have doubled

Low entropy natural resources-
there is a HUGE difference between:
PRICE COST VALUE

Modern Human Culture Functions as a
Superorganism
1.Energy and Maximum Power Principle
2. Human Behavior
3. GDP and access to power
4. Conclusions/implications

Energy seeking in nature
Organisms and ecosystems in nature self-organize so as to better access an energy gradient
(e.g. branches and leaves to maximize surface area exposed to sun)

Maximum Entropy Production Principle

Superorganism
1. Energy and Maximum Power Principle
2.Human Behavior

Our minds can look forward but our feelings
come from what worked in the past

“Ultrasociality”
Humans – like ants bees and termites are an extremely social species

Sexual selection & relative fitness –
yup –humans are animals too!

IS BIGGER BETTER?
• Would you prefer a 4,000 sq ft house in a
neighborhood of 6,000 sq ft houses?
• Or would you prefer a 3,000 sq ft house
in a neighborhood of 2,000 sq ft houses?
Prof Robert Frank –
“Money and Happiness: Rank of Income, Not
Income, Affects Life Satisfaction”

The ‘wanting’ feels stronger in our brains than the ‘having’

Check list
Agenda of the Gene Preference Checklist
Temperature: 10 F___ 65 F ✓ 110 F ___
Wealth: prefer to be poor ___ prefer to be rich ✓
# of children wanted: zero ___ greater than zero ✓
Prefer: newspaper__ dial up___ dsl___ broadband ✓
Prefer to be: miserable ___ comfortable ✓
Need to be in town in 2 hours: drive car✓ walk__
Prefer to: win wars ✓ lose wars___
Care more about how your life is in: 2018 ✓ or 2028___
Prefer to be viewed as: more✓ or less __ successful than ones neighbor

Human animals seek physical homeostasis, almost
all of which requires energy Most psychological needs in our culture still
require more energy, but don’t have to

Time
Care/attention
As biological animals we heavily weight the present over the future

Time
Care/attention
We want brain services, and we want them today, not
next week, next year or next decade
In thermodynamic terms ‘power’ is energy used per unit time.
The brain is similar…

Superorganism
2. Human Behavior
3.GDP and access to power

ENERGY
Up until the 1970s we continued our physical world expansion, adding vertical land productivity
(fossil carbon) to previous horizontal productivity (farming). We ran into 2 energy crises in 1970s.
Energy and resource led productivity

ENERGY
To keep access to energy growing, we went to 1) debt as a way of pulling resources forward in time and 2)
globalization as a way of accessing cheaper areas of production and more cooperation. Hit a wall in 2008
Debt and trade productivity

ENERGY
Since 2008, central banks and governments responded with “temporary” too big to fail guarantees, QE,
artificially low interest rates, balance sheet expansion, to maintain populations access to energy/services
Central bank and government guarantee era

ENERGY
Rule changes (e.g. Italy making prostitution and cocaine sales part of GDP), new tax and benefit schemes,
and numerous other ‘abstractions’ allow us to continue growing the energy spigot. But for how long?
?
Orwellian productivity?

STRAW = ENERGY AND NATURAL
RESOURCES SIZE
Major influences on the size
of the straw (E):
1) Low cost of energy C
2) Energy technology T1
3) Consumer tech T2
4) Cheap/free credit M
5) Government rules G
6) Population/Nodes (P)
C
STRAW-(Cross section view)
G T
M
G
C
M
E
T2
Circa 1990
N
T2
P
T2

C
T1
Organic growth of global energy spigot was based on
cheap energy and e.g. power plant efficiency. These
factors are now smaller than they used to be

M
G
T2
Increasingly we are growing the energy spigot by money creation, rule
changes, and novelty devices requiring energy (but generating GDP)

No debt With access
to debt
Cheap access to credit changed the shape of global oil production

The things we are doing to expand the
size of our ‘energy straw’ are less and
less sustainable
Major influences on the
size of the straw (E):
2) Better technology T
3) Complexity Nodes N
6) Population (P)
EC
G
T2
M
G
C
M
E
T1
Circa 1990 Circa 2020
N
N
P
P

Time
GlobalEnergyConsumption
1900 1950 2000
The outputs of the Superorganism are energy based – the
inputs increasingly are non-caloric

The net result of 7.6 billion humans each individually pursuing an internal optimal foraging theory energy-marker algorithm,
cooperating and assembling into groups, corporations and nations is an energy hungry superoganism, planetwide

Our species is defacto functioning as a “Superorganism”

This has two main inferences (implications to follow later)

We assume bigger/larger= more able to
grasp, envision and plan for complex
events
A single human cell
A kidney
A person
A small group of colleagues
A large group (e.g. Congress)
A nation of humans
A world of 8 billion

LOW
HIGH
LOW
VERY
HIGH
LOW
LOW
A single human cell
A kidney
A person
A small group of dedicated humans
A nation of humans
A world of 8 billion

(aka the larger the
group of people,
the dumber it gets
wrt complex plans)
1. Behaviorally,
global human society
functions using simple
tropisms, (akin to an
simple amoeba).

Thinking doesn’t happen outside individual brains. There is no one driving the bus

2. Physically, global human society is functioning
as an energy dissipating structure
Every single good or service consumed by global economic system
originated with a small fire burning somewhere on planet

Downstream of the
Superorganism…

Superorganism
2. Human Behavior
4.Synthesis
5. Conclusions and implications

The main implications of “Superorganomics”

1. The human Amoeba (superorganism) IS the invisible hand

2. As a global culture, humans are no longer maximizing
surplus, but surplus ‘value’ (digital representations of surplus)

Global GDP from O A.D. Source Angus Maddisson, IIER calculations
Long Term – Growth was not the norm
3. Economic theory wasn’t chosen because it was true/valid – it was
the emergent path for the superorganism/dissipative structure
Long Term Economic Growth 0-2000 C.E.
?

Money
Non-renewables
Renewables

Money
Non-renewables
Renewables
ALL KEY DECISIONMAKERS IN
OUR WORLD ARE EXPECTING
THE BLACK LINE (BECAUSE OF
FLAWED COBB-DOUGLAS)
3b. There is no credible institution or government body or corporation globally that is
specifically planning for an end to growth despite growth being over for 80%+ of OECD people.

3c. Politically, our system is not broken, but working perfectly. Moving away from the rich
feeding grounds of fossil productivity is not in the job description of high ranking humans.

4a. As long as human cultures maximize GDP, efficiency and
better technology will merely build a larger global heat engine.

4b. Growing renewables (in the current culture maximizing
GDP) will likely just build a bigger aggregate heat engine

Fossil ‘magic’ increasingly went more towards productivity, than wages
Chart: Emmanuel Saez, published in Forbes.

Increasing substitution of human labor for mechanical
(under current trends) will impoverish higher % of humans

Sidebar  Humans and machines –from the vantage of the Superorganism
1. Most technology is just leading to a higher global demand for primary energy –
when primary energy begins to decline, technology will have to do much more
(or we’ll have to do with less)
2. As robots increasingly become cheaper than human workers – we’ll have to
reconsider the relationship between ‘jobs’ and ‘work’ and…what to do with all
those who were replaced by robots? If enough people drop back to poverty
levels, who will buy the tech products?
3. There is a difference between being technologically possible, and
technologically affordable and scalable
4. Most modern time saving tech devices give us more time to play games and
waste time
5. Technology (esp smart phones, internet, social media etc) are shortening our
attention spans, making our citizens less capable of complex, long term tasks.

5. The mass extinction and metabolic impacts on biogeochemistry are
downstream effects, not easily ‘willed’ away or solved by changing prices

6. The main way we are accessing energy today is via the credit markets.
Sources: BEA, Federal Reserve

6b. As long as we can increase credit, we’ll continue
to grow. When we can’t we won’t.

The things we are doing to expand the
size of our ‘energy straw’ are not
sustainable and increasingly risky
Major influences on the
size of the straw (E):
2) Better technology T
3) Complexity Nodes N
6) Population (P)
EC
G T2
M
G
C
M
E
T1
Circa 1990 Circa 2020
N
N
P
P
T1

What do we do when we’ve kicked the
can as far as it will go, and is now
blocking the road?

7. We will keep
growing until we
run out of ‘food’

7b. Then we will respond to the Great Simplification…
•
•
•

We can have a very large
economy (like now) with decent
amount of renewables,

Or a smaller economy
powered in good part
by renewables….

But not a larger economy
powered by renewables

Superorganism
2. Human Behavior
4. Synthesis
5.(speculative) Conclusions and implications

1.
SOURCE
2.
SINK
The Situation

1.
SOURCE
2.
SINK
The Narrative

Higher energy costs in coming decades will make energy intensive activities unprofitable

Lowest quintiles of incomes in almost all OECD countries
have been hit by significantly declining incomes.
Source: Census.gov

Income development 2002-2014, U.S. census data (www.census.gov), graphic IIER
For 80%+ of people (in USA/Europe) growth is already over
..yet all governments continue to plan for growth…

What’s happening seems like somebody’s fault…

Viewed from perspective of superorganism we are all complicit but no one is to blame
What’s happening is largely because fossil helpers are asking for pay raises at a time when Amoeba is larger, and hungrier

Good news: our physical needs require energy. Most psychological needs do not.
After the superorganism shrinks there will be new models of how humans
receive our ‘brain services’. But we have to understand who we are first.

Iier graph on
www.energyandstuff.org

?
THE CARBON PULSE
We are ~here
The economic inputs to the worst climate models are delusional. Fossil fuels will quit
before we fire them. But will that suffice? And will the cure, unprepared for, be worse?

1) Energy is what we have to budget and spend. Money is just a marker for real
capital/wealth.
2) The primary drivers of growth – cheap energy and available credit are waning. We’ve
already hit social limits to growth.
3) We don’t face a resource scarcity situation but one of declining ‘resource
contribution’. Costlier energy inputs reduce benefits to economies. There isn’t a real
energy shortage but rather a longage of expectations.
4) Our evolved behavior drivers make it difficult to act/plan ahead other than in crisis.
Biology determines what we need, culture determines how we get it.
5) Global market based human society is functioning like a dissipative structure – and
will continue to do - until it cannot.
6) We need to – as best as we can – use intelligent foresight and be aware of the reasons
why a lower consumption, more local and regional future is on the horizon.
7) The good news is we only need a fraction of all this material stuff to be happy and
healthy
Brief Summary

The Challenge of the 21st century:
Given this backdrop,
what do we do??

The Probability Distribution of the Future

What is NOT likely to happen:
1.Growing the economy AND mitigating
climate change
2.Growing the economy by REPLACING
fossil fuels with renewables
3.Humans en masse choosing to leave fossil
sunlight in the ground
4. Governments explaining limits to growth
BEFORE limits to growth are well past

Quite simply:
we need a completely different conversation
What to do – as a world/species?

What to do – as a species?
Ask better questions:
~What is our goal?
~What are the stakes?
~How can we use the remaining oil and gas towards best purposes
so 200 years from now our descendants don’t look back and say ‘it
was ALL wasted’.
~Does knowing who we are, where we came from, what we are
doing, what we need/want, what is possible, matter? (I’m hopeful
that it does)

What to do – as a nation/institution?
~Educate people on ecology and natural resources at young age
~Consider taxing resources instead of labor
~Start pilots of residences without baseload and lower consumption lifestyles
~Direct resources to support science and unbiased journalism/media
~Redefine poverty and provide safety nets for lower tranches of society
~Consider a “Anti-rebound effect Pool” where profits from new tech and
efficiency aren’t fed back to the Amoeba but to more sustainable infrastructure
~Break large groups working on better futures into smaller subsets. E.g. take
500 people working on an issue and divide funding into ~100 groups of 5.

What to do – as a University/College?
~Educate and train students in subjects and skills that will be needed in a source/sink
constrained future
~Have science and technology directed towards providing basic human needs (problem is
there isn’t funding for this – yet – in most schools)
~Build new interdisciplinary collaborative capacity
~Retiring professors consider a pro-future Capstone project during their last 3 years at
University
~We need detailed expertise and continued specialization, but perhaps the academy can stop
rewarding hyperspecialization associated with such reductionism.
~Make your school needed and relevant – because much of our University system is a product of
‘surplus’ which is going away.
~Be bold and take risks. A highly-educated, disciplined mind is a terrible thing to waste.

What to do – as individuals?
~Use logic, reason and think for yourself, and avoid the consensus trance
~Become ‘woke’ to the huge advantage you have in life, because you understand these things:
you’re one of the (unfortunately) very few
~Try to accept you can’t shift things too much before the energy/economy reality becomes more
apparent to others
~Don’t step out of society - live a normal life, advance in a job you like in todays world, but know it
will likely change at some point
~Be a ‘sleeper’ leader/anchor for the future / be ready to engage when the world needs your
knowledge
The simplest changes….

From an energy/economy perspective
~Simplify first and beat the rush
~Don’t become overly reliant on energy intensive activities
~help to re-localize/re-regionalize supply chains
~learn a physical skill
~help to design technology that provides basic human services as opposed to short
term dopamine
~Contribute to massive list of societal transition projects and campaigns tackling
pieces of the challenge

From an brain/behavior perspective
~Get to know your brain (this may be uncomfortable)
~Be happy with absolute wealth instead of relative
~Consider a ‘paleo behavior’ diet. E.g. Take electricity, technology breaks – reset
your brain in nature
~Choose your tribe wisely
~Relax, smile, laugh and enjoy life
~Be kind to yourself

A conversation with yourself
~Who am I during these times?
~What do I stand for?
~The time is not to minimize my impact, but to maximize it
~My species is not evil. We are complex creatures capable of great things: both
terrible and wonderful
~I am part of a ‘Superorganism’. And I Am Not

We live in very special times.
The world is not yet fully broken.
What is our species capable of?
‘Brain services’ per NRR will be key metric
Knowing who we are and what is at stake
is the first step. Caring is the 2nd. Then there are more…
We are each part of an energy hungry global Amoeba.
And We Are Not….

Energy Technology and Money - From Lens of the Superorganism

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