Obsolete Economics

This lecture by Prof Nate Hagen is among the best I have recenty watched. It was presented in Saudi Arabia in early 2018, entitled “Energy, Money and Technology”. He brings together, in an hour, a wide range of ideas from many disciplines to show how our species is acting like a super-organism that is out of control and is bound to exceed the limits to the economic, money and debt-driven economic growth to which all nations are currently dedicated. He exposes the great error of the Cobb-Douglas conventional production function model of economics as seriously flawed. The model fails to factor in the true role of cheap fossil energy that has enabled exponential increases in human population and environmental impact on the planet. The conventional model also fails to incorporate the sources of economic activity and the sinks into which its wastes are discarded. Unusually, he deals with the evolved psychology of our species to explain why large-scale adaptation is not likely to avoid major socio-economic  breakdown as cheap carbon rises in price and as money and debt creation spiral out of control.

Hagen is a former Wall Street financier who took a ten-fold cut in income to teach and research at university once he saw the trajectory fired by cheap energy and cumulative debt upon which global systems are moving. As a taster, here are four “can’t haves” from one of his many slides:

  1. Economic growth and the end of climate disruption.
  2. Carbon-sourced energy replaced by  sufficient renewables.
  3. Achieve agreement to leave fossil fuels underground.
  4. Get governments to recognise and act to avoid the limits to growth before collapse of cheap energy-based modern life ensues.

The lecture condenses a whole course into a rapidly surveyed set of key concepts and is worthy of careful study.

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