Depression cycle without increasing energy use?
Certainly there is aclose relationship between energy use and labor productivity, but not necessarily one-to-one, and this needs to bethought about if we are to work out how to build a “steady state economy”. Increases in productivity can resultfrom improved science and technology, and productivity can be measured in morethan quantities and pounds of things. For example a computer may take less resources and energy to make thanthe calculating machines and file cabinets it replaces; and much of the gain inFord’s assembly line came not from increased energy use but better organization. No this is not just hedonics! Even in the 1700’s when energy use wasnot expanding rapidly, capitalist systems needed an exponential expansion ofcredit to grow, which always reached a limit resulting in panics and depressions. We need to thinkdeeply about this as we consider how to construct a steady-state economy out ofthe ruins of the present collapse, one that is truly stable and not doomed torepeat the cycle. Constant energy input will not be enough to assure this!
Chris has commented on the difference between a money dominated life and one that is productive and thoughtful but not driven by fear of unknowns like the impondereable derivitive markets or mark to market assets being used as liquid assets to bolster a portfolio that is truly a house of cards.
We need to begin to look at local currencies. This is part of what W.Buffet is doing because the dollar eventually will not be worth much outside of the US. In Berkshire county MA there is a test local currency called "Berkshares" they are created by trading $90 of US currency for $100 Berkshares. There are 300 businesses in that county that will accept payment in whole or in part for a transaction. As long as you are working within the area served by Berkshares you have a 10% edge over the dollar excahnge rate. When someone needs to trade for something outside the region they suffer the 10% deflation at the transfer point.
We are working on carbon negative energy systems within the US with the expectation that within six months there will be no liquidity for more than local production of anything. It is essential that we find ways to set up these local currencies prior to this time of illiquidity.
I suggest that one who is interested in how things ought to work read the recent collection of Wendell Berry’s interviews. It was compiled in 2007 and describes how rural communities should work and how to treat land as if ones life depended up on it.