The Economic Superorganism: Beyond the Competing Narratives on Energy, Growth, and Policy
By Carey W. King
466 pp. Springer International Publishing – Oct. 2020. $29.99.
In this aptly titled book, University of Texas research scientist Carey W. King argues that the modern-day global economy is a superorganism. King observes that much like an ant colony, or any other superorganism in nature, the global economy must constantly consume and dissipate energy to grow and sustain itself. And when faced with constraints to its energy supply, it acts like an ant colony hemmed in by limits to its food supply. There’s also a great deal in common between evolutionary processes in the biological world at large and the way in which capitalistic economies open up new foreign and domestic markets. But the most fundamental trait that the global economy shares with biological superorganisms is that both are inextricably part of a finite natural world, and thus both are inherently incapable of growing forever.
This reality is key to King’s arguments in The Economic Superorganism. The book takes a deep, data-driven dive into the various energy and economic narratives that occupy today’s public discourse, coming out in favor of those that acknowledge physical limits to economic activity. “The purpose of this book,” states King in the first chapter, “is to explain how physical constraints affect our social outcomes, in particular economic outcomes, more than we think.” To this end, it examines trends like population, debt, income distribution and infrastructure to show how energy impacts economic and physical growth. It also endeavors to provide a “physics-based explanation” for today’s wage and income inequality in America and other Western countries, along with a brief course in how to apply systems thinking to matters of energy and the economy.
The author is a practitioner of econophysics, an economic school that brings the methods and theories of physics to bear on economic phenomena. One of these theories is the maximum power principle formulated by mathematician Alfred Lotka in 1922, which holds that organisms that are better at extracting energy from their environments are more likely to survive and propagate. King cogently argues that this applies to economies as well. Another principle of physics that factors prominently into econophysics is the second law of thermodynamics, which states that whenever energy flows, some is lost as waste heat. Unlike conventional economics, econophysics accounts for entropy by thinking not in energy terms but in “exergy” terms, exergy being that portion of an energy flow that isn’t lost as waste, and is thus available to be used.
In light of how much misinformation there is about the ways in which energy interacts with the economy, part one of this book seeks to sort out the science and facts from the rhetoric, and to dispel some widely held false beliefs. It begins by critically evaluating some familiar narratives about energy and the economy, pointing out their faults, merits and most commonly used fallacious argumentative strategies. Along the way, it defines basic concepts like energy, energy return on investment (EROI), power, gross domestic product (GDP), energy reserves (versus resources) and thermodynamic laws. It also tracks primary energy consumption and spending on fuels in the United Kingdom, America and the world at large, and provides a history of how we arrived at present trends in energy consumption and fuels spending.
King uses data and graphs to show how ecological limits have long been exerting themselves in ways seldom acknowledged. Chief among these is a slowing in the rate of world population growth, which in turn has led to aging populations in high-income countries. Western nations have also seen decreased rates of economic growth and unprecedented, ever-escalating debt-to-GDP ratios as a result of slowdowns in their energy consumption. Other megatrends examined by King include the unprecedented low interest rate environment of recent years and America’s aging infrastructure. He acknowledges that it isn’t immediately clear what some of these trends have to do with biophysical constraints, and stresses that in order to grasp many of the connections, one must be able to think from a systems perspective.
Complex systems like economies and ecosystems, explains King, have countless components that interact in unpredictable ways. This gives rise to emergent properties, which are traits or behaviors that no individual part possesses on its own, but which the system as a whole exhibits as a result of the interactions among its parts. King cites the example of a school bus. A bus is made up partly of wheels, but wheels alone don’t possess the property of transporting people; that is the combined work of the wheels, engine and many other constituent parts. Some other, weightier examples of emergent properties include stock market collapses, oceanic dead zones and the increasing sensitivity of Earth’s climate to anthropogenic global warming. Due to a general lack of systems thinking skills, most people find it challenging to make sense of emergent phenomena—which is why King’s primer is sorely needed.
The discussion of narratives focuses on two pairs of competing narratives that dominate current debates about the world energy and economic situation. The first two, which King calls the energy narratives, are as follows: “Fossil fuels are the future” and “Renewable energy is the future.” These are accompanied by two equally diametrically opposed economic narratives. The first economic narrative, which King terms “technological optimism,” insists that technological substitution will inevitably allow industrial humanity to achieve all its desired economic and social outcomes. Its counterpoint is “technological realism,” which says that our finite planet and the laws of physics place hard limits on growth and thus on social outcomes.
King gives both credit and criticism where due on each side of the fossil-fuels-versus-renewables debate. “What I’ve come to discover” he writes, “is that while both the fossil and renewable narratives have valid claims, they both often produce misleading visions.” It’s common for advocates of a particular type of energy to try to make it seem more “reliable” than its competitors by focusing only on those aspects of reliability that favor it and disfavor the others. For example, a tactic of many fossil fuel proponents is to use arbitrarily short time intervals, such as days to months, over which to evaluate the reliability of renewables. Renewables seem unreliable in this light, due to the variability of sunshine and wind over short periods. Renewables advocates, on the other hand, will extend the time interval to centuries or millennia to make the point that while fossil fuels are likely to be exhausted within centuries, the sun and wind will be here effectively forever. Yet this analysis ignores how vital oil’s reliability over very short spans is to industrial society’s “just in time” delivery system.
A particularly fascinating section describes how econophysists have likened monetary transactions and income distribution to the behavior of molecules in a gas. Just as gas molecules exchange energy as they randomly collide, so consumers, merchants and other participants in the economy exchange money whenever they meet. The comparison may seem curious at first, but it follows logically and is borne out by studies of income data from various countries. King cites one that looked at U.S. data and found that the income distribution of more than 97% of the population matches the exponential Boltzmann-Gibbs distribution of energy.
The chapter on solutions begins with the recognition that because of the biophysical limits on economic growth, we have a finite ability to pursue solutions to today’s crises, even though we like to imagine we can solve all of them simultaneously. King contends that our wishful thinking is buttressed by “delusions of control.” The first of these is the confidence delusion, which says that we can always grow the economy if we maintain enough confidence in technology, markets, human ingenuity and ourselves. King questions the assertion that confidence constitutes an economic fundamental, and he insists that crucial information and knowledge are far more important to possess than confidence. There’s also the finance delusion, which encourages people to believe, for example, that efforts to wean off fossil fuels are bound to succeed as long as they receive sufficient investment. But the massively money-losing proposition that is the U.S. shale (tight) oil industry hardly supports this belief, observes King. Other delusions of control include the “freewill,” “political will” and “decoupling and services” delusions.
The book’s conclusion speaks to a range of themes involving the future of the economic superorganism. These include the need to balance economic growth and economic equity, the question of whether it’s possible for the superorganism to “contemplate” the risk that climate change poses to humanity in coming centuries, the potential of the Green New Deal to address inequity through a massive renewable energy buildout and the matter of whether the resulting capital should be publicly or privately owned. Drawing on insights from philosophy, permaculture and theoretical biology, King critically considers each of these issues before turning to what he considers to be the truly salient questions—namely, “whether or not we should plan for the end of growth and if so, what such a plan even looks like.” He doesn’t pretend to have easy answers.
In his final remarks, King returns to the energy and economic narratives introduced in chapter one, lamenting that people too often use them to speak past one another instead of engaging in meaningful discussion. He closes by expressing his hope that this book will help enable thoughtful conversation. It must be said, however, that the belief systems underpinning the narratives King rightly bemoans are pretty much impervious to information-based persuasion. Even the most accessible popular book would have a formidable row to hoe—and The Economic Superorganism is, by necessity given its complex subject matter, an intensely cerebral academic volume. Still, the effort is well worth making, and hopefully a critical mass of books like this will move our public discourse closer to where it needs to be.