If Earth were a closed system, economics would be a zero, or worse a negative sum game. Luckily it’s not.
A common argument against the ability for life to exist is that the second law of thermodynamics states that entropy increases within a closed system. But such arguments don’t hold water, because the Earth is not a closed system.
It may seem odd that I’m bringing the creationism and life into a discussion about economics, but this same distinction plays out in discussions of wealth. Contrary to what some might believe, in order for one person to become wealthy — even absurdly wealthy — another person does not need to lose anything. In fact, both can still gain. But why and how much?
Solar Fusion Power
We rely heavily on nuclear power. In fact, the world itself functions thanks to the giant fusion reactor sitting 1 AU away from us. It’s called “the sun.” In terms of total power output, the sun produces a phenomenal amount of power. It would fry us to a crisp if we didn’t receive just a small fraction of its total output. But even that small fraction is a lot. In fact, it’s over 1,000 watts per square meter. For simplicity, I’m going to be a bit lazy with the usage of power and energy. I might talk about one and then switch to the talking about the other. Power is just energy per unit time.
Of course, only a fraction of that energy makes it to the surface for us to use. 19% is absorbed by the atmosphere, and about 30% is scattered back out into space. That doesn’t mean that the 19% that’s absorbed is lost. It continues to warm the world, and fuel weather patterns, and so on. But about 51% does make it to the Earth. And it drives our entire biosphere, and our economy, indirectly. It is the junction between the external environment and the technosphere where energy is transferred. New energy enters the system, and waste energy is released.
From Energy to Wealth
The rest of these figures are mere guestimates, but guestimates are still very useful in figuring out courses of action and making reality checks. I’ll try to use conservative figures, but I’m more than willing to listen to any criticism. Perhaps someone has material that can provide better insight into the matter.
Let’s say that 10% of the energy striking the surface ends up entering the technosphere (net). At 89,000 TW of power, that’s an increase of 8,900 TW of power entering the system. What’s the economic value of this power input? As of November 2019, the national average cost of a kilowatt-hour of electricity was about 13 cents. But that’s retail cost. And it’s electricity. Let’s say that the economic value of a kilo-watt hour is a mere 5% of that figure, or $0.065 per kilowatt-hour. Some number crunching gives us a figure of $507 trillion per year, or about $50K per person at a population of 10 billion people.
Now $100B still seems like a lot, but compared to the value of energy being injected into the technosphere each year, it’s not all that much, is it? It’s 0.02% of the annual energy input. To acquire it over the course of one’s lifetime is still incredible, but it is not unfathomable, nor is it revolting, especially when one recognizes that this figure is simply the amount of new energy being added each year. It is not the total amount of energy in the system, nor are these figures really close to the maximum amount of wealth that could be added to the system, especially as we start reaching into space for more resources.
Moreover, as we use the available energy to produce better technology, which can draw in more energy from the external environment and reduce inefficiencies, we are increasing this figure every year. In fact, it makes sense that those who are heavily involved in bringing in new sources of energy, and those who create new ways to utilize that energy, would end up profiting. Sometimes it works out that way, and sometimes it doesn’t.
The internet itself certainly created a lot of new options, and while many people failed, a lot of people succeeded and gained significant amounts of wealth. I expect crypto+blockchain technology to yield similar results: we will see a massive increase in wealth overall, with some benefiting for getting in early and having the vision to bring about this new paradigm.
I understand concerns about unrestricted growth. From a “spiritual” point of view, I think we should try to limit our impact on the environment, while still doing what we can to grow and thrive, both here on Earth and elsewhere. It is every being’s imperative to survive and to ensure the survival of its progeny. I also consider all of Earth’s organisms to be part of a one species, that I call the “Earth species.” Our own survival, and the survival of our progeny, ensures the survival of that Earth species.
And we have a hell of a lot of room to grow. The figures I used in this analysis were fairly conservative. Moreover, if we could expand beyond this world and reach the point where we could use a mere 100th of one percent of the sun’s total output, that would still be almost 40 billion terawatts. That’s about 450,000 times the total power received by the Earth. Our only limit is the universe, and who knows, maybe even that won’t be a limit. I truly believe that we can grow, and thrive, and do so without being a pest on the universe.
Wealth Through Force
Admittedly, just because someone can become extremely rich, without force, doesn’t mean that it always happens that way. A lot of wealth accumulation is forced. People have been using force for thousands of years to accumulate wealth, and create domesticated anthroposystems. We should always avoid the use of force as a means to acquire wealth. And we should always work to improve the condition of those around us. I just recognize that we can do so, while also becoming wildly successful.
Figures mainly come from a Solar FAQ compiled by Jeff Tsao, Nate Lewis, and George Crabtree.
If you want to learn more about terms like “technosphere” and “anthroposystem,” they come from other discussions on technoecology, which is a detailed analogy between the biosphere and the system of human activities and material inventory.