Hi Gail, I really enjoyed your presentation.

Money = energy is kind of right but I have argued that money is really an energy allocation sytem. As weallknow energy cannot be created or destroyed,only changed from one form to another. It can also be stored, or accumulated and concentrated and it is the allocation of this stored energy for which we have invented the monetary system.

The most common and important type of energy traded is food and it would have soon become apparent to early traders that a way had to be devised to break apart the relative value of food so that you didn't have to kill a whole cow, every time you needed a cup of sugar.

The capitalist system holds that money will flow to those who are best able to allocate it in such a way as to create concentrations of energy which then perform a function in society which is desired by the participants. It really is no accident why the rich are the rich. They are typically smarter with the way that they allocate whatever energy they have to accumulate more of it, whereas poor people in the same society, all other things being equal, tend to waste their energy allocations on self indulgences which are energy dispersing. Society keeps score by allocating units of currency to people according to their behaviour.

Markets and finance of course are the logical outgrowth of this phenomenon and even though markets may stray and allocate money stupidly from time to time, it eventually corects and the money is taken off stupid people and may be destroyed (what's happening now) or re-allocated more appropriately.

The bigger the market, the longer the lag between stimulus-response and back to stimulus. Energy availability is perhaps the outer boundaries to which a market will always try to reach and then can grow no more. If the available energy actually starts to shrink, it will still be allocated along the same principles, with money continuing to be the means of allocation.

Every human activity is a decision to spend energy regardless of whether the measure is dollars or calories. The big problems come when we forget that money is only an abstract concept that represents our relative allocation of the available energy. Creating money alone does not create more energy but it is amusing to watch the various central banks try to do just that.

These are very interesting comments that essentially point to the need for clarification that might come from the perspective I propose.

Gail invokes the recursive nature of energy extraction that currently keeps true costs opaque. She notes that economists are loathe to do the rethinking, although the ecological economists do engage in thinking of energy as the true currency and all that that entails.

Turmoil has essentially recast the proposal noting the relationship between money as a token representation and free energy, which actually does the work. This description shows that economics isn't completely off the mark in studying markets and allocation. It is the disconnect between true currency and its artificial surrogate that is at the root of misunderstandings.

And Kohesion notes the fog that exists around understanding wealth, its creation, and its proper uses. People can be rich in monetary terms and not contribute one iota to the economy in the sense of increasing the availability of free energy.

Both viewpoints can be true.

I don't know if it will be possible to change enough people's perspectives or not. I don't know if it could be done in time to make a difference. But I am reasonably sure that for us to eventually understand and maintain a sustainable economy we will have to realize the true role of energy flow and work processes. We will have to be able to manage this by measurement (accounting) and allocation (markets, yes, but also coordination). Most of all we need a strategic view of what kind of world mankind needs to have in order to achieve actualization and balance with the rest of nature. Once we have such a view, and a means to manage our behaviors, perhaps our species can settle into a mode of enjoying the world. Prudent reshaping, wisely chosen new technologies that enhance sustainability and comfort might replace the frenetic drive to consume and corrupt. I remain hopeful.

George

Thank you.