David Smith, the Economics Editor of the Sunday Times has just published a book called "My Own Free Lunch" (Profile Books). It takes its name from the famous rule, "There is no such thing as a free lunch", invented by the legendary New York mayor, Fiorella La Guardia but taken to heart by economists everywhere as being something equivalent to Newton's Laws of Motion or Einstein's Theory of Relativity.
To celebrate the launch of the book, the publishers have agreed to pay for a free lunch (for two actually) for the person who can come up with the best exception to the rule. I've come up with the biggest exception to the rule -- and have once again taken the opportunity of criticising almost all the economists of the last century and a half since Ricardo -- in particular all those brilliant, though woefully misguided, people called neo-classical economists. <<<<< Dear David Smith, Ah! Having read your articles every Sunday for several years (with much enjoyment and profit -- I got out of shares about four years ago partially due to something you wrote then), you have now given an opportunity to a publisher of early choral music to teach a thing or two to an economist! There is, in reality, one immense free lunch, which has been available for most of man's past, is not totally free at present, but will be free once again in the future. It is the most important feature of our survival and our economy. It is something without which our species could not have survived. Malthus came close to realising its importance, and Ricardo might have done so, but didn't quite because he became preoccupied with fertility of soil rather than sunshine. Marx then followed the Ricardian trail and, since then, has led all the economists (whether Marxist or non-Marxist) of the last century and a half up a cul-de-sac from which only the odd one or two have peeked out in a mystified way with worry lines on their faces. One of the rare exceptions is Nicholas Georgescu-Roegen whom you will know as a pupil of Schumpeter and who took the energy basis of economics very seriously. ["The Entropy Law and the Economic Process", Harvard U.P. 1971]. The economists' blind spot is energy. This is the free lunch. True, it isn't technically free at the present time because our main source of energy is only available in concentrated pockets and has been monopolised by naughty people. But energy is essentially free and has been absolutely free for most of man's existence. A very brief survey of mankind's past will suffice to show this: 1. Hunter-Gatherer times (from circa 100-150,000 ya): the only energy available (apart from a little from burning wood at campfires) was that of the food he gathered or hunted. This was freely available, and needed only a portion of the energy obtained from it in order to obtain more of it. In other words, man made a profit from the balance of energy was freely available. This enabled him to use muscular energy for his only industry (making tools and flint axe- and arrow-heads). 2. Agricultural times (from circa 10,000 ya): free solar radiation received on most temperate and equatorial land surfaces with decent soil and rainfall could support selected plant life, supplying proteins, sugars and starches for personal energy, and wood for advanced metal smelting. (Malthus came close to understanding the essential role of energy because he was concerned with the necessary amount of energy [food] that a labourer must have in order to survive and procreate. Ricardo brilliantly developed the concept of profit due to the landowner and the squeezing of profits to all subsidiary entrepreneurs and labourers but he was dominated by the variable fertility of different grades of land, and didn't give importance to the other necessary ingredient -- the receipt of solar energy.) 3. Industrial times (from circa 2,000 ya): use of free coal outcrops and oil seepages, followed circa 250 years ago by full-scale development of deep coal mines and then from 150 years ago by oil drilling. These concentrated sources are only legally "non-free" by being legally owned by a small number of individuals able to exercise monopoly power. (Marx followed Ricardo's Iron Law of Wages in assuming that profit being surplus energy, or increased energy productivity, it was was measured in money by the portion of the wages that the employer should have paid, but didn't. Just as Ricado overlooked the energy of the sun, Marx overlooked the immense amounts of energy [coal, steam power, water mills] being supplied increasingly efficiently to the factories.) 4. Hydrogen economy (circa 2030 onwards): when fossil fuels start to become steeply expensive because of China's and India's demands and man is more concerned with pollution, and perhaps CO2 in the atmosphere, a totally non-polluting and massive new fuel technology will need to be created -- far beyond anything in scope than nuclear power. This will be derived from free energy from the sun once again. The amount of solar energy received every year by the earth is at least 5,000 times the amount of energy in the total fossil fuel reserves plus radioactive energy sources. Solar energy will, of course, have to be intermediated either by silicon-electronic cells or genomically (hydrogen produced from water by man-made bacteria. The hydrogen economy is now being researched by Craig Venter of Human Genome Project fame and now the head of the Institute for Biological Energy Alternatives, Maryland, and undoubtedly also by the Chinese who are already pulling ahead in some areas of research to do with the genome. The new hydrogen-based economy will supply energy at such low costs as to be considered free even at the point of use. Genomic methods will need very little by way of high-tech equipment -- once the formidable genetic problems have been solved. (See a recent New Scientist article for further discussion about this.) The hydrogen economy will encourage local production of both useful energy, electricity and of sophisticated goods. It will diversify the polarised structure of the present global economy and population densities. It will, however, require large amounts of land-use (wherever fresh water is available) and will compete with land used for agriculture at present. It is therefore desirable that world population should decline quite steeply from now about 2030 onwards. Thankfully, this is highly likely from present-day fertility trends in over 60 countries of the world. I look forward to a free lunch but I will give notice that if I were to be succcessful I would choose The Royal Crescent Hotel, Bath as the venue -- being a place that is so expensive that I've never dared enter it previously. However, I will do so gladly on this occasion if I am rewarded with this Novel Prize for Economics. Yours sincerely, Keith Hudson >>>>> ---------------------------------------------------------------------------- ------------ Keith Hudson, General Editor, Handlo Music, http://www.handlo.com 6 Upper Camden Place, Bath BA1 5HX, England Tel: +44 1225 312622; Fax: +44 1225 447727; mailto:[EMAIL PROTECTED] ________________________________________________________________________ _______________________________________________ Futurework mailing list [EMAIL PROTECTED] http://scribe.uwaterloo.ca/mailman/listinfo/futurework
