Transcript Energy & Money Integrating Social Metabolism into Economic

Energy & Money
Integrating Social Metabolism into
Economic Analysis
Blair Fix
Canadian Society for Ecological Economics
Toronto
November 2, 2013
Real GDP:
A measure of our ignorance?
A Quantity Measure of Output
GDP Nominal =
=
Quantity× Price
GDP Real × GDP Deflator
GDP Nominal
GDP Real =
GDP Deflator
Quantity of What?
Quantification Requires Units
3 apples + 3 oranges = ?
The Seven SI Base Units
Defining 1 second:
The duration of 9,192,631,770 periods of the
radiation corresponding to the transition
between the two hyperfine levels of the ground
state of the cesium 133 atom.
The Choice of Unity Affects
Aggregate Quantity
Apple : Orange
Mass (kg)
1:2
Energy (J)
3:4
Price ($)
5:7
The fundamental problem with using
price as a unit...
Relative prices change all the time, meaning
our unit ($) has no single definition!
A Historical Example
Measuring Changes in Quality?
Hedonic Quality Adjustment
“The practice of decomposing an item into its constituent
characteristics, obtaining estimates of the value of the
utility derived from each characteristic, and using those
value estimates to adjust prices when the quality of a good
changes.”
US Bureau of Labour Statistics
A Completely Different
Approach to Output
Dissipative Structures
Society as a Dissipative Structure
Social Metabolism
Useful Work:
A physically meaningful
quantity measure of output.
A Pecuniary Feedback
GDP Nominal
= Dissipative Pressure
U Price
Most Types of Useful Work
Have No Price
1. Mechanical Drive
2. Heat (Low, Mid, High)
3. Light
4. Muscle Work
5. Electricity
The Price of Electricity as a Proxy
for the Price of Useful Work
Dissipative Pressure
=
GDP Nominal /U Price
GDP KWH
=
GDP Nominal / P KWH
KWH Deflated GDP
Japan
United Kingdom
United States
Conclusions
Rethinking Labour Productivity