MAKING SURPLUS ENERGY DATA AVAILABLE
In recent times, it’s fair to say that three broad themes have dominated discussion here.
The first of these, of course, is surplus energy economics – the philosophy which says that the economy is an energy system, not a financial one. Money may be the map of the territory, but the territory itself is energy.
The second “hot” topic is Ponzi finance. In the early years after the millennium – and for reasons which the surplus energy interpretation can alone explain – real economic growth petered out. Since then we’ve been faking it, spending borrowed money and calling this “growth”. All the while, of course, debt (and informal “quasi-debt”) has escalated. Essentially, the powers that be have been busy destroying the future, not just by accumulating debt but also by crippling other forms of provision for the future, most obviously pension funds and other forms of saving.
Third, the general public has started to smell a rat. I don’t mean that the public understand surplus energy theory, or spend their time comparing growth with borrowing. But the public does have an intuitive sense of when things are going wrong, and this is one of the reasons why they are busy repudiating the “liberal” elites, along with much of what these elites stand for.
The bottom line of these three themes is that policymakers and economists – as some of the latter, to their credit, acknowledge – don’t understand what is happening. To tackle this, we are in urgent need of new economic understanding.
This is urgent, because what the authorities have been doing for a decade and more has been akin to carrying out brain surgery with carpenters’ tools. They can’t fix the economy because they don’t really understand how it works.
And this is where SEEDS comes in. To explain why, I need to digress a bit.
After publishing Perfect Storm (when I was head of research at Tullett Prebon), I embarked on writing what was to become Life After Growth. Throughout that project, I realised that there was a glaring need for a comprehensive mathematical insight into the energy economy. For the book, I was able to include general trends in ECoE (the energy cost of energy), and had data to illustrate, for example, the progression of energy, population and economic output over time. What I did not have, however, was a level of granularity enabling evaluation of individual economies – and the world economy as a whole – with any level of detail.
This was why SEEDS – the Surplus Energy Economics Data System – was developed. Initially, the aim was to estimate ECoEs across fuel sources and economies. At first, SEEDS simply provided estimates of ECoEs on a country-by-country basis over time. The thinking was that, once we had a grasp of ECoEs, we could deduct them from GDP to work out what the “real” economy of goods and services was really doing behind the public facade of recorded output. This has been developed to the point where twenty-one countries are covered by the system – these are the United States, Canada, Mexico, Brazil, France, Germany, Greece, Italy, the Netherlands, Norway, Poland, Portugal, Russia, Spain, the United Kingdom, Australia, China, India, Japan, Saudi Arabia and South Africa.
At the same time, it became apparent that a lot more economic content was required. The “wish list” at this point included debt and borrowing, trade and external flows, government finances, and measures on a per capita basis. Above all, the aim was to get into the dynamics of borrowing and growth, and pull all of these together with the fundamentals of ECoE and surplus energy.
With all of this accomplished and just a few tweaks remaining after several years of effort, the latest version – SEEDS 17 – has become an extremely valuable interpretive tool. To use a motoring analogy, SEEDS has evolved from a Morris Minor into something reasonably akin to Mercedes.
But even the best car achieves nothing whilst it remains in the garage.
The next objective, logically, is to make SEEDS generally available.
Broadly, there are two main “audiences” for SEEDS. The first are individuals concerned about what is happening, and keen to further their understanding. The second are professionals, engaged either in making decisions or in providing advice. (There is actually a third category, comprising academics and non-profit organisations, but how to meet their requirements remains to be decided).
This argues for two kinds of product. The current plan is that, for the general public, comprehensive data will be available as PDFs which can be downloaded free of charge. The working name for these is SEEDS Snapshots. For professionals, a more detailed data package (known as SEEDS Pro) will be made available at what I hope will be a pretty reasonable price.
This project is still under development, and it may be some while before SEEDS Snapshots and SEEDS Pro go live. Also, as you may know, I’m planning a sequel to Life After Growth.
Meanwhile, of course, I’ll continue to post articles here – and please do keep making your very helpful comments.