Energy Accounting

Energy Accounting

Energy Accounting is the hypothetical system of distribution, proposed by Technocracy Incorporated in the "Technocracy Study Course", which would record the energy used to produce and distribute goods and services consumed by citizens in a Technate. [ Economy and Thermodynamics]

Scientists have written and speculated on different aspects of energy accounting. [Stabile, Donald R. "Veblen and the Political Economy of the Engineer: the radical thinker and engineering leaders came to technocratic ideas at the same time," "American Journal of Economics and Sociology (45:1) 1986, 43-44.] Many variations of energy accounting are in use now, as this issue relates to current (price system) economics directly, as well as projected models in possible Non-market economics systems.

Energy accounting and balance

Energy economics relating to thermoeconomics, is a broad scientific subject area which includes topics related to supply and use of energy in societies. Thermoeconomists argue that economic systems always involve matter, energy, entropy, and information.Baumgarter, Stefan. (2004). [ Thermodynamic Models] , Modeling in Ecological Economics (Ch. 18)] Moreover, the aim of many economic activities is to achieve a certain structure. In this manner, thermoeconomics attempts to apply the theories in non-equilibrium thermodynamics, in which structure formations called dissipative structures form, and information theory, in which information entropy is a central construct, to the modeling of economic activities in which the natural flows of energy and materials function to create scarce resources. In thermodynamic terminology, human economic activity may be described as a dissipative system, which flourishes by transforming and exchanging resources, goods, and services. [cite journal
last = Raine | first = Alan
coauthors = Foster, John; and Potts, Jason
title = The new entropy law and the economic process
journal = Ecological Complexity | volume = 3 | pages = 354-360 | date = 2006
doi = 10.1016/j.ecocom.2007.02.009
accessdate = 2007-11-19
] These processes involve complex networks of flows of energy and materials.

Once we understand the various transformations of energy that are possible, an energy balance can be used to track energy through a system, and is a very useful tool for determining resource use and environmental impacts. [] The idea is to use the First and Second laws of thermodynamics to determine how much energy is needed at each point in the system, and in what form that energy is. The accounting system keeps track of energy in, energy out, and non-useful energy versus work done, and transformations within the system. [ Environmental Decision making, Science and Technology]

Physical scientists and biologists were the first individuals to use energy flows to explain social and economic development. Joseph Henry, an American physicist and first secretary of the Smithsonian Institution, remarked that the "fundamental principle of political economy is that the physical labor of man can only be ameliorated by...the transformation of matter from a crude state to a artificial expending what is called power or energy." [Cutler J. Cleveland, [ "Biophysical economics"] , "Encyclopedia of Earth", Last updated: September 14, 2006.]

In "Wealth, Virtual Wealth and Debt" (George Allen & Unwin 1926), Frederick Soddy turned his attention to the role of energy in economic systems. He criticized the focus on monetary flows in economics, arguing that “real” wealth was derived from the use of energy to transform materials into physical goods and services. Soddy’s economic writings were largely ignored in his time, but would later be applied to the development of biophysical economics and bioeconomics and also ecological economics in the late 20th century. [,_FrederickSoddy, Frederick - Encyclopedia of Earth]

Georgescu-Roegen introduced into economics, the concept of entropy from thermodynamics (as distinguished from the mechanistic foundation of neoclassical economics drawn from Newtonian physics) and did foundational work which later developed into evolutionary economics. His work contributed significantly to bioeconomics and to ecological economics. [Cleveland, C. and Ruth, M. 1997. When, where, and by how much do biophysical limits constrain the economic process? A survey of Georgescu-Roegen's contribution to ecological economics. "Ecological Economics" 22: 203-223.] [Daly, H. 1995. On Nicholas Georgescu-Roegen’s contributions to economics: An obituary essay. "Ecological Economics" 13: 149-54.] [Mayumi, K. 1995. Nicholas Georgescu-Roegen (1906-1994): an admirable epistemologist. "Structural Change and Economic Dynamics" 6: 115-120.] [Mayumi,K. and Gowdy, J. M. (eds.) 1999. "Bioeconomics and Sustainability: Essays in Honor of Nicholas Georgescu-Roegen". Cheltenham: Edward Elgar.] [Mayumi, K. 2001. "The Origins of Ecological Economics: The Bioeconomics of Georgescu-Roegen". London: Routledge.]

The units of the accounting system proposed by Technocracy Incorporated, would be known as Energy Certificates, or Energy Units. Energy accounting would replace money in a Technate, but unlike traditional currencies, energy units could not be saved or earned, only distributed evenly among a populace. [The Energy Certificate essay by Fezer. An article on energy accounting as proposed by Technocracy Inc. Article on alternative system to money 'energy accounting']

Energy units would probably not have to be physically handled by the citizens themselves, as the system would likely be computerised. In this proposal, the Technate would use information of all available natural resources, industrial capacity and citizen’s consuming habits to determine how much of any good or service was being consumed by the populace, so that it could match production with consumption. It is this balance between production and consumption that is represented by the Technocrats' chosen symbol, the Monad.

The amount of energy units each citizen would have would be equal, within a sustainable context, the constraining factor being the Technates resource base and technological level.

The reason for the use of energy accounting according to Technocrats is that it would ensure the highest possible standard of living as well as equality among the Technate's citizenry, within the context of sustainable abundance.

Energy accounting as proposed, uses a post scarcity type of economy as its basis. [The Energy Certificate essay by Fezer. An article on Energy Accounting as proposed by Technocracy Inc.] The Technate design as projected, would include such post scarcity aspects as free housing (Urbanates), transportation, recreation, and education. In other words free everything, including all consumer products, as a right of citizenship. [Ivie, Wilton "A Place to Live: 1955 Technocracy Digest] Everyone would receive an equal amount of consuming power via this Non-market economics, post scarcity method, in theory.

Proclaimed Benefits

Under the Energy Accounting system, a car, for example, would be valued by the energy it takes to create the product (energy to run and supply the factory, plus the energy to transport all materials and the final product, plus energy consumed by humans involved with production or transportation, etc.). In this way, ecological costs are accounted for, since energy is the main non-renewable resource consumed by humans. A manufacturing system which produces a car using less energy, would be more environmentally sustainable. In this way, quality and efficiency are maximized through careful review of their toll on the total reserve of energy and resources available to the population.

Another example of why technocrats support the energy accounting system is that they say it can eliminate (or greatly mitigate) many social problems, which are caused by problems in the current Price system. Since the productive capacity of the technate is equally available, technocrats state that things such as theft, gender inequality, and class hierarchies would be mostly eliminated from a consuming point of view, as all citizens would be equal in consuming power.

An additional advantage to energy accounting would be its empirical accuracy, namely, energy units could not appreciate or depreciate in value, and would themselves be direct representations of physical quantities. This would eliminate the possibility of debt and inflation, credit or debit in monetary terms, and release humans from a class system based on money. Everyone would receive an equal amount of consuming power via this Non-market economics, Post scarcity method, in theory, and the reward and punishment aspect of money is not in play. Things like education funding would no longer be measured in a money budget, but would be allocated the amount of resources needed to accomplish educational goals. Special interest groups would also be precluded of power as the system outlined can not be influenced as our political price system is currently influenced. [R. B. Langan, [ "I Am The Price System"] , "Great Lakes Technocrat", No. 66 (March/April 1944).]

Since technology is continuously evolving, there is much debate on what method would be used to record and measure expenditure of energy among the populace. However, as with most things connected to a science based social system as the Technate design is made out to be, the most efficient and practical method would be the one used. In any case, the Technate would have to use technology to eliminate security risks and make the process seamless.


Some arguments against energy accounting are briefly listed here:

*The money incentive is lost; people will not work
*There is no structure to the society, and people need hierarchies
*It creates too much equality

Technocrats would agree that, as consumers, every person would be equal in a Technate. Technocrats argue that communism and capitalism are both systems evolved from scarcity, and that mankind has never attempted to implement a system based on abundance, using science and energy accounting to arbiter government decision making. In this way, the technocratic system would not be susceptible to the failings of Communism or Capitalism or price system economic concepts.

One argument against a system that is used to distribute an abundance within the context of protection of resources is that there will always be scarcity. While technocrats argue that technology can eliminate scarcity, opponents see it as a far-fetched dream at the present time. Technocrats argue that modern technology can produce more consumable goods and services (such as food, clothing, transportation, communications, etc.) than human beings are able to physically "consume", and this is what defines an ability to deal with scarcity, and furthermore, that using a science based social system without the monetary concerns now used to arbiter economic choice, protection of natural resources for our future survival is attempted as a priority, instead of money making.

ee also

*Technocracy Incorporated
*Technocracy movement
*Energy Survey of North America
*Artificial scarcity
*Post scarcity
*Abundance (economics)
*Technocratic views of the Price system
*Willard Gibbs
*M. King Hubbert
*Non-market economics
*Energy Balance
*Energy and Environment

External links

* [ Energy Distribution Booklet]
* [ The Energy Certificate] Adapted from an article by "Harold Fezer, Technocracy Magazine, July 1937"
* [ Technocracy Inc. Archives] Multiple articles and essays, many concerning Energy Accounting.
* [ A Place To Live In. Wilton Ivie Technocracy Digest Nov.1955.]
* [ Economy and Thermodynamics: Borisas Cimbleris (1998)]


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