Review of a book by Malcolm J. Greenstuart. Pigtale Publishing, Yanakie, Victoria, Australia, 2001
“Cosmic
Accounting”
Review
by
Kieth Wilde
This is an update and modest extension of Buckminster Fuller’s vision of potential abundance by means of a global electric energy grid, an idea for which there was a boomlet of enthusiasm in the early eighties. It emerged out of the energy crunch of the early seventies and the concomitant notion that since usable energy is the most critical element in any economic system; it ought to be the standard of value. Some thinkers extended this reasoning to propose that money should represent a measured quantity of free or usable energy (a Joule standard in place of the gold standard). Fuller’s grid brought this notion closer to feasibility, for it would permit thousands of mini-generating facilities of great variety to feed into it, especially from solar collecting devices. Since the sun is shining somewhere all the time and energy can be transmitted speedily around the grid, every continent can be using solar power 24 hours a day. Part of the enthusiasm for the Fuller vision was its democratizing potential. If everyone had a device for collecting and transforming free energy from wind, sun, or falling water and a connection to the global grid, then consumption from the grid when one’s own generator was idle could be likened to withdrawals from a savings account. Once wired up in this way an individual would never again have to pay to get his or her work done. That would be a very substantial contribution to equalizing incomes around the world. It is therefore a highly appropriate item for consideration by campaigners for social justice, and so it was that I encountered Greenstuart’s presentation to the Basic Income European Network (BIEN) at Barcelona in September of 2004. He appeared on a panel with others who argue that opportunities for “free lunch” are abundant and in fact enjoyed by the most wealthy members of our species.
The main departure of Cosmic Accounting from what I remember of Fulleresque ideas in the eighties is the focus on concentrated energy farms as contrasted to the great variety and number of independent generators feeding into the grid from the user’s own location. The author would give a jump start to energy money by giving it away to everyone, in equal shares, from more centralized power stations. He imagines that recipients would start using their endowments of free energy as a replacement for money and that the attractions of this system would encourage its spread over all the planet. The metaphorical equivalent of Net National (Global) Income would be collected and tallied each day and divided equally among all individuals on earth. Each would have his/her allocation recorded in a central computer and their usage would be constantly monitored, by meter and the equivalent of a debit card. The central computer keeps track of distribution and consumption, and the individual accounts and debit cards enable participants to spend and to keep track of their credit balances. (Unconsumed daily budgets could be converted into an energy savings bank, such as a seawater desalinization plant; technological progress will overcome the objection that we are heavily reliant on petroleum fuels for transportation.) This system permits the transfer of energy credits to whomever is interested in receiving them, at the discretion of the owner.
Greenstuart is an Australian engineer, and he reports that with a solar collecting device (parabolic dish) recently perfected at Australian National University it is now possible to generate all of the energy consumed annually on earth, from every source (6 ¥ 1014 Kwh), on a collector farm equivalent in area to one-quarter that of South Australia. He proposes a pilot project in that region, to serve a community of about 20,000. He estimates the cost of the parabolic dish energy farm and the necessary gridwork to cost $70 million (AUD). This amount should all be raised by donations from about 10,000 people, none of whom would expect any return on their contributions other than the resulting endowment of a perpetual energy income–plus the satisfaction that they are taking a critical step toward transforming the world to a sustainable basis. “All we need is the money to build the generation and distribution facilities in the first place so we can start giving energy away at no charge.” While we are still wide-eyed, he goes on to affirm that “a first thing it will take for this initiative to start moving is to discard the disbelief that 10,000 people won’t sponsor a scheme that does not produce a financial return. [I]t will take believing that it is possible to get over all the other potential hurdles.” This can be accomplished, he believes, by spreading the good news about “the very attractive possibility and wonderful outcomes that are associated and naturally delivered with this system” (i.e., the negation of all the environmental and humanitarian horrors lamented by doomsday prophets of the past half century).
The notion of free electrical power strikes one as preposterous in 21st century Ontario, but the context of the Barcelona conference lends some plausibility. The energy grid by itself (as illustrated in Fuller’s “dymaxion” projection of the globe as a flat map) is doubtless feasible from the technological standpoint, and this possibility is an endowment of “free lunch” from collective human ingenuity and effort over thousands of years. It is owed to no one of this generation. There is a clear affinity with the Social Credit principle of cultural inheritance. And the arguments for Basic Income offered by the author’s co-panelists in Barcelona make a persuasive case for the availability of unearned rents that could be taxed away from their privileged recipients at no cost to overall economic performance. It is therefore supportable on the financing front from a principle that is regularly developed in textbooks of economics–or at least used to be. Greenstuart’s arguments for a donated investment and free distribution of energy credits are unnecessarily convoluted because he has apparently not become aware of the daunting social impediments to Fuller’s vision of a sustainable system.
Fuller is quoted as having said that “wealth is the accomplished technological power to [provide for human needs and wants]. Money is only an expediency-adopted means of interexchanging items of real wealth.” It is further noted that Fuller was encouraged, near the end of his life (in 1983), to observe that the idea of energy-money had become a topic of conversation (115). That gave him hope that humanity might survive. (For he recognized the non-sustainability of the existing monetary and financial system with its requirement of economic growth to distribute income.) Energy as money did indeed become a topic of conversation as the environmental movement gathered strength in the sixties and seventies. Cosmic Accounting gives us no information about the momentum or lack thereof that followed that awakening, and it seems to have fallen below the horizon since about the early nineties. The author mentions his contacts with Global Energy Network International and the Buckminster Fuller Institute without implicating them directly in his enthusiasm for cosmic accounting. Only one paper in his list of references addresses the topic of energy accounting as a monetary system, and it was published in the first volume of Ecological Economics in 1989.
The notion that energy be used as money stems from the observation that energy is the principal or critical component to any production and the only truly scarce or limiting element to fulfilling human needs or wants. All inorganic materials can be recycled, and biospheric management and interpersonal services will be provided by willing volunteers once people do not have to worry about where their most basic income (embodied energy) is coming from. Energy is therefore the true cost of everything. The next step in this line of reasoning is to infer that the price of everything should be the same as its cost. Cosmic accounting presupposes that all (legitimate) costs are energy costs, and that it is the sum of these costs built into any item that should determine its price. This is a near equivalent of saying that the price of an item ought to be the same as the value of the labor that went into it, with an implicit judgment that everyone’s labor should be counted equally. Part of the appeal of energy accounting as replacement for the monetary system is its anticipated contribution to the elimination of non-productive and wasteful activities. (For example, energy conservation would be a paramount consideration in resource allocation, and most of the existing financial system could disappear.) Those services that are useful, even though not directly productive of physical output, would be voluntary (teachers, physicians, artists, entertainers, etc.). Handicrafts and other activities that do require a large share of human physical input relative to inanimate energy would be exceptional in having prices that exceed their (electrical) energy cost. Instead of recognizing this as a payment for labor, however, Greenstuart calls it “profit.”
His solution therefore depends on the good will of people who may have expended considerable effort to accumulate skills that are in demand. It also would have to win over the agreement of the owners of inorganic (recyclable) materials out of which machines, grids, buildings, etc. are made. For example, the energy cost of a parabolic collector disk is said to be six months, but the money cost is so high that it takes 20 years to repay. The premium in money terms is a social obligation to people with unique skills and rare property resources. Whether it is a mine, junk yard or patent, these people have claims against others that are protected as legal rights to property. Property values (claims of ownership) regularly reflect an element of rarity. Air is supremely valuable to humans, but it usually is not sufficiently rare to command a price. At the level of interpersonal services, rarity is also a factor and regularly entails the social element of obligation. The idea of value is deeply linked to interpersonal obligation. Diamonds are a favored illustration: Now that they can be manufactured, diamonds are less rare, but they have maintained high value due to their accumulated symbolism of interpersonal obligation. The link of values like these to energy costs of production is tenuous at best. Conventional accounting keeps track of them in terms of money. Balances accumulate, which gives a storage aspect to money. Storage is much less convenient for electrical energy. Greenstuart counters (private communication) that the storage defect can be mitigated by technological development. This is doubtless true, but if it were removed completely then cosmic accounting seems likely to suffer from the same defects that give rise to the phenomenon of unearned income in the existing system.
Part of the appeal of energy-as-money probably stems from the notion that money should have intrinsic value–real value that can be stored up and consumed on a rainy day. Just as old, however, is the understanding that no kind of money can really perform this function, as Midas learned when he tried to eat or embrace gold. Clarity in thinking about money is enhanced by thinking of it as claim on value as contrasted to value in itself or a store of value.1 Greenstuart’s scheme for transition to cosmic accounting requires that some people voluntarily give up part of their claim on other members of society. It therefore entails issues of social justice that are as old as humanity. And although modern technology is introduced, it does not seem to have the capacity to make those old issues go away.
Inanimate energy slaves do make more production possible with less human labor, but the social issue remains and is inextricably linked to the observation of economists that human input is the ultimate source of all value. It was always possible to reduce toil, pain and social injustice if one could attribute different motivations to members of our species. Many visionaries have devised schemes for social organizations that would overcome human nature. Thomas More anticipated Fuller’s vision, 500 years ago in a fantasy-land he called Utopia. He made an estimate of how much work per day from every individual it would take to do all the work necessary to feed, clothe and house the population. It was only a few hours. The rest of the time they could spend in creative and socially uplifting activities of every kind–just as Greenstuart has suggested is possible in the world of abundant energy slaves (inanimate). That amount of work per person would cover all real costs, and there need be no accounting at all, since everyone would be paying full price for everything, every week of his or her working life. Everything necessary (and jewelry was not on the list) would be available in abundance, so nothing would have a price. Costs were already paid, so there was no need for money. His requirement of a few hours of work per day from everyone is the equivalent under different technological circumstances of the proposal to share the annual solar energy endowment equally. Greenstuart stops at that point, in the belief that he has completed the theoretical work. Thomas More, however, did not stop there. Having laid out an energy distribution system as initial conditions, he then carried those assumptions forward to examine every implication he could conceive for what social life would be like if the system worked according to plan. When he was finished, he surmised that no group or nation had ever, nor probably would ever, put it into practice. Fuller’s vision did not get beyond the human barriers perceived by More.
1. A distinction made by Gunnar Tomasson recently on the “Gang8” Internet forum that may be viewed at http://finance.groups.yahoo.com/group/gang8. Tomasson is a Washington-based economist in private practice with special interest in monetary and financial reform. He spent a 23-year career in the IMF.
The concept of using energy flows as a measure of value enjoyed a flare under the sponsorship of the Club of Rome in the 1970s, as is reflected in my book Babel’s Tower: The Dynamics of Economic Breakdown (1977). In it I have the following criticism of the book of Howard T. Odum and Elizabeth C. Odum, Energy Baus for Man and Nature, McGraw Hill Book Company, New York, 1976:
“The attempts of ecologists to integrate price into their models have not been more successful than the efforts of economists to work non-renewable fossil-energy factors into theirs. On either side the tendency has been to ignore the different subsystems contributing each its specific input into price.
“The Odums set up a direct equivalence of monetary and fossil-energy units. ‘The following explanation suggests that energy flows are a measure of value and are ultimately responsible for the values humans attribute to money…. The town isolated in an agrarian region in a steady state...helps us understand how energy flow represents value for survival and why circulating money helps keep track of their values…. Money circulates from rural forms to the town and back. The money flows as a counter-current to energy flow. It starts as low-quality energy in the country and then is transformed and concentrated by production process and the transport of product to the town. In the town, the energy is concentrated further in high-quality-goods and services that are returned to the country. For a regional system to compete well and thus survive, it must use its energies in the least wasteful way while generating the most energy flow…. When such an energy arrangement exists, it is an equal-value loop. The circulation of money around that loop is the way human beings recognized that the flows are of equal value. The fossil-fuel equivalents of the energy flow around the loops are also equal, since both were generated from the same energy sources.... In steady-state conditions fossil-fuel equivalence can be used as a measure of contribution to survival and thus to value.’
“The excursions of the Odums into social theory suffer from improvisation. The circulation of money can hardly be described as ‘the way human beings recognize that the energy flows are of equal value.’ There are societies in which money plays a quite marginal role, but energy flows effectively enough for survival. The ‘steady-state’ which serves as king-pin in the proof of the equivalence of energy and money is a monistic abstraction – very much the counterpart of the equilibrium points of marginalist theory in economics.
“It is out of the question that our society should revert to a steady state – even if such actually existed in a remote past. We must balance our consumption and supply of energy. But to do so we shall have to introduce some highly dynamic changes in the structures, ethic, and motivations of our society. That implies that it will be anything but stationary, though its energy consumption may become static or even decline. A society that has attained our level of technology and pluralism is inescapably subject to a high momentum of change. That change must be patterned so that we do not destroy our ecology and ourselves, but that will call for ‘organic growth’ rather than a stationary state.
“Far more than physical energy enters into the production of high-quality goods and services. It is impossible to reduce the work involved in the writing of James Joyce’s Ulysses to their equivalence in fossil-fuel units of energy. If such an equivalence existed, we would be helpless to explain the phenomena of classical Athens, Elizabethan England, or Renaissance Italy. The entire consumption of physical energy in such societies was negligible by our standards.
“The fallacy of the Odums is that they treat our economic-ecological complex as though it were a homogeneous system, when it is in fact composed of several subsystems, each with its specific logic. The Odums attempt to assimilate everything into the ecological-resources subsystem, just as conventional economists try imposing the logic of the ‘pure and perfect market’ on the other subsystems.”