Wealth and Energy
A successful society is vitally dependent on two “fluids”: wealth and energy. I call the two items “fluids” since they “flow” from a high potential level, a “source,” to a low potential level at the “sink,” doing “work” on the way. These two fluids are the indispensable agents of progress. Their activity and contribution to social progress depends on their availability at a high potential level and the presence of a sink at a lower potential level. The bigger the difference between the high and low levels the more interesting and advanced the work that can be done.
Clearly there are other requirements for social progress, such as good education, efficient government, wise policies and so on. However, none of these will result in progress unless two essentials are in place: accessible, appropriate, energy and significant sources of wealth to employ this energy profitably. Brainpower is well distributed among populations of all societies but access to wealth and energy is often limited by bad social policies or natural circumstances. A notable bad policy which hinders progress is an uncompromising drive to establish “equality” in the availability of resources that society must keep unequal to progress. No progress can take place without abundant energy and wealth at various levels of potential.
Let us start with energy and its critical importance. One can misjudge how universally important it is by concentrating on automobiles and aircraft. Energy is not just critical in these obvious applications, it is a critical component in all our activities; agriculture, industry, mining and so on. It is critical in the production of what we have and all we aspire to have. One can plan the efficient use of energy to maintain or reduce expenditures but there cannot be any progress without obtaining ever more energy at an ever-increasing level of potential. A simple concept of the level of a potential is the height of a dam holding a reservoir of water used to generate electricity. The higher the dam the greater the level of potential generating capacity. A wider dam may produce more electricity in terms of total amount, but per cubic meter of water the higher dam will make more.
Our progress is critically dependent on increasing energy use at ever higher potential. We could travel a certain distance by horse on the energy of a sack of fodder, more rapidly and further using coal and steam locomotives, even more rapidly using cars and planes powered by liquid fuels and now rockets promise to use nuclear power for propulsion. At each stage we required more and higher-level energy to allow progress. The same is true in the progress of metallurgy, or the mining and refining of increasingly scarce elements for electronic components, and in the operation of the CERN cyclotron which uses prodigious quantities of high-level energy to plumb the very basics of our universe.
At any level of development, the use of energy depends on obtaining it at a high potential and using it to do useful things as it is passed trough a process or an engine. If we did not know how to raise available energy to a high potential, we could do nothing with it. This potential is usually measured in terms of temperature or voltage or, more generally, the height of the source above the sink.
There was no heat available for our technology until we learned to control fire. We now burn fossil fuels, which have stored energy at a low temperature, to make the energy available in useful form at a high temperature. Beginning with that simple process we have developed ever higher energy potentials, by using nuclear reactions (to blow cities to smithereens, for an example) and electricity to precisely melt metals in welding. A world at a fixed temperature, with no gradients, would not produce the energy of a lightning stroke. Nor would it make our technology possible. We need a potential difference for things to happen.
There is a whole set of methods we use to create inequality in the potential of available energy. Having created that, we pass the energy from a high level to a low level and make it do “work” as it passes through (the molten metal of a weld is the result of work done by high-level electrical energy but as the metal cools to room temperature the energy is not lost, it just becomes useless for further welding). This is a “trickle down” process that degrades energy irretrievably. The whole universe contains only a fixed amount of energy which is constantly being trickled down to a lower level. The total available energy of the universe cannot be lost or augmented, there is only so much of it and it is being constantly degraded.
The Big Bang took place at a temperature of billions of degrees and more and has now used this high-level energy in expansion so that the universe is much bigger and its average temperature is now a mere couple of degrees above absolute zero. For those who worry about such things, the future is bleak. Some day the universe will have degraded all its energy to such a low level that nothing more can happen. That is the inevitable end when all energy is at the same level.
The upshot of this is: energy is limited and irreplaceable. We can only look for new sources and use them efficiently; but we will need it in ever increasing amounts if we want to progress. Reducing energy potential (or use) to zero will bring on the end of activity, as would finding ourselves short of available energy sources. Policies which limit the availability of energy will delay progress.
Wealth is also a fluid requiring a potential to generate progress as it flows from a high potential down to a lower level. In this case things happen as wealth flows from those who have it to those who need it. It goes through stages doing “work” (creating things) at each stage. Wealth is therefore also a fluid but the difference between wealth and energy is striking. Clearly it takes both energy and wealth to flow from high to low potential in order to do anything useful. But, as wealth flows from a high potential, it can generate more wealth, call it “profit.” Unlike energy, which cannot be created or destroyed but is irretrievably degraded, wealth can also be irretrievably degraded but, more importantly, it can be created. The more wealth we have the more “work” we can do with it and the more “profit” we can generate for future progress. Wise management of wealth can lead to continued progress and an ever more capable and comfortable society.
At the same time, without a gap in wealth levels there can be no flow of wealth and no more wealth can be created besides that minute amount created by using personal effort. Moreover, if we use wealth at a loss or make no profit, the cold death of society looms. It is as certain as the aforementioned death of the universe, nothing more can be done if there is no difference in wealth levels. Wealth can be terminally degraded, or squandered, but it need not be, it can be increased.
It is patently wrong to equalize wealth so that all sources of wealth are at the same level. Moreover, if all wealth is in one hand, say the government’s, the uses of this wealth are bound to be less than optimal due to human nature and the policies of governments that are driven by its irrationality. Personal advancement, individual ingenuity, daring, and sheer greed, as well as competition, drive profit (accumulation of wealth) and progress in a free economy. In this case human nature enhances the creation of wealth. But modern democratic governments would be horrified and denounced if they made a profit on their operations.
An unkind commentator might say that democratic government operations are the ultimate sink for the flow of wealth in a free economy. This is not entirely an exaggeration. Indeed, some government expenditures could be shown to yield a profit, though indirectly. For example, the funding of the interstate highway system in the US has done much for the economy and the creation of wealth. However, much of government revenue has not been shown to yield a profit, instead it proceeds to an even lower set of sinks: welfare, unemployment insurance, medical care, the department of education and other low-payoff and bloated civil service operations.
Many such schemes were initially meant to be cost effective by protecting or providing certain resources, often by assisting the temporarily needy who can recover and be producers of wealth. But the original goals have been perverted and these programs and their associated bureaucracies now often serve to encourage indolence, push burdensome papers on wealth producers and garner votes for any government that promises to expand such programs, skewing the policies of all political parties toward wasteful but sentimentally charged expenditures. Those are the ultimate sinks; wealth is degraded with little or no prospect of wealth generation. It is inevitable that when we run short of energy, progress stops and technology fails; when we run out of wealth, social collapse will surely ensue.
The vigorously promoted slogans of those who believe in social equality are dangerous and wrong. They go against the laws of nature. Going against nature (call it reality) is dangerous. It is an example of the hubris that dominates many of our ideologies and activates those who dream rather than think. Equality, in any aspect of our universe, is the end of progress in that field. In societies equality promises to lead to social torpor. Waste in government spending threatens social decline as resources are directed to non-profitable ends.
Wealth and energy are fluids which need to be brought to a high potential before they can do useful work as they pass from that level to a level of lower potential. This is a law of nature; to get work out of a fluid you need to pass it from a high-level reservoir to a low-level sink.
But wealth is a human construct and we have cleverly designed that fluid so we can generate more of it as it works. Energy is a fluid constructed by nature, which chose not to make it renewable. As a result, we need to diligently search out sources of energy and use them efficiently so we can continue to make progress using our ever-increasing wealth to satisfy our burning desire for comfort, knowledge and progress. But we must not degrade our wealth as we resort to increased funding of causes that do not yield a profit (such as ever more generous social services, misleadingly called “rights”), or the use of ever more expensive sources of energy, in a righteous pursuit of “renewability.” That too can lead to a social disaster. Policies which needlessly narrow down the distribution of wealth, or reduce its ability to work, will delay social progress.