[ExI] repercieve the economy [was: Engineering]

ablainey at aol.com ablainey at aol.com
Sun Dec 23 14:08:43 UTC 2012




-----Original Message-----
From: Rafal Smigrodzki <rafal.smigrodzki at gmail.com>

On Sat, Dec 22, 2012 at 7:57 PM,  <ablainey at aol.com> wrote:
>> How is producing your own energy going to create debt?
>### Producing your "own" energy in a social setting always requires
>resources that have to be obtained from others - solar panels,
>fertilizer for corn, land titles, mineral rights, uranium, whatever.
>So before you produce energy you always have to incur a debt or a >loss
>to your current asset balance sheet.
>If you use more purchased resources on making this energy than it is
>worth to others, you will not be able to pay off the debt incurred to
>generate energy.
Here I was talking in terms of National debt. Creation of energy currency does not create a national debt like printed money does. The current fiscal cliff is an artifact of todays debt based system and there is no real way to pay off the debt apart from sign over most private assets to the central bank.
Yes in an energy economy is perfectly possible to incur private debt. As said these can be paid back with future energy generation, or you could go out to work for more kWh. Not everyone will be generating although it would be an obvious source of income.
But where today the risk of not being paid by the debtor lies in his ability to work profitably and decide to send the cheque. Instead the risk will only be that his generation equipment is destroyed before it repays you. A far lower risk and something that could easily be covered by insurance. Additionally if your debt is secured against his generation equipment rather than him personally (although he will have liability) if he dies, you still get paid.
>As Mirco pointed out, if others are more efficient in producing
>energy (e.g. they are using a coal power plant while you are using
>solar cells), the price of resources expressed in a standardized
>deliverable of energy will be high.
However the perception of the situation is different. The energy used to make a loaf of bread is constant if the method remains the same. It takes the same amount of light for grow wheat, same amount to mill flour, to bake the loaf. The currency unit is constant, the kWh. A loaf today has the same energy input as a loaf in 10 years time.
The only way to increase profitability is to increase efficiency in the production process. So a loaf in 10 years time is identical but takes far less energy to produce.
Now think of that in terms of market competition. Today I could raise the price of a loaf to infinity. The only thing stopping me is my competition. However over time competitors do edge up their prices to increase profit. There is no theoretical limit to this apart from it becoming so expensive that people start to produce their own bread, grow their own wheat etc.
As such the high limit is actually the energy cost for a consumer for producing a loaf. 
Now compare to an energy economy where only efficiency can vary. The theoretical maximum profit can only be realised by attaining efficiency of 100%. 
You cannot go beyond 100% efficiency or your are entering the realms of overunity. So again it is the energy involved in the system that dictates the limit.
Both high and low limits or each system are static values and measured in units of energy. 
Doesn’t it make more sense to opt for the system where efficiency is the most profitable and the price of an essential item is virtually static over time?
>For example, making a solar cell takes a lot of human effort and
>various material and immaterial resources (research, capital costs,
>electricity, chemicals, accounting, plant security, janitorial staff
>etc, etc) per unit of energy generated from cells. But generating
>energy from coal takes very little effort per unit of energy. A coal
>plant will be able to pay a janitor many joules per hour. The solar
>cell producer will have to match that salary - and this high salary
>(as expressed in joules) will have to be included in the prices
>charged to you for buying the solar cells. The price of solar cells >in
>joules will be high in relationship to the number of joules you can
>generate from them.
>So as long as you buy more of other people's work effort per joule >of
>"your" energy generated than this energy is worth to them, you will
>have to go in debt to finance your enterprise.
>> You simply allocate the energy units to the creditor when you do generate
>> it. I could do that right now as the infrastructure already exists. I have a
>> grid tie solar setup, a feed in tarrif and a bank account. Currently the
>> meter reads in kWh, that is converted and I am paid for generation in £ and
>> then my creditors take payment in £. There is no real reason why the kWh
>> need to be converted during the process. They already have a guarenteed 25
>> year fixed monetary value per unit. I could in theory set up a loan today
>> using future energy generation as a guarantee. Then use that loan to put
>> more panels on the roof or improve the efficiency of the system. thus
>> increasing my income.
>### Ah, now I understand where you are coming from - you stand to >gain
>from forcing others to buy your electricity, at an inflated price >they
>would never pay voluntarily.
Yes I do personally stand to gain but I am already gaining. The system is already there in all but name and my solar kWh is worth the same as any other kWh on the market.
Again you are perceiving the value in terms of todays money. The value of a kWh produced by low efficiency solar has exact equal value to a kWh produced by a coal fired station. 
Who has paid the cost here? You seem to think the consumer will pay and that I am forcing them to by expensive energy.
However It would actually be me paying with my inefficient setup. I have outlayed more on equipment and will take much longer to recoup that cost. So it is me that is driven to invest in more efficiency in order to improve my profit.
However the long term view for the coal power station is not good. They also need to convert to some renewable source before the fossil fuel runs out. So even though their profits are greater today, they will still be chasing the same future technology as me. This is already the case in the energy industry where oil companies are now providing renewables.
So both will be investing in the solar cell manufacturers and the Janitor there will be getting a good wage.
It already happening. That janitor *is* being paid and the solar cell company is making a profit despite their product being far less efficient. Manly because people can’t put a coal power plant on their roof. So they must generally use renewables for micro generation.
Having a currency unit that doesn’t inflate due to its nature being a fixed immutable unit if energy means that the janitor can receive a minimum wage and won’t have his buying power eroded over time. In fact the opposite should be true over the long term. A loaf of bread will become cheaper in energy terms to produce and if the only way bread producers can outdo the competition is by lowering price. Then the janitor will get cheaper bread. As it should be in a developing world.

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