In a way, I have perhaps mixed two issues into the same post–that may have been more helpfully explained in separate posts.

I really use Chris Cook's idea of energy as a numeraire (thankyou) as a jumping off point to talk about the challenge of earning capital profits in an economy where, in the background, the net profit of energy is likely in decline.

I really don't embrace the idea of using energy as money in this post. That said, I am open to the idea–though I suspect the world clumsily finds a way to accord value to energy producing nations and the currencies of those nations anyway.

As I try to explain in the most, I am only touching lightly what is a huge and complex issue. Even Chris Cook came on board to explain that he was not saying energy was the only money.

My truer interest lies in the issue of Net Energy. And I, like others, am still very much at the probing and learning stage of that question.

Best,

G

In a way, I have perhaps mixed two issues into the same post–that may have been more helpfully explained in separate posts.

I really use Chris Cook's idea of energy as a numeraire (thankyou) as a jumping off point to talk about the challenge of earning capital profits in an economy where, in the background, the net profit of energy is likely in decline.

I really don't embrace the idea of using energy as money in this post. That said, I am open to the idea–though I suspect the world clumsily finds a way to accord value to energy producing nations and the currencies of those nations anyway.

As I try to explain in the most, I am only touching lightly what is a huge and complex issue. Even Chris Cook came on board to explain that he was not saying energy was the only money.

My truer interest lies in the issue of Net Energy. And I, like others, am still very much at the probing and learning stage of that question.

Best,

G

In a way, I have perhaps mixed two issues into the same post–that may have been more helpfully explained in separate posts.

I really use Chris Cook's idea of energy as a numeraire (thankyou) as a jumping off point to talk about the challenge of earning capital profits in an economy where, in the background, the net profit of energy is likely in decline.

I really don't embrace the idea of using energy as money in this post. That said, I am open to the idea–though I suspect the world clumsily finds a way to accord value to energy producing nations and the currencies of those nations anyway.

As I try to explain in the most, I am only touching lightly what is a huge and complex issue. Even Chris Cook came on board to explain that he was not saying energy was the only money.

My truer interest lies in the issue of Net Energy. And I, like others, am still very much at the probing and learning stage of that question.

Best,

G

In a way, I have perhaps mixed two issues into the same post–that may have been more helpfully explained in separate posts.

I really use Chris Cook's idea of energy as a numeraire (thankyou) as a jumping off point to talk about the challenge of earning capital profits in an economy where, in the background, the net profit of energy is likely in decline.

I really don't embrace the idea of using energy as money in this post. That said, I am open to the idea–though I suspect the world clumsily finds a way to accord value to energy producing nations and the currencies of those nations anyway.

As I try to explain in the most, I am only touching lightly what is a huge and complex issue. Even Chris Cook came on board to explain that he was not saying energy was the only money.

My truer interest lies in the issue of Net Energy. And I, like others, am still very much at the probing and learning stage of that question.

Best,

G

The standard textbook definition of money is useful and accurate – to wit: money is a human invention that serves three purposes: store of value, numeraire, medium of exchange.

1) Store of value. In this context think of money as an inter-temporal loan made with yourself. (E.g.: I have enough food today, therefore I will not exchange this barrel of oil now in my possession for food. Rather, I will exchange this barrel of oil for money, then next week, when out of food, I will have money to use to buy some).

2) Numeraire. A way to make comparisons. (E.g., the price of cornmeal is $1.00 a pound; the price of wheat flour is $1.50 a pound. Money makes possible a comparison between the two, and leads to a decision about which to buy, based on personal preferences.)

3) Medium of exchange. This is by far the most important of the three. It makes exchange possible between people who lack the double coincidence of wants. (You supply oil analysis and want food. How many farmers want the oil analysis that you supply? Probably not many. Money makes it possible for you and a farmer to coordinate yourselves, and be mutually useful.)

Coordination is not trivial. A medium of exchange – i.e., money – makes possible coordination between people who are widely dispersed, who have access to different types and levels of knowledge and information, who want different things, and who pursue different goals.

With respect to numeraires, you can use anything you want to define the unit of money – e.g., one dollar can perfectly well be defined to equal X BTUs of energy. Many people have talked about commodity standards for money. The discussion of this topic would be one that is basically about which commodity would make the best standard. (I personally favor an ounce of gold as the numeraire for many reasons, not the least of which it that gold has served this function for thousands of years.)

But I don’t sense that you are interested in arguments about commodity standards per se. It seems to me that you are saying something like this: energy is important, therefore a BTU of energy should be the numeraire. The unstated portion of your argument would then be something like this: if a BTU of energy becomes the numeraire, people in general might come to understand the importance of energy, and be willing to accept painful strategies needed to deal with the looming problem of oil scarcity.

To say this another way, my sense of the matter is that your argument about money and energy is “propaganda” or “marketing”—- words used to move people to action. This is not meant as a putdown. Words used to move people to action are essential. But also essential is clarity. Are your words descriptive (about “the way things are”), normative, (abut “the way things ought to be”) or are you engaged in exhortation (“words used to move people from the way things are to the way things ought to be”)?

The standard textbook definition of money is useful and accurate – to wit: money is a human invention that serves three purposes: store of value, numeraire, medium of exchange.

1) Store of value. In this context think of money as an inter-temporal loan made with yourself. (E.g.: I have enough food today, therefore I will not exchange this barrel of oil now in my possession for food. Rather, I will exchange this barrel of oil for money, then next week, when out of food, I will have money to use to buy some).

2) Numeraire. A way to make comparisons. (E.g., the price of cornmeal is $1.00 a pound; the price of wheat flour is $1.50 a pound. Money makes possible a comparison between the two, and leads to a decision about which to buy, based on personal preferences.)

3) Medium of exchange. This is by far the most important of the three. It makes exchange possible between people who lack the double coincidence of wants. (You supply oil analysis and want food. How many farmers want the oil analysis that you supply? Probably not many. Money makes it possible for you and a farmer to coordinate yourselves, and be mutually useful.)

Coordination is not trivial. A medium of exchange – i.e., money – makes possible coordination between people who are widely dispersed, who have access to different types and levels of knowledge and information, who want different things, and who pursue different goals.

With respect to numeraires, you can use anything you want to define the unit of money – e.g., one dollar can perfectly well be defined to equal X BTUs of energy. Many people have talked about commodity standards for money. The discussion of this topic would be one that is basically about which commodity would make the best standard. (I personally favor an ounce of gold as the numeraire for many reasons, not the least of which it that gold has served this function for thousands of years.)

But I don’t sense that you are interested in arguments about commodity standards per se. It seems to me that you are saying something like this: energy is important, therefore a BTU of energy should be the numeraire. The unstated portion of your argument would then be something like this: if a BTU of energy becomes the numeraire, people in general might come to understand the importance of energy, and be willing to accept painful strategies needed to deal with the looming problem of oil scarcity.

To say this another way, my sense of the matter is that your argument about money and energy is “propaganda” or “marketing”—- words used to move people to action. This is not meant as a putdown. Words used to move people to action are essential. But also essential is clarity. Are your words descriptive (about “the way things are”), normative, (abut “the way things ought to be”) or are you engaged in exhortation (“words used to move people from the way things are to the way things ought to be”)?

The standard textbook definition of money is useful and accurate – to wit: money is a human invention that serves three purposes: store of value, numeraire, medium of exchange.

1) Store of value. In this context think of money as an inter-temporal loan made with yourself. (E.g.: I have enough food today, therefore I will not exchange this barrel of oil now in my possession for food. Rather, I will exchange this barrel of oil for money, then next week, when out of food, I will have money to use to buy some).

2) Numeraire. A way to make comparisons. (E.g., the price of cornmeal is $1.00 a pound; the price of wheat flour is $1.50 a pound. Money makes possible a comparison between the two, and leads to a decision about which to buy, based on personal preferences.)

3) Medium of exchange. This is by far the most important of the three. It makes exchange possible between people who lack the double coincidence of wants. (You supply oil analysis and want food. How many farmers want the oil analysis that you supply? Probably not many. Money makes it possible for you and a farmer to coordinate yourselves, and be mutually useful.)

Coordination is not trivial. A medium of exchange – i.e., money – makes possible coordination between people who are widely dispersed, who have access to different types and levels of knowledge and information, who want different things, and who pursue different goals.

With respect to numeraires, you can use anything you want to define the unit of money – e.g., one dollar can perfectly well be defined to equal X BTUs of energy. Many people have talked about commodity standards for money. The discussion of this topic would be one that is basically about which commodity would make the best standard. (I personally favor an ounce of gold as the numeraire for many reasons, not the least of which it that gold has served this function for thousands of years.)

But I don’t sense that you are interested in arguments about commodity standards per se. It seems to me that you are saying something like this: energy is important, therefore a BTU of energy should be the numeraire. The unstated portion of your argument would then be something like this: if a BTU of energy becomes the numeraire, people in general might come to understand the importance of energy, and be willing to accept painful strategies needed to deal with the looming problem of oil scarcity.

To say this another way, my sense of the matter is that your argument about money and energy is “propaganda” or “marketing”—- words used to move people to action. This is not meant as a putdown. Words used to move people to action are essential. But also essential is clarity. Are your words descriptive (about “the way things are”), normative, (abut “the way things ought to be”) or are you engaged in exhortation (“words used to move people from the way things are to the way things ought to be”)?