Once again, I had quite a break in blogging. I spend a lot of time putting together research projects, in a network of many organisations, which I am supposed to bring to working together. I give it a lot of time and personal energy. It drains me a bit, and I like that drain. I like the thrill of putting together a team, agreeing about goals and possible openings. Since 2005, when I stopped running my own business and I settled for a quite academic career, I haven’t experienced that special kind of personal drive. I sincerely believe that every teacher should apply his or her own teaching in the everyday life of theirs, just to see if their teaching still corresponds to reality.
This is one of the reasons why I have made it a regular activity of mine to invest in the stock market. I teach economics, and the stock market is very much like the pulse of economics, in all its grades and shades, ranging from hardcore macroeconomic cycles, passing through the microeconomics of specific industries I am currently focusing on with my investment portfolio, and all the way down the path of behavioural economics. I teach management, as well, and putting together new projects in research is the closest I can come, currently, to management science being applied in real life.
Still, besides trying to apply my teaching in real life, I still do science. I do research, and I write about the things I think I have found out, on that research path of mine. I do a lot of research as regards the economics of energy. Currently, I am still revising a paper of mine, titled ‘Climbing the right hill – an evolutionary approach to the European market of electricity’. Around the topic of energy economics, I have built more general a method of studying quantitative socio-economic data, with the technical hypothesis that said data manifests collective intelligence in human social structures. It means that whenever I deal with a collection of quantitative socio-economic variables, I study the dataset at hand by assuming that each multivariate record line in the database is the local instance of an otherwise coherent social structure, which experimentins with many such specific instances of itself and selects those offering the best adaptation to the current external stressors. Yes, there is a distinct sound of evolutionary method in that approach.
Over the last three months, I have been slowly ruminating my theoretical foundations for the revision of that paper. Now, I am doing what I love doing: I am disrupting the gently predictable flow of theory with some incongruous facts. Yes, facts don’t know how to behave themselves, like really. Here is an interesting fact about energy: between 1999 and 2016, at the planetary scale, there had been more and more new cars produced per each new human being born. This is visualised in the composite picture below. Data about cars comes from https://www.worldometers.info/cars/ , whilst data about the headcount of population comes from the World Bank (https://data.worldbank.org/indicator/SP.POP.TOTL ).
Now, the meaning of all that. I mean, not ALL THAT (i.e. reality and life in general), just all that data about cars and population. Why do we consistently make more and more physical substance of cars per each new human born? Two explanations come to my mind. One politically correct and nicely environmentalist: we are collectively dumb as f**k and we keep overshooting the output of cars over and above the incremental change in population. The latter, when translated into a rate of growth, tends to settle down (https://data.worldbank.org/indicator/SP.POP.GROW ). Yeah, those capitalists who own car factories just want to make more and more money, and therefore they make more and more cars. Yeah, those corrupt politicians want to conserve jobs in the automotive industry, and they support it. Yeah, f**k them all! Yeah, cars destroy the planet!
I checked. The first door I knocked at was General Motors (https://investor.gm.com/sec-filings ). What I can see is that they actually make more and more operational money by making less and less cars. Their business used to be overshot in terms of volume, and now they are slowly making sense and money out of making less cars. Then I checked with Toyota (https://global.toyota/en/ir/library/sec/ ). These guys looks as if they were struggling to maintain their capacity to make approximately the same operational surplus each year, and they seem to be experimenting with the number of cars they need to put out in order to stay in good financial shape. When I say ‘experimenting’, it means experimenting upwards or downwards.
As a matter of fact, the only player who seems to be unequivocally making more operational money out of making more cars is Tesla (https://ir.tesla.com/#tab-quarterly-disclosure). In There comes another explanation – much less politically correct, if at all – for there being more cars made per each new human, and it says that we, humans, are collectively intelligent, and we have a good reason for making more and more cars per each new human coming to this realm of tears, and the reason is to store energy in a movable, possibly auto-movable a form. Yes, each car has a fuel tank or a set of batteries, in the case of them Teslas or other electric f**kers. Each car is a moving reservoir of chemical energy, immediately converted into kinetic energy, which, in turn, has economic utility. Making more cars with batteries pays off better than making more cars with combustible fuel in their tanks: a new generation of movable reservoirs in chemical energy is replacing an older generation thereof.
Let’s hypothesise that this is precisely the point of each new human being coupled with more and more of a new car being made: the point is more chemical energy convertible into kinetic energy. Do we need to move around more, as time passes? Maybe, although I am a bit doubtful. Technically, with more and more humans being around in a constant space, there is more and more humans per square kilometre, and that incremental growth in the density of population happens mostly in cities. I described that phenomenon in a paper of mine, titled ‘The Puzzle of Urban Density And Energy Consumption’. That means that space available for travelling and needed to be covered, per individual capita of each human being, is actually decreasing. Less space to travel in means less need for means of transportation.
Thus, what are we after, collectively? We might be preparing for having to move around more in the future, or for having to restructure the geography of our settlements. That’s possible, although the research I did for that paper about urban density indicates that geographical patterns of urbanization are quite durable. Anyway, those two cases sum up to some kind of zombie apocalypse. On the other hand, the fact of developing the amount of dispersed, temporarily stored energy (in cars) might be a manifestation of us learning how to build and maintain large, dispersed networks of energy reservoirs.
Isn’t it dumb to hypothesise that we go out of our way, as a civilisation, just to learn the best ways of developing what we are developing? Well, take the medieval cathedrals. Them medieval folks would keep building them for decades or even centuries. The Notre Dame cathedral in Paris, France, seems to be the record holder, with a construction period stretching from 1160 to 1245 (Bruzelius 1987). Still, the same people who were so appallingly slow when building a cathedral could accomplish lightning-fast construction of quite complex military fortifications. When building cathedrals, the masters of stone masonry would do something apparently idiotic: they would build, then demolish, and then build again the same portion of the edifice, many times. WTF? Why slowing down something we can do quickly? In order to experiment with the process and with the technologies involved, sir. Cathedrals were experimental labs of physics, mathematics and management, long before these scientific disciplines even emerged. Yes, there was the official rationale of getting closer to God, to accomplish God’s will, and, honestly, it came handy. There was an entire culture – the medieval Christianity – which was learning how to learn by experimentation. The concept of fulfilling God’s will through perseverant pursuit, whilst being stoic as regards exogenous risks, was excellent a cultural vehicle to that purpose.
We move a few hundreds of years in time, to the 17th century. The cutting edge of technology is to find in textile and garments (Braudel 1992), and the peculiarity of the European culture consisted in quickly changing fashions, geographically idiosyncratic and strongly enforced through social peer pressure. The industry of garments and textile was a giant experimental lab of business and management, developing the division of labour, the management of supply chains, quick study of subtle shades in customers’ tastes and just as quick adaptation thereto. This is how we, Europeans, prepared for the much later introduction of mechanized industry, which, in turn, gave birth to what we are today: a species controlling something like 30% of all energy on the surface of our planet.
Maybe we are experimenting with dispersed, highly mobile and coordinated networks of small energy reservoirs – the automotive fleet – just for the sake of learning how to develop such networks? Some other facts, which, once again, are impolitely disturbing, come to the fore. I had a look at the data published by United Nations, as regards the total installed capacity of generation in electricity (https://unstats.un.org/unsd/energystats/ ). I calculated the average electrical capacity per capita, at the global scale. Turns out in 2014 the average human capita on Earth had around 60% more power capacity to tap from, as compared to a similarly human capita in 1999.
Interesting. It looks even more interesting when taken as the first moment of a process. When I divide the annual incremental change in the installed electrical capacity on the planet, and I divide it by the absolute demographic increment, thus when I go ‘Delta capacity / delta population’, that coefficient of elasticity grows like hell. In 2014, it was almost three times more than in 1999. We, humans, keep developing denser a network of cars, as compared to our population, and, at the same time, we keep increasing the relative power capacity which every human can tap into.
Someone could say it is because we simply consume more and more energy per capita. Cool, I check with the World Bank: https://data.worldbank.org/indicator/EG.USE.PCAP.KG.OE . Yes, we increase our average annual consumption of energy per one human being, and yet this is a very gentle increment: barely 18% from 1999 through 2014. Nothing to do with the quick accumulation of generative capacity. We accumulate densifying a global fleet of cars, and growing a reserve of power capacity. What are we doing it for?
This is a deep question, and I calculated two additional elasticities with the data at hand. Firstly, I denominated incremental change in the number of new cars per each new human born over the average consumption of energy per capita. In the visual below, this is the coefficient ‘Elasticity of cars per capita to energy per capita’. Between 1999 and 2014, this elasticity had passed from 0,49 to 0,79. We keep accumulating something like an overhead of incremental car fleet, as compared to the amount of energy we consume.
Secondly, I formalized the comparison between individual consumption of energy and average power capacity per capita. This is the ‘Elasticity of capacity per capita to energy per capita’ column in the visual below. Once again, it is a growing trend.
At the planetary scale, we keep beefing up our collective reserves of energy, and we seriously mean business about dispersing those reserves into networks of small reservoirs, possibly on wheels.
Increased propensity to store is a historically known collective response to anticipated shortage. Do we, the human race, collectively and not quite consciously anticipate a shortage of energy? How could that happen? Our biology should suggest it just the opposite. With the climate change being around, we technically have more energy in the ambient environment, not less. What exact kind of shortage in energy are we collectively anticipating? This is the type of riddle I like.
 Bruzelius, C. (1987). The Construction of Notre-Dame in Paris. The Art Bulletin, 69(4), 540-569. https://doi.org/10.1080/00043079.1987.10788458
 Braudel, F. (1992). Civilization and capitalism, 15th-18th century, vol. II: The wheels of commerce (Vol. 2). Univ of California Press.