Energy and money

Is energy merely another commodity among many in the modern industrial economy? Or is it the very basis of our financial and material life?

Alfred Korzybski, the founder of a discipline he called general semantics, is famous for the saying, “The map is not the territory.” In keeping with this dictum, we might readily agree that money is merely a map of wealth and not wealth itself. We generally recognize wealth in tangible things such as land, buildings, factories, mines, vehicles, and tools. We now understand wealth to include ownership of abstractions such as words on a page, trademarks, software and trade secrets.


But the confusion of money and true wealth often leads to another confusion, namely, the idea that energy is just one among many commodities in modern civilization, the importance of which can be judged by its price. In truth, energy is the master resource without which nothing else gets done. Even if that energy comes from our own physical labor, it must still be harvested and digested in the form of food before we can use it. But in modern society, the amount of energy from human labor that goes into our economic output is so small that it doesn’t even register on a graph of energy sources. Almost all the energy that goes into our products and services comes from elsewhere, fossil fuels, hydroelectric, nuclear power, a very small contribution from renewable fuels, and, of course, the free contribution of the Sun in the form of crops, forestry resources and other biomass.

For the United States in 2006 the total expenditures for energy were 8.6 percent of GDP, according to the U. S. Energy Information Administration’s 2008 Annual Energy Outlook. That’s not inconsequential. But the importance of that expenditure far outweighs its size. If that energy were suddenly to become unavailable, the whole economy would collapse.

Scitizen