IT IS TIME TO RETHINK THE WORLD

Have you ever seen an X-ray picture of your own body? Rethinking the World
(ISBN 13:978-0-595-67868-6) provides a new insight into the human journey with a
sense of detached realism as close as possible to looking at the image of our very own
ribs, arms, legs or teeth, snapped to a magnetic board. This paper summarizes the results
of the research that “Rethinking” presents in detail. It emphasizes the mess into which our
half-conscious (or pre-conscious?) global civilization sinks deeper and deeper every day.

Let us begin by creating the mental likeness of a restless, expanding mass that
includes the human biomass and everything produced and manufactured by humans, plus
all forms of life (plants and animals) in human service. Let us call this physical entity
culture and its growth cultural evolution. This “clump of matter” image (“clump of mud”
if we insist on dispensing entirely with anthropocentric narcissism) is not a mere
metaphor. It is what physicists call a “far-from-equilibrium, dissipative structure” that
evolves unidirectionally and irreversibly and has emergent properties. “Far from
equilibrium” means not only life but everything that has structure (including tornados and
magnets) because equilibrium for the physicist is the homogenous dispersion of matter in
the universe. (The late Nobel Laureate Ilya Prigogine is the spiritus rector of a school of
physics called disequilibrium thermodynamics that focuses on the evolution of far-from-
equilibrium dissipative structures.)

We are individuals in “our” culture (non-italicized) -- the collectively determined

context with its social and economic attributes. But from the perspective of a broad,
unknown and unknowable real reality (the Noumenon in Kant’s philosophy), you and I
are also objects or things as in culture (italicized). (In a way, we are all nodes in a sutured
lattice.) Cultural evolution (non-italicized) and recorded history are the narrative versions
of time’s passage measured by cultural evolution in a physical sense.

Culture functions through interconnected brains. Interconnectedness reached

global scope (the status of a “worldwide web”) during the first half of the 19th century.
The emergence of this web and the phases it has traversed since then has been and will
always remain the central process of cultural evolution. Therefore, the duality suggested
by talking about “cultural evolution and cultural evolution” may also be seen in physical
and in language-mediated rational (logocentric) terms. The world as nature is the phase-
like transformation of linked neurophysical states in human brains. The world as
universal history, with its recorded places and events, may also be captured as the phase-
like transformation of symbol and referent relations pertaining to beliefs and values in the
socioeconomic realm.

Linking events over the ages into a single pattern of universal history is part of
humanity’s intellectual heritage. We see it evolve and become enriched through diversity
from the Bible and the philosophy of antiquity through Kant, Hegel, Marx, and Toynbee
all the way to current day macrohistorians. The concept came under the highly acclaimed
and compelling criticism of postmodern thinkers (i.e., Foucault and Derrida). The
postmodern state of mind demoted universal history to parochial-interest-serving, self-

1
referential ramblings. Hopefully, it will pass. Just like morality, the shared
comprehension of the past will have to play a crucial adaptive role in humanity’s long-
term survival. Acceptance of the thermodynamic perspective on cultural evolution could
be read as a postscript to the denial of universal history.

The terrestrial sphere

Considering the planet from the outside, imagine that the bulb, in which we are
enclosed as we ride around our sun and with the solar system through the cosmos, has a
diameter of 20,000 miles. Its center is the center of the Earth. Meteors enter, hydrogen
atoms escape, and dust becomes annihilated in nuclear explosions, but for all practical
purposes, these events leave the weight and composition of matter fixed and unchanged
in this 3-D surface we call the terrestrial sphere.

The terrestrial sphere is thermodynamically closed.

Modern thermodynamics distinguishes among three kinds of systems: open,

closed, and isolated. The open system exchanges both energy and matter with the
exterior; the isolated exchanges neither. Obviously, the terrestrial sphere is a closed
system. Whatever we do with matter, incorporating it into our bodies, using it as raw
material, discarding the bodies, throwing away or reusing matter again and again -- our
virtually permanent weight and composition of atoms remain constant. The matter that
we are and use just rolls around “in the earth’s diurnal course with rocks, stones, and
trees,” to quote William Wordsworth.

Matter and energy are theoretically equivalent.

For an economist, Einstein became immortal by discovering that there is a fixed

exchange rate between matter and energy. It is the speed of light squared. It is a huge
number, but a constant one. Just as the price of a commodity can be expressed in dollars
or yens, matter can be expressed in terms of energy and vice versa.
Despite their theoretical equivalence, matter and energy have an important
asymmetry. While we can produce energy from matter, we lack the technology to do the
reverse in economically significant quantities. This circumstance seals our fate. The
internal energy (the sum of kinetic and potential energy of all particles) in the fixed
number of atoms and molecules is the absolute limit of energy the terrestrial sphere can
release.

Cultural evolution is subject to the laws of thermodynamics.

The first law of thermodynamics guarantees that whatever we do with matter in

the terrestrial sphere, the energy it contains will remain with us. But the second law
informs us that this process is dissipative. The two main interpretations of the second law
are “inevitable waste” and “increasing disorder.” The first refers to the fact that heat
gained from the internal energy of matter cannot be transformed into mechanical energy

2
with one hundred percent efficiency (work output/heat input is always smaller than one).
It is impossible to construct a perpetual motion machine.

The second interpretation states that disorder in a closed (or isolated) system tends
to increase. This disorder is called entropy, a word that derives from the Greek word for
evolution. Just like evolution, the growth of entropy is unstoppable and irreversible. An
important corollary of the growing disorder is the diminishing possibility that the human
observer can discern (through statistical regularities) where individual molecules and
atoms are and what they are up to. This phenomenon is called increase in “information
entropy.”

Energy is the ability to do work. One form of energy cannot be transformed into
another form without losing some of it beyond reprieve. The more matter we use the
more matter we disperse and render useless. Since cultural evolution is the growing use
of matter, we increase ceaselessly the portion of unavailable or latent energy as well as
disorder in the terrestrial sphere.

The study of thermodynamics has shown that the growth of far-from-equilibrium

dissipative systems follows a pattern of phase-like evolution. It is characterized by the
alternation of relatively steady and unsteady states. The first ones may be called phases of
dynamic equilibrium (or stable disequilibrium) and the second ones, chaotic transitions.
Relative steady states tend to be longer in duration than the unsteady phases separating
them. Chaotic transitions “punctuate” dynamic or relative steady states.

Since cultural evolution is the narrative or universal history version of cultural

evolution, it must reflect the indicated phase-like nature of its physical correlate.

The narrative version of cultural evolution

Schematically, the chart below depicts the structure of world history (or the
“archeology” of our current world order):

GS0 (1500-1789)  GS1 (1834-1914)  GS2 (1945-present)

Late feudalism/ Laissez fair/ Mixed economy /

early capitalism metal money weak multilateralism

The following table summarizes the main characteristics of these organizational

stages of cultural evolution.

3
 Stages of Evolving Global Self-Organization

Distinguishing International Labor/Management International Game- Organizational

economic trade relations cooperation theoretical complexity
feature among classification
governments
(1) (2) (3) (4) (5) (6)

Agrarian Feudalistic Nonexistent Zero-sum Absence of

products, hierarchy; game global self-
GS0 Agrarian
metals, and collective organization
primitive bargaining is not a
manufactures; known concept
employment
level does not
depend on
international
trade
Add inter- No framework for Implicit Positive-sum Low level of
industry collective game global self-
GS1 Large-scale
commodity bargaining; legal without organization
industrial
exchange; system cooperation
employment unequivocally
moderately favors capital
depends on
trade
Add intra- Framework for Explicit Positive-sum Higher level
industry collective game with of global self-
GS2 Mass
commodity bargaining; legal cooperation organization
production,
exchange; system creates
consumption
employment balance between
strongly labor and capital
depends on
trade

Characteristics (3) and (4) evolved through macrohistoric trauma, ending in the
broad acceptance of (or at least grudging obeisance to) globally applied foundational
legislation (imprimatur). Social and economic history treats characteristics (1) and (2) as
continuous processes without recognizing their dependence on the strictly phase-like
evolution of the imprimatur. Academic inquiry appears to ignore the phase-dependence
of characteristics (5) and (6). In its hostility toward all mega-narratives, postmodern

4
critique in the social sciences and humanities lost sight of the most obvious possibility for
developing a critical perspective on current social conditions and global issues.

Anything mental is also physical – at least to some extent. At the current state of
science, this is a settled rational supposition even if empirical details are far from being
known and the extent and form of correspondence are subject to intense debate. The
thermodynamic reconceptualization of cultural evolution does not require full-fledged
monistic physicalism as in the so-called “identity theory” of the mind-body problem.
“Minimum physicalism” suffices.

An elaboration of the narrative version of cultural evolution follows.

***
With the discovery of the Americas and news about circumnavigation, the planet
incontrovertibly acquired the mental image of a finite globe. Geographic globalization
was accomplished; global-scale interactions could emerge. Cultural evolution reached the
crucial point of being recognized in its full (contemporary) extent. The long but
accelerating march from the correct notion of what is “worldwide” to the “worldwide
web” began.

The period that lasted from the beginning of the 16th century to the outbreak of the
French Revolution (labeled late feudalism/early capitalism or GS0 in the current project)
witnessed rapid economic diversification, the growth of trade (the early signs of
economic globalization), and the emergence of modern science and philosophy. While
agriculture and a social organization reminiscent of landownership-based feudalistic
social hierarchies -- or pure military subjugation -- remained dominant around the world,
industrial activities gained in significance and the proportion of population living in
towns (though slight) began a secular upward trend. The evolution of economic
institutions and social thought reflected the development of incipient capitalism, the
gradual coming to power of the bourgeoisie. Although these trends were most keenly
present on the European Continent, they had also been documented in Asia, particularly
in Japan.

Burgeoning industry and commerce stretched the limits of agrarian, aristocratic-

military-, and spiritual authority-dominated social frameworks but the world was not yet
ready to engage in conscious self-organization.

Retrospective analysis reveals the three fundamental conditions that were required
to move from self-standing, mutually hostile monarchies engaged in the crudest form of
competition to conscious cooperation with a global scope: (1) a sufficient number of
territorial units (compartments) each of which recognizes the value of cooperative
behavior, shows durability, and partner-worthy reliability; (2) a minimum threshold of
interaction among them (e.g., travel and trade); and (3) a single body of governing
principles that is both immanent and transcendent, i.e., that leads to the creation of
domestic (intra-compartment) economic systems while allowing for inter-compartmental
cooperation based on the recognition of mutual benefits.

5
 As later history revealed, nation states (countries) became the basis of global
networking. They are the compartments that are sufficiently analogous in their
organization, legal foundations, general intentions, and stability to consider each other
“partner-worthy.”

The three conditions were absent during most of GS0, appearing only towards the
end of the period.

Condition 1: Nation states already established at the outset of GS0 followed the
doctrine of mercantilism in their domestic economic organization and international
policies. Mercantilism approximates the behavior known in microeconomics as the “zero
sum game” (i.e., your gain is my loss). The players (nation states) operated under the
impression that the volume of international trade was constant and to win meant to have a
trade surplus (exports minus imports) so as to acquire precious metals (gold and silver).

Not only did individual nations strive to accumulate precious metals at the
expense of others, but their numbers were also too small and unevenly spread to form a
global network. The epoch’s most advanced state organization, the Ming Dynasty in
China, gradually decomposed and then collapsed under external pressure. In Europe,
although the concept of modern sovereign nation became legal reality at the conclusion
of the Thirty Years War (1648), most of the continent remained divided among small
territorial units or multi-ethnic conglomerations under dynastic rule or outright foreign
domination. The compartments were unstable because they lacked communitywide
interest-serving territorial governance. (For example, marriage between the children of
two princes or a successful military campaign could change administrative borders,
altering the fiscal system with total disregard for “public interest.” This concept, so
crucial in modern electoral politics, had no practical significance.) Perpetual warfare,
revolts, colonial status or complete isolation characterized the rest of the world. But the
arrow of time pointed unmistakably toward the formation of modern nation states, a trend
that gathered momentum in the 19th and continued through the 20th century.

Condition 2: We see a gradual increase in economic interactions, particularly in

Western and Northern Europe. Relatively small-scale trade (mainly in luxuries and
precious metals as far as exchange with other continents was concerned) led to the
accumulation of commercial gains, which then transformed into industrial capital
(sufficiently large to be invested in the formation of physical capital), producing
increased amounts and variety of traded goods.

Condition 3: Although the gold standard mechanism (which ends blind

mercantilist ambitions as well as the rivalry between precious metal and paper money)
and the economic doctrine of laissez faire were known during the second half of the 18th
century prior to the French Revolution, their application remained extremely limited.
These ideas were considered liberal, untried, even utopian by established authority still
mired in the conviction that the bigger the trade surplus, the stronger the nation.

6
Principles approximating a zero sum game (e. g., Holland’s gain is France’s loss
measurable in gold) prevailed in international economic relations.

The conditions required for the existence of a global system matured and united in
early 19th century Great Britain. The world’s first global system, laissez faire/metal
money (GS1), entered the stage of universal history there in the symbolic year of 1834,
but not before a chaotic transition shook the European Continent, which played the
central role in cultural evolution.

A chaotic transition is like a brainstorm that leads to remaking or, equivalently,

rethinking the world. It begins as the established world order (a deterministic system)
becomes increasingly prone to disruption through stochastic (random) developments.
(This characterization corresponds to the “butterfly effect” known in chaos theory or
nonlinear dynamics.) An innocuous and totally unpredictable event escalates in
significance and marks the beginning of a period during which the world identifies the
parameters of a new scheme of relative (dynamic) global equilibrium.

The chaotic transition that led to the establishment of the first, most primitive
global order (GS1) lasted from the outbreak of the French Revolution in 1789 until the
symbolic year of 1834. From the clash of extreme intentions, such as the creation of an
egalitarian society through Jacobinian despotism, territorial integration through imperial
conquest, and aristocratic restoration, emerged the triumphant bourgeoisie. This new
ruling class of entrepreneurial revolutionaries was, in a way, egalitarian, in a way,
aristocratic, and yet, in another way, successful in integrating the world.

The first global system appeared when the conditions necessary for its existence
were ripe to be put it into practice by a mover-shaker social group or class. Before the
French Revolution, the aristocracy, in alliance with the Church, would have blocked such
a transformation. Inertia would have prevailed over innovation and progress. By the
1830s the bourgeoisie was strong and confident enough to push through legislation
required for the free functioning of markets in commodities, labor and money.
Unobstructed entrepreneurship and free competition were on and the factory system
could expand. GS1 spread quickly to the rest of Europe and to other continents, including
the United States, which was born with a great penchant for GS1’s spirit of liberty and
entrepreneurial creativity.

The main attribute that distinguishes GS1 (and for that matter any global system)
from GS0 is the recognition that national self-interest is best served by making
allowances for similar ambitions in the rest of the world. The digit in denoting global
systems (i.e., 0,1,2 in GS0, GS1, GS2) refers to the level of cooperation through
harmonization among nations, in principle and practice. Since GS0 did not feature any
such conscious harmonization it was not a global system. (It was global system naught.)

In terms of institutions, national economic systems under GS1 were built on the
doctrine of noninterference by the state in private economic activities (laissez faire) and
on the mandatory exchange of national paper money for precious metals (mainly gold

7
coins or bouillon) at bank windows. In contrast, GS0 national economic systems were
based on strong central authority, on the state’s ambition to amass as much gold as
possible. GS1 reflected the recognition that national self-interest is best served by
institutional harmonization and by overcoming the state’s “jealous fear” (David Hume’s
expression) over losing gold. GS0 lacked such integrative global scope.

GS1 had a pivot or epicenter or “world leader” -- Great Britain. It became the
reference point against which other nations would measure their institutional
arrangements, business and personal conduct. The closer to the British model, the better.
There was no such leadership during GS0.

With GS1, the most advanced nations (the vanguard) became involved in
conscious self-organization. They submitted to the principle of allowing the ebb and flow
of precious metals across their borders. They tuned their domestic systems (adjusted
immanently) so as to allow universal economic laws to do their magic. The compartments
(i.e., the countries, the players) discovered and agreed on a global framework for
maximizing their objective of economic growth and tended toward standardizing their
institutions and strategies. (This is, of course, an abstraction. Practice and experience
were divergent enough to suspect a functioning mess with unabated suspicion and, in
some cases, outright hostility among the players. Nonetheless, the retrospective
characterization of GS1 presented above remains valid in its broad outlines.)

Although GS1 was born among pain and trauma, it gradually ended up raising
living standards and led to the creation of the middle class. The following are quotes from
the most enduring opponent of classical capitalism (GS1), Karl Marx:

“The bourgeoisie, by the rapid improvement of all

instruments of production, by the immensely facilitated
means of communication, draws all, even the most
barbarian nations into civilization. The cheap prices of
commodities are the heavy artillery with which it batters
down all Chinese walls, with which it forces the barbarians’
intensely obstinate hatred of foreigners to capitulate. It
compels all nations, on pain of extinction, to adopt the
bourgeois mode of production; it compels them to
introduce what it calls civilization into their midst, i.e., to
become bourgeois themselves. In one word, it creates a
world after its own image.”

……………………………………………………………………...

“Subjection of Nature’s forces to man, machinery,

application of chemistry to industry and agriculture, steam-
navigation, railways, electric telegraphs, clearing of whole
continents for cultivation, canalization of rivers, whole
populations conjured out of the ground — what earlier

8
 century had even a presentiment that such productive forces
slumbered in the lap of social labor?”

In retrospect, these lines, written in 1848, were only the flourish of the trumpet
that announced GS1’s future success. Between 1850 and 1900, per capita global output
(income) more than doubled despite an increase of world population from 1.2 billion to
1.6 billion. Further acceleration in per capita was recorded during the Edwardian period
(the first decade of the 20th century). The world’s population began to see elegance and
luxury on levels undreamed of before. But the evolutionary clock was ticking toward the
demise of GS1, which became increasingly unable to accommodate further economic
growth. The following were GS1’s four most obvious limitations:

• Gold-dependence of money supply became a straightjacket to economic growth.

• Industrialization reached the point at which national economies were prone to
accelerate and decelerate if left on their own. (The fiscal and monetary measures
required to deal with this phenomenon through countercyclical government
intervention were outside GS1’s parameters).
• Lack of framework for labor/management bargaining prevented the move to mass
production and consumption.
• Economic and financial interdependence called for concerted action among
national governments. GS1 had no institutions or schemes for such international
cooperation.

GS1 was blown to smithereens with the outbreak of World War I.

The period 1914-1945 was the chaotic transition that ushered in the second and
current global system, called mixed economy/weak multilateralism (GS2). As observed in
thermodynamic processes, world history (the narrative version of cultural evolution)
exhibited the signs of diverse and conflicting approaches to reestablishing the conditions
of (dynamic or relative) steady state. These were the alternatives:

• Restoration of GS1 by attempting to bring back the gold standard.

• Communism: A new form of self-organization.
• Fascism: Territorial conquest through military aggression, winner takes all
(i.e., semi-colonial or colonial status for the rest of the world).
• Mixed economy: A new relationship between public authority and the
market as well as between labor and capital.

As befits the physical and mathematical descriptions of chaos, these alternatives

clashed in an experimental melee – a Darwinian showdown -- from which the mixed
economy emerged as victorious.

The mixed economy became the backbone of GS2’s domestic economic

organization. It implies private-ownership-based market economy with important roles
assigned to the state in securing economic prosperity and social peace.

9
 The United Nations and its charter organizations represent weak multilateralism.
Its flagship agencies in the economic and financial sphere are The World Bank, the
International Monetary Fund (IMF), and the General Agreement on Tariffs and Trade
(GATT), which became the World Trade Organization (WTO) in 1995. The United
States took the role of epicenter or “world leader” from Great Britain, upgraded with the
functions of system administrator.

GS2 outshined and outperformed GS1. It brought material welfare within the
reach of billions. During the 50 years from 1950 to 2000, despite an increase in world
population from 2.5 billion to 6.3 billion, per capita global output (income) increased
more than four-fold.

But now the clicking of the evolutionary time machine heralds the onset of a new
transition. The reason is not, as Marx thought, that capitalism (now in its modern or
reformed version) could not provide prosperity for the masses, or that it suffered from
incurable limitations in ensuring economic expansion. The reason is the exact opposite:
GS2 cannot stop growing. Its existence is conditioned on the maximum growth
achievable and, therefore, it is incompatible with a predominantly renewable-resource
based global society in agreement about the use of scarce nonrenewable resources and the
environment. The terrestrial sphere’s ability to support unbridled economic growth is
limited and we are approaching the limits.

The structure of global evolution as described could be discovered only recently,

since the fall of communism in the early 1990s.

While there was a socialist commonwealth, the world lived with the impression
that it had two parallel, competing global systems. Planet-wide self-organization appeared
to be bi-systemic. This view was uniform, except that the communists considered their
system a promise to the world while everybody else regarded it as a menace.

In retrospect, Communism was not and could not have become a global system:

• Communist-controlled countries had to deal with the rest of the world in

terms of GS2.
• They represented around 5 percent of global trade.
• The communist system appealed only to a tiny minority and this
circumstance disqualified it from becoming the foundation of a new world
order. No global system could exist against the will of national majorities.
• It did not develop a distinct socioeconomic behavior. It only suppressed
and deformed GS2-typical behavior. (Populations in formerly communist-
controlled countries snapped out from socialist institutions and
immediately adopted multiparty, private entrepreneurship-based economic
organizations roughly at their respective pre-communist level of social
development.)

10
 This is not to deny or even belittle the historic significance of Communism. Its
early economic growth performance and proclaimed idealism presented the rest of the
world with a major political challenge. It became (1) the “balance wheel” that helped
define the mixed economy and (2) the socio-psychological, philosophical prop needed to
recognize that the real hegemonic world order (GS2) did not acquire ontological status;
i.e., its attributes did not become confused with natural laws.

1. As a balance wheel, the communist threat helped define the respective weights
(“the mix”) of private and public expenditures in the mixed economy. It pushed
the balance in favor of public expenditures (e.g., military spending in the United
States, social programs in Western Europe and Japan.) We can acknowledge this
by observing that a restriction of public authority followed the collapse of
communism. The era since 1991 has witnessed a forceful wave of deregulations
and privatizations; the emergence of the so-called Washington Consensus.

[Note: The Washington Consensus refers to economic policy prescriptions to be included

in "standard" financial assistance packages to needy countries by Washington-based
institutions such as the International Monetary Fund, The World Bank, and the U.S.
Treasury Department. The term has become synonymous with the ideology of
neoliberalism whose main aim is to increase the weight of the private sector in the “mix”
by disparaging public policies and reducing taxes and government expenditures. By now,
however, the insufficient and often counterproductive nature of the policies that flowed
from the Washington Consensus has been widely recognized. At the instigation of Joseph
Stiglitz, Nobel Laureate and former top World Bank official, economists are encouraged
to develop a theoretical and policy environment dubbed post-Washington Consensus.]

2. Were it not for antagonism and occasional militant criticism, the radical presence
of the prevalent human-made environment would appear to the individual as an
unchanging and unchangeable objective reality.

The willingness to criticize social arrangements is a culturally maintained and

transmitted trait. It increases the species’ evolutionary potential. Without skepticism
shadowing every single social arrangement, human-made institutions would become
dogmatic in-growths, taking on the guise of natural laws (e.g., gravity or
electromagnetism). This would endanger cultural evolution because it is contingent upon
the systematic renewal of global institutional arrangements. Since the fall of communism,
environmental and anti-globalization movements have become the main sources of
highlighting GS2’s shortcomings, i.e., its existence as a human creation.

Given that communism was not a global system, we may conclude that, thus far,
only the sequence “GS0GS1GS2” corresponds to the thermodynamic process we
call cultural evolution.

Let us repeat: The global system is a human artifact, a collaborative contrivance

of billions of interconnected neuroanatomical states; expressed through characteristic
institutional architecture and socioeconomic behavior.

11
 Beliefs and Values: Historicity and Physicality

[Note: Beliefs here are associated mainly with ethic and values mainly with morality.
Whereas ethic has a teleological dimension, i.e., it relates to expectations and intentions;
morals are fundamentally deontological -- i.e., they relate to duties and prohibitions.
Further research would align the subject at hand with the “EI Theory.”]

Beliefs and values that are socioeconomic in nature are of canonical importance in
the rules and practices that characterize interactions under a specific global system.
Among the many binary, hierarchic-order-containing valuations, they allow the
individual to distinguish between “right” and “wrong;” “rational” and “irrational.”

Some examples: Assuming the existence of public responsibility for individual

employment and welfare is part of GS2 personality. There was no such expectation under
GS1. (Under GS0, the aristocratic landowner did have some – never rigorously enforced
– obligation to prevent starvation or gross neglect on his property. Religion provided the
ideology and the vassal relationship of the poor the rationale for such arrangements.)

We believe that cooperation among national governments should solve

international economic problems, reduce global inequities, and remove obstacles
blocking worldwide progress. Since GS1 lacked a framework for national governments to
cooperate, the generations living in those times did not expect foreign nations to do
anything for them. (Deep suspicion or outright hostility characterized relations among the
relatively few nation states under GS0.)

GS1 values did not allow people to enjoy life on borrowed money. GS2 has
changed that. Not only is borrowing to consume and acquire homes morally acceptable, it
is a necessity. Credit allows the money supply to expand and to clear markets, that is, to
buy up what we have produced in order to maintain employment and ensure continued
economic growth. (Under GS0 it was wrong even to extend credit.)

By sorting the stream of everyday experiences, beliefs and values help formulate
individual response in “behavior-evoking” situations.

The physical reality of cultural evolution, that is cultural evolution, centers on the
collective transformation of global system–specific material states in individual brains.
These states are interconnected in such a way as to correspond to the rules of the
prevalent multibillion-person socioeconomic game. (With appropriate qualifications,
every global system is also “Nash equilibrium.”) Since this network is part of a
unidirectional thermodynamic unfolding, it cannot move from one major phase to the
next by skipping chaotic transition.

As beliefs and values pertaining to a global system strain to transform in order to

make individuals and institutions correspond to new organizational principles
(commensurate with the demands of the next stage of cultural evolution), effective and
proposed changes create a variety. But the array of emergent solutions (“mutations”) is

12
too wide and uneven. There is a “surplus of possibilities” (Derrida’s expression applied to
the interpretation of texts.) A process of pruning must first eliminate unfit mutations and
then sort out affinities among the remaining (“surviving”), widely diverse groups to
create a handful of forcefully supported alternatives (“historical blocks,” to use Gramsci’s
expression; groups with “adaptive value” in terms of evolutionary science). In the end,
these few (at minimum two) would have to slug it out among (or perhaps between)
themselves in direct confrontations. In the evolution of human-made environments,
genetic tendencies; vaguely sensed or presupposed beliefs and values do the selection.
The restoration of dynamic equilibrium (or stable disequilibrium) globally and enduringly
is the only proof that the newly ensconced system has been selected for survival. (I.e.,
proof is available only ex post.) Both the two historically recorded examples of chaotic
transition and evolutionary adaptation (as a generalized Darwinian mechanism) point to
this algorithm as the only workable one.

The unidirectional and irreversible nature of cultural evolution brings to bear the
decisive argument in support of this inference. The evolution of the clump of matter that
culture is (with individually-anchored neurobiological traces characteristic of the global
system, interconnected into a worldwide web at its center) cannot occur without
hesitation, search, and experimentation. If it could, cultural evolution would not be a
thermodynamic process because it would be reversible and not unidirectional (i.e., the
accumulation of entropy enclosed in the terrestrial sphere could be halted or reduced).The
only imaginable way for the particles in culture to increase in number and accomplish
crisis-free changes in their self-organization (i.e., to have cultural evolution without
chaotic transitions) is that, by some miracle of coordination, they would know their
positions and velocity at every second. By induction, all particles would move on
deterministic (“Newtonian”) trajectories, holding out the theoretical possibility for the
whole material entity (culture) to reverse its evolution. Such an assumption conflicts with
the second law of thermodynamics: The accumulation of entropy through cultural
evolution is deterministic only in direction. Ex ante, its manifestations remain stochastic.
We know this from our everyday experience. The unfolding of world events consistently
defies divinations inspired by coupling current situations with their supposed historical
precedents.

Consequently, at least from the human perspective, “hesitation, search, and

experimentation” are irreducible features of cultural evolution and these motions swell to
the proportion of macrohistoric crisis when the transition is major, i.e., it occurs from one
distinct major state to the next.

Turning to the future, the following section presents the general physical reason
for the nascent conflict between cultural evolution and its terrestrial limits.

The world approaches its shrinking material limitations at an accelerated tempo.

Culture ( C ) is maintained by the use of somatic and extrasomatic energy (SE and
XSE, respectively). In a functional form,

13
 C = H (SE, XSE)

Since culture increases, its first time derivative, i.e., cultural evolution, is positive
with regard to both somatic and extrasomatic forms of energy. As a matter of historical
experience, CE ⇔∆H 1 / ∆t and ∆H 2 / ∆t (i.e., cultural evolution has been equivalent to
the increasing use of both somatic and extrasomatic energy).

Culture is conceivable as energy performing work (W ). The larger the number of

atoms incorporated into culture (i.e., the larger doses of energy it contains, the more it
weighs), the more work it will perform. Culture is proportional (in joules) to the product
of a (very large) vector of forces (F ) and a matching vector of distances (d ):

C W =F . d

Culture -- an ever bigger and more effective machine with a human ghost?
Shocking, but this is what we get when we throw the stoic detachment lever as far as it
can go and observe ourselves from the cosmic perspective of indifferently accumulating
seconds since the Big Bang. Our civilization is nothing more than a growing lump of
energized substance smeared over a small rock that spins, wobbles, and soars into
nothingness at breakneck speed.

Cultural evolution may be seen as a rising quantity of work, linked to the increase
in human activities and the motion of human-crafted objects. (The time derivative of
culture and the work it performs remain proportional.) Since the total amount of matter
culture uses (m) increases (i.e., since there has been and there is cultural evolution), the
force (F ) is an acceleration even if the speed at which this matter moves ( v ) may vary.
Based on Newton’s Second Law, the force, which transforms energy (SE, XSE) into
work, may be captured by a rate of increased momentum:

F = ∆ (m . v ) / ∆t

By definition, the variable m is equivalent to free energy. (Its complement, latent

energy, is unavailable for use.) The quantitative relationship between m and v is
obviously indeterminate, but note that the velocity at which matter incorporated into
culture “moves” (i.e., as we push and pull and make our tools and machines push and
pull) is also a function of matter. Human actions or those performed by human-crafted
objects cannot deploy energy without terrestrial matter. Thus, we can rewrite the above
expression as

F ∆ (m ) / ∆t

The force (F ) is proportional to the depletion of “free” (and a corresponding

increase in the “latent” or “unavailable” portion of) energy enclosed in terrestrial matter.

If we consider the work culture does by maintaining itself and expanding during a
given period of time, we arrive at the concept of power as defined in physics. This way

14
we can perceive the bill Mother Nature charges humanity (through a fictitious Global
Town and Country Utility Co.) in kilowatt hours. At present, the world has not yet
acknowledged that it is running up the charges.

To sum up, acceleration in the force that converts the energy-equivalent of culture
into the work it performs unequivocally escalates the drawing down of free energy
enclosed in matter – a fixed quantity. Cultural evolution is, therefore, the exponentially
growing dissipation of its material constraints, a phenomenon that remains unchanged as
the process approaches its limit. No, the world is not crazy. It is not the reckless or
suicidal bus driver who is pushing the gas pedal to the floor even after being told about
an impassable foggy terrain strewn with stone barriers ahead. There is no driver and
acceleration is GS2’s life blood -- our livelihood, our money.

The “new growth theory” – an aside

The now fashionable, so-called new (or endogenous) growth theory (NGT)
gropes for a balance between humanity’s ecological reality and the current world order’s
“cowboy” economic mindset, which extols the glamour of and sees no limitations to
infinite economic expansion on our ever more populous and chemically ever more
depleted planet.

[Note: NGT is distinguished from its predecessors (particularly from the neoclassical
model that dominated academe until the mid-1980s) by “endogenizing” variables
formerly considered to be exogenous. Through their simultaneous interactions, all the
variables are solved within a mathematical formulation of long-run economic growth,
typically captured by growth in productivity (output per capita). Particularly noteworthy
is the “endogenization” of technological progress and demographic expansion. These two
variables used to be fed into models (i.e., they were previously exogenous). By focusing
on an enlarged concept of capital (called “generalized capital”), which includes human
knowledge and returns to investments in research and development (R&D), NGT
heroically bans diminishing returns.]

NGT is a Panglossian justification of GS2 mentality and is completely blind to

prevailing problems of development. In a theoretical and policy environment where push
is coming to shove to solve unsolvable problems within GS2’s institutional framework,
NGT proclaims the good news: Economic growth and growth in productivity may go
hand in hand on our planet until the end of time. The implication is that, as generalized
capital grows (the economy’s size expands), per capita output (productivity, hence
personal incomes) will also grow. This is possible, essentially, because as the example of
developed countries (the “North”) shows, at a certain level of development, activities
shift from physical- to the human-capital intensive “knowledge economy.” Such shift
reduces demand for energy and raw materials, and increases demand for services and
education. In short, heightened brain activity and networking slow the rate at which our
civilization ingurgitates usable and emits degraded matter.

15
 Senior government officials (trained in economics) in the industrialized
democracies boast about the diminished role energy and raw materials play in total
output; they ignore the structural shift in the world economy that made such partial
results in their respective national statistics possible. The buildup of industry in the
“South” has made (and continues to make) possible the buildup of the service sector in
the “North.” Of course, hair salons for dolls in New York and Paris use less energy and
raw material than manufacturing dolls in China. If you compare the hourly dollar wage of
an American or French doll hairdresser with that of a worker in China, you will see right
away why the service sector has a greater weight than industry in world economic data.
The number of hours spent in industry compared to that in services would be a better
starting point to assess the relative significance of the two sectors. Remembering what
most of the global population lacks but would like to have (that is, modern
infrastructures, cars, computers, household appliances) would be a better starting point to
explore future demand for energy and material resources. The number of hours that the
world population would have to spend in industry to arrest the current trend of global
pauperization and to bring living standards to “Nordic” levels trumps the number of
hours that could be spent in extending services typical of developed country life styles.

The NGT perspective fails to recognize that four-fifths of humanity living in the
“South” cannot leapfrog around industrial development into a “Northern-style” post-
industrial service economy, which itself is dependent for its existence and expansion on
the physical growth of capital in the “South.” And to raise the material welfare of the
world (with a population of 6.6 billion now; 9 billion in three decades) we would need a
planet several times bigger than we actually occupy.

Everybody wants to have the furniture of our civilization, currently enjoyed

mainly in the “North.” This means further acceleration in material output (cultural
evolution if we include demographic expansion) in the foreseeable future.

Nonetheless, NGT is appealing and not only because it is theoretically more

sophisticated and comprehensive than its predecessors. It also contains a vital grain of
truth as far as humanity’s future is concerned. If and when global society reaches a
sustainable equilibrium with its ecological reality, it will be able to extend its welfare
only if its economy evolves as the “North” has been during the past decades. Indeed, it
will have to move away from industry and restrict the depletion of free energy through
cultural evolution.

Implications for the economy and the environment

Culture feeds on billions of tons of structured matter per year, all of which will
eventually return to where it came from -- the terrestrial sphere. Cultural evolution may
be seen as a gigantic and growing throughput of matter accompanied by degradation.
Cultural evolution dissipates the terrestrial sphere by “sucking out” its free energy.

Economy

16
 The rising costs of material resources will become a drag on the global economy.
The exhaustion of oil reserves is shaping up as the 21st century’s first great lesson on just
how remarkably short-sighted and defectively organized our world is. Hopefully, it will
be a sufficient lesson, and therefore, the last.

As we exhaust free energy enclosed in matter, we must encounter nature’s

exactment on production. But unlike any other tax, duty or toll, this one cannot be
outlawed by legislation and, after a while, it cannot be rendered insignificant by adding
value to production. Ultimately, the rising costs of production will chip away from
profitability, bringing economic expansion to a halt. Our expansion-dependent world is in
a no-exit situation. It cannot expand to ensure “Northern” living standards to the entire
world and it cannot stop growing without provoking social upheavals and major, open-
ended conflicts.

Environment

Environmental sinks (e.g., the atmosphere, the oceans, and land) are the ultimate
destinations of degraded matter. One of the most potent complaints of the ecological
movement is the overflow of these sinks, i.e., their use beyond their nature-given ability
to empty themselves and restore their capacity to absorb. The thermodynamic perspective
on human civilization tells us that environmental sinks are uncountable and correlated in
so many ways as to exceed our time, resources, and computing capabilities to identify
and document them. The best science can do is to “course grain,” that is, to provide
exhaustive enumerations of an infinite variety of possibilities – a perfect setup for
surprises.

The human observer is lulled into believing that it has just identified the last
manifestation of environmental degradation, completing the list of things to do, control,
or prevent. The triumphant stories of eliminating the harmful effects of toxic chemicals;
restoring the ozone layer, and cleaning the air and inland waters are all part of a grand
illusion. Control and reversal of global warming seem only a question of “political will”
and technical know-how. Just a smidgen of more government control, new tax incentives
and subsidies, clever market solutions such as the auctioning and trading of pollution
rights, a call upon science and technology and we are home free: The environment will be
cured forever. The truth is not only more inconvenient than Mr. Gore believes but it is
also much more complex.

Certainty associated with the potential effects of long range causalities, hidden
among the consequences of culture’s growing weight in the terrestrial sphere’s fixed
weight, tends to diminish. Growth of “information entropy” (a byproduct of increase in
the number of possibilities as to the whereabouts of individual molecules and their actual
and potential interactions, i.e., “what they are up to”) signifies the continuous decline in
human ability to assess the actual condition of the planet’s ecological order and its
potential evolution. Human society must expect growing capriciousness from its
decomposing ecological context. Its environment becomes an ever more perplexing
conundrum.

17
 Cultural evolution is the throughput of overwhelmingly nonrenewable material
resources in a thermodynamically closed space. At the present stage of technical
development, we are not polluting the environment, we are the pollution. To achieve a
relative ecological steady state (where ecological degradation is reduced to a minimum
and human understanding of the environment becomes stable) many things in our lives,
institutions, and behavior will have to change.

Other signs of earthly limits to cultural evolution

The exhaustion of easily accessible free energy enclosed in matter and the
inadequacy of global self-organization and associated typical individual behavior are not
the only factors that endanger the “business as usual” continuation of cultural evolution.
The World Economic Forum, which routinely monitors and analyzes global risks, has
identified the following further factors that could disrupt the world’s current stable
disequilibrium: fiscal crises caused by demographic shift (i.e., the projected slowdown in
population growth); international terrorism; the proliferation of weapons of mass
destruction (WMD); interstate and civil wars; failed and failing states; transnational
crime and corruption; retrenchment from globalization; Middle East instability;
pandemics; and the breakdown of the critical information infrastructure (CII). Directly or
indirectly, these risks are also attributable to the current growth of population and
widening income differentials. They testify to the deficiency of the world to rationally
diagnose, prognosticate, and treat its problems.

All the economic, environmental, and other factors quoted are interdependent. A
totally unexpected and utterly unpredictable event anywhere could cause any of these
factors to intensify and spill over to the rest of them, causing trouble everywhere. The
likelihood that such an event will surprise us one day is on the ascendance. Pure
contingency is in an accelerated process of becoming pure certainty. As cultural
evolution eats into the terrestrial sphere, it cumulates the likelihood of its autoparalysis.

The Question of the Century

The 21st century will answer the following critical question: Can transition to a
sustainable harmony between homo sapiens and its ecological niche be achieved through
a gradual, that is, economic growth-sustaining and current institutions-preserving
transformation? Can cultural evolution soft-land or is it in for hard landing? The present
theory maintains that soft-landing is extremely unlikely. The coming (hopefully
transitional) macrohistoric chaos associated with a major collision between our growth-
dependent civilization and its material limits appears to be physically inevitable.

The acceleration principle behind the expanding human presence is tied to the
present, largely unconscious conviction that man lives in an open thermodynamic system.
Such a system is indispensable for individual existence, but this indispensability has
extended to communities, business firms, industries, and nations. Practically all
groupings and organizations, small or large, behave as if they also lived in an open

18
thermodynamic environment. “Not in my backyard” is the primitive manifestation of a
deep and ominous conviction: “I live in an open thermodynamic system; you deal with
it.” This glaring inconsistency and self-contradiction will have to be worked out at the
global level.

The expansiveness of the “cowboy” perspective in business will have to

transmute into the defensive mentality of a “Dutch” economy in the terrestrial sphere.
The “cowboy” perspective and mentality will have to be redirected to outer space in order
to fend for humanity’s long-term survival.

Let us call the currently prevalent state of the world, characterized by the
unconscious belief that we live in an open thermodynamic system and the related
“cowboy” mentality in economic affairs, State No. 1.Then State No. 2 is the steady state
in which weak acceleration in the exhaustion of material resources is subjected to long-
term plans to capture matter from outer space; in which the notion that we exist in a
closed thermodynamic system is widely accepted and this acceptance is paired with
individual willingness to live with the constraints of a global “Dutch” economy. Then the
question is reduced to “How do we get from State No. 1 to State No. 2?”The
thermodynamic insight into world history suggests that there is virtually no chance for a
smooth (i.e., economic growth as well as institution-preserving) transformation. A new
period of macrohistoric turbulence, a new chaotic transition is on the horizon.

The individual, bent by nature on reproduction and the accumulation of material

wealth, must come to grips with the same bent in every other individual. At humanity’s
current and foreseeable level of development, the emergence of and strife among
antagonistically opposed “historic blocks” -- each representing an alternative world order
-- is the only algorithmic maneuver global society disposes to move from one relative
steady state to the next. From the cosmic perspective of a much faster temporal flow than
we perceive, our traumatic and costly chaotic transitions may appear nothing more than
periods of introspection and self-correction in the “observed form of life.”

While this general assertion may be accepted as logically plausible, or even

compelling, it faces insurmountable obstacles when one tries to demonstrate its validity
through specific aspects of contemporary life. When the debate moves from topic-neutral
physics to the analysis of topical, social, political, and economic issues, the resistance
hardens into reinforced concrete. And we may thank our good fortune that things are this
way. If people could be convinced with words that they had to change themselves and
their institutions in order to solve problems (no matter how imposing and threatening
they may be), human society would be dangerously labile. It could not hold on to a
functioning form of self-organization and would be subject to erratic changes. It would
resemble a delirious individual wandering aimlessly in the wilderness.

Long-term world equilibrium -- GS3

As the world’s growing population and economy encounter terrestrial limits, a

new global system, called “two-level economy/strong multilateralism” will be needed.

19
 On one level, activities that depend heavily on nonrenewable natural resources
and put the environment at risk would be subject to globally-determined constraints.
These activities would be allocated to nations and transnationally-dominated sectors such
as the petrochemical and automobile industries. On the other level, it would be “business
as usual” market economy.

Strong multilateralism implies democratically organized world governance

(complete with a global central bank, global currency, and global minimum wage) with a
framework of cooperation in space engineering and colonization. The world would have
a 100-year plan.

Comparing a world that can have a 100-year plan with the one that lived through
the past century gives us pause. It hints at such a profound change that to reach it may
require either a very deep and long-lasting chaotic transition or intermediary global
systems separated by chaotic transitions. Under either alternative, chaotic transition is
the next expected phase of macrohistoric evolution.

***
The apodictic demise of GS2 is obscured by contesting any possible way it may
happen. This phenomenon is not unique to the present context. The individual fights
every disease with unshakeable belief in its own resilience and trust in medical-
pharmaceutical know-how. Yet, sooner or later, there will be a death certificate on the
shelves of the Office of Vital Statistics. The case of a global system is analogue. It is
resilient and ascribes to itself an infinite capacity of adaptation and problem-solving but,
eventually, it must become history.

The coincidence of the impossibility for GS2 institutions and behavior to survive
adjustments required for the species long-term survival and the impossibility of admitting
helplessness finds expression in discursive stalemates over energy, raw materials, the
environment, poverty, and what have you. Rational thought, trained and constrained by
the radical presence of the world order, is inclined to consider irrelevant or unfounded
any suggestion that the future cannot be secured by the repertoire of tried approaches.
The question then arises: Is it worthwhile for someone with this conviction to engage in
public debates? The answer is “yes,” with the following qualification: The purpose of
demonstrating the illusory nature of the “business and politics as usual” path leading
human society to a temporally significant balance with its ecological reality is not to win
the debate, but to plant and strengthen the idea about the realistic solution and identify
the hurdles barring its attainment in the preconscious mind.

With this caveat, the five points below represent a small sample of possible
arguments between those who trust in gradual transition and those who do not. Each can
provoke disagreement over whether or not a world order reflecting the rational perception
of the species’ ecological steady state is attainable without major shocks. The five points
are as follows: (1) Beliefs and values; (2) The coincidental need for change at all levels of
human self-organization; (3) GS2’s unsuitability to live under the constraints of

20
predominantly renewable resources; (4) The fallacy of marginal adjustment-based
transition to such an economy; (5) Oil.

(1) Beliefs and values

Imagine a world . . .
--with international mega projects to harness tidal energy and outer-space solar radiation;
to mine the moon, to prepare the terraformation of Mars through a 100-year plan;
--where nations voluntarily share scarce nonrenewable resources and environmental sinks
among them; where the “North” makes sacrifices on behalf of a blushing “South,” which
protests that this must be temporary and it will in due time recompense such unexpected
gesture of largess;
--where living standards are significantly more dependent on local community efforts
than on the worldwide franchise and the transoceanic shipments of plastic toothbrush
holders and fat little Buddha statues with blinking bellies;
--where grabbing hands, graft, and vice to enhance one’s own financial fitness is
considered bad manners or signs of retardation.
It is hard to believe that a world like this could be reached through persuasion or
the accumulation of individual, national, and international experiences translated into
gradual institutional adjustments at all levels of social and economic organization. To
make such huge adjustments, we must suffer and must make and see others suffer. Or
alternately, the internal organization of national economies must produce local autonomy
through self-reliance so as to make the renouncement of a good portion of nonrenewable
resource-dependent commerce with the rest of the world little or no sacrifice. In either
case, a new global order is implied.

Individual experience and willingness to alter behavior mutually condition one

another. We do not want the unfamiliar. To embrace a system of beliefs and values that is
both planetary in scope and drastically new compared to the current one demands
unlearning, experimentation, catharsis, and foundational trauma -- the characteristic
features of chaotic transition.

Global transformation in the web of interconnected cerebral substances represents

the central process of a unidirectional thermodynamic unfolding, i.e., cultural evolution.
This web cannot move from one major phase to the next by skipping chaotic transition.
And it is difficult not to see State No.1 (GS2) and State No.2 (GS3 or one of its
predecessors) as two distinct major phases. Indeed, the assertion that the difference
between the two states is greater than the one between GS1 and GS2 is immune to any
reasonable challenge.

(2) The coincidental need for change at all levels of human self-organization.

Chaotic transition is inevitable when the need for profound change is

simultaneous at the individual, national, and global levels. (The three levels are
designated as “micro,” “meso,” and “macro,” respectively.) Each constrains the
transformation of the other two and the transformation of each is constrained by any of

21
the other two. As forces push away from State No.1, without advance agreement
regarding the micro, meso, and macro conditions implied by State No. 2, the process of
reinventing the world has no other recourse but to ask macrohistoric chaos for help.

If a smooth transition from one major state to the next were possible, world
history would not be an epiphenomenon of cultural evolution. Smooth (i.e., individual
behavior-, national- and global institution-preserving) transformation would imply that
cultural evolution had perfect information about its direction. If it did, it would be a
deterministic process with an impeccable memory and, therefore, it would be reversible.
This contradicts the well established fact that cultural evolution is irreversible. It
accumulates entropy -- a uni-directional process by the second law. We may recognize
cultural evolution’s lack of a deterministic trajectory (at least from the human
perspective) by noting the eternally novelty-producing nature of world history. Neither
cultural evolution’s individual participants nor any possible combination of them can
have have ex ante knowledge about the direction of history. In order to continue
evolving, culture cannot forget its past, but it must be forgetful enough not to be
reversible and to outfox human computing capabilities when these are deployed to
foretell the future with scientific precision.

Growing “initial condition sensitivity” (the potential for submicroscopic causes to

trigger out-of-proportion effects) characterizes the world before its order breaks down.
The immediate circumstances that prompted the French Revolution and the outbreak of
World War I (the events that started the two chaotic transitions on record) could vie with
Edward Lorenz’ butterfly story to illustrate touch-and-go sensitivity in nonlinear dynamic
systems (such as cultural evolution).

A strong El Nino cycle caused bad harvests in France in the period before 1789.
Shortage of grain and the subsequent gauging of bread prices led to the storming of the
Bastille on July 14th. Thus, unusual behavior of water molecules in the Pacific Ocean
represented the stochastic behavior (the flapping wings of the butterfly) that made happen
what had to happen, the unleashing of a needed and inevitable chaotic transition to the
first global system (GS1).

The assassination of Archduke Franz Ferdinand in Sarajevo on June 28, 1914

would not have happened had it not been for the young assassin’s sudden appetite and the
coincidental whim of the Archduke to order his driver to check out the exact same side
street where the assassin has just wolfed down his sandwich. Neuronal events traceable to
states in subatomic particles account for setting into motion the second chaotic transition.

Shakespeare’s Brutus mused about a “… providence of some high powers that

govern us below.“ This may be so, but it is extremely improbable that we can divine it.
The breakdown of GS2 will most likely begin with a total surprise, a seemingly minor
event whose effects will out-run the human capacity to predict and control.

***

22
 In retrospect, every age seems naïve, but there are differences. Does naiveté come
under the heading of “They did not know better,” “Outright laughable,” or “Oh, what
tragic ignorance?” From a distant future perspective, some of our convictions, practices,
and expectations might belong to this third category, along with slavery and punishment
of those who dared to deny the planet’s flatness and universal centrality. Points 3-5
intend to illustrate current naiveté with potentially explosive consequences.

(3) GS2’s unsuitability to live under the constraints of predominantly renewable

resources.

GS2’s defining feature is its unquestioned commitment to, and complete

dependence upon, economic growth. We know that growth will eventually (most likely
during the first half of this century) encounter the planet’s physical limits. This spells
crisis for GS2 no matter what happens. Both continued and stalled expansion is lethal to
its institutions and ideology. Growth would eventually be slowed then stopped by the
drag of increasing resource costs; no-growth would entail galloping impoverishment with
violent individual and group actions in its tow. No matter how human society finds out
that cultural evolution has reached its physical limits, it will have to deal with the
contagion of discontentment economic stagnation heralds. A new global system that can
live with green constraints will have to emerge. In addition to this general menace
hanging over GS2, there are other aspects that make its survival in the epoch of
dependence on predominantly renewable resources totally impossible.

GS2’s monetary system is an important case in point since global systems are
characterized by their monetary arrangements. Today’s world depends on the U.S. dollar
in order to function and expand -- a ridiculous proposition. How long can one-fifth of the
global economy incur debt to the rest of the world or sell its assets to it before it becomes
apparent that the accumulated debt is sour and there is mutual unwillingness to buy and
sell further assets? Increments in the mass of the world economy are bigger than those in
the U.S. economy. This dilating asymmetry is stretching GS2’s monetary and financial
institutions to its limits without any sign that this process could stop itself before
popping.

A smooth replacement of the dollar by the euro or a basket of currencies that

would include the British Pound, the Swiss Frank, the Yuan, the Yen, and the Ruble
would be unworkable.

For the euro to replace the dollar, the EU as a block would have to accept a
secular deterioration in its trade position and consequent structural transformations. This
is unacceptable for Europe or for any other country or region. Mitigating the loss of
manufacturing jobs in the United States is the expansion of industries directly and
indirectly related to armament (i.e., aviation, rocket science, cybernetics); the country’s
unique ability to develop scale economies in the service sector, and its leading role in
planetary affairs owing partially to the fact that its language has become the world’s
cultural, political, and technological lingua franca.

23
 In theory, even if Europe would and could assume the place the United States
currently occupies in underpinning GS2’s monetary system, it would have to incur even
larger and faster accumulating deficits since the increment in the mass of the world
economy always exceeds the increment in the mass of any of its constituents. Eventually,
Europe would also have to pass the role of financial pivot to someone. To whom? To
China? Then China, incurring debts even faster than Europe, would pass the burdens and
privileges of ensuring global liquidity to India, and then back to the United States again?
Even a half-conscious world would notice that the concept of a single dominant guarantor
of the monetary conditions required for the expansion of global economy and commerce
is patently untenable.

The second alternative, i.e., the replacement of the dollar with a basket of
currencies, would imply a new global system, that is, new institutions, including a global
central bank. The world is very far from accepting such a thorough transformation
without some crisis.

These arguments are in line with the thermodynamic thesis of global history.
Given the unidirectional nature of a dissipative thermodynamic unfolding, certain
configurations do not form cycles, i.e., remain unique, never repeatable one-time
occurrences. We also see that intrinsic changes, i.e., major remakes of the world order, do
not result from statistical evidence, logic, or firebrand rhetorical eloquence.

(4) The fallacy of transition through marginal adjustments; a tipping point too far.

The spontaneous, market-force generated transition to an economy with green

limitations is condemned to failure. If the global economy, led by industrialization in the
impoverished four-fifths of the world, grows as projected during the coming decades, the
easiest accessible free energy enclosed in matter (hydrocarbons, most importantly) will
flow into current production (construction, automobiles, household appliances) and not
into the sector that produces substitutes for nonrenewable resources. In a few decades, if
not sooner, such expansion would encounter the drag of rising energy and material costs.
The stagnant business atmosphere would engulf the sector destined to reduce global
dependence on exhaustible resources.

If, as a result of some unforeseen combination of tax/subsidy policies, public

pressure, and technological breakthroughs, the renewable resource-dependent sector
spread, that phenomenon itself would slow the world economy. Green limits are an
imposition on the unlimited (“cowboy”) business mentality. Their progress would stop
the present drive toward global industrialization long before renewable rather than
nonrenewable resources could guide the world economy. We would then be back at
square one. Stagnation in the predominant conventional sector (i.e., in the one that is still
overwhelmingly dependent on exhaustible resources and carries the primary
responsibility for global output and employment) is not conducive to never-before-seen
capital expenditures to develop the planet’s renewable resource base.

24
 Presently, most economists and environmentalists place their hope in transition
through marginal adjustments. A little more demand for and supply of renewable
resources until, in due time, economies of scale (decreasing costs) in their production
make them irreversibly dominant. Such a smooth, well-behaved process is destined for
derailment. Global transition to a green resource base is not only the largest structural
transformation history has ever seen, it is also the most urgent one. These hard facts
imply conditions not contained in the annals of economic development.

The pitfall of bad timing and its cumulative effects

Any structural transformation involves abandoning old and bringing on new

production capacity. While the abandonment of unprofitable capacities is quick (occurs
through shut-downs), the coming on line of new capacities takes time. If individual
countries and the world as a whole could harmonize the rhythmic difference between
destruction and creation, gradualism might work. But contemporary national and
multilateral institutions are not equipped to carry out such harmonization.

Public policies face an unpalatable choice. If they try to dictate a fast pace of
industry-wide reengineering (ramping up the frequency of shut-downs), they increase the
risk that capacity fallouts exceed the installments of new capacity, with the corollary
consequence of decelerating the growth of output and employment. If they are not
coercive enough and trust the spontaneous creative force of “market and technology,” the
transition may time out: Higher energy and material costs create a drag on economic
growth. How can anyone believe that the majority of the world’s 268 nations would not
fall into one error or the other; and, as they do, that these errors would not swell into a
debilitating global force?

Transition’s latent “own-demand” trap

It takes vast amounts of nonrenewable resources to substitute renewable ones for

them. As long as the traditional, primarily nonrenewable resource- based sector
dominates the economy, it will successfully bid away these resources from the
substitution sector. Once a nonrenewable resource becomes scarce and its price reaches
the level at which the production of its substitute becomes profitable, the capacity to do
so at significant levels will prove to be inadequate. The “own-demand” of the substitution
sector for nonrenewable resources has been undersupplied.

The vulnerability of the substitution sector

In order to build up the substitution sector it must be protected against random

developments (e.g., economic fluctuations, discoveries of nonrenewable reserves,
improved efficiency in their use) and manipulation by interest groups whose aim is not to
solve long-run economic problems but to maximize the value of the particular
nonrenewable resource under their control. To ensure a certain degree of autonomy for
the substitution sector, its development ought to depend on its own endogenously driven
growth potential. It must feed on its own internal economy. Its material-substituting sub-

25
sector would have to use wind or solar energy; its renewable energy sub-sector would
need to depend on renewable materials. While it is extremely unlikely that an
autonomous green base would come about and spread spontaneously, delivering the “Big
Push” appears to be outside the parameters of current economic institutions.

If the world has defied the odds so far, disputes over equity will do it in

Let us say that pure economic and organizational obstacles have been overcome
by a confluence of luck, unforeseen flexibility of business and government to develop
new schemes of cooperation, and a series of technological breakthroughs. But here comes
the abyss of inequity. Once the green resource base begins to constrain global output,
disagreements about whose output, why and how long, and under what conditions, would
squelch transition in ferocious geopolitical brawls.

The problem of peak oil, which is beginning to haunt the world, is the most
important concrete illustration of the impossibility of reaching the transition’s tipping
point under the current system of incentives and thinking.

(5) Oil – The “market” may have already dropped the ball1

Contemporary discourse concerning the potentially enormous problem of dealing

with peak oil overlooks the “own demand” of substitution. It takes a lot of oil to
substitute for oil. A closer look reveals that the structural gyration of historical
proportions associated with the process is up to its chin in the stuff.

Oil flowing into the economy splits into two branches: The first is called “current
production” and the second (a relatively new one) is earmarked “for the substitution
process.” The substitution branch also splits into two: energy (e.g., geothermal, bio, wind,
solar, etc.) and material (renewable agricultural products and abundant nonrenewable
materials). These two sub-branches are locked into a system of “internal” (“intra-
substitution branch”) demand. The entire enterprise of eliminating global subjugation to
King Petroleum will be successful if increased flows of energy and materials from the
substitution sector into the current use sector overcompensate for the reduced flows of oil
into it.

As of now, the replacement of oil is not gaining ground. The implication is worse
than mere stagnation. The U.S. Department of Energy (DOE) warns of severe negative
economic fallouts unless a crash program of mitigating the effects of the peak is
undertaken 20 years before it occurs. A little familiarity with peak predictions (clustering
between 2010 and 2020, skewed toward the lower limit of the range) shows that the
world has already missed its cue. DOE predictions also show that, despite the beating of
drums, the ratio of renewable sources in the world supply of energy will barely change
between now and 2030. It will remain close to, but below 10 percent. In its savage
appetite for economic growth, the world blindly ingurgitates energy resources;

1
This section repeats almost verbatim my article entitled “Global Substitution for Oil; Learning by Doing
Ourselves in,” published in the Energy Bulletin on June 26, 2007.

26
dependence on oil is on the rise. From a distant future perspective, our civilization may
well appear demented. It accelerates even after being told that the paved road ahead will
soon end, to be followed by an unknown and dangerous terrain. Any way we look at it,
global energy policies (if the brew of divergent and conflicting national and transnational
corporate aspirations qualifies for the concept) clearly fall short of any “peak oil minus
20 years” crash program.

The spontaneous, market-force generated growth of the substitution sector -- a

small green island in the Black Ocean -- is far from being assured. Current upward ticks
in oil prices (the long shadow of the approaching peak), to be followed by peak- and
post-peak real shortage-driven secular price increases could curtail the élan of the world
economy. The stagnant business atmosphere would then engulf the substitution sector. If,
as a result of some unforeseen circumstances, the substitution sector spreads, that
phenomenon itself could slow the world economy.

Green limits constrain and redirect market exuberance. If they were to dominate
the world economy, they would slow and stop the present drive toward global
industrialization. Yet the growing billions who suffer from a deficit of material welfare
want to industrialize in the coming decades -- no matter what.

The following transpires from a recent report of the International Energy Agency
(IEA): A cumulative investment in energy-supply infrastructure of over $20 trillion in
real terms over 2005-2030 would be needed to satisfy the growing global demand for
energy. It is highly dubious that all this investment will actually occur. Capital formation
in the oil and gas sector in real (inflation-adjusted terms) has been stagnating since 2000.

This remarkable phenomenon gives us an ominous hint about the limitations of

the market (“as is”). Current oil prices should have already prompted massive flows of
investment capital into the energy sector. Are we witnessing the emergence of a never
before seen failure of the market’s famed anticipatory prowess? Is this problem simply
too big to be solved by unflinching insistence on “hands-off, dirty price-spoiler”
neoclassical micro-mentality? If considerably higher prices of oil are needed to coax out
the required investments (even under the current financial conditions of a “global savings
glut”) then the cause will never produce the desired effect the way encrusted folk
economics ensures us it always must and must always. Further increases in the price of
oil (even as a 3-year moving average) would dislocate the world economy. Then who
would provide the record capital investment needed to safeguard future economic
progress?

It is not difficult to see that the broadly defined substitution process can be
successful (i.e., demand for and supply of oil declines as the demand for and supply of
substitutes increase) if, and only if, the substitution branch becomes an autonomous and
expanding center through the infusion of creative energy and will. The cycle of
dependency must be broken within the substitution branch. For example, increased output
in solar energy will have to depend increasingly on the use of materials made of natural
and synthetic fibers and the production of these fibers would have to entail increasing

27
amounts of solar energy. But this self-reinforcement is an act of creation, not a
spontaneous development.

Significant substitution away from oil through “business as usual” (i.e., “just
leave it to the market”) is no slam-dunk. It is more will-o-wisp. Placing all our hopes in
an undirected, random, natural selection-like evolution of economic activities to develop
the oil-substituting green sector must eventually give way to a belief in human creativity;
in the possibility of remaking the world in the image of a new logos, a yet to be
discovered rationality.

***
The philosophy and practice of decentralized and uncoordinated decision-making
in resource use is blowing the world on the wrong tack. Transforming the structure of the
global resource base, while simultaneously constraining its size, is not a task that “free
markets,” as understood by contemporary economic libertarians, can accomplish.
Restraint at the prevalent imbalance in material wealth is bound to spark disagreements.

The global society (it is time to discover it!) will need a 100-year plan to manage
its transition to a sustainable, green economy. Of course, the word “plan” sounds negative
if not frightening to most people because it recalls bad memories about state regulations,
political surveillance, shortages, and misdirected economic development. Nevertheless,
the development experience of the past century hints at a possible optimum in using
public authority to coordinate objectives and means. The plan appears to be a usable
instrument when it is applied to drawing resources into the economy, which explains the
early successes of socialist growth performance. It proved to be a miserable failure to
improve living standards through satisfying consumer needs. But here we are talking
about ensuring an adequate flow of resources rather than telling a firm how many
sweaters it should produce during the next five years.

Naturally, this advice will not be taken to heart right away. Clear facts derived
from immediate experience will have to convince the world that concerted precaution and
coordination is the way to go. But make no mistake; those facts and experiences are on
their way.

Predicament and Hopefulness -- Concluding thoughts

The thermodynamic predicament embedded in the human condition transpires in

two cardinal ways: (1) Self-empowerment (i.e., cultural evolution) is self-endangering
and (2) an all-embracing macrohistoric pulsation accompanies world history (the general
text of cultural evolution).

Cultural evolution entails the dissipation of resources upon which it is physically

predicated. As the human race strengthens itself through its sheer size and scientific-
technical-economic might, it undermines the conditions required for the continuation of
this process. Over the long run, escape from decline (cultural devolution) and chronic
instability (unstable disequilibrium) is possible only through capturing low-entropy

28
matter (i.e., material resources abundant in free energy) from outer space. During the next
few centuries, the mining of the moon and the terraformation of Mars are the two most
realistic projects in this domain of human endeavor.

Concerning the second manifestation of the predicament, given that billions of

humans are organized by subsequent global systems, which are necessarily rigid in their
fundamental aspects, history’s long rhythm (the alternation of relative steady states and
chaotic transitions) is a physical inevitability. We are all engulfed in this unfolding. The
array of interventions to change the course of history is part of this comprehensive and
unconscious process. For example, the communist movement, whose adherents believed
they were ushering in a new and improved world order, ended up helping to define the
parameters of reformed capitalism.

Current conditions and the direction of history as a physical process indicate the
approach of a new chaotic transition. Pollyanna, who now speaks to us through vector
calculus-wielding political economic zombies, dismisses it on practical and ideological
grounds. Cassandra, who never forgets to send grim postcards from the future, tells us
about some bottomless darkness that is about to swallow mankind without reprieve. In
their own respective ways, both these extreme views disparage the potential of human
reason and adaptability.

Do not despair!

No lesser power than the “insatiable hunger for existence” allied with the
“extravagant fecundity of world will” (to use Nietzsche’s words) underwrites a more
intelligent and noble day after tomorrow.

29