Politics is Downstream of Energy

The politics of energy austerity will soon get very ugly

It is fashionable these days to claim that “politics is downstream of culture”. It is as though a bunch of twisted academics and gullible politicians insisting that men can become women and everything is racist are having a significant impact on the great arc of human history. Even though these ideas have undoubtedly had some minor impact on society, in the grand scheme of things they are as irrelevant today as those who once believed the Earth was the centre of the universe. It is a sad sign of the narcissism of our times that these people think the world revolves around them and they have forgotten what really matters and overlooked the big forces that have driven political change in the world.

The second law of thermodynamics teaches us that entropy, or disorder always increases. We use energy to slow down that trend and create temporary order in our world to tame nature. Prior to the industrial revolution, energy came from the wind, the sun, wood and food. 50-80% of GDP was required to gather energy and produce food for people (see Figure 1 from Day et al).

Figure 1 - UK Share of GDP Needed for Fuel and Food (Source - John and D'Elia Day et al)

As Figure 2 (from Our World in Data (OWID)) shows us English GDP and UK CO₂ emissions per capita were relatively static from 1800 to 1830 (OWID do not show energy use so far back, so emissions have been used as a proxy).

Figure 2 - UK GDP vs CO2 Emissions 1800-1914

As the Industrial Revolution took hold, emissions and energy use per person rose nearly four-fold, leading to GDP per capita more than doubling by 1914. Increased mechanisation led to fewer jobs in agriculture, but an increasing number of better paid jobs in skilled trades. Arguably, the availability of cheap, abundant energy enabled the Slavery Abolition Act to be passed in 1833 and the British Empire had sufficient surplus of energy, men and money to afford a Royal Navy to enforce the ban in the North Atlantic.

By 1867, the increasing wealth of the burgeoning middle class led to the extension of the voting franchise and by 1884, roughly two in three men had the vote. In the aftermath of WWI, the franchise was extended to all men over 21 and to women in 1928.

Surplus energy meant that as the proportion of GDP used for basic subsistence fell, more time and effort was freed up for innovation and the development of art and culture. The invention of the internal combustion engine and after that, the jet engine revolutionised transport, making it easier to transport people and goods across the world. The invention of refrigerators, washing machines, dishwashers, microwaves and vacuum cleaners transformed domestic chores, making it easier for women to participate in the workplace. Of course, all these inventions needed energy too and so energy demand continued to increase as the developed world got richer and lived longer, more comfortable and less physically demanding lives. Cheap, abundant energy led to societal transformation and political development.

A careful look at Figure 1, shows that society-level energy return on energy invested (EROEI or EROI) grew from about 5 in the 17^th century to about 30 at peak in the late 20^th and early 21^st century. As discussed before, EROEI matters. Low EROI means that a larger amount of society’s effort is geared towards the basic subsistence tasks of gathering energy and growing food. High EROEI means much more time and effort can be devoted to higher pursuits.

Unfortunately, the expansion of energy and wealth can lead to complacency and we collectively forget what it was that allowed us to create the most prosperous society the world has ever known. Bad ideas like Malthusianism can flourish and luxury beliefs that undermine the very principles on which society was built can begin to take over. We have people like those mentioned above who can live off the fruits of their ancestors’ endeavours yet do nothing themselves except increase entropy and disorder. The very same people who would have us believe a bloke in a dress with a Gender Recognition Certificate is a woman, also try to kid us that a wind turbine with a Renewables Obligation Certificate is a dispatchable power station. In the name of saving the planet, we are being forced to give up on concentrated, reliable energy and energy supply is dwindling as shown by the orange line in Figure 3 below. We are being forced to move backwards to high-entropy, diffuse sources of energy like wind, solar and wood pellets so societal EROI is falling.

Energy prices have risen as supply has fallen through a combination of taxes on hydrocarbons, subsidising expensive renewables and incurring the extra costs of intermittency and remote connections. As a result, energy consumption is falling and the economy is stagnating as shown by the blue line in Figure 3 (data sourced from OWID).

Figure 3 - UK Real GDP vs Energy Use per Capita 1990-2023

The economy grew steadily from 1990 to 2006 and energy consumption was relatively constant at about 44,000kWh per person per year. Gains in efficiency allowed the economy to grow even though energy consumption was stable. However, since then the economy has grown much more slowly, as energy consumption has fallen by around 35%. This has created a “wealth gap” so we are about $18,300 worse off per person and the economy would be 36% larger if we had continued growing at the same trend rate as from 1990 to 2006.

We should be under no illusion that there will not be significant political impacts from this energy austerity. We can see this if we think about the fundamentals of money. The earliest forms of trade involved exchanging goods and services directly through barter. As trade became more complex, commodities with intrinsic value like grain or salt became money. Eventually, metals like gold, silver and copper became money because of their durability and divisibility. However, it takes labour to make goods or provide services; labour is work and work requires energy. In this sense money represents energy. Even the high-end services of today like accounting, law or share trading rely upon the accumulated energy in buildings, roads, computers and so on to function.

The impact of reduced energy consumption will be slow at first as the assets and wealth accumulated over the 200 years of the industrial revolution take time to dissipate or be sold off. But as energy becomes scarcer and the disorder in the low-EROEI energy system rises, the fruits of the energy revolution and society itself begin to decay and we might expect disorder in society to rise too. A stagnant or contracting economic cake likely means civil unrest will rise and crime will become more widespread. In effect societal entropy increases as energy consumption falls.

Governments might try to maintain living standards through borrowing. This is already happening, with money printing, large deficits, debt to GDP ratio flirting with 100% and rising bond yields making it more expensive to borrow. If we think about borrowing in terms of a mortgage, you take out a loan to buy a house and then work to produce income to pay back the loan. On a societal scale, government borrowing will eventually have to be repaid through taxes generated from work. But as we have seen money is effectively a representation of energy, so if our energy production falls, we will do less work and generate less income to pay the taxes to repay the borrowing.

This is particularly important at a time of growing global tensions. The UK and EU have committed to rearming by increasing defence spending. However, as our steel industry collapses we will not have the capability to make armoured vehicles. Without chemicals we cannot make explosives for munitions or fertilisers to feed ourselves. Neither the UK nor the EU have committed to increasing energy supply. As

Doomberg

has pointed out, a bomb is nothing more than stored potential energy unleashed in a concentrated form upon an enemy. To produce a bomb, you need to either create that primary energy or pay for it in exchange for equally valuable services. Or you can print funny money for a short period of time and trick people into thinking that your IOUs are money good. The latter is what the EU is currently doing.

This is not sustainable and governments will soon find that you cannot print energy. We should not under-estimate the scale of societal disruption that will occur as our energy supply declines. Unless we rapidly change course we are heading for a monetary and energy system reset.

As we saw above, cheap, abundant energy, transformed society, delivering unprecedented prosperity and positive political change. We have moved into an era of energy scarcity and devalued money. If we continue down this Net Zero path, we will soon find that political change from energy austerity gets very ugly, very quickly. The recent countrywide blackouts in Spain and Portugal are an important warning of where we are heading. Thankfully, the Reform Party has already ditched Net Zero and there are signs that the Conservative Party has abandoned Net Zero targets. Even Tony Blair has cottoned on that Net Zero policies are “doomed to fail”. We can only hope the Labour Government reverses course before it is too late. Both politics and culture are downstream of energy.

---

This Substack now has over 4,000 subscribers and is growing fast. If you enjoyed this article, please share it with your family, friends and colleagues and sign up to receive more content.