Created Tuesday 27 March 2018
2 Curves - Concept vs. Reality
Mind vs. Body
I am going to make a rather slow and simplistic beginning to our journey of exploring the End of Growth through the incongruence see between Economics (Concept) and Energetics (Reality). The incongruence in the way in which we define Money Growth vs the reality of Peak Oil (energy availabity) and the reasons for Financial Collapse.
This is necessary as we need to revisit a lot of basic principles that we take for granted. Only by tracing that path, can we begin to understand the non-negotiable predicament that we, in the modern industrial world, find ourselves in.
So we start at a time far in the past of civilization. That is when a certain Concept took root in our minds and we have built upon that Concept ever since, to the point that it literally took over every aspect of our Reality. It is the concept of Money and the idea that Money must grow with time.
But before we get to that, let us look at how Concept and Reality interact in general.
Our mind comes up with a Concept. But to execute it in Reality we have to put our body to use.
For instance, our mind comes up with the concept to lift up a glass of water. And our body can move a hand to do it. The Concept can be fulfilled by Reality.
Next, our mind may suggest that we lift a chair. And our body can lift that chair too. Again Reality can match the Concept.
But what if our mind came up with the concept of lifting a school bus – with just our body of course? The Body can try but it will not be able to do it. The Concept has failed.
In short, the Mind can come up with any concept but it is not necessary that the Body could or even should fulfil that in reality. There are limits to bodies but maybe not to minds. Respecting limits is something that Civilization has collectively baulked at in a peculiar celebration of the symbolic over the real.
Concept vs. Reality - Shape of Concept Vs Reality
Let us say our mind comes up with a Concept of the growth of a given quantity that is increasing in a manner that looks like the graph on the left. As you can see, the quantity increases slowly at first but then increases faster and faster with each step. And this goes up forever. This type of growth, which becomes increasingly faster with passing time, is mathematically called Exponential Growth
I have deliberately chosen this curve as it represents the behavior of one of the most important concepts in our Modern Industrial World, namely money.
The Concept is sky-reaching – INFINITE.
The right graph is the shape of Reality. It is a measure of how much the Body is able to deliver to make that Concept happen, because remember: our mind can come up with any Concept but the Body eventually has to deliver. This curve starts at zero, goes up sharply to reach a peak and then decays to zero. This shape is called a Bell Curve.
Once again this curve is not arbitrary, as we will see shortly, and it represents the shape of a lot of things in Reality, especially Oil.
So Reality is bounded and FINITE.
In other words, the left curve is what the Concept expects, which is infinite. And the right curve is how much the Body can give, in Reality, which is finite.
Now you can clearly see that the Body is behaving differently from the Mind and may not be able to give what the Concept expects. And that is going to create serious problems of expectations. That is exactly what we are interested in examining. The Mismatch between Concept & Reality
Let us move the 2 curves onto one graph so that we can compare their shapes more closely. Though there is an obvious mismatch between our Concept and Reality, it is interesting and important to understand there are similarities too at certain times.
PHASE 1 – Paradise Times
In this phase, up to point 1, the Reality Curve moves parallel to the Concept Curve. This means it does behave like an exponential curve and keeps pace with the Concept.
This means that Reality in this phase is able to live up to the expectations of the Concept.
The Growth of the quantity is TRUE. No wonder we are all happy and we call it Paradise Times.
PHASE 2 – Body Withers
Beyond point 1 and up to point 2, the Reality Curve stops behaving like an exponential curve and is not able to keep pace with the Concept Curve. Look at the right graph and you can see Reality tapering off and slowing down.
The Concept can be said to be showing some signs of failure in Reality.
The Growth of the quantity is therefore FALSE.
We will see later that this failure results in a withering of the Body that was trying to live up to the Concept.
PHASE 3 – Concept Withers
Beyond point 2, the Reality Curve in fact goes in a totally opposite direction to the Concept Curve and returns to zero.
In other words, whatever your Concept was, it has TOTALLY failed!
Growth is IMPOSSIBLE.
We will see later that this failure results in the inversion of the very Concept itself. So growth in fact becomes shrinkage.
To understand this in real terms, it is time to draw an analogy with an example of a Concept and a Reality that you can relate to.
The Coach and the Runner
Let us examine the relationship between Concept (Mind) and Reality (Body) through the example of a Coach and a Runner.
This example is selected to highlight the hazards of exponential thinking especially in the context of the finiteness of performance of a human body. The coach expects results based on a purely mathematical model, while the runner is enticed by the stunning though unreal prospects of performance. Following this example will help us understand how a Concept Curve and Reality Curve evolve and then interact.
The Coach has a Concept which he claims can make you, the Runner, run at the speed of sound in just 18 months.
“How is that possible?”, you wonder.
He explains, “Can you run at 10 km/h?”
“Yes, of course, that is slightly faster than walking”.
“After one week, can you run 7% faster at 10.7 km/h?”
“After one more week, can you run 7% faster at 11.45 km/h?”
“And after 3 weeks, can you run 7% faster at 12.25 km/h?”
“Well, that is my Super Concept. Every week you run 7% faster than your speed of the earlier week – nothing more, nothing less. And in 18 months you will break the speed of sound”.
You look at the chart, but after 10 whole weeks, your speed has reached only about 20 km/h from 10 km/h. Hardly a “Super Speed Chart”. Besides, the speed of sound is 1,225 km/h. That is 1,000 km/h more. “How can I reach the speed of sound?”, you ask.
He gives a cocky smirk and says, “But just see what happens every 10 weeks after that”. You notice something amazing. Your speed is doubling every 10 weeks as in the chart below:
See how it shoots up after the 10th week. Moving faster and faster to the sky.
It suddenly dawns on you how it works. What the Coach has just described is an exponential curve. When the Super Coach is making you run 7% faster than your new speed, it means that your speed is compounding. It is increasing by a greater amount each week. This means your speed is increasing exponentially. This means it doubles every 10 weeks!
Indeed, compounding is a Super Concept. And that is how in just one and a half years, if you keep up the exponential trend, you will be running at the speed of sound and more!!!
No wonder you agree to his training. BUT, wait a minute! What will be the fees? And he says, “NOTHING”.
How come? “Because”, the Super Coach says, “I am going to recover that from the sponsors who I have sold this Super Concept to. In fact, I will pay you some money out of the sponsorships. Howzat?”!
Too good to be true and you hop onto his Super Coaching Program.
PHASE 1 – Paradise Times
In the first week, he makes you run at 10 km/h as planned. That is just slightly faster than walking!
Then at the end of the first week, he wants you to run 7% faster at 10.7 km/h. And of course you can do that. It is only a small increase.
Then at the end of the second week, you are running 7% faster of 10.7 km/h and that is 11.45 km/h. And so on, as per his Super Chart.
So for 10 weeks you are able to keep up with his set speed and at the end of the 10th week you have almost doubled your speed from 10 km/h to 19.67 km/h. You don’t feel any stress. Your body is able to cope with this exponential trend of increasing your speed.
And therefore, because your body is able to cope with the Concept, all is well. Your Coach is happy and your Sponsors are thrilled and paying you large amounts of money for your achievements.
These are Paradise Times. You are eagerly waiting to hit the speed of sound.
PHASE 2 – Body Collapse
Starting Phase 2 the following week, you notice that you could only increase your speed by 6 % and not the 7% that your coach expects.
The coach will have none of this and he pushes you harder the next week to make up for the lost performance.
But in the next week, your body can only improve your speed by say 4.5% as opposed to 7 %.
Super Coach does not tell the sponsors about the difference between REALITY and CONCEPT and so the SPONSORS keep looking at his Super Chart posted in their offices and blindly continue betting on you with higher stakes.
Super Coach pushes you harder still and yet your body does only 2.8% better in the 15th week.
You start feeling mentally stressed and focus strictly on training, avoid social contact and secretly start taking steroids to artificially boost your performance in an attempt to match your coach’s expectations.
The coach intensifies his training each week and you increase your steroid dosage but the speed percentage only decreases. Your body begins to show obvious signs of breakdown. The more your coach reproaches with structured torture, the more you push, the more your body withers.
The next week, there is only a mere 1.5% increase in speed. Horror of horrors! In fact, your rate of improvement itself is slowing down from 7% to 6% to 4.5% to 2.8% to 1.5%. In other words, you are getting faster… but at a decreasing pace! Unseen to you, your body is crumbling now at a catastrophic pace because of the added mental and physical stress, and of course, the steroids.
Yet all this while, the coach keeps the sponsors blissfully unaware of your real performance and they are busy selling tickets to your Super Show of breaking the speed of sound. They are only aware of your performance for the first 12 weeks and that has convinced them that this is how the trend is going to be forever. So everyone’s perceived financial gains continue skywards as per the left curve of Concept but your performance is tapering off as per the right curve of the Reality of your body.
And now you reach the end of Phase 2 – the top of the Reality Curve. You clock 0% increase that week!
You are running the fastest you ever have but with a body propped up with steroids and no increase in speed.
The Reality cannot be concealed any further. Your SPONSORS hit the ceiling as they discover that your COACH has not been sharing the reality – the slowdown of your improvement. In a messy showdown your sponsors withdraw.
This is a double whammy. On the one hand your body is a wreck. On the other hand the huge amounts of money the sponsors have already paid are a write off. Any possible future gains evaporate and your financial world comes crashing down.
You realize that you are collapsing both from the outside and from within. In Mind and Body. In Health and in Wealth. In Concept and in Reality.
PHASE 3 – Concept Collapse
You are at the peak of your performance, at the top of the Reality/Body Curve. From now on, it will obviously be downhill, because the more stress and steroids you take, results, in fact, in a decrease of your performance. Because that is how the Body behaves. Clearly you are in a crisis.
You have to make a choice.
How the future pans out in Phase 3 depends on what changes you make in your paradigm and the choices you make. But if you were to ask me, this is what I would say.
You must do 2 things at this point in time.
- Kill the Concept. Namely sack your Super Coach and abandon his crazy concept of eternally increasing your speed exponentially because that is just his Mind insisting on an infinite Concept.
- Save your Body. Stop taking the steroids immediately, or you will die prematurely because you have to deal with the limits of your Body.
I know what I would do, but then again, the choice is yours. It is your body.
The Actual Concept & Reality
After the analogy of the Coach and the Runner, we come to the Actual Concept and Reality that this book is about.
This time the Concept is Money.
And Reality is all known Resources on our planet.
This time the Mind is the Financial System and the Body is that of Mother Earth.
This time we let the Mind of the Financial System come up with a Concept and we will take everything from the Body of Mother Earth to fulfill it.
That Concept is money and money must grow.
Then why did I give the example of the Coach and the Runner if we were going to talk about Money and the Earth?
To understand this, we have to first change our perception of the Earth significantly from what our industrial mindset has engrained in us. The Earth is not a huge, inanimate hunk of mud, rock, ores, minerals, etc. that can spew out resources at whatever rate we wish for human purpose alone. It is not to be viewed as a storehouse of resources for us to extract, loot and dispose of. That is the classical, rigid and narrow viewpoint of a culture called Industrial Civilization. The same culture that revels in being the most advanced but finds itself mired in a domino effect of crises.
The Earth in fact is a complex organism. It is as living as each of us. We are merely a part of it like everything else on it. Everything is intimately connected to make the whole organism work. The Earth in fact is a body just like our runner. It is living.
This was no great news to the primitive and indigenous people who have walked gently on the Earth for tens and hundreds of thousands of years before civilized man appeared on the scene. The Red Indians, the Pygmies, the Yanomamo, the Eskimo, the Adivasi and innumerable other indigenous cultures all the way back to hunter/gatherers, derisively called primitive, always perceived every part of the Earth as a single living whole – the rivers, the clouds, the wind, the rain, the soil and even the rocks and mountains. And that is the reason why they treated it with humility, reverence and a sense of gratefulness. This, in turn preserved the Earth for so long in its awesome grandeur and beauty – the original and true Garden of Eden.
Then came along a totally different kind of culture called Civilization. This culture proved to be diametrically opposite to all others before it. With its peculiar worldview of ownership, Civilization, starting with agriculture (last 10,000 years) and then building up to the Modern Industrial Civilization (last 150 years), has efficiently destroyed much of the living planet in an ecological blink of the eye. It treated the Earth, our mother organism, as a one-time, exploitable and disposable source of goodies that are needed to run our financial system, meaning to make money grow.
With money growth as our ultimate objective we take all kinds of health capital from the Earth and pass it through our single-minded and destructive industrial system to convert it into financial capital. That is the sole purpose of the Modern Industrial World.
It is only when we perceive the Earth as a single living organism that we get a new insight into the stresses we are putting on the Earth’s Body by our habits and insistences. And this perspective automatically defines LIMITS – something that modern economics does not believe in.
In the same way that everything needed to achieve the Super Coach’s Concept for the Runner came from the Runners body, everything that has to make the Financial System work has to come from the Earth’s Body. And all bodies are limited. Yet Modern Economics, much like the Super Coach, does not believe in limits.
We need to delve further into the impacts of this brutal version of concept and reality that that is actually a clash of economics vs energetics.
In order to be able to evaluate the mismatch between money and energy and the implications of it on our idea of perpetual exponential growth, we need to revise what is meant by Economics and what is meant by Energetics.
So let us start first with an examination of the principles of Economics.