Hall: “Most production models of economics are not based on these biophysical laws and principles; in fact, they tend to ignore them.”
For decades mainstream economics has been able to ignore the significance of energy in shaping economies because oil has been cheap and easy to find and extract. Charles Hall tells The Mint why oil is not well and how science has many of the answers but technology alone does not.
US ecologist Charles Hall does a good line in a withering condemnation of modern economics. He says the discipline “lives in a contrived world of its own, one connected only tangentially to what occurs in real economic systems.” He offers what he casts as a more realistic take on economics that is based on scientific principles. “I worked on the concept that most economics is bullshit,” he tells The Mint.
Hall, trained as a natural scientist, aligns with the school of biophysical economics – an approach to economics governed by natural scientific principles rather than the social “scientific” thinking in which it is currently framed. In a 2001 paper he said: “the wealth that is distributed in the markets must be produced in the hard sphere of the material world where all operations must obey the laws and principles of physics, chemistry, and biology. Our concern is that most production models of economics are not based on these biophysical laws and principles; in fact, they tend to ignore and often break them.”
Hall’s challenge to conventional economic thinking had a breakthrough when, In 1981, he made front page news in the Wall Street Journal with a short academic paper – “some of the best four pages I’ve done” – in which he forecast that oil drilling was declining in efficiency and could cease to be a net producer of energy in the US by 2000.
The point that made the news was not that that oil could cease to be, but that it could cease to be of any value as an energy source. Hall wrote: “The time at which domestic petroleum will no longer on average be a net fuel for the nation is not when all the wells run dry but rather at some point before that time when the energy cost of a barrel of oil is the same as the energy in that barrel,”