Economy

The Economy

The living world, the biosphere, has a natural cycle of production and consumption, the natural economy, which is powered by the energy of the Sun. Each organism passes through a life-cycle of birth, growth, maturation, senescence, death, decay, and renewal which contributes to the sustainability of the community of life as a whole.

The human economy operates on natural resources, referred to here in simple terms as energy, materials, water, food, and ecosystem services. Of these natural resources it is energy that is the driver of all activity. Energy derived from the natural economy is used to power the cycle of extraction, processing, distribution, consumption, and disposal of resources as goods and services that is the human economy.

Historical background

The history of the human economy is a rich tapestry interwoven with societal evolution, technological advancements, and the ebb and flow of resources and wealth. From its humble beginnings in ancient civilizations to the complex global networks of commerce seen today, the human economy has been a driving force in shaping the world we live in.

In ancient times, economies were primarily localized, with goods and services exchanged through barter systems. Agriculture played a central role in early economies, as communities relied on farming and animal husbandry to sustain themselves. The emergence of organized societies led to the development of early forms of currency, such as shells, beads, and precious metals, which facilitated trade and enabled the growth of more sophisticated economies.

The rise of empires and trade routes, such as the Silk Road and the Trans-Saharan trade, connected distant civilizations and facilitated the exchange of goods, ideas, and technologies. The ancient Greeks and Romans made significant contributions to economic thought, with philosophers like Aristotle and Cicero pondering the nature of wealth, value, and the role of the state in economic affairs.

The Middle Ages saw the emergence of feudalism, a system characterized by land ownership and obligations between lords and peasants. The expansion of trade and banking in medieval Europe laid the foundations for the rise of merchant guilds and early forms of capitalism. The Renaissance period brought about a renewed interest in commerce and innovation, with the development of banking institutions, stock exchanges, and maritime exploration leading to the age of exploration and colonization.

The industrial revolution of the 18th and 19th centuries heralded a new era of economic transformation, as mechanization and mass production revolutionized industries such as textiles, transportation, and manufacturing. The rise of capitalism as a dominant economic system fueled rapid economic growth and industrialization in Western countries, but also led to social inequalities, exploitation of labor, and environmental degradation.

The 20th century witnessed the devastating impact of two world wars and the Great Depression, prompting governments to adopt interventionist economic policies to stabilize economies and promote social welfare. The emergence of new economic theories, such as Keynesianism and neoliberalism, shaped economic policy-making and debates on issues such as inflation, unemployment, and economic growth.

The post-World War II era saw the establishment of international financial institutions like the International Monetary Fund and the World Bank, aiming to promote economic cooperation, development, and stability on a global scale. The digital revolution of the late 20th and early 21st centuries transformed the way economies operate, with the rise of e-commerce, digital currencies, and global supply chains reshaping the landscape of economic activities.

Today, the human economy is more interconnected and interdependent than ever before, with global markets, multinational corporations, and digital technologies driving economic growth and innovation. However, challenges such as income inequality, climate change, and geopolitical tensions continue to shape the economic landscape and present complex policy dilemmas for governments and businesses alike.

In conclusion, the history of the human economy is a testament to the ingenuity, resilience, and adaptability of human societies in the face of changing circumstances and challenges. As we look towards the future, it is imperative that we learn from the lessons of the past and work together to build a more sustainable, inclusive, and equitable economic system that benefits all members of society (AI Sider July 2024).

Natural economy

All life is powered by energy that is derived ultimately from the Sun. Plants capture the energy of sunlight during photosynthesis and this is stored in plant tissues as chemical energy. This energy is taken up by other organisms when plants are eaten as food, and it then passes through the food chain.

Because plants are at the base of the food chain they are known as primary producers and, a such they support the rest of the biological world with other organisms the consumers. This biological energy is eventually dissipated as heat, but before it does so, it passes through the organic cycle of production and consumption. The entirety of materials and processes that maintain this cycle of life is called the natural economy.

Human economy

Running within the natural economy, and totally dependent on it, there is the human economy with its production, consumption and distribution of goods and services.

Humans, like all other creatures, are dependent on the primary production of plants to provide the life sustaining biological food energy required for ourselves and our livestock. Powered by this energy we can then access further resources – water, materials, and other organisms that are among the ecosystem services needed to maintain the human economy.

Hunter-gatherers of Natura made use of the natural economy with minimal use of energy and materials, but as human numbers increased, along with technological expertise, so the human economy made increasing demands on the natural economy vastly accelerated when the energy of domesticated plants and animals during Agraria was supplemented by the energy of fossil fuels that greatly accelerated energy and resource consumption during Industria. Our initial need for food gathered from the wild has turned into industrial agriculture. Our need for shelter has turned into the building and construction industry. The advantages of mobility have become modern transport systems. The need for water has turned into dams, pipelines, irrigation systems and treatment plants. Raw materials have been harnessed for manufacturing.

During Informatia, the demand on the natural economy has impacted on global biogeochemicals, including chemicals crucial to life – water, carbon dioxide, oxygen, nitrogen and phosphorus – a human-induced change in the biosphere that has been indicated by the designation of a new epoch, the Anthropocene.

Natural economy – Historical background

The relationship between humans and nature is fundamental to the existence and functioning of our planet’s ecosystems. Throughout history, humans have relied on nature and its resources for survival, sustenance, and economic prosperity. Plants, in particular, have played a crucial role as natural capital in sustaining human life and supporting economic activities. This intricate interdependence between humans and nature highlights the concept of the natural economy, where nature provides vital ecosystem services that contribute to human well-being and economic development.

Plants are essential components of the natural economy, serving as sources of food, medicine, shelter, and raw materials for various industries. From ancient civilizations to modern societies, plants have been integral to human life, providing nutrition, healing properties, and materials for construction, clothing, and fuel. The domestication and cultivation of plants, known as agriculture, marked a significant milestone in human history, enabling settled living patterns, population growth, and the development of complex societies.

Plants as natural capital play a crucial role in sustaining ecosystem services, which are the benefits that nature provides to humans and other organisms. Ecosystem services can be classified into four main categories: provisioning services (such as food, water, and raw materials), regulating services (such as climate regulation, pollination, and water purification), supporting services (such as nutrient cycling and soil formation), and cultural services (such as spiritual and recreational benefits). Plants contribute to all these categories of ecosystem services in various ways.

One of the most important provisioning services provided by plants is food production. Agriculture relies on plants as primary producers, converting solar energy into biomass through photosynthesis. Crops such as grains, fruits, vegetables, and legumes are cultivated for human consumption, providing essential nutrients and sustenance for populations around the world. The diversity of plant species also contributes to food security and resilience in the face of changing environmental conditions and pest pressures.

In addition to food, plants are a valuable source of medicinal compounds used in traditional and modern healthcare systems. Many pharmaceuticals are derived from plant extracts, highlighting the importance of plant biodiversity in maintaining human health and well-being. Furthermore, plants provide materials for the production of textiles, wood products, biofuels, and other industrial goods, supporting economic activities and livelihoods.

Plants contribute to regulating ecosystem services by supporting biodiversity, controlling erosion, and sequestering carbon dioxide from the atmosphere. Forests, wetlands, and grasslands play a critical role in climate regulation by absorbing and storing carbon, mitigating the impacts of climate change. Plant roots help stabilize soil structure, prevent erosion, and improve water infiltration, enhancing soil quality and water purification processes.

Pollination is another crucial regulating service provided by plants, facilitating the reproduction of many flowering plants and crop species. Bees, butterflies, birds, and other pollinators play a vital role in pollinating plants, ensuring fruit and seed production for food crops and maintaining biodiversity in natural ecosystems. However, the declining populations of pollinators due to habitat loss, pesticide use, and climate change pose a significant threat to plant biodiversity and food security.

Supporting services such as nutrient cycling and soil formation are essential for maintaining the productivity and resilience of ecosystems. Plants absorb nutrients from the soil, recycle organic matter, and contribute to the nutrient cycle in terrestrial and aquatic ecosystems. Root systems help improve soil structure, increase water retention, and promote microbial activity, enhancing soil fertility and ecosystem health.

Cultural services provided by plants include aesthetic, spiritual, and recreational benefits that contribute to human well-being and quality of life. Gardens, parks, and natural landscapes offer opportunities for relaxation, inspiration, and connection with nature, promoting mental and physical health. Plants have significant cultural and symbolic meanings in diverse societies, reflecting human values, traditions, and beliefs.

Despite the vital role of plants in sustaining human life and ecosystem services, the natural economy is facing increasing threats from anthropogenic activities, such as deforestation, habitat destruction, pollution, and climate change. The loss of plant biodiversity, degradation of ecosystems, and disruption of ecosystem services pose significant challenges to global sustainability and human well-being. Conservation efforts, sustainable land management practices, and policy interventions are crucial to preserving plant resources and enhancing the resilience of natural ecosystems.

In conclusion, the natural economy highlights the intricate relationship between humans and nature, emphasizing the indispensable role of plants as natural capital in supporting ecosystem services and human well-being. By recognizing the value of nature’s contributions to economic development, health, and cultural diversity, we can promote sustainable practices that conserve plant resources, protect biodiversity, and ensure the long-term resilience of ecosystems for future generations. Investing in the conservation and restoration of plant diversity and ecosystem services is essential for building a more equitable, resilient, and harmonious relationship between humans and nature in the natural economy (Sider July 2024).

Key points

• All life is sustained and powered by the energy of the Sun

• The Sun’s energy is stored in plant tissue during photosynthesis

• Plant tissue provides the food energy that powers biological metabolism and biological activity

• Plants are at the bottom of the food chain and, as the planet’s life-support system, are called primary producers

• The activity of living organisms is generated by biological energy

• For humans, that party of biological energy used for social activity is called social energy so both biological and social energy are used to drive activity directed at collective or social goals

• Social activity can be increased by either using existing forms of energy more efficiently or by finding new forms of energy

• Biological energy, especially that used for our muscles, is made more efficient by the use of tools. Tools leverage the available energy and they may be either physical (technology), or mental (planning, use of mathematics etc.)

• Historically, to achieve social goals, biological energy was supplemented not only by tools, but by additional sources of energy – like fire, wind, and flowing water

• Only in 19th century Europe was the full potential of the concentrated energy available in fossil plants (coal, oil, gas), a cheap and plentiful source of energy that, when combined with technology (heavy machinery), launched the Industrial Revolution

• It is social energy (mostly fossil fuels derived from ancient plants) that powers the synergies of social organization that enhance the modern human economy, the social metabolism, of resource extraction, production, distribution, consumption, and disposal

• Today, in Informatia, the challenge is to find ways of minimizing the environmental impacts of social metabolism (climate change being just one of these) a major step being the transition from the social energy of plant-based fossil fuels to renewable social energies like wind, solar etc.

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First published on the internet – 1 March 2019