Energy and the Rise and Fall of Political Economy

Energy and the Rise and Fall of Political Economy

Energy and the Rise and Fall of Political Economy

Energy and the Rise and Fall of Political Economy


The First and Second Industrial Revolutions were about energy: steam power revolutionized 19th-century Great Britain and electric power revolutionized 20th-century America. Yet political economy, the science of wealth born of the First Industrial Revolution, is devoid of energy, focusing instead on machinery or capital. According to basic mechanics, tools per se are not productive, as they are not source of energy. This book uses basic mechanics and thermodynamics to reexamine the rise of political economy as the science of wealth in the 19th and 20th centuries. The study shows that the failure of generations of political economists to incorporate energy into their models of production and distribution has led to the unfortunate state in which economics currently finds itself. With the inclusion of energy, important insights result. For instance, the Solow Residual in both 19th-century Great Britain and 20th-century America disappears.


Tout ce qui traîne se salit

--French proverb

Political economy as an intellectual endeavor is relatively recent, its history extending back to the early nineteenth century. It is generally held that its origins owe in large measure to a technological innovation, namely the introduction of complex machinery in the late eighteenth/early nineteenth century. Hand tools were replaced by power (machine) tools (Berg, 1980). In this book, it will be argued that while this is an accurate description of the origins of political economy, it is incomplete. Missing is the role of energy innovations, specifically, the steam engine in the nineteenth century and the electric motor in the twentieth century, in the birth of, and growth of political economy. With the advent of steam-powered machinery, inanimate, fossil- fuel-based energy replaced animate muscular energy as the source of power/work. Overall energy consumption increased dramatically as did output and conventionally defined labor productivity. This seemingly trivial substitution, I argue, is what underlies the increased interest by early nineteenth century moral philosophers in the issues of wealth creation.

It will be argued that by focusing on energy instead of machinery, important insights result. For example, there is the problem of growth, both output and conventionally defined productivity. It will be shown that energy in general, and energy consumption in particular are at the root of the first and second industrial revolutions. Rising labor productivity throughout the nineteenth and twentieth centuries, I show, is intimately tied to energy deepening. Another is the role of energy rents in the problem of income distribution. By substituting animate, muscular energy with inanimate fossil-fuel-based energy (i.e., fire . . .

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