Soddy’s name sometimes pops up as well in Ecological and Environmental Anthropology (not sure about Economic Anthropology) as contributing to the ideas of energy flows through systems, maintenance costs, etc.

I had no idea that they were the same person!

Problem is.. 36 to 1 is probably not asking high enough leverage in the first place. Didn’t Carlyle Group and others go upwards of 60 and more?

http://en.wikipedia.org/wiki/Loan_shark

Does anyone want to try comparing the math on loan sharks vs banks at $36 lent for every $1 of assets? I loaned out my calculator.

he foresaw the energy potential of atomic fission as early as 1909. But his disquiet about that power’s potential wartime use

I wonder how ecological economists (Soddy? others?) would direct the trillions our Treasury has slucied towards the banksters?

(and I bet the society he expected when all 5 prescriptions were implemented wouldn’t be spending it as we seem to be….)

Ecological Economics
(http://www.sciencedirect.com/science/journal/09218009)

(the auto link thing is not working again when I check it, so just the URL)

Though some may think it gives too much respect to neoclassical economic ideas.

If you’ve had some college econ and thermodynamics, the following article is very readable, and runs down where the analogies hold and where they don’t. The differences between neoclassical assuming a circular flow with no attention to energy balances, 2nd law, temperature, and irreversability, as opposed to thermodynamics that does pay attention to those details, are discussed.

Is neoclassical microeconomics formally valid? An approach based on an analogy with equilibrium thermodynamics.
Tânia Sousa and Tiago Domingos
Ecological Economics
Volume 58, Issue 1, 10 June 2006, Pages 160-169

Bottom line is that some of the math has same structure, but the content and the correspondence between the marks on the paper and measurable quantities in the real world are completely different.

The authors say that you should do two simultaneous systems, one for the econ relationships, but these must obey a thermodynamic laws, which implies that the circular flow is a crude simplification that must be made more realistic now, with possibility of resource exhaustion and high probability of global warming kicking in. They can be modeled as two simultaneous systems, with the thermodynamic model being an source for the ‘circular flow’.

Economists have paid attention to energy balance since before the 1973 oil crisis, and 2nd law, by building ad hoc models where we need to get more and more production out of fewer and fewer available resources. But I don’t know of any attempts to do emprical work based on it. I am not sure we know how to integrate the very simple aggregate production and cost functions used in economics with energy input that can be measured.

I don’t know if I agree with number 5. But it is true that debt must be limited, particularly debt generated through leverage, in order to keep economy stable and from going into weird disequilibrium states that it cannot recover from you. But you don’t need thermodynamics to show that. Funny that economists, especially financial economists, conveniently paid no attention to that before 2007, even though it was known at least ten years ago.

This kind of talk will be the death of capitalism, or our financial system, whichever comes first.