Submitted to the Conference on the Economics of Peace

Submitted to the Conference on the Economics of Peace

Sonoma, CA conference held Oct. 18-23, 2009
Bill Gough (based upon his previous writings)

Comments on Transforming Money, Rebuilding Community, and Redefining Wealth

GDP & Open Cycle Economics

World population is estimated by the United Nations to increase from 6.5 billion in 2005 to 9.2 billion in 2050 (United Nations, 2008). The U.S. Census Bureau predicts that the United States population will rise from the 304 million in 2008 to 439 million by 2050 (Swift, 2008). When I was attending grade school at the time of the Great Depression the U.S. population was 132 million. World population increase is a driver behind the increasing problems we face and we can not continue increasing population for long at the current rate.

However, the root structural cause underlying the global environment and security problems is the fact that ecology has become a subsystem of the economy. This occurred because the world is operating an open cycle economic system in which resources are extracted from the earth to enter the cycle and exit as wastes. The entire system has been powered by polluting energy sources. Each person in the USA is producing 4.5 pounds of garbage per day. Only 1% of the wastes we produce in the United States are being recycled, the other 99% is trashed in six months. For every can of garbage we produce, 70 cans are produced upstream in the production process. (Leonard, 2008). Even when material is recycled it eventually downgrades due to the buildup of chemical impurities. Then it is down-cycled to a lower purpose, such as filler material, and eventually becomes a waste (Hawken, Lovins A., & Lovins L. H., 1999, p.79). In this open cycle economy there are only three sinks for the waste material to be deposited. They are the air, water, and soil -- the life support systems for planet earth.

The citizens of our world need to become aware of the environmental, security, economic, and social implications of continuing to use an open cycle economic system. Nature operates as a closed materials system powered by a clean energy source, our sun. The human species cannot continue to operate and increasingly expand an open materials economy within Nature’s closed materials system, and power this expansion with polluting energy sources. In fact if the developing world models our open materials economy and our lifestyle, we would require three to five additional planet earths (Leonard, 2008).

Humans need to develop the technologies necessary to close our materials cycle. In addition we will need to adjust our current economic system. Economists now use the term “ecological economics,” in the past this was called “closed cycle economics,” or “stationary-state economics” (Daley & Farley, 2004; Daley, 1991; Boulding, 1973). In our current open cycle economics great emphasis is placed upon increasing the Gross Domestic Product (GDP). GDP is the total market value of all final goods and services sold in an economy in a particular time period. It is a measure of economic activity. Hence, the GDP indicates how fast we can push “things” through our open-ended system.

However, GDP is flawed as a measure of economic and societal wellbeing. Much economic activity does not improve quality of life – for example, low quality products, natural disasters, and war. In fact, GDP increases when we pay the costs of pollution, the costs of crime, and the economic losses from natural disasters like Hurricane Katrina. GDP also excludes volunteer activities, elder care by family members, etc. Even worse for our future, GDP does not measure the sustainability of growth. This can’t continue since we are already observing the first negative effects of operating and growing as an open system while living inside of Nature’s closed system -- earthship Earth (Robins, 2008; Mack 2006).

To achieve growth in the GDP the open system fosters planned obsolescence. How many of you have noticed that things tend to fall apart after a few years? It also encourages perceived obsolescence – the promotion of new clothing designs and new car styles, something we have come to expect and anticipate. In a closed cycle economy the pressure is to minimize the recycling costs. Growth would be fostered in intellectual pursuits, the arts, music, and social activities. Financial rewards through a more equable distribution of wealth would need to evolve – society is beginning to recognize these needs, for example the efforts to increase teacher’s salaries to strengthen our education system (Gough & Eastlund, 1971; Daley, 1991). At the present time the statistics of GDP are guiding this Nation rather than values. Society is paying a price for the focus upon growing the GDP.

Alternative indices are being proposed that account for societal and environmental factors related to real human development. We need this “Enlightened Economics!” For example, Friends of the Earth support the Index of Sustainable Economic Welfare (ISEW) (Friends of the Earth, 2008). Other indices being proposed are the Genuine Progress Indicator (GPI), the UN’s Human Development Index, etc. (Robins, 2008). An urgent need exists to settle upon a new measuring index that can help guide our leaders and citizens. The GDP can still be calculated but it should no longer serve as the guide to national policy. It was a tool developed over 60 years ago to measure our increase productivity during World Was II and has lost its appropriateness as the driving index for society in the 21st century. Its principal creator Simon Kuznets cautioned that “the welfare of a nation can scarcely be inferred from a measurement of national income” (Wikipedia, 2008).

Need to Close the Materials Cycle

I believe that we will need a true holistic approach to the problems that we will face in the future. The issues that societies will encounter in this evolving future are so interconnected that new technologies need to be developed to address the overall problem not just a single topic. The approach would be to develop technologies that returns us to the closed materials cycle inherent in Nature.

Paper #1 below is for the layman. It covers the overall issues involved -- resource depletion, pollution buildup, national security, and economic changes and how they are related. Paper #2 that I authored with Dr. George Miley of the University of Illinois was published in an American Nuclear Society (ANS) journal and focuses upon the more technical aspects of an Inertial Electrostatic Confinement (IEC) fusion torch system. Note that there are short term applications for using fusion plasma technology that could yield near term financial benefits to investors.

  1. Paper for the layman: A Route to Ecological Sustainability
  2. Paper by George Miley: The IEC Fusion-Plasma Torch - A Path For Closing The Materials Cycle

Our End Goals

The following 300-word write-up describes our end goals:

The world is facing a myriad of man-made environmental problems that threaten our future. At the heart of the environmental problem is our injection into Nature of vast numbers of molecular structures and alloys. At the same time the natural sources of many basic materials are rapidly being depleted. With dwindling natural resources and growing waste piles our fundamental challenge is to close the materials cycle in an environmentally compatible way before escalating shortages lead to global wars as nations vie for remaining resources. Our approach focuses upon the fact that Nature has at its foundation only 92 fundamental elements. What we term environmental pollutants and wastes consist of molecular structures that have been created out of these 92 elements. To eliminate environmental problems our pollutants and wastes need to return to their original state., then these elements can be used or reconstructed into new products for society.

For example, we propose a revolutionary solution to do this that uses the ultra-hot plasma generated in a fusion-temperature plasma device to completely vaporize and dissociate materials into ions, which can be separated and collected as pure elements. We employ an environmentally friendly fusion fuel that is neutron-free -- a proton-boron fueled (p-B11) fusion power plant using Inertial Electrostatic Confinement. The extraction of the ultra-high temperature plasma for the fusion torch represents a unique capability of fusion-technology. The physics basis for starting on this process already exists. NPL Associates, Inc., a small high-tech company in Illinois, specializes in advanced energy source research, and is a leader in proton-boron fusion development. Recent research has progressed to the point where a clear development path can be identified for achieving the proton-boron fusion plant. Funding for fast-track development is about $80 million to achieve a small demonstration fusion-torch recycling plant in 6 years.

William C. Gough
Los Altos, CA

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