By the way, there is already an ongoing discussion to this topic.

The World Economics Associations Web Conference

"Conference on the political economy of economic metrics"

28th January to 25th February, 2013

The Paper: Energy as the Numéraire of any Given Economy

http://peemconference2013.worldeconomicsassociation.org/?paper=energy-as-the-numeraire-of-any-given-economy

Hi George,

yes I think we both agree quite a lot in this point. You know Reiner Kümmels work? (The Second Law of Economics: Energy, Entropy, and the Origins of Wealth). He discusses the importance of energy in the production process which is much bugger than the average normal cost only implies.

And you final remark can be underlined with one comment, that the only "renewable" source of labor is an "energy harvesting machine" for getting renewable energy from wind, sun etc. - or our very own energy from own own body work. Other sources of energy (all kind of fossil fuels) are just something like a huge stock pile which we constantly using up.

Ok, I have to say: In physical words there can never be a reproduction of energy - but I think in economics the workers can be described as a "continouisly running source of labor" (in fact the worker get their energy from the food ... which gets the energy from the sun (vegetables) or from animals (meat) ...

The interesting point is that there is no way for the total macroeconomy of doing some kind of "more" economic activity without more use of energy - as I would say.

The big flaw of the neoclassic theory is that there is no integration of this fact into the theory itself. It looks like a perpetual moving machine.

And in our financial reality the only guy try to "proove making money" are the guy moving around electric signals with a lot or zero numbers ... while they think they "do some kind of productive work".

I would say they fail to do that. It is, in my point of view, a clever way of printing money and take a big part of it for their own personal use without others recognizing it. It is a smart way of having a good life at the end ... without doing anything really productive. ... I would say.

Thanks also for this reply!

I really think that there is one very important basic mismatch of the economic theory of today. It is not at all linked by definition to the real world.

It is like talking about the "weight" of the products having only a ruler for measuring centimeters.

The basic unit for "one single part of any given economy" is not at all defined. Using money for describing the processes inside of an economy is more or less possible - but not the right way.

The right way is to define exactly what the core characteristic of "an economy" is like, setting a defined unit and a given scale for it, and then we are in the game of measuring.

I very well know that economic theory doas not ask this question today. There were these discussions - Schumpeter did it, Karl Marx did it - and much more also.

The only problem was at the time of these guys there was no real understanding of the nature of energy, what that means in physical words.

And I think that was the reason why they did not get the right answer of the question of "what is one part of an economy" and "what is the unit and the scale for it".

Thanks again for your good comments.