Collapse is highly probable out come given our current socioeconomic system. If we want to avoid a collapse, or failing that, be able to rebuild after a collapse we need to be proactive in building an alternative, sustainable, socioeconomic system.

The Collapse is Coming

It looks like we are heading for a collapse. Millions of species could go extinct [1, 2, 3] as global warming reeks havoc of our environment. Scientist have been warning of this for decades [4], yet we haven’t actually done anything about the problem [5, 6, 7]. Yes, we have made some token efforts but what we have done so far is like painting the facade of a rotting building green. Looks good but doesn’t actually do anything about the problem.

This heading to collapse should make a lot of people who want an alternative, sustainable, moneyless, socioeconomic system happy. Shouldn’t it? After all, the argument goes that we will be unable to build such a sustainable, socioeconomic, system without a collapse as the current system will act in such a way as to prevent any other system from emerging. Jacque Fresco used to be quite fond of this argument [8]. 

But this all could depend on what we mean with “collapse”. A collapse could just be an economic phenomena like the Great Depression in the 1930s. But it could also be more severe than that such as Easter Island, Mayan, or the collapse of Anasazin (Ancestral Puebloans) society [9]. These latter collapses are more of interest than a financial collapse like the Great Depression. The Great Depression resulted from one part of the system collapsing where as the collapse of the Mayan civilization, Easter Island, and the Anasazin society all involved environmental factors; the inhabitants overexploited the environment. “Over-exploiting” the environment is more like what we are doing today. So, any potential collapse will most likely be similar to the collapse of these societies. 

That brings up a problem; the societies that collapsed with the environment as a contributing factor did not recover. Not in themselves. People from outside the areas moved into those areas, like Easter Island, or they remained abandoned, such as the towns of the Anasazi. And we, on our planet, do not have an “outside”, that can move in. So, if we actually achieve a collapse then we could be looking at the end. That is to say, a situation that we can not recover from. That would mean that in looking to build a moneyless, sustainable, society post-collapse we run the risk of ending up in a situation where we do not have the ability to build such a society. That means that we need to be a bit more proactive. 

Building for the Future 

Proactive in two ways; first in preventing a collapse as it does not really serve ours or anyone’s best interest to wait for a collapse. Second, on failing the first, we need to sow seeds from which we can start building a better society. 

What we can do is form groups to preserve what we can and build up communities that are sustainable as much as possible. I like to think of this as the “Alien Planet” idea. Imagine living on an alien planet, like Mars, where the environment is hostile. The type of community we would need is one that can manage its own resources within the bounds of the community; grow its own food, manage its own waist, for example. Like a space colony. As much as possible. This could be done on a small scale like grown your own food in your garden or having a small hydroponics set up. It could be also done on a larger scale, like building a community with its own land. Next we would have to network these groups together. The more we have, the more people, the more land, the more we can do and the more we could support each other. The idea is laid out in The Design [10] and is called stepping-stones. 

Stepping-stones would set seeds if a collapse was to happen but, ideally, it will allow for the evolution towards a new sustainable, moneyless, society. It would allow us to test ideas out and to experiment. However, it still doesn’t deal with the problem that we could face of a system that would work against moving to a sustainable socioeconomic system. For that, I think, we need to be proactive in another way; politically. 

We do not advocate a “revolution”, nor the over throw of any government but doesn’t mean we can’t participate in the political processes of a democracy. There are opportunities to form pressure groups and even political parties or just to be members of political parties to influence the debate and movement toward a sustainable society. In other words, take part in society. We could even participate more in social media with more videos, articles, or fund raisers but I think this is only worth while if it leads to action on the ground (all talk and no action!). 


We are heading for disaster and if that was to occur we would find it difficult if not impossible to recover and to build a sustainable, moneyless, society. If we are to build such a society then we need to be proactive. At the end of the day, if we fail to achieve a sustainable society, we only have ourselves to blame.

About the Author 

Andrew Wallace is a former director of EOS. He has a PhD in Artificial Intelligence and Robotics. He is a former University lecturer and currently works as a consultant.







[6] How to Stop 30 Years of Failing to Cut Emissions  



[9] “Collapse”. Jared Diamond. Penguin Group. 2005.

[10] The Design. EOS.

 Dr. Andrew Wallace BEng(hons) PhD EurIng

Thermoeconomics: The use of Exergy in Alternative Socioeconomics


As our current socioeconomic system does not have a sustainable nature thus, it will collapse. This paper presents an alternative to today’s system that utilizes exergy as a common accountancy unit for a sustainable resource base socioeconomic system.  An item’s cost, in terms of exergy, reflects the physical cost of the item. The system utilizes management techniques such as optimisation, Life Cycle Analysis and Cost Based Analysis to produce items efficiently and minimize their exergy and environmental cost.

Read more: Thermoeconomics: The use of Exergy in Alternative Socioeconomics


Our current socioeconomic system comes with a number of attributes that results in the system having an unsustainable nature.  The system uses a fiat money system; where banks create money, out of nothing, which they then lend out. The borrowers then pay back the money with interest. Thus our money supply takes the form of debt and we always have more debt in the system than money due to the need to pay interest and for companies to acquire profit. “Beneath” the world of economics lies the actual psychical system of resources, production and goods which we use the money system to regulate. However, the money does not represent a physical variable of the system. Instead it has a subject nature.  The fiat nature of our money system and its disassociation form the physical world necessitates and allows the system to drive constants exponential growth. However, no physical system can sustain exponential growth. Although banks can create money ad infinitum, the physical world cannot keep up and our system with either collapse, change over to an alternative sustainable system or we will “cut back” the system through wars, disease, famine or other natural disasters to allow more growth.

Other reasons for the unsustainability of our current system included the dependence on finite energy sources such as oil and nuclear power as well as the liner form of production we use (from resources to production to disposal) rather than a sustainable cyclic system (from resources to production to recycling / reuse to resources) [Ekins, GowWal].

This paper presents and alternative, sustainable, economic system  using exergy as a foundation.

Economic systems as a resource allocation system

Economic system represent a type of resources allocation system. In an economic system we have a set of resources, R, and set of production facilities, P, which produce a set of goods, G, used for consumption. Such a system requires energy to run. Actually, the system requires a set of energy producers that make available a supply of usable energies (exergy), Ex. People (H), though demands for goods, then drive the system.

The system then becomes:

Where D represents the demands and M the manufacturing capacity to meet those demands. We can regulate such a system using variables that represent the state of the system. Exergy forms one such variable. 

Exergy as a common accountancy unit

The term “exergy” refers to the usable energy for a physical system and follows from the second law of thermodynamics; we cannot full change heat to work. Energy comes in different forms such as potential, chemical, kinetic and electrical energy. Not all forms of energy have the same potential to produce work. We can convert electrical energy completely to work  but cannot convert heat energy fully to work [Wall].

As any socioeconomic system requires energy to work we can measure how much available energy (as exergy) we have  and that will give us a measure of the system’s ability to produce.

A socioeconomic system not only needs energy but also materials. We can also use exergy as a measure of materials. This follows from the materials having a chemical potential. Thus, the exergy, Ex, we have becomes:

In addition, information can also have an exergy value. This follow from the application of statistical mechanics and information theory where we can define a particle as have one bit of information.

As we can use exergy to measure usable energy, materials and information that a socioeconomic system utilises, exergy, therefore, forms a common accountancy unit for any socioeconomic system.

Exergy has an additional property of use for a socioeconomic system; exergy has a relationship to the environment. The greater the difference a system exhibits between itself and the surrounding environment the greater the exergy becomes. Thus ice in the tropics has a higher exergy value than ice in the Arctic. Heating has a higher exergy cost in the winter than in the summer [Wall].

As exergy forms a common accountancy unit and has a relationship to the environment we can use exergy as a control variable for a resource allocation system such as a socioeconomic system.

Overview of an Exergy Based Socioeconomic System

A socioeconomic system based on exergy becomes a resources allocation system where we would have a system that uses state variables to control the system. The system would use exergy to measure the production cost of an item so each item produced would have a cost that reflects the physical cost of that item rather than a subjective monetary value. A society would also have a certain amount of exergy available for the production of each item and the processes that go into maintaining and running society. The resource allocation problem then becomes one of allocating exergy to production based on the user initiated demand for goods and the maintenance requirements of the system. We could do this through calculating how much exergy we would have available for the system, within a given time period, as a whole allocate x amount for the system maintenance and large common projects then distribute the remainder equally among the user base as “Energy Credits” (EC). The ECs effectively represent production capacity and the users can then allocate  EC to production to acquire personal items.

Management of the Resource Allocation System

The resource allocation will need management to efficiently control the system and to minimise production and environmental damage, if we wish to have a sustainable system, as well as determine the cost of an item.
Figure 1. Macro-economic model of an exergy based socioeconomic system

G = goods M = materials E = energy / exergy Ec = Energy Credits

Determining an item’s cost

Physical variables determines the cost of an item in the presented system rather than the subjective valuation of a (free) market. We express the cost in terms of exergy so each item has an exergy value giving the amount of exergy consumed in the items production. We can use Life Cycle Analysis (LCA) as a method for determining an items cost.

The term LCA refers to a method of determining the processes and their impact for the production of an item from the beginning of production until the disposal of the item. From the acquisition of the raw material to the production of the parts to the production of the final item and then later the disposal of the item. LCA assess the contribution to environmental damage and resource depletion but it could also recode how much exergy the process of producing an item consumed at each stage. How much in acquiring the raw materials? In transporting the parts? In producing the whole? and in disposing of the item?

LCA analysis begins with defining goals and boundaries for the study. It then goes on to perform an inventory analysis. During the inventory analysis the assessors collect data on the system for the items production as well as model the whole process.

After data collection, the assessors evaluate the impact of the process in various categories. We can then evaluate these impacts and determine the  actual physical cost in terms of exergy for a given item.

Cost Benefit Analysis

Cost Benefit Analysis forms a technique for assessing the pros and cons of the production of a item. Normally, a CBA states the costs in monetary terms. For a socioeconomic system based on exergy the CBA would use exergy as the unit of cost. This gives a more objective assessment as exergy directly relates to the physical state of the system, whereas money does not [RahDev, Owen]. Also, the use of exergy enables the assessors to fully assess the costs of an item as all benefits and cost would utilise the same accountancy unit. So, for example, the environmental impact  would have an exergy cost which would lead to a more realistic assessment of costs compared to a monetary based assessment where assessors can ignore much of the environmental cost if it doesn’t have any direct money value (such as if the polluter doesn’t have to pay).


Management of the system aims to minimise impact on the environment and maintain a sustainable system. To do that, the management process would need to optimise the production of goods so that production  use the minimum amount of materials and energy for the maximum amount of life expectancy. [Fran]

The optimisation problem involves a set of functions to optimise and a set of boundary criteria. An exergy based socioeconomic system would have the optimisation functions:

maximise life expectancy (L)

minimise material and energy (exergy cost)

Where and represent the optimisation functions.

Subject to the follow constants:

within the limits of the available energy and material supply as well as environmental impact (I).

For example, an item car, requires a certain amount of material of a given type; steel, aluminium or plastic. Each possibility for construction has a certain cost for production in terms of exergy; exergy using in extraction of the raw material, referencing and production of the base material as well as transportation. Each material will also have an associated life expectance. So, the optimisation problems comes down to maximising the life expectance for the minimum exergy cost such as a plastic construction might have a lower exergy cost but shorter life expectance than steel and aluminium might last longer than steel but have a higher exergy cost. At some point we would have the optimal material for a given cost.

Engineers have a variety of optimisation methods available, which include the following:

1. Calculus (max and min)
2. Pinch method
3. Convex optimisation

Calculus (max and min)

Calculus forms the basic method for optimising functions through first and second derivatives to find the maximum or minimum point of the function.  Engineers could use calculus to find the point of maximum life expectancy and the points of minimum material and exergy usage as well as minimum environmental impact.

Pinch method

The pinch method forms an example of a widely used optimisation method, specially adapted for heat energy systems and engineers use the method of optimising large scale industrial processes [Pinch]. Two phases compose the pinch method; an analysis phase and a synthesis phase.

The analysis phase involves the collection of data form measurements of the actual system and simulations. The analysis phase also uses site expertise to validate the data. From the data, engineers develop models of proposed changes. They then assess the impact of the proposed changes. The analysis phase involves iteration around a loop.

The synthesis phase aims to effect actual improvements in the system.

Convex Optimisation

The term convex optimisation refers to a set of techniques which includes least square fit and liner optimisation. Once defined as a convex problem, engineers can often find the solutions for optimising a certain criteria within given limits using well known methods such as  solving simultaneous equations.


Our current socioeconomic system does not have the property of sustainability and, therefore, will collapse. If we wish to maintain a good standard of living then we will need to find an alternative to our current system. This paper presents one such alternative.

A socioeconomic system represents a form or resource allocation where we allocate raw materials to the production of goods. Such a system forms an example of a physical system. We can control such a system through measuring the physical variables of the system. Exergy forms a common accountancy unit for such control as exergy measures not only the usable energy of a system but we can also measure the materials in the system as well as information with exergy. The system would then need management to maintain the system in a state of dynamic equilibrium within the limits nature imposes to keep the system sustainable.

Items produced would have an associated exergy cost to produce that item. We can use LCA and CBE (in exergy terms) to evaluate an item and determine its exergy cost. Energy Credits (ECs) represent the production capacity in terms of exergy. Citizens could then allocate ECs  to production to acquire items they want.

Managers and engineers would use various optimisation methods to assess the optimal production method for required items. They would aim to minimise environmental impact through minimised material and exergy utilisation as well as maximising life expectancy.  For optimisation, we can use exergy as a common accountancy unit for  assessing both the benefits and costs of production in more realistic terms than a  money based approach.


[Ekins] Paul Ekins, (2006), THE FUTURE OF SUSTAINABLE DEVELOPMENT, in Dimensions of Sustainable Development, [Eds. Reinmar Seidler, and Kamaljit S. Bawa], in Encyclopedia of Life Support Systems (EOLSS), Developed under the Auspices of the UNESCO, Eolss Publishers, Oxford ,UK, [] [Retrieved March 12, 2010]

[GowWal] John M. Gowdy, Marsha Walton ,(2008),SUSTAINABILITY CONCEPTS IN ECOLOGICAL ECONOMICS, in Economics Interactions With Other Disciplines, [Ed. John M.Gowdy], in Encyclopedia of Life Support Systems (EOLSS), Developed under the Auspices of the UNESCO, Eolss Publishers, Oxford ,UK, [] [Retrieved March 12, 2010]

[Wall] Göran Wall. Exergetics.

[ RahDev]SM Osman Rahman, Stephen Devadoss, (2005), ECONOMIC ASPECTS OF MONITORING ENVIRONMENTAL FACTORS : A COST-BENEFIT APPROACH, in Environmetrics, [Eds. Abdel H. El-Shaarawi, and Jana Jureckova], in Encyclopedia of Life Support Systems (EOLSS), Developed under the Auspices of the UNESCO, Eolss Publishers, Oxford ,UK, [] [Retrieved 5 February, 2010]

[Owen] Anthony D. Owen, (2004), ENERGY POLICY, in Energy Policy, [Ed. Anthony David Owen], in Encyclopedia of Life Support Systems (EOLSS), Developed under the Auspices of the UNESCO, Eolss Publishers, Oxford ,UK, [] [Retrieved 5 February, 2010]

[Fran] C. A. Frangopoulos, (2004/Rev.2008), OPTIMIZATION METHODS FOR ENERGY SYSTEMS, in Exergy, Energy System Analysis, and Optimization,[Ed.Christos A. Frangopoulos],in Encyclopedia of Life Support Systems(EOLSS), Developed under the Auspices of the UNESCO, Eolss Publishers, Oxford ,UK, [] [Retrieved 12 March, 2010]

[Pinch] Pinch Analysis: For the Efficient Use of Energy, Water and Hydrogen. ISBN: 0-662-34964-4

Exergy for Resource Accounting


A hi-tech society utilises energy, materials and information. Such a society utilises automation as much as possible to reduce work thus in such a society in becomes useful to use a measure of energy for resource monitoring and allocation. The article looks at the exergy concept as a way to measure energy utilised, materials and information for a hi-tech resourced based economy such as one that uses an energy accounting system. 


Since its beginning, the technocracy movement has advocated a thermodynamic interpretation of economics [Tec]. This comes from foundation works in thermodynamics and the works of Professor Soddy [Sod] .

In thermodynamics, we can model all processes as converting energy from one form to another and in the process generating work or forming structures of low entropy. Nothing gets done without the conversion of energy. We lose no energy but we done change the form of the energy and as we do so the resulting energy forms have less use [YoFr].

Although originally scientists developed thermodynamics for heat engines such as steam trains the laws of thermodynamics have much wider application. We can apply them to the human body and to society as a whole and to information [Cha, Geo]. It was from this realisation that the technocrats in the US used thermodynamics as a way to interpret economic and resource allocation system.

Since the 1930s science has progressed and a number of concepts have become unified in a thermodynamic understanding. For example, we can understand information as a form of entropy as well as economics and social history and life (as processes that try to maximise low entropy).


Entropy measures a negative concepts; disorder or the uselessness of energy. The higher the entropy the more the disorder and the less use we can obtain from a given quantity of energy. We can look at this another way and measure the amount of useful energy we have; the negentropy or exergy [Wall]. The term “Exergy” means external energy; its a measure of our ability to do work. Our ability to do work has a dependence on the environment. For example, if we have a high temperature difference between a heat source and the outside world we can gain more work than if we have heat at a lower temperature and if we had heat at the same temperature as the surrounding environment we could get no work out of it. Thus, exergy has a relationship to environment and a relationship to value. Ice in the desert has a higher exergy content and thus higher value. Ice in the Arctic has low exergy and low value.

The entropy concepts allows us to capture a number of other concepts in thermodynamics such as Gibbs energy and Helmholz energy which measure useful energy in relation to heat and heat and pressure reservoirs. We can also measure exergy content of materials through measuring the Gibbs energy in relation to the environment form of a material and the concentration of that material.

We can extend exergy to measure information. Entropy was linked to information in the work of Shannon [Sha]. The more states a system has the greater the potential the system has for storing information and, thus, the more useful the system from an information perspective. Thus a system with high information potential has low entropy or high exergy. The information potential also has a link back to the environment as known information (information that matches the environment) has no value but information that differs from the environment (from what we know) has value.

Exergy and resource accounting

In energy accounting we measure the production capacity, in terms of energy, we have for personal use and then divide that with the number of people we have. We then issue Energy Credits (ECs) to each person for them to allocate to production. In the system we produce and then consume energy credits. Actually, we really measure the amount of useful energy used in production not the energy itself; we measure the amount of exergy consumed in production.

A resource allocation system,however, does more than just allocate energy for production; it also allocates materials. Each item produced takes a certain amount of raw materials to produce it and this needs taken into account when managing the system. Exergy offers a way we could do this in common with energy used in production. In using exergy as a measure we not only measure more closely what we do in production but also have a common unit to measure the materials used as well. As a hi-tech society not only consumes exergy but also utilises information, exergy also gives us a common unit of measure for measuring information. Thus exergy gives us a common unit of measure for energy usage, materials and information.


As we can use exergy as common unit for energy usage in production and materials as well as information the exergy concept becomes a possible accounting method for a energy accounting system or a resourced based economy.


[YoFr] “University Physics”. Young and Freedman. Addison Wesley

[Wall] “Exergetics.” Göran Wall. Bucaramanga 2009

[Geo] “The Entropy Law and the Economic Process”. Nicholas Georgescu-Roegen. Harvard University Press. 1971.

[Cha] “The Physical Foundations of Economics”. Jing Chen. World Scientific Printers. 2005

[Sha] “The Mathematical Theory of Communication” C. Shannon. The Bell Systems Technical Journal. 27, 379-423, 623-653.

[Sod] “Wealth, Virtual Wealth and Debt” George Allen & Unwin. Frederick Soddy. 1926

[Tec] “Technocracy Study Course”. M. King Hubbert et al. Technocracy Inc.