“Our economic and financial system is based on assumptions of continued growth. Currently growth is highly dependent on energy and a surplus thereof as provided by high EROI energy sources. Our available energy sources, however, are providing less and less energy returns on the amount of energy we put into them. Therefore the amount of surplus energy available is declining. Thus, given the dependence of growth on energy, growth will decline too. The little remaining health of our financial systems, however, relies heavily on assumptions of continued growth and rather high ones at that, but those assumptions will increasingly turn out to be false if Boyd’s prediction of declining EROI is true”.
Great article on the link between society’s diminishing energy return on energy investment and the current economic and financial crisis. A must-read for all austerians and post-Keynesians. This time it IS really different.
See on www.resilience.org