The Third Curve ~ A New Lens to Understand our New Economic Reality
This article was originally published by Mansoor Khan, Accessed October 2018 REPRINTED WITH PERMISSION
A New Lens to Understand our New Economic Reality
Financial markets are under threat. Growth rates are dropping.
The age-old remedies prescribed to boost economic growth are proving ineffective, if not outright dangerous.
Ten years after the 2008 global financial crash, nothing seems to work as per projections.
But what if the rules of the game have inverted?
What if economic growth is eluding us for a reason that we have discounted all this while?
What if there are indeed limits to growth?
Yes, the Modern Industrial World stands at a crucial and unavoidable turning point. The sacrosanct paradigm of modern economics, namely perpetual growth, is in the process of ending. Our economic growth model makes 2 simple yet amazingly unreasonable assumptions:
1. That money is the currency that runs the world. In fact it is energy.
2. That we have limitless energy other resources on a finite planet.
These assumptions appeared to hold true for the last 150 years – the first half of oil reserves. But now we are about to begin the second half of the story of oil. This half-way point of oil is an unprecedented point in history and is called Peak Oil. Peak Oil is not an ideology but an aspect of geology – the point of maximum oil extraction from the earth.
This geological limit is what defines what will be economically possible in the future starting right now. The global economic collapse of 2008 was the advent of this turning point because past the peak we get only less oil. Therefore less industrial and economic growth. This spells doom to the religion of perpetual economic growth.
This book is NOT directly about morality, justice, equity, environmental consciousness and other noble human values. It is about the head-on collision between:
Our total acceptance of an infinite economic growth model which is not possible.
Our total denial of the finiteness of the earth which is evident.
We need a new lens to understand this inversion of economic reality. The Third Curve provides us that lens.
It identifies the root cause of the malady by reminding us of the forgotten relationships between money and energy, capital and resources, concept and reality.
And that forces us to accept energy descent which mean end of growth as a natural and healthy paradigm.
Perpetual Growth - the biggest global religion – is both impossible and a disease.
It is impossible because it needs infinite energy and resources.
It is a disease because it will kill everything if we chase it.
And we are chasing it.
This is exactly the ideology of a cancer cell.
Peak Oil & End of Growth - Understanding Energetics, 25 October 2014
A 1 hour presentation that covers that basic argument of my book 'The Third Curve - The End of Growth as we know it'. It explains from an Energetics perspective that perpetual Growth is both impossible and in fact the definition of Cancer.
The presentation shows the incongruity between an exponential definition of money growth that we have defined from our mind and the reality of resources and mainly fossil fuels that follows a bell curve.
This way we get introduced to a new discipline called Energetics which is energy accounting as opposed to Economics which is money accounting. And as energy is the fundamental currency of the universe, we need to understand its behavior and the pitfalls of only doing money accounting which can be manipulated at will leading to the delusion we see in the financial and industrial world today.
Over time this leads to a fundamental deficit that we are facing since we hit Peak Oil in 2005.
The more we try to overcome this deficit and pump Growth by extreme measure of extraction and exploitation, the more we will be spreading the Global Cancer that we can see ripping apart everything from communities, to eco-systems to the very climate itself.
ABOUT THE AUTHOR
Mansoor Khan studied computer science at IIT Mumbai, Cornell University, and M.I.T, Boston and then moved onto making four feature films. In 2003 he finally escaped the clutches of the city and moved to Coonoor, India, to realize his life’s vision of starting an organic farm that was self-supporting and local. Acres Wild is a cheesemaking farmstay that allows guests to experience a close-to nature experience. Spread over 22 acres, Acres Wild is now a key landmark in Coonoor town.