Ecological systems are observed associations of species in specific environments or regions. Without insisting on a slavish copy of this concept to economic systems, it is important that the elements of an ecosystem and an econosystem remain at least parallel or the benefits of the predictive nature of ecosystem theory will be lost to the econosystem. To that end, let’s return to the species/lucrespecies parallel. A biological species is a population of individuals with similar characteristics that reproduce more like individuals. A lucrespecies is analogous in that it is a population of entrepreneurs with similar characteristics and that tend to create more entrepreneurial entities that are of similar characteristics. I previously chose the example of the biological species of human beings (Homo sapiens) as analogous to the lucrespecies of car manufacturers. In these two analogous species, the individuals are respectively people, like you, and corporations, like Honda and Toyota.
So to look for and distinguish different econosystems, like different ecosystems, one must look for assemblages of lucrespecies in specific socio-political environments or geographic regions. In a previous blog, I mentioned some terrestrial ecosystems. Without doing too much imagining, if I ask you to visualize a tropical savannah I am sure that in your mind you see rolling plains of grass and shrubs mixed with isolated low trees and herds of large herbivores. I also imagine you would not have much trouble telling me what is the top predator. This is a relatively simple ecosystem by comparison let’s say to a tropical rain forest. Can you as easily tell me what the major herbivores are in a tropical rain forest? Or what the top carnivores might be in a South American rain forest? This is a much more complex ecosystem with many more and much smaller species in general than a tropical savannah. A tropical desert is even less complicated, although probably less familiar.
The main reason for the variation between the types of ecosystems is the amount of energy and raw materials such as minerals and water as well as suitable living conditions (stable ground, physical complexity) available for primary producers to use to get the whole system going. Presumably the same kinds of things are going to determine the nature of econosystems. The main reason for this type of similarity between ecological and economic systems is that the base unit of each system is living organisms. In the economic system, the base unit is the living breathing entrepreneur who must eat, breathe, and drink. To be sure modern econosystems have more ability to import and export that do natural systems, but we’ll deal with that later.
To start looking for ecosystems, one goes from location to location examining the extant assemblages of species looking for patterns of diversity and trophic structure. We can do the same for econospecies. Of the 100 poorest countries and the poorest per capita income in the world, 90% are in the tropics. The exceptions (in more northern climates) are currently in hostile situations. The richest countries are primarily in the warm to cold temperate zones of the world. This observation has considerable value. With a few exceptions, the countries with the richest per capita income are all in the north or temperate north. The exceptions are the very small oil rich nations of Qatar, the UAE, Kuwait, and the strategically located Singapore.
Twenty-eight of thirty-eight dictatorships or countries considered not to be “free” are in the tropics. Twenty-four of the twenty-eight tropical dictatorships or not free countries are amongst the poorest nations. The exceptions are Brunei and two oil rich countries (Oman and Qatar).
On a world scale the distribution of economic sectors in each country varies widely. The world average is 5.9% agriculture, 31.3% industry, and 62.8% services (CIA estimate 2010). You can use the chart below to interactively examine the distribution of sectors within a country on a world scale.
via chartsbin.com
This great little chart courtesy ChartsBin statistics collector team 2011,
The map below shows 2010-2011 Global Competitiveness Index (GCI) in 139 major and emerging economies from all of the world’s regions. The GCI, a highly comprehensive index for measuring national competitiveness, which captures the microeconomic and macroeconomic foundations of national competitiveness.
via chartsbin.com
Another great little chart by chartsbin.com
This map compares each country’s total consumption Footprint with the biocapacity available within its own borders. Many countries rely, in net terms, on the biocapacity of other nations to meet domestic demands for goods and services. For example: Japan imports Ecuadorian wood to make paper; Europe imports meat fed on Brazilian soy; the United States imports Peruvian cotton; and China obtains lumber from Tanzania.
World Total Biocapacity: 1.78 gha per capita
World Ecological Footprint of Consumption: 2.7 gha per capita (i.e. we are using more resources than the Earth can provide.)
Currently less than 20 percent of the world’s population living in countries that can keep up with their own demands.
What is a global hectare (gha)? A global hectare is a common unit that encompasses the average productivity of all the biologically productive land and sea area in the world in a given year. Biologically productive areas include cropland, forest and fishing grounds, and do not include deserts, glaciers and the open ocean.
via chartsbin.com
Still another helpful chart by chartsbin.com Data source: Global Footprint Network’s 2010 Edition.
These are a few of the characteristics that we often look at in describing a large economic system. But are they the correct variables to describe an econome? With this much information in hand it is now possible to begin to define the different kinds of economes or economic zones that characterize the world. As with ecological zones or biomes, the task at hand is not to think of these as having been designed, but instead to recognize them as patterns that happen in an economically free-running world full of human beings with all the complexity of their normal personal, social, biological, cultural, political, and spiritual interactions and relationships working together and reacting to the forces around them that shape their behaviour.
More in the next blog!