While the prevailing wisdom so far considers the competitive forces in economy to be similar to those of evolution, in the preceding posts, I have argued that the better model is ecology. An ecological model can also be characterized by the catch phrase “Survival of the fittest”.

Furthermore the time frame for an ecological model of competition is much more reasonable than for evolution. Ecological changes are visible in time frames that range from a few hours to a hundred years, whereas evolutionary time frames are more on the order of thousands of years at a minimum — even for economic evolution.

Let’s build on the hypothesis that competition in economics is akin to competition in ecological situations. Using the preliminary economic taxonomy we might begin by defining the equivalent of ecological primary producers (plants). I dealt with some of this in an earlier post (Plants and Plants). We also need to discover if there is a similar way of tracing some thread through economic ecology, just as we normally trace energy flow in natural ecological systems through what are known as trophic (energy) levels. Most people understand the image of plants being the first level, then herbivores eat the plants, and predators eat the herbivores, on up to the top predator. In ecology the energy comes from what amounts to an infinite source (the sun). The raw materials that are used to make the organisms in the trophic ladder are sequestered in their bodies. When each individual in the system dies or is eaten and excreted, those raw materials are returned to the system to be re-used, often in much the same geographical location as the materials were first incorporated.

Is there a similar system in economics?

In the subsistence economic “phylum”, just like the natural ecosystem, the people would function as herbivores and predators that like their animal colleagues at the time would die and return both their bodies and the manufactured goods (furs, bones, wooden implements, stone chips, etc.) back to the same region where they incorporated them.

In the barter phylum of economics, the raw materials are still not transformed very much from their original state, so while the materials might migrate further during the stages they are incorporated into the bodies, clothes, and tools of the traders, nonetheless they are ultimately returned to the soil and air.

It took about 90,000 years from the emergence of the economic phylum “subsistence” to see the first of major transformation of the raw materials in the early technology and industrial periods that made it difficult or impossible to recycle some or all of the raw materials. This happened about the same time that the economic phylum of “monetary” emerged. As the energy supply shift from sunlight and wood burning to fossil fuels, the energy supply also began down a new track — it would ultimately prove not to be an infinite supply.

So to back up and draw the comparison. Yes, there is energy flow in economic systems and the most primitive two economic phyla (systems) are exactly the same as the biological system; an infinite supply of energy from the sun, use of raw materials is through limited transformation that does not render them non-recyclable.

However a combination of changes moving to the monetary system changed this. The change may or may not be related to money as a means of representing material goods, but the key is using fossil fuels, a non-renewable finite source of energy to produce manufactured goods that no longer are easily recyclable back to useful raw materials. In fact, in many cases the waste produced actually pollutes the system reducing its productivity even more. A side note that is dismaying, of course, is that the non-sustainable economic system has a profound deleterious effect on the natural ecosystem, disrupting its natural processes.

So while the most recent economic developments are not favourable to a sustainable system, it is nonetheless a system that has the same essential parts as an ecological system.