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Economic Equilibrium and the Big Rip

I’m a big fan of those astrophysics programs on television with their wonderful graphic imaging showing planets, galaxies, and the entire universe blowing itself to smithereens, or collapsing back onto itself in an equally glorious display of cosmic fireworks. I especially like to see and hear young scientists continue to push the boundaries of “the known” outward and hypothesize about what lies beyond them. Every theory seems to set things on the knife edge of a balancing act with mind-blowing consequences regardless of which way events could tip the balance of things. Will it end when it all fizzles out (the “Big Freeze”), or when it blows itself apart (the “Big Rip”)?

The same kind of forces seem to be tugging toward or against equilibrium here on Earth. Gaia theory, for example, posits that our planet’s environmental system as a whole seeks a physical and chemical optimal for contemporary life. It is a complex theory of how our waters and atmosphere tend to reset toward a life sustaining balance in spite of temporary disruptions caused by earthquakes, fires, climate change, or by man’s foolishness. Much like the universe, however, the time scale for finding equilibrium is much too long to be of any value to help us save ourselves from our own misdeeds. We seem to be pre-programmed to self-destruct after about 10,000 years of mischief making. Our dilemma is summed up nicely by the cartoon character Pogo in his insightful observation “We have met the enemy…and he is us.”

Still the universe seems to have afforded us multiple chances for saving us from ourselves. It can be inferred in the likelihood that there is more life “out there” in the universe. For those who like to play with the variables in a scientific equation designed to reveal what the probabilities are for life extant our solar system, it is laid out for us in an equation called “Drake’s Equation.” An online version is at this website:
http://www.classbrain.com/artmovies/publish/article_50.shtml

My set of estimates for this equation puts the probability of intelligent life extant our own able to communicate their existences outward at 3 planets per galaxy. That is a tiny number given the enormous number of stars in the typical galaxy. But with 200 billion or so galaxies in the universe, that would mean there are about 600 billion planets with such intelligent life. Because of the vast distances involved and the obstacles to be overcome, however, no living thing will ever come into direct contact with any other living thing without a discovery or breakthrough of cosmic proportions.

Pulling our focus back to Earth, it is encouraging to see countries such as Germany, Italy, and Japan have all rebounded amazingly well since WWII, thus showing the resiliency of the human spirit after human attempts at annihilation. Even forests that become ravaged by fire recover in a relatively short time. The outcome of our current climate change dilemma is much less certain. But there is an eternal social struggle that remains even after the ravages of wars and fires and climate have purged themselves from our midst. It is embedded in greed and it shows itself in wealth and income inequality.

There is an economic principle called “Pareto Optimality,” named for the Italian economist who first wrote about it. It states that when all resources are being used most efficiently, you cannot take from any resource without an equal loss occurring somewhere else in that system. This principle is very easy to see and understand with this analogy: Consider a well-tuned combustion engine that is running at peak performance. Every cylinder is firing at its precise moment such that the engine is producing its maximum horsepower. Or as my neighbor would say “this baby is hummin’. “ Now let some yahoo come along and take one spark plug just because it’s there. The engine may still run, but it will cough, backfire, and sputter with a substantial loss of power.

Ditto for the economy. Move things around and output (GDP) drops. And when that happens, down comes incomes, employment, and tax revenues, while up goes deficits, unemployment, and a long list of social ills. Take excessively from a finite pool of income and that leaves less for everyone else. In that regard the economic engine is very much like the combustion engine. Enrich someone beyond his own imagination and many others suffer. Excessive taking by a few results in gross poverty by the many. That cause/effect relationship is as clear as the rising sun even when slightly clouded by misleading arguments: “The poor are envious, lazy, parasites,” or “the wealthy are industrious, smarter, and deserve more.”

What is the equilibrating mechanism that can teach us how to save ourselves before we kill “the goose that lays the golden eggs?” And if we cannot or will not accept that remedy, how and when will our economic engine freeze up or explode?

U.S. national wealth doubles every 10 years. The answer lies somewhere within these numbers:

Today: Wealth = $76 trillion
2024 : Wealth = $152 trillion
2034: Wealth = $304 trillion
2044: Wealth = $608 trillion
2054: Wealth = $1,216 trillion
2064: Wealth = $2,432 trillion

The top 5 percent are pulling in upwards of 90 percent of our wealth. The bottom 95 percent are losing more and more with each passing day. We can end this projection, or we can wait for the cosmic scales of justice to end it for us. I predict a “Big Rip” by 2040 when it all blows up in a colossal fireworks and a meltdown unlike any in human history. This much is certain: The countdown clock is ticking… and there is not one policy change on the horizon that will save us from this looming disaster. Once again, “we have met the enemy…and he is us.”