On Maximum Power Principle

On Maximum Power Principle

Howard Odum’s maximum power principle is very influential in the circle of ecological economics and biophysical economics.

This principle says that the more lasting and hence more probably dynamic patterns of energy flow or power (including the patterns of living systems and civilizations) tend to transform and restore the greatest amount of potential energy at the fastest possible rate. Howard T Odum (1977) 

However, this is not how living systems operate. Some animals eat tree leaves. This reduces the overall energy flow in photosynthesis, from solar energy to chemical energy stored in living systems.

This is similar in human societies. Oil producing countries would not maximize their oil production. They would control the output of oil to maintain high oil prices. This reduces the amount of energy flow. Someone blew up the Nord Stream pipelines. This reduces the amount of energy flow to Europe. Monopolies don’t maximize output or energy flow. They aim to achieve high profit by maintaining scarcity. Carbon tax makes the energy more expensive. This reduces the energy consumption for ordinary people. The collectors of carbon tax, of course, increases their own energy consumption.

Overall, organisms and organizations try to increase their own resource consumptions. At the same time, they try to suppress resource consumption by others so there are more resources left for themselves to consume. MPP does not apply, either in biological world, or in human world. There is no purpose, hence no equilibrium, for the entire biological world or the entire human world. There are only purposes for individuals, or groups of individuals.

MPP sounds “natural” because it is a natural extension from the mainstream economic theory.

A system survives not because it maximizes output, but generates positive return. A big system with high output may fail. A small system with low output may prevail.

On maximum power principle (II)

Theories guide our thinking. They also constrain our thinking.

Maximum power principle, or maximum utility theory are often associated with the evolutionary trend, or the power of natural selection. For most of the modern history, higher output of a society is accompanied by its expansion. Those who consume more expand their population. However, this trend has been reversed in the past several decades. Now the fertility rates in most high consumption groups, together with many who are eager to modernize, have dropped below the replacement rate. The evolutionary trend forward is quite clear. High power consumption is not equivalent to winning natural selection.

There is indeed more power output over the last several centuries. It is a natural consequence of the large-scale use of fossil fuels. There are also geological periods when power output declines, as in times of great extinctions, or the onset of glacial periods. The change of power output has little to do with maximum power principle. 

In summary, evolution and natural selection do not equal maximum power principle or maximum utility. Natural selection is about positive return on investment.

The following are some more specific comments.

Oil is the input of other industries. But it is the output of the oil industry. By restricting the oil output, oil industry can gain high profit.

Other industries will also attempt to influence their output. One example is Canadian medical system. By design, it is very difficult to access Canadian medical system, unless you are powerful or visible. The scarcity of medical care leads to outcry for more investment. Hence doctors in Canada are very well paid. The better paid the doctors, the more powerful they become. The longer waiting time for patients. More money is showered to doctors. This forms the virtuous cycles for the medical professionals, and the vicious cycles for the ordinary people. This outcome is natural. Value is a function of scarcity. When a business or a profession has monopoly power, inevitably it will control output, not maximize output.

But to remain politically powerful, they could not claim to restrict output. That would weaken their political power. Instead, they will proclaim maximum output, maximum service, hence the popularity of maximum power principle, or something like it. Only by claiming maximum service to all, monopolies can retain monopoly and political influence. That is why we hear the concept of maximum output, or maximum utility, so often.

As for “equal fitness paradigm”, it is easier to assess the result for smaller organisms, which have shorter lifespans. Look at the viruses. COVID viruses have expanded exponentially over several years. Before that, AIDS viruses expanded exponentially over a short period of time. Look over a slightly longer time frame. Human beings are the most dominant species today. One million years ago, humans didn’t even exist. “equal fitness paradigm” only applies to “equilibrium population”. But there is no equilibrium population when we look closer. If we look at the short lifespan organisms, such as viruses and bacteria, this becomes obvious. (Some people don’t think viruses belong to living systems. That is another matter.)

What is the degree of monopolies in our society? Think about the human species. Thousands of species of wild mammals contain only less than 3% of the total biomass of all mammals. The rest are biomass of humans and human domesticated mammals, such as cattle and horse. The level of monopoly of human beings in the biosphere is very high.

Inside human societies, state government monopoly is the universal organizational structure all over the world. Monotheistic religions have overwhelming political influence almost everywhere. The most important industries, such as medicine, education, power supply, finance, all enjoy strong monopoly powers. In Canada, medicine is monopolized with state funding; education, from primary to tertiary schools, are funded exclusively, or mainly, by governments; power supply is provided by crown corporations; CPP deduction is mandatary for all workers, including self-employed. Monopoly dominates almost all important areas in life in Canada, and many other societies.

The concept of competitive equilibrium, with following up principle of maximum utility or maximum power, is popular in economics and ecology not because it describes reality accurately, but because it appeals to the interest of the ruling class. The ruling class always believe the current state is the optimal equilibrium state, because they are ruling the world right now. They believe in the end of history because they want to rule the world forever.

Quotes from The Economic Superorganism by Carey King

The purpose of the economy seems to be to maximize the average rate of useful work output. (p. 326)

Howard Odum took on Lotka’s idea, calling it the maximum power principle:

This [maximum power] principle says that the more lasting and hence more probably dynamic patterns of energy flow or power (including the patterns of living systems and civilizations) tend to transform and restore the greatest amount of potential energy at the fastest possible rate. Howard T Odum (1977) 

… Lotka’s and Odum’s concept, linking evolution and power, explains the rationale behind energy and economic narratives that posit more energy is always better. (p. 327)

Comment: In Fig 6.6., p. 297, when energy consumption per person is increasing, the share of wages as percentage of GDP is stable. When energy consumption per person is stable, the share of wages as percentage of GDP is declining. It seems the share of wages as percentage of GDP has a tendency to decline, unless propped up by strong growth of energy consumption.