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.

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.