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  • Writer's pictureJerome Michael McLaughlin

How Does the World Work?

I have been asking myself this question in earnest over the past several months. It is a daunting if not laughable endeavor when one considers that any single answer is impossible. A comprehensive answer is beyond the reach of any one mind much less the possibility of articulating it to someone else. But to better navigate my own little world within the context of the larger one that appears so vexing at times, I set out to see if I could make some fundamental sense of this complex machine we call human civilization.

I am early in my voyage, but certain truisms have become abundantly clear:

Everything is downstream from ECONOMICS.

MONEY is a language.

ENERGY is life.

Everything is downstream from ECONOMICS.

In discussing world history, we tend to dissect events and the people who made them happen. In other words, we focus on the players, the politics, the celebrity, the psychology, and the resulting aftermath of occurrences as they have been recorded. We study major events in history and discuss what occurred when, who was involved, and why these events might have taken place.

But the “why” is only what is visible on the surface, not the currents roiling beneath. We rarely look through the glare of surface reflection to discover the true source of the event, the origin of the action that first set things in motion. Yet, when history is studied more deeply, one catalyst constantly resurfaces as THE dominant ingredient – economics.

When we examine the state of economic affairs during any particular period, then tie those conditions to major events, a pattern emerges. The economics of wealth fuels the events of the world. The gain, loss, or threat of loss of wealth causes nearly all wars, depressions, strife, collapse, and calamity. But most importantly, those who control the wealth are not always the ones directly in power but are often lurking behind the scenes pulling the strings and manipulating momentous decisions.

World War 1, the Great Depression, the bombing of Pearl Harbor, the rise of Hitler, China’s Great Leap Forward, the Iraq War, the rise of ISIS, the death of Saddam Hussein and Muammar Gaddafi, the decline of the Roman, Dutch, Spanish, and British Empires, the current descent of American hegemony, the COVID pandemic, the war in Ukraine…the origin and catalyst of each of these major events can be found in the complex undercurrent of economics, namely banking and the manipulation of money.

The politics, actors, imagery, and associated cultural narratives are all but colorful and tragic theatre.

MONEY is a language.

Money is how we communicate value. Money is the signal we use to collaboratively set the value of everything. The price of a thing (or service) is established by people constantly buying and selling, and this repeated action determines how a particular thing is valued at any given period of time.

But what exactly is “money”?

THIS is the key question. And none of the answers are simple or precise. For our purposes, money is the instrument used to measure an individual’s time and energy spent.

On the positive side of your personal ledger, how you expend your time and energy throughout the day directly translates into the money you earn. On the negative side of the ledger, where you spend this earned product (money), determines in a sense, who you are. Yes, there are other actions that take place outside the calculations of the ledger that help determine who you are, but for the sake of this discussion, what you do and how you spend is a fairly precise indicator of what you believe to be “of value”. If someone accessed your credit card or bank statement, they could make a fairly rapid assessment of what is most important to you. In other words, how you spend your money tells the world, these are the things that I prioritize above all other things. THIS is what I value.

However, over time, one fact remains stubbornly true: If the money you earn is diminishing in value, maintaining a positive personal ledger is exhausting and unachievable, and society in general is headed for trouble. Value as a fundamental understanding between individuals quickly erodes as the common language used to communicate it becomes confused and easily manipulated.

What you have worked hard to achieve with your time and energy is being undermined by the very thing that determines its value. Therefore, you must now spend more time and energy to maintain its value even though the price appears to be going up. For example, if you own a home that has increased in “value” by 5%, but the value of the money used to measure your home’s worth has diminished by 8%, your home’s actual value has decreased 3%. Now you must work even harder to make up the difference. And no matter how hard you work, you never will.

Without a form of money that maintains (or even INCREASES) in value over time, any additional time and energy spent earning that money is wasted. What is valued today must be valued the same, or optimally higher, tomorrow. But if the money earned and spent today is worth less tomorrow, the seeds of great future conflict have been sown.

ENERGY is life.

The civilizations that have survived for long stretches of time are those that have become most efficient at utilizing energy. Practical energy use empowers efficiency. And efficiency enables a civilization to flourish.

In the beginning, it was the energy of the sun that grew the plants that the animals would graze upon that we in turn would hunt and eat to grow strong and smart. It was the sun that grew the trees we burned to heat our caves and crude shelters and construct the villages where we specialized our skills and fortified our towns against marauding neighbors. It was the sun that grew the trees tall and straight to build our ships. And it was the sun that raised the winds so we could sail our ships vast distances to trade and thrive.

But the real evolution of exponential energy usage began with us. We were the first form of kinetic energy – human power. We harvested by hand, hunted on foot, plowed the soil with sticks, and built our dwellings with the power of our own bodies. We were the single source of energy until we managed to domesticate and harness the more powerful beasts to reduce the need for strictly human labor. Over time, we observed the world and leveraged our growing minds to experiment and put the things around us to work.

How can we get more for less? How can we produce more using the resources of the earth to make life less of a daily struggle? Every innovation was dedicated to making life easier, more comfortable, more tolerable, more enjoyable.

Human power would eventually be replaced by animal power which would then be replaced by organic power - biomass (wood / whale oil) - which would then be replaced with the exponential power of fossil fuels (coal / oil / natural gas) and the almost miraculous energy found in a nuclear reaction (uranium).

Today, the earth could never sustain two billion much less eight billion people without fossil fuel. The energy required to feed, shelter, clothe, and care for billions is made possible only by the efficiency and productivity of fossil fuel. Fossil fuels are used in EVERY facet of the critical features of modern life - agriculture and manufacturing. From the boot on the farmers foot to the fertilizer in the fields to the fork in your hand, fossil fuels were integral to EVERY step of the process.

Additionally, every means to harvest sustainable or “green” energy involves fossil fuel. Turbines, solar panels, hydro-electric dams, cranes, trucks, batteries, piping, wire, as well as the manufacturing, maintenance, and disposal of it all requires the expenditure of fossil fuel.

Whether we can admit it or not, our current standard of living is due to the incredible power of one thing – relatively inexpensive energy. Without it, we will quickly starve, freeze, perish from disease, and fight with one another endlessly for every scrap of food and fuel we can find.

Final Thought.

It has been said, “Reality bats last.” We are at a unique juncture in human civilization. Will we continue to flourish, or will we choose to regress and retreat even though the facts of physics are undeniable? Without the manifestation of individual integrity, a sound form of money, and efficient sources of energy, life as we have come to know it will soon become quite different, and not nearly as comfortable, or enjoyable, or even tolerable.

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