"Two Intellectual Systems: Matter-energy and the Monetary Culture"

(summary, by M. King Hubbert)

During a 4-hour interview with Stephen B Andrews,SbAndrews at worldnet.att.net, on March 8, 1988, Dr. Hubbert handedover a copy of the following, which was the subject of a seminar hetaught, or participated in, at MIT Energy Laboratory on Sept 30, 1981.

"The world's present industrial civilization is handicapped by thecoexistence of two universal, overlapping, and incompatible intellectualsystems: the accumulated knowledge of the last four centuries of theproperties and interrelationships of matter and energy; and the associatedmonetary culture which has evloved from folkways of prehistoric origin.


"The first of these two systems has been responsible for the spectacularrise, principally during the last two centuries, of the present industrialsystem and is essential for its continuance. The second, an inheritancefrom the prescientific past, operates by rules of its own having little incommon with those of the matter-energy system. Nevertheless, the monetarysystem, by means of a loose coupling, exercises a general control over thematter-energy system upon which it is super[im]posed.


"Despite their inherent incompatibilities, these two systems during the lasttwo centuries have had one fundamental characteristic in common, namely,exponential growth, which has made a reasonably stable coexistence possible.But, for various reasons, it is impossible for the matter-energy system tosustain exponential growth for more than a few tens of doublings, and thisphase is by now almost over. The monetary system has no such constraints,and, according to one of its most fundamental rules, it must continue togrow by compound interest. This disparity between a monetary system whichcontinues to grow exponentially and a physical system which is unable to doso leads to an increase with time in the ratio of money to the output of thephysical system. This manifests itself as price inflation. A monetaryalternative corresponding to a zero physical growth rate would be a zerointerest rate. The result in either case would be large-scale financialinstability."


"With such relationships in mind, a review will be made of the evolution ofthe world's matter-energy system culminating in the present industrialsociety. Questions will then be considered regarding the future:

* What are the constraints and possibilities imposed by the matter-energysystem?human society sustained at near optimum conditions?

* Will it be possible to so reform the monetary system that it can serve asa control system to achieve these results?
*

* If not, can an accounting and control system of a non-monetary nature bedevised that would be approptirate for the management of an advancedindustrial system?

"It appears that the stage is now set for a critical examination of thisproblem, and that out of such inquries, if a catastrophic solution can beavoided, there can hardly fail to emerge what the historian of science,Thomas S. Kuhn, has called a major scientific and intellectual revolution."