Be informed

I have been reading some excellent books recently. You know the ones that you wish you had written? I have written a book, and I have just read The Physics of Capitalism by Erald Kolasi. It is brilliant and takes no prisoners. It also a book that I will need to incorporate into the next edition of my textbook if the publisher ever gets round to inviting an update. I know my book needs revision, not least because we’ve all been on generative AI catch-up. My bio needs an update, too.

Back to Kolasi. He’s a physicist. A physicist taking on economists in a way that economists should have been taking on economics in the 21st Century. Back to me. My book starts with a statement about the finite planet and argues that business strategy has to be devised and executed so as not to breach the planetary boundaries, of which there are nine. Kolasi’s genius (at least for me) is to use his knowledge of physics to critique arguments by economists (and others to be fair) about technological “solutions” in the context of climate change. It is hugely effective and it tells it bluntly and with humour (though totally unfunny if you are an economist).

At its bluntest, Kolasi likens economists to people who simply cannot accept that we cannot make light go faster than the speed of light (3×10⁸ m/s) or go below absolute zero (currently -273.15^oC). More realistically, in terms of the efficiency of the stuff we use and rely on, internal combustion engines struggle to be more efficient than 35 per cent (conversion of liquid fuel into kinetic energy/Carnot cycle). 70 per cent is a theoretical maximum, but such an engine is unlikely to be put into a car; photovoltaics, 15 per cent (though theoretically possible, but never achieved, 90 per cent). And so it goes. As Kolasi notes, too, even if we could get 90 per cent conversion of solar energy to electrical energy we would still struggle to meet demand for panels and electrical energy as they need an energy source to extract raw materials and manufacture. There are limits (that neo-classical economists will not accept).

GDP and decoupling

The likes of Hannah Ritchie have been making a strong case for decoupling as a sign that capitalism can survive a climate crisis. We can grow economies (as defined by GDP) and reduce carbon emissions simultaneously and absolutely. It’s a dangerous myth.

Some definitions first: relative decoupling is simple reduction in carbon emissions whilst experiencing an increase in GDP. Absolute decoupling is a kind of safe zone where decline in carbon emissions outstrip growth and head towards zero. From what I can see, and have read, there is no absolute decoupling even using current measures of GDP. For Kolasi, the current measure is the problem as it does accurately measure change in the biophysical scale; namely, the use of natural resources in production and reproduction.

Then there is the question of permanence, assuming GDP is a fair measure of output. Kolasi tells us that with this perspective, economic growth and life expectancy have decoupled as Americans die earlier than previously. Where we thought there was a positive relationship between growth and life expectancy, that seems not to be the case. But no one is saying there has been a decoupling.

Then we can consider the data on emissions. They are to some extent estimates. We might have a handle on carbon dioxide, but we certainly do not have measures of methane, nitrous oxide, synthetic and fluorinated gases, all of which are more potent greenhouse gases than carbon dioxide. Even before the Trump administration, the Environmental Protection Agency in the USA relied on self reporting by corporations! Now it is unlikely that any degree of self-reporting will be needed.

Finance

Talking of changes in direction, up to 2021, banks had been reducing (not eliminating) lending for fossil-fuel projects. That has now changed. The Guardian newspaper has reported that “Two-thirds of the world’s largest 65 banks increased their fossil fuel financing by $162bn from 2023 to 2024.” The US Treasury has withdrawn from the Network of Central Banks and Supervisors for Greening the Financial System, essentially giving a green light to private banks to start lending again. Indeed, JP Morgan, Citigroup, Bank of America, Morgan Stanley, Wells Fargo and Goldman Sachs all withdrew from the net zero banking alliance. Here is a table of the worst offenders (apologies for the poor resolution, but if you download it, it is fine):

Be rest assured, banks have not changed.

The steam engine

A book that opened my eyes to the non-inevitability of industrial fossil economies was Andreas Malm’s, Fossil Capital. The argument was threefold: first, capitalists were not prepared to share resources such as flowing water. Second, flowing water was located in areas that required investment by capitalists in infrastructure such as housing, schools, medical. Thirdly, where this infrastructure existed, labour militancy was difficult to manage – wages were going down and work rates increasing. Capital is best optimised if it is mobile. The steam engine enabled capital mobility despite being less efficient than water, at least until major improvements were made to the design of steam engines (to stop them from exploding if nothing else). All this being true, it is not the whole story. Kolasi has helped me to refine this argument.

Let us compare changes over time (Kolasi 2025: 290):

Year	Steam HP	Water HP	Wind HP
1800	35,000	120000	15000
1830	160,000	160,000	20,000
1870	2,060,000	230,000	10,000

That brings us to two additional concepts that I did not get from Malm: exergy and spectralization. Exergy is a thermodynamic system’s maximum capacity for useful work (p290); spectralization is the “diversification and variation in the conversional methods of existing technologies in response to changing social and ecological conditions” (p222). And so…

“…Boosting the spectralization of conversional technologies was the main causal vector for the corresponding improvement in the efficiency of industrial devices. The Industrial Revolution in England and virtually everywhere else as well, followed a path of exergy-driven efficiency gains that spurred additional gains and butterfly effects in economic productivity. The English achieved this incredible growth through a huge increase in the aggregate output of mechanical work a process spearheaded by the spectralization of high-pressure steam engines, and eventually the spectralization of other types of engines as well.”

Kolasi, 2025: 290-1

Let me unpick that, probably imperfectly. Efficiency per se is not the point. It is exergy efficiency. And curiously, Kolasi demonstrates that steam engines had a negative impact on aggregate efficiency across the English economy as a whole. Indeed in their early days they were highly inefficient relative to water and wind. The more steam engines that were installed – at least until 1770 – the lower the efficiency of the economy in aggregate. My head hurts trying to get it around this idea.

In the 19th Century it is a different story. But steam’s impact is not that it could be used to power textile factories. Rather it is this spectralization whereby if became a significant component of the economy as a whole, not least in transportation (shifting coal to factories and shifting product to markets). And if we think that steam power is a thing of the past, we must remember that it is steam power that generates most of the world’s electricity.

Steam power does something else, too, which I had not considered. Steam enables capital to be used harder. By which we mean, it enables us to hit things harder – in a foundry, for example, that is useful.

That leaves a question as to why coal? Well here’s a thing, the answer lies is that great British phenomenon of the enclosures. Back in the sixteenth and seventeenth centuries, the aristocracy displaced many people from their traditional lands by enclosing it – fencing it off and turning it into private property. This displacement led to a rapid urbanisation. People were concentrated in towns and cities and used wood to heat their homes. More rapacious, though, was the state’s need for timber for warships. The nation’s forests disappeared. Coal was a suitable substitute and, as Kolasi writes, “…the northern parts of England were full of it”. Full of it for sure, but it was under ground. The mines were established but they needed pumping. That was first significant industrial use of steam power – to pump mines.

The steam engines then went through spectralization – the addition of condensers to improve thermodynamic efficiency; new gear configurations that allowed the engines to generate rotary motion and to power machines in factories; and the transition from low- to high-pressure machines as the driving motive force. Kolasi (p281) argues this was the “breakthrough moment of the entire industrial revolution”.

Colonialism

The English enclosures displaced many and created a work-hungry proletariat. International colonialism resulted in mass slaughter, disease and slavery. Kolasi (pp300303) goes into great detail about the activities of the Dutch East India Company (VOC). Most brutally, the company slaughtered the majority of the people of the Banda Islands (modern day Indonesia) because they had a monopoly in nutmeg growing. On discovering exactly where the fabled trees grew in 1621, 15,000 people lost their lives through brutal acts of beheading and being pushed over cliffs. These people were substituted for by slaves. The VOC set the stage for the Amsterdam Stock Exchange becoming the first publicly-traded company; but as is ever, the company declined as the secret of nutmeg was demystified and grown in other regions with suitable climates. The Dutch Government nationalised the assets in 1799.

The Circular Economy

We hear a lot about the circular economy…it is essentially another attempt at saving capitalism from itself. In its purist form, the waste from one cycle of production becomes the raw materials for the next. A weakness here is the issue of recycling. Many of us are asked to recycle our waste – my weekly doorstep collection is a case in point. I separate out my plastic, card, glass and metals to be collected. Notwithstanding the fact that turning glass and metals into reworked materials requires energy. Plastic…to much cannot be recycled, and even if it can, the capacity is rarely there to enable it. So, recycling is not realistically part of the circular economy – energy is lost in the circularity.

For circularity to be meaningful, materials have to be reusable or re-purposable. A glass bottle needs to be reused as a glass bottle (energy is required for transportation and cleaning. Textiles need to be re-tradable, up-cyclable and volumes need to come down, drastically. A recent story in the Guardian newspaper illustrates once again just how much textile materials find their way dumped in habitat and wilderness because we cannot absorb the volumes being disposed of.

Sources: Decoupling Chart – Hannah Ritchie (2021) – “Many countries have decoupled economic growth from CO2 emissions, even if we take offshored production into account” Published online at OurWorldinData.org. Retrieved from: ‘https://ourworldindata.org/co2-gdp-decoupling’ [Online Resource]

Bank investment table – Banking on Climate Chaos: Fossil Fuel Finance Report, 2025: https://www.bankingonclimatechaos.org/?bank=JPMorgan%20Chase#fulldata-panel (accessed 21 June 2025)

Steam Engine: Chris Allen / Steam engine, Nortonthorpe Mills, Scissett

VOC Plaque: By Stephencdickson – Own work, CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=72939415

Ghana Wetlands – source unknown. Taken from Guardian story.