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by Helmut Maier Head of Dept. Economic Analysis and Statistics Berlin School of Economics

Is there an Economic System within the Nature? Approach and Results Существует ли экономическая система в природе ? подходы и результаты. Paper presented to the Leontief-Readings 29 – 30 September 2006 St. Petersburg. by Helmut Maier Head of Dept. Economic Analysis and Statistics

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by Helmut Maier Head of Dept. Economic Analysis and Statistics Berlin School of Economics

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  1. Is there anEconomic System within the Nature? Approach and ResultsСуществует ли экономическая система в природе? подходы и результаты Paper presented to the Leontief-Readings 29 – 30 September 2006 St. Petersburg by Helmut Maier Head of Dept. Economic Analysis and Statistics Berlin School of Economics oekonom@fhw-berlin.de

  2. Subject and Aims • Subject is the analysis of nature’s own economic and financial system the existence of which is supposed and substantiated. • Mainaim of this economic analysis – a political and long term aim – is to find paths how to response to global challenges of present by means of nature’s economic and financial system. • Aim of this oral presentation is to demonstrate WassiliLeontief’s heritage within the results (of the macro-economic part) of this analysis and to animate you to read and learn more about this subject.

  3. Global Challenge: Crowding of World Population Development of World Population by Continents 1000 - 2100 12 billion people Year 2000 Year 2100 Year 1000

  4. Global Challenge: Aging of World Population World Population 1950 and 2050 in absolute and relative figures Male Female Male Female Relative Absolute absolute Black Lines 1910 Grey Fields 2050

  5. Global Challenge: Aging in Germany Age Distribution in Germany in the Years 1910, 2000, and 2050 1910 2000 2000 2050 Source: Federal Statistical Office of Germany

  6. References • Introduction to nature’s economic and financial system, features, impact on human society and politics (Maier 2006, ISSN 1439-3956) • Economic explanation of social and natural phenomena. Is there an economic system within the nature? (Maier 2005, IIOA) • What is the money equivalent in the nature? Results of a hedonic approach (Maier 2003, ISI)

  7. Approach • Idea is to look at natural phenomena/events with eyes of the economist. • We try to interpret selected phenomena/events as markets where creatures exchange goods and services – buy, sell, and pay. • As we can’t ask and communicate with creatures we use the strongest tools of science which are: observations, intuition, and analytic instruments. • Thus the door opens to the economic and financial system of nature’s world.

  8. Axioms of Nature’s Economic and Financial System I • The “natural state” is the planet system of the sun. • Its laws are the “natural laws”. • Its population is the “entirety of creatures”. • Its (social) top aim is “conservation of life”. • Creatures have “incomplete information”. • “Any good and service” has its price. • Means of payment is “energy”. • Markets occur as “dual markets” with double roles of sellers and buyers.

  9. Axioms of Nature’s Economic and Financial System II • Species/Populations are “industries”. • Creatures are “enterprises” as well as “customers”. They produce, consume, and finance their final product “life“ equal “living biomass” themselves. • The sun is the “central bank”. • The “natural state” finances its activities by energy from sun and by taxes from creatures. • “Taxes” are energy transfers from creatures to the environment; reversely “subsidies” are energy transfers from the environment to the creatures.

  10. Results and Conclusion • In a series of tests I could not reject the hypothesis of a well-functioning economic system within the nature using “energy” as equivalent of money. • This natural system is superior to human ones and reacts sustainable on activities of all species. • The social and natural phenomena: - Crowding, aging, poverty, unemployment, migrations of (human) population, - Change of climate, deserted regions, I identified as tracks of such reactions of the superior natural system on mostly human economic activities.

  11. Substantiation The following selected items demonstrate: • the (observable) transfer of the payment “energy” within the natural “dual markets”, • the compatibility of micro-economic balances of “supply and demand” and “cost and return” with the laws of “conservation of masses and energy” in natural sciences, • and the design of an input-output table of natural world at works prices, the latter refers to Leontief’s heritage.

  12. Substantiation I Exemplary demonstration of the mean of payment “energy”, and of the payment transfer within the natural phenomenon/event “deer are grazing on a meadow”

  13. Eyes of economist: Food market Demand = Deer population Supply = Grass population Price = ??? Good = Grass Payment transfer = ???

  14. Eyes of economist: Dual transport market Price = paid with chemical energy Payment transfer = by eating, deer get chemical energy of grass Supply = Deer population Demand = (Seeds of) grass Service = Transport

  15. Eyes of economist: Food market Demand = Deer population Supply = Grass population Price = paid with kinetic energy Good = Grass Payment transfer = by eating, seeds of grass get kinetic energy

  16. Substantiation II Exemplary demonstration of the compatibility of the economic balances “of supply and demand” and “of cost and return” with the natural laws of “conservation of mass and energy” within the natural phenomenon/event “deer are grazing on a meadow”

  17. Dual food and transport marketscoupled and closed Micro - economic model YsXs YdXd Mass supply function deergrass balanced Y so = Y do X so =X do demand function grassdeer Conservation of mass Energy/mass unit balanced pyo = pxo Price py px Conservation of energy

  18. Substantiation III Exemplary demonstration of how creatures produce, consume, and finance their product “living biomass” by themselves within the natural phenomena “deer are grazing on a meadow”, and the food chain including “plants/birds/viruses” using W. Leontief’s input-output approach

  19. Substantiation Thus Leontief’s open ended and static model X = A X + x or X = (I – A ) – 1 x with X : = Vector of total production of biomass of all species in energy units, x : = Vector of final use of biomass of all species in energy units, A : = Matrix of input coefficients (I – A ) – 1 : = Leontief inverse matrix, describes as well activities of all species of natural world (in total more than 1,75 millions). Driving forces of this natural system are the supply of energy from sun, and the self-demand for “life” of the species and creatures; limited by the facilities of primary input on earth.

  20. Thanks ! Greetings from Berlin Humbold University where W. Leontief got his PHD

  21. Thank you, Mr. Leontief New York, May 1998

  22. Is there anEconomic System within the Nature? Approach and ResultsСуществует ли экономическая система в природе? подходы и результаты Paper presented to the Leontief-Readings 29 – 30 September 2006 St. Petersburg by Helmut Maier Head of Dept. Economic Analysis and Statistics Berlin School of Economics oekonom@fhw-berlin.de

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