Building an Energy-Based Economy

Factual Questions
1

I’m working with a group of people designing a new RPG, and our brains have collectively melted whilst pondering one particular problem. You see, one feature we desire is an economy based entirely on energy. Or perhaps we should be using power; we’re not even sure about that much. Anyway, we eventually settled on joules. Our citizens would get paid in joules, would spend their joules at the mall, would be able to convert those joules directly into stored energy.

So the question is, how exactly do we do this conversion? How many joules equal a dollar? Or should we be using watts or something instead?

To give a better idea of what we’re looking for, here’s a couple things we tried. We looked around a bit and found that a consumer pays approximately 50 cents for a AA battery. An online source stated that this battery would contain one kilojoule. That gives us a conversion of $1 => 2kJ.

We also found that one pays approximately 9 cents to the power company for one kw-hr. This gives us 400kJ per cent. $1 => 40mJ.

You might notice, as we did, a slight discrepancy here. We’re not sure which number is more valid, or whether we should be going with either of them. I get the feeling we’re all missing something obvious that a few internet searches isn’t going to help us realize.

So I post this in the hope that someone who has more knowledge about this than we do will take the time to do a few calculations. So, in an economy where each product is priced based on the energy that went into making it, and where you can deposit your paycheck directly into batteries, what’s the equivalent of a dollar?

Any help is appreciated.

2

I can see the ads now: Buy an Acme Energy Storage Unit, and protect your family joules!

I’d go with the power company over the battery, since that’s closer to the ‘pure’ energy cost. A lot of the battery price is from packaging, distribution, advertising, etc.

3

The thing is, one of the key aspects of a currency is scarsity. Since you can make energy from using a bicycle, burning stuff, and from eating, how is this going to impact your economy? If you do make energy scarse enough for a currency, you run into problems of how your society is going to operate.

Also, you lose energy through transmission and storage, meaning that it would lose value over time; another big no-no for a form of currency exchange. It’s the same reason why we don’t have the cabbage as a form of currency (excluding barter of course).

Now, if you would base you economy around a specific, highly compact, rare and useful energy store - like petroleum, energon or small squeaky animals (provided they were immortal and unaffected by energy transfer)- you make it a lot more feasible.

I think that your calcs are right. Batteries are for storing the power, and include the cost of electrcity, materials and manufacturing. The power bill is just th ecost of transmittion and generation. Just remember the difference between Joules (an absolute unit) and the Watt (a rate of change of energy per unit time). Oh, and a kW.hr is 3.6MJ.

4

Thanks for the responses so far.

It might help if I explained the setting a bit more. Everyone’s hurtling through space on a giant generation ship which, as a whole, is a closed system. Except that its inhabitants have only managed to access the uppermost decks, which have an influx of free energy from deeper within the ship. The specific nature of this source is unknown.

Of course, a faction has seized every known power generator and thus taken control of the inhabited portion of the ship. They then dole out power as they see fit.

The joule-based currency is more of an entitlement, the same way a dollar used to entitle you to a certain amount of gold. If you have 2kJ credited to your account, then you’re allowed to draw 2kJ from a power node. If you choose to dump that into a battery and it drains away over time, well, that’s your problem.

Rabid_Squirrel’s point about generating energy by pedaling a bicycle and such is a good one. We’ll have to think about that. Perhaps a solution is not to allow the conversion of stored energy into the joule “credits” described above. More input on this issue is welcome too, though I realize it’s going a bit beyond the bounds of my original question.

Glad to hear I’m not totally off. I suppose the point we were missing before is that, while the energy itself seems cheap, it always has to go through some pretty inefficient conversion in the process of actually being used. The problem is that we still have to decide on some hard numbers at some point, and that’s where it gets confusing.

5

Remember, this is on a space ship. The kinds of things you’ll need to use power for will either require a lot of it or a specific kind of source. For example, your entire living room is going to be wired to a battery. Hacking into that battery and hooking up a bicycle to power things is going to be very risky and also not have much effect. Sure someone can do it, but is it really worth the risk? Try running your computer from a bicycle sometime.

Of course someone could try to build an alternate generating system, but they’d need a lot of know how and would undoubtedly attract the unfavorable attention of the current grid owners.

I don’t think you have to worry much about alternate power sources.

The power company is definitely the right model for your economy rather than the battery, however I don’t think you need to worry about exact conversions unless you’re trying to convert from an economy in another game. I would start by deciding how much power a single adult living alone consumes as a minimum. That’s just consumption, not trading it for anything. Then decide what percentage of a poverty level lifestyle is just consumption, what is trade. Start with the idea of a 50/50 split for example. So a single adult consumes x joules, but really needs 2x to live. (you can alter that based on life forms, availabe resources etc.) Minimum wage should get you about 75% of what you need to live, so that people earning minimum wage will have to find roomates in order to make ends meet.

6

Oh right, I originally thought that you wanted to treat energy exactly the same as monetary currency, not as a rationing system. My bad.

I would work if you had to pay for the power to run the life-support, lights and heating. You could then trade credits to the baker who would then use the power to make bread, etc. Thus the bad guys have enough power to use energy weapons, soak in the hot tub and leave the bathroom light on all night while the teeming millions are left with throwing rocks, cold showers and huddling around a candle made of ear wax.

I suppose you could have the Oppressors cracking down on energy generation (like the US alcohol prohabition), and have a blackmarket in biologically derived methane (anaerobic digesters) or pedalling machines.

It sounds like an interesting idea. I hope to hear more about your project!

7

Not hamsters though, we tried them, they don’t work!!

Rabid Squirrels maybe??

8

But surely this is the whole point? You can’t “make” energy. That violates the mumbleth law of thermodynamics. The point is that, in order to pedal a bicycle, walk up the stairs, or type on the SDMB, you need energy from food. And that food requires more energy to be produced than it will supply to consumers. My head is starting to hurt thinking about how you could use energy as a currency. Something tells me that entropy would get in the way. It normally does when you think you have a bright idea.

9

I think you mean 40 megajoules (MJ), not 40 millijoules (mJ). If energy is this cheap, then you don’t have to worry about people generating their own, because the investment is prohibitive. I mean, you could in theory generate electricity for yourself with a bike at home. Do you know anyone who ever would consider doing this?

I’ve actually done a bit of investigating into which foods you could eat a lot of that gets you the most energy per cost. Rice is the best I’ve found, at around 40 Calories per cent, which is just under 17 MJ per dollar. Most foods are more like one-tenth this calorific per cost (4 Calories per cent). Given the huge inefficiencies involved in making your own energy, if you were given one dollar and told to buy food, eat it, and burn those Calories making energy, I would be surprised if you could get more than 5 MJ out of it.

If you had a 10-meter-square lawn covered with 10% efficient solar panels, you’d get around 400 MJ a day (assuming you’re at Earth). At 40 MJ per dollar, this is just $10.

So, I think that if energy is at least 10 MJ (100 Petaergs) to the dollar, you wouldn’t have to worry about people treating energy as anything but currency.

10

No point in that. There is no real need to peg the joule to the dollar. Regarding your calculations, they include a lot more than just the energy component–you’ve got all the stuff that goes into making batteries and running a power plant that need to be taken out somehow. But there’s no reason to do that, just pick something arbitrary. Since you’re not using dollars anyway, there’s no reason to set the value of a shirt, let’s say, in terms of joules to the price of a shirt in dollars.

One way to do it would be to consider the caloric content of food items. A bowl of rice contains X calories which equals Y joules. That’s the value of a bowl of rice per se. That should represent a minimum value, or there-abouts, since the rice can be converted into heat if nobody wants to eat it. The maximum price of the bowl of rice is going to be the energy content plus the cost, in terms of energy, of making it oneself. That maximum price part is pretty sketchy, since one could corner the market on food and drive the price way up. Then a person may be forced to give up massive amounts of energy just to get enough food to survive.

Please note, that if the spaceship isn’t getting energy from the outside, you’ll have a contractionary economy since the supply of your numeraire will be constantly decreasing as heat is lost to space. Plus shift from low entropy to high is going to make the usable energy avaible decrease.

11

If energy is scarse, electricity may be relatively more expensive. OTOH, since it would presumably require the fewest conversions it may be less. (We turn plants into electricity via furnices, you’d turn electricity into plants via light.) Either way a conversion is tricky.

In fact, could you invent some other sort of energy which behaves a lot like electricity but has a different name, so if you have to fiddle any numbers no-one can call you on it.

Spend a little bit of time working out prices, etc, now. What’ll be more expensive than to us? What less?

There may be a black market in some solar energy, if the monopoly inflates the price of energy beyond that of collecting solar.

There’s little need to worry about bicycles - the energy used to grow the food used to power the cycler will be more expensive than the enegy produced.

…unless the monopoly charges different amounts for different uses. eg. They charge a lower markup on food to keep people sweet, so they don’t die, or because people would strike. Then someone who can reasonably efficiently turn food into luxury energy could run a black market conversion scam, (a bit like melting coins down for silver if the silver content is greater than the face value). I don’t know what the conversion method would be (combustion? eating and cycling?) though.

12

It would be interesting to consider what would be luxury goods in such an economy.

Meat is one that immediately springs to mind, especially cattle. Fish , however would be an economy meat since its fairly good at converting feed into flesh.

Refridgerators would probably be another one as well as air-conditioners, generally, anything that cools stuff down will be more expensive than stuff that heats stuff up.

13

No problem, and probably my fault. I doubt I made it very clear to begin with.

You’re right. I meant megajoules. Not sure why I was using a little m. Probably because I kept seeing kJ.

Anyway, taking drnihili’s suggestions and similar suggestions from others, I think we’ve settled on this:

A source gives us 10^12 joules as the energy used yearly per capita in the US. I’ll assume this is rather more wasteful than what would be desirable aboard a ship, so I’ll start with 50% of that. Daily, then, one consumes about 1400MJ.

Next, we’ll assume that this is a fairly middle-class level, and call the minimum needed to live 700MJ daily. So our minimum-wage level will be 500MJ.

Assuming an 8-hour shift, that makes our minimum wage about 60MJ/hr, which I can’t resist converting to watts. “I make 17000 watts” is an interesting way to state one’s wage.

Anyone see anything wrong with those numbers? The people who say “just pick a number and stick with it” are probably right, but I’m still concerned about being massively, obviously wrong somewhere.

True, if you consider the entire ship to be within the “system.” But actually, only the first few decks are occupied, and as far as they’re concerned (or can tell), the energy coming from deeper within the ship is infinite. Easy way to get around a lot of possible objections, eh? Probably we as the game designers will decide it to be a zero-point energy source or anything else we care to make up, since the ship’s technology is far more advanced than that of its inhabitants. Its exact nature, however, won’t be known to the ship’s citizens.

Thanks again to everyone who’s responded so far, it’s been a great help.

14

:smack: Thanks for reminding me about that r_k, I should have said “transfered biological energy to electrical”. It’s one of those little verbal shortcuts I tend to use.

15

Nice way of putting it, r_k. Could I use that as a sig one day?

16

I love this topic. This is soo something I would do. If I write a novel with a similar economic system, maybe I could use some of your ideas, with proper credit of course.

Try to do some research on “Embodied Energy.”
(Sorry, I’m at work and our filter keeps me from surfing, but I can provide a link to Yahoo:
http://search.yahoo.com/search?fr=slv1&ei=UTF-8&p=“Embodied+Energy” There seem to be some nice hits.)
Embodied energy is the amount of energy it takes to mine, produce, deliver, and install a building component. It is a very very useful method used by “green” Architects to decide what building materials they will use. Concrete or steel? Wood or fiberglass? Stuff like that. Using these numbers, you can more easily see how much more costly one product is verses another. For example, for the same amount of energy it takes to produce one average sized paper grocery store bag you can produce about 100 plastic grocery store bags. Plastic bags in your economy should be 100 times cheaper than paper bags, disregarding things such as supply and demand.

17

The most important question to ask yourself is, “On what basis does the faction decide to dole out more or less energy to one person over another?” What good/services do the citizens provide to the faction? If everyone get’s the same amount then it’s a prison economy with a twist. The curve of possibility for economic growth would be the inverse of that of a free economy. The only possible investment opportunities would be in energy conservation technologies because everything else is a zero sum. No amount of energy can create more energy therefore it can only be invested so that it might be more wisely spent in the future. If you can be more clear on those first questions I can help you with the rest.