Every economy runs on light. That is not a metaphor – it is physics.
Without light, there is no life. Without life, there is no labour. Without labour, there is no economy. Yet modern economics behaves as if energy, health, and human limits do not matter.
In this Boxing Day video – part three of my Christmas series on light – I explain why labour is transformed solar energy, why burnout is an energy failure, why infinite growth on a finite planet is impossible, and why fossil fuel capitalism is about power, not necessity.
Light reconnects economics to life itself – and forces us to rethink wealth, growth, and what an economy is actually for.
This is the audio version:
This is the transcript:
Welcome to Boxing Day, and this is the third in our series on light, which I'm producing over this Christmas period in 2025.
Today, I want to talk about the economy, because every economy runs on light. This is not a metaphor; it is physics.
Without light, there is no life.
Without life, there is no economy.
Without light, there is no health.
Without light, there is no wealth, however we define it.
Almost all usable energy on Earth comes from the sun. Agriculture depends on it directly. Wind and water are solar-driven. Fossil fuels are stored ancient sunlight. Light underpins everything and transforms it as well. Light can even be seen as metanoia, that thing possessed of transformative power that changes everything.
Human labour is transformed solar energy.
Food becomes muscle, thought, and care.
Workers cease to be abstract inputs; they are biological systems with limits.
And all of that matters because, at present, economics does not see the world that way.
Economics too often treats labour as a cost. Physics tells us that it is an energy process. Exhaust people, and systems fail, is what physics says. Burnout labour, and productivity collapses. This is not ideology; it's reality, but our economists, and most especially our politicians, forget this to our cost. When they're talking about why systems fail, they forget that it's all because of the failure of that interaction between light and us.
Growth economics also ignores physics. It treats the planet as just another variable. Energy is simply one of those things that is provided to us free of charge, according to neoclassical economics. But it isn't like that. Energy is not substitutable. You cannot deregulate sunlight. You cannot financialise thermodynamics. Limits exist, whether markets like them or not. And infinite growth in this world is a fantasy. You cannot, literally, grow forever on a finite planet. That's not pessimism, it is arithmetic. Ignoring this reality has created crisis and denial.
The truth is that a lot of the narratives that are being put forward as if they're true, but which aren't, are all about politics. We do not lack energy; we lack fair access to it. Energy poverty is a political choice, and so too is fossil fuel dependence. Power explains persistence, but persistence in this case in pursuing the wrong policy.
Fossil fuel capitalism is a perfect example of this. Fossil fuels represent concentrated control over energy, and that, of course, created wealth and vast amounts of it, but it also created dependency, and renewables threaten this centralised power. Renewables diversify the control of energy; we could all make our own. Resistance to renewable energy is therefore political and not technical. Light decentralises control, and that means that we have to rethink wealth - because wealth is not money; it is the capacity to sustain life. Energy access determines that capacity.
Distribution matters more than accumulation in that case, and energy transition is social transition. It must be planned, it must be just, and it must be democratic. This is critical when we talk about how we're going to manage net zero. It isn't just a technical process. But what this means is that our economy is not disconnected from physics; that's a fantasy. Light reconnects economics to life itself. But in doing so, it points out that this is where the radical power for transformation within our world really exists.
We have that capacity to change what and how we do, and we could, and there is no purely financial economy that flows from this understanding. In fact, that is one of the most important points I'm making of all in this particular video . There is only light, used, delayed , diverted or denied. That is what the economy is actually about. But that's also why claiming the light for ourselves is so important, and that will be a theme of videos to come.
Previous posts in this series:
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“Distribution matters more than accumulation … and energy transition is social transition. It must be planned, it must be just, and it must be democratic. This is critical when we talk about how we’re going to manage net zero.”
As part of this criticality it’s essential we understand the falsity of the rich few in denying the following:-
When the state spends, it does not convert existing base money into broad money; rather, it increases both base money (commercial bank reserves) and broad money (private sector bank deposits) simultaneously through the creation of new money.
If the Green Party doesn’t hammer this home it’s done merely a harmless protest party ultimately serving the rich!
Agreed
@Schofield
“When the state spends, it does not convert existing base money into broad money”
That’s why the actual name ‘The Treasury’ is so misleading.
Other countries have a Finance Ministry.
The ‘Treasury’ implies people humping around a box to collect and distribute funds, which might be just about appropriate for a local authority as a currency user but is now certainly not for central government as a currency creator.
Even the title ‘Chancellor of the Exchequer’ is outdated and without modern relevance, coming as it does from the Norman department of state dealing with the royal revenues, named Exchequer from the chequered tablecloth on which accounts were kept by means of counters.
https://www.oed.com/dictionary/chequer_n1?tl=true
The nomenclature is all woefully obsolete.
No wonder the understanding is too…
Unless of course ‘The Treasury’ is still using counters?
🙂
Thanks, Peter
https://new-wayland.com/blog/gilt-issues-considered-harmful/
“ Most of the arguments made in favour of sustaining public debt issuance can be reduced to special pleading by an industry sector for public assistance in the form of risk-free government bonds for investors as well as opportunities for trading profits, commissions, management fees, and consulting service and research fees. […]
The operation of public debt markets absorb a diversity of real resources deployable elsewhere. […] The opportunity costs in terms of the labour employed directly and indirectly in the public debt ‘industry’ are both real and large.
The ‘cottage industry firms’ that characterise the public debt industry use resources for public debt issuance, trading, financial engineering, sales, management, systems technology, accounting, legal, and other related support functions.
These activities engage some of the brightest graduates from our educational system and the high salaries on offer lure them away from other areas such as scientific and social research, medicine, and engineering.
On balance, public debt markets appear to serve minor functions at best and the interest rate support can be achieved simply via the central bank maintaining current support rate policy without negative financial consequences.
The public debt markets add less value to national prosperity than their opportunity costs. A proper cost-benefit analysis would conclude that the market should be terminated.”
“ A simple pension payment plan at National Savings, along the lines of the Guaranteed Income Bonds and Indexed Linked Savings Certificates, would solve the problem permanently, would be limited to individuals, and would allow them to manage their risk profile as they approach retirement. (Rather than an annuity or ‘drawdown’, they would sell out of risky assets and transfer the money to National Savings, or just save for their pension directly in National Savings from the start).
Since it would be only available to individuals and there is no need to pay middlemen, it is clearly far more efficient than the current Gilt issuing system.”
Please read this post in full
I have
Thank you
Richard,
You state you have read this in an earlier comment:
https://new-wayland.com/blog/gilt-issues-considered-harmful/
But what do you think?
The issue with gilts is not technical. It is structural and political.
Gilts, issued because of the so-called full funding rule (see this blog’s glossary for explanation) break the connection between savings and real investment, and that damage runs right through pensions, asset markets and public policy.
Gilts are technical liabilities of the state.
In practical terms they are government-guaranteed income streams, no different in substance from National Savings products.
The difference is not what they are, but how they are designed. National Savings products are limited to individuals, capped, and non-tradable. Gilts are none of these things. They are open to unlimited ownership, to financial intermediaries, and to overseas investors, and they are traded in markets that then claim political authority, which process is deeply politically damaging.
As a result, very few gilts are held directly by households. Most are held by financial institutions and foreign governments and entities, but are often managed by intermediaries. We therefore pay a state income to middlemen and outsiders for no identifiable public purpose, while tolerating a trading market that claims the power to discipline government.
Gilts also, by design, suppress productive investment. Because they pay income and are negotiable, they can divert returns away from real assets. When gilts were removed from markets through quantitative easing and replaced with bank reserves, asset prices rose. When gilts are issued, other asset prices are lower than they would otherwise be. That can discourage the supply of the assets we actually need, particularly housing and infrastructure. The QE rationale was built on this understanding.
The usual defence for this situation is pension funds require gilts. But this is an admission that the private pension system cannot manage risk on its own. Indexed-linked gilts exist to support pension funds, and when those funds destabilised themselves in 2022, the Bank of England had to intervene. A system that repeatedly requires state rescue is not privately viable.
There is an alternative. Savings and pensions could be channelled directly through National Savings, using guaranteed and, possibly, index-linked income products limited to individuals. That would reconnect savings to public purpose, remove intermediaries, and allow government to focus investment where it is socially needed.
The fact is that gilts are not operationally necessary. They persist because they serve the financial sector. That is not a sufficient justification for their continued use if better options can be created, as I suggest possible.
Richard:
Likely you have already caught up with the Reith Lectures. If not, you may find the commentary on mechanisms of societal change interesting.
https://www.bbc.co.uk/sounds/brand/b00729d9
Thank you for all the great presents throughout the year.
Merry Christmas
I ended up finding them conceited, elitist, lacking a moral compass and typifying what might be called a privileged NGO attitude. Profoundly disappointing.
I find myself reflecting on John 3:19
https://www.biblegateway.com/passage/?search=John%203%3A19-20&version=CEV
It’s the theological equivalent to where we are politically right now – that people see the light but prefer darkness.
There’s another biblical concept that causes a lot of theological debate – It’s called the “unforgiveable sin” and has spawned many sermons and monographs.
It’s mentioned in Mark 3:20-30
https://www.biblegateway.com/passage/?search=Mark%203%3A20-30&version=CEV
Personally, I think it is most easily summed up by John 3.19 – “seeing the light, and preferring darkness”. It isn’t ignorance that is wicked. It isn’t being tricked or lied to or exploited or abused that makes someone unforgiveably evil (although they may do very bad things because of it, but that does not make them lost).
What is unforgiveably wicked, is seeing the light, knowing what it is and that it is good, but CHOOSING darkness. Seeing kindness and compassion and truth, but DELIBERATELY going the way of cruelty, hardheartedness, and deliberate deceit.
Being offered the chance of redemption, understanding what it is, and saying NO! because that would mean losing power, privilege and priority.
In Mark 3.30, the context is the religious leaders who, repeatedly (the verb is in the imperfect tense) called Jesus “Beelzebul”.
In political economy, this “unforgiveable sin”, means KNOWING that one way, based on deliberate deceit, leads to inequality, misery, war crimes, genocide, and climate catastrophe and knowing that the other way, which is based on truth, offers hope of economic and environmental redemption. But then (and this is the unforgiveable self-destroying bit), they smear those who offer hope and redemption, they denigrate them, lie about them, and call that which is good, evil.
They know what they do, they CHOOSE darkness rather than light, they have locked themselves in a dark cellar, and broken the key to the door. We do not need to condemn them, for they choose to condemn themselves.
It is a truly awful fate – it is not forced on anyone, it is avoidable right up to the last minute.
Thnank you.
It’s very disconcerting that one of the most authoritarian nations on earth is the world leader in renewable energy, and likely to remain so. China is the world leader in global installations of solar and wind, controlling key supply chains (solar cells, batteries, turbines), and driving the energy transition with massive capacity additions that exceed the rest of the world combined, aiming for carbon neutrality by 2060. This year China built more solar capacity than the rest of the world combined. China has also been the world’s largest emitter of fossil fuel emissions for the past 20 years.
And China is the most powerful authoritarian one-party state on earth that actively opposes Western-style liberal democracy. The CCP views Western constitutional democracy as a threat to its legitimacy and authority, and China has set about weakening, spying on, stealing from, hacking into, subverting and undermining democratic institutions and nations; it is simultaneously investing in developing nations in the global south, and partnering with Putin against the “West” in both hemispheres, as well as clearly intending to take Hong Kong.
I wonder what anyone else makes of this matter.
There is much to condemn about China – especially on human rights.
But, do you think it expansionist?
The evidence is that China is challenging the existing international order militarily and economically. Militarily, China has aligned with Russia in backing Maduro against the Trump administration. China has asserted claims over nearly the entire South China Sea, ignoring international rulings, and threatens to take Taiwan by force. Chinese ships have used water cannons and made deliberate collisions with Philippine vessels in the South China Sea. There has been what analysts call substantial growth of the PLA Navy, viewed as preparations for conflict in the Taiwan Strait. By the way, China now has the world’s largest navy. Beijing spends billions of dollars annually on an “antidemocratic toolkit” of nongovernmental organizations, media outlets, diplomats, advisors, hackers, and bribes all designed to prop up autocrats and sow discord in democracies. The CCP provides fellow autocracies with guns, money, and protection from UN censure while slapping foreign human-rights advocates with sanctions. Chinese officials offer their authoritarian brethren riot-control gear and advice on building a surveillance state; PRC trade, investment, and loans allow those dictators to avoid Western conditionality regarding anticorruption or good governance. See http://www.uscc.gov/sites/default/files/testimonies/USCCTestimony3-13-20%20(Elizabeth%20Economy)_justified.pdf.
Xi claims that China’s aggressions are in defense of national security and economic security. We hear the same line from Putin and Trump.
So, we have three world powers and then Europe.
I see little to choose between the three world powers right now; certainly all hive every intent of destabilising Europe.
The question is, what are we defending, and why? The issue is how few of our supposed leaders can answer that question.
What are we defending and why – I remember watching Notre Dame burn.
I imagine that we all do.
What we can do with/about our leaders, and I include myself in “our” because we are all in this together: my Congressman once told me “don’t look to this chamber for leadership. You people lead. This house will follow.”
So, how do we do that unless it is by raising awareness, as I seek to do?
Raising awareness is necessary, even crucial, if insufficient , isn’t it?
The tool we are using is the internet. From the first commercially available personal computer, in 1982, to now, the expectations and awareness of millions of humans has changed to one of connection.
As a practical matter, how to get to leaders has no glib or summary answer. It’s more than a case of the donkey, the carrot, and the stick. I think it’s necessary to talk with some of the world’s leaders, those who are “on our side” and available, and ask their thoughts.
I don’t know what the UK people and what Europe’s people are thinking, but the view from California is that the people are in conflict between chaos and decency, between far right and not very left analyses. The common enemy is what I call the marketocracy, and it is the goal of transnational capital and crime to rule the planet.
So what can we offer instead? Here’s China, leading the world in renewable energy while fostering authoritarianism around the world, and blocking the COP 30 goal of transitioning away from fossil fuels. . .
I think we need to seek discussion with amenable world leaders.
Thanks for this series of thoughts and for responding to my challenges. I appreciate that. And yes, we need those conversations.