Cannabalism, entropy, economics and consumerism.

Among the millions of species of organisms out there, you can find a species that specializes in eating almost anything. There are lion-poo specialists, feather-barb specialists, lichen specialist, you-name-it specialists. There are also lots of generalist species, and many of these generalists engage in cannibalism. But no species is a cannibalism specialist. I can say this with confidence, even though we don't know what most species eat in any detail. A species of dedicated cannibals would quickly run out of energy. Everything an organism does burns energy that cannot be retrieved. Thermodynamics and all that. If a population is to withstand the ravages of entropy for any time at all, there has to be a sizable inflow of concentrated nutrients and well-ordered energy. A population of cannibals has outflows but no inflows, and quickly changes food supply or goes extinct. Engaging in cannibalism can be beneficial for short periods under specific circumstance, but you can't eat all conspecifics all the time. That way lays rapid extinction. Similarly, an ecosystem cannot persist for any period of time without massive inward fluxes of organized energy. Sunlight, geothermal chemicals or organic detritus from one of these two are necessary inputs to every ecosystem we have ever come across. Without that, organized energy in the system quickly declines until life can no longer be supported.

This same logic applies in economics. Pyramid schemes and speculative bubbles ultimately must collapse, because there is no underlying production of valuable stuff to support the outflows of capital of those involved in the speculation. Extending the analogy only slightly further, we see why a "consumer services based economy" cannot long persist. We import the carpet-cleaning machine from China, but we cannot export the carpet-cleaning service. We import the yoga mats but can't export the yoga lessons. We bring in coffee beans but can't export the latte. The consumer services part of the US economy (the biggest part) sends money out but brings effectively no money in, feeding instead on money that is already in the system.

The fact that our consumer economy lasted as long as it did/has is a testament to why economics is a social science, rather than a natural one. Humans are inherently illogical, and economics needs an understanding of that as much as it needs equations to understand the ways in which we are logical. Economic theory worked out for any other species would perform terribly for humans, meaning economics is by necessity anthropocentric, and therefore a social science. This has allowed an economy with few inflows to persist by inventing imaginary inflows, known as international borrowing. Americans may not be able to give you anything back for your stuff, but if you lend us the money to buy it from you, we will promise that at some point in the future we will borrow more money from someone else to pay you back with interest. Stated this way, it is an obvious pyramid scheme. But we have preferred to think that because our economy is large, because it has been dynamic, we soon would no longer need to borrow. Instead, I hope, we have figured out that we have to consume at a level closer to the level at which we produce. Otherwise we are just eating our children's future earnings, which is a bit too close to cannibalism for my taste.