World History as a Thermodynamic Process
* Article: World History as the synoptic narrative of a thermodynamic unfolding. By Peter Pogany.
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Source
excerpted from: “What’s Wrong with the World? Rationality! A critique of economic anthropology in the Spirit of Jean Gebser” (Nov. 5, 2010)
Also published as Appendix B in the book “Havoc: Thy Name is Twenty First Century,” published Oct. 2015.
Introduction
Prologue, by David MacLeod:
"Peter Pogany (1936-2014) was born in Budapest, Hungary. As a trained Economist, he taught International Economics in Vietnam, worked as a Senior Economist and Statistician for Petroci in the Ivory Coast in Africa; worked as an Economist for the U.S. International Trade Commission (where he contributed to many high-profile U.S. government studies on foreign economic issues), and was an Adjunct Professor at George Washington University.
Pogany framed the stages of recent world history as Global System 0 (GS0), Global System 1 (GS1), Global System 2 (GS2), and Global System 3 (GS3). Each of these can be considered subepochs within modernity. Pogany saw each of these sub-epochs as self-organizing systems where the people embedded in them are so enmeshed socially, culturally, spiritually, economically, that it becomes their 'myth of the given.' They can't see other ways of being or organizing and the system itself reinforces what contributes to the system and squeezes out opposing forces and ideas. Therefore it's very difficult to change the system. Pogany’s views were in line with those of cultural philosopher Jean Gebser, who argued that system change only happens when the existing system goes into decay, and through a chaotic transition the next oncoming system "overdetermines" the previous system.
A kind of progression or cultural evolution can be observed through these different stages, gradually becoming more like an evolved, mature, dynamic ecosystem where dominator species do not thrive, and collaborative species thrive more and more. However, it is not a gradual progression. Pogany framed it as a series of abrupt bifurcations, along the lines Gebser outlined, and consistent with the disequilibrium thermodynamics of Ilya Priogine.
“As elaborated by Ilya Prigogine, the father of modern disequilibrium thermodynamics, a material entity that gains in size while becoming increasingly complex (where complexification is defined as growing volumes of information generated and transmitted among the entity’s decision centers) must undergo an alternation between relative (dynamic) steady states and bifurcations (chaotic transitions).” - Peter Pogany, “ ‘Fifth Structure’ – emergence in economics: Observations through the thermodynamic lens of world history” (2009, p. 4).
Discussion
"The present analysis is interfused with the thermodynamic theory of world history, which is briefly summarized below.
Human population and produced artifacts together may be perceived as a material entity, an aggregation of atoms or, even more generally, that of subatomic particles. This entity, culture, has undergone exponential growth through human activity (extended reproduction both biologically and economically), a process called cultural evolution.
As elaborated by Ilya Prigogine, the father of modern disequilibrium thermodynamics, a material entity that gains in size while becoming increasingly complex (where complexification is defined as growing volumes of information generated and transmitted among the entity’s decision centers) must undergo an alternation between relative (dynamic) steady states and bifurcations (chaotic transitions).
By the end of the 18th century, cultural evolution demanded global-scale organization to maintain its accelerating mode. The chaotic transition that began with the French Revolution and ended in the early 1830s led to the establishment of the world’s first global system (GS1), characterized by laissez faire and metal money. It lasted from approximately 1834 (the “birthday of the industrial proletariat” [Polanyi], a year of intense legislation in Britain concerning the poor) until the outbreak of World War I in 1914. The period 1914-1945 was another chaotic transition that brought the second and current global system (GS2) -- mixed economy/weak multilateralism -- into existence. (Until the end of the Cold War, socialism remained an unsuccessful alternative for global self-organization.)
At present, physical limits are beginning to slow cultural evolution. Its demand for free (accessible) energy (in the form of low entropy matter and energy carriers), and capacity to absorb pollution are coming into conflict with non-expendable terrestrial constraints. As a consequence, the world has either entered or is on the verge of entering another period of chaotic transition. A new global system (GS3), two-level economy/strong multilateralism, will be needed to create a sustainable balance between culture and humanity’s ecological niche. Micro-activities will have to be made legally subject to globally-determined and nationally allocated macro-constraints. The required transformation of individual behavior and institutions will be vast. "
(http://www.humanthermodynamics.com/Fifth_Structure_Emergence_in_Economics.pdf)
The Evolution of Global Systems According to Peter Pogany
David MacLeod:
"The related concept that Pogany used, while not as sexy sounding as Superorganism or Moloch (which I wrote about here), was GLOPPE, which is an acronym for GLObal Population Plus its Economy. Pogany described GLOPPE as “a life phenomenon,” a thermodynamic spontaneous process that includes all of the contours that define an organism with a primordial entropic drive of a dissipative self-organizing structure. Pockets of order are eventually exceeded by the disorder required by the 2nd law of thermodynamics. Hence, a “superorganism” by any other name — one that actively defends its niche via feedback loops.
Global Systems
In his “thermodynamic take on universal history,” with growing degrees of self-organization, Pogany identified the nascent form of GLOPPE’s self-organization as Global System 0 (GS0), which existed from 1500-1789 — the preparation for the age of global systems, in which we saw European explorations and colonization sweep the globe, along with the emergence of modern scientific thinking and The Enlightenment. This was the age of Bacon, Galileo, Shakespeare, Newton, and Bach.
GLOPPE’s size then reached the point of where it required global-scale organization, and we experienced a chaotic transition. Beginning with the French Revolution in 1789, followed by the Napoleonic Wars, this chaotic transition finally calmed down, and the British legislative process enacted the “Poor Law Amendment” in 1834 (the abolition of “Speenhemland”).
GS1
This then gave birth to Global System 1 (GS1), which existed from the 1830s to the outbreak of World War 1. Pogany summarized GS1 as laissez-faire/metal money/zero multilateralism. Nation building, globalization, and a free-market economy predominated, and economic growth outpaced world population, so that per capita income increased.
- Laissez-faire: Free market competition with minimal government intervention. National economies with capitalist commodity and resource markets.
- Metal money: Gold and silver as the “metal” monetary base; gold eventually gained the upper hand in what came to be called “the gold standard,” where national governments pledged to exchange paper currency for gold at a stipulated price.
- Zero multilateralism: Cooperation among national governments remained quite limited. Nation-building predominated, with Great Britain leading the way. The nation states of Italy (1861) and Germany (1871) were born. Trade between nations grew; increased globalization made it harder for any individual nation to get along without the rest of the world.
“Social, economic, religious, scientific, and cultural histories during the prelude to modern capitalism tell of an incessant pressure and catalysis, sometimes silent and low-key, sometimes noisy and violent, that moved Europe into the driver’s seat of world history and toward the great transformation out of its agricultural, feudalistic-aristocratic societies of the late Renaissance into industry-oriented, bourgeois-liberal national systems in the 19th century…
The great transformation succeeded. Cultural evolution advanced. All three of its indices pointed upward. However, even as GS1 expanded across the world, and evolved and perfected itself, the undercurrents for its demise were already gathering momentum.”
- Peter Pogany, Rethinking the World, pp. 55 and 63
This system broke down in 1914 with the “Guns of August” (i.e. the outbreak of WWI — see A Lesson in History, by Peter Pogany) as GS1 lost its ability to accommodate cultural evolution. As Pogany described it, “The ‘Guns of August’ blew GS1 to smithereens.” (Havoc, p. 123)
GS2
This second chaotic transition (1914-1945) that included WWI, The Great Depression, and WWII, led to the Global System’s second (and current) form, Global System 2 (GS2): mixed economy/minimum bank reserve/weak multilateralism.
- Mixed economy: The New Deal transformed the global system to prioritize a private-ownership based market economy with a public regulatory authority provided by the state to secure economic prosperity and social peace.
- Minimum bank reserve: A fiat currency where banks hold minimum (“fractional”) reserves, and loan maximum amounts, building an economy that has become dependent on continuous growth in order to repay loans.
- Weak multilateralism: The United Nations with its charter organizations and flagship agencies, such as The World Bank, the International Monetary Fund (IMF), and the World Trade Organization (WTO) are representative of weak multilateralism. Weak because these agencies and nation states lack the ability and authority to truly reign in multinational giant corporations - “there is no dependable (strongly goal-oriented, result-guaranteeing) multilateral oversight.”
“GS2 has brought a major but not a critical change,” according to Pogany.
GS1 can be seen as “classical” capitalism, and GS2 as “reformed” capitalism.
Over time, the physical limits have become increasingly evident as GS2 is built upon the requirement of ongoing economic growth. The GS2 demand for free (accessible) energy and its lack of capacity to absorb pollution are coming into conflict with terrestrial constraints. As a consequence, the world is coming into another period of chaotic transition.
“The world is now facing a crisis because GLOPPE behaves as if the terrestrial sphere, which it dissipates as it grows, were an open thermodynamic system when, in reality, it is a closed system.” - Peter Pogany
Thermodynamics plays a key role for Pogany, in his recognition that we live on a finite planet on which we’ve exceeded carrying capacity. Limits to growth have indeed begun to kick in. He saw the next chaotic transition as beginning sometime between 2008 and 2030.
“Macrohistory suggests that only a new global transformation will be able to clear the road for a future that does not roll out the red carpet to cultural devolution. What gives us pause is that, if it took “1914-1945″ (circa 70 million dead, many millions maimed, and the hardships of the Great Depression) to move the world from the most primitive form of socioeconomic self-organization to a more ordered one (a relatively minor qualitative adjustment), it staggers the imagination to contemplate what it might entail to go from ‘here’ to the ‘world-as-self.’ “
- Peter Pogany, Rethinking the World, p. 182-183
“The new chaotic transition will start between now and the 2030s, and barring a miracle, it will turn the world into a charnel house on a scale that will make the destruction of ‘1914-1945’ look like a mere prologue. But the will to live must triumph in the fullness of time. Once this defining, dark chapter is closed and the world discovers itself, there are many reasons to believe in the rebirth of an all-embracing, well-founded Hegelian optimism.”
- Peter Pogany, Havoc, Thy Name is Twenty-First Century, p. x
GS3
The next global system that Pogany theorized, which he envisioned as “the macro-future’s optimistic scenario,” would be Global System 3 (GS3), which would feature a two-level economy/maximum reserve banking/strong multilateralism.
- Two-level economy: At one level, large scale production in certain sectors will need to be controlled by nations and multinational producers. These would be sectors such as mining and other heavily polluting industries, for example. The other level would be locally based private enterprise and free markets operating “under thoughtfully conceived quantitative constraints.” (Rethinking the World, p. 80)
- Maximum Reserve Banking: “The monetary system would be based on a global currency issued by the global central bank. Maximum bank reserves would restrict the ability of banks to extend loans. Just as under the prevailing minimum reserve system, some banks in some instances may keep no reserves at all; under the maximum reserve system some banks in some instances might be required to keep 100 percent reserves. While such an arrangement may not eliminate the creation of money through debt, it would certainly change its nature.” (Havoc, Thy Name is Twenty-First Century p. 128-129)
- Strong multilateralism: “These arrangements would require a new set of domestic and multilateral agencies. GS3 multilateralism would represent a profound change from GS2’s “weak” version. It implies the liberal-democratically valid consent of the world’s population to a moral and legal authrority to overrule national preferences in the interest of long-term global interests. The accomplishment of this global transformation is the macro-future’s optimistic scenario.” (Rethinking the World, p. 80)
(https://daviddmacleod.substack.com/p/global-systems-peter-poganys-thermodynamic?)