Why the Global economy is suffering permanent damage and everyone loses
In all the wars and other local conflicts involving armaments that are taking place at the present (which for me, at the time of writing, is March 2026), especially what is happening in the Middle East, the one certainty is that energy is being released into the atmosphere of an already increasingly warming planet every time there is an explosion or fuel is burnt to send planes or missiles towards their target. In addition, all damage is a loss of goods and services that previously were available to someone or something, because the armaments humans use also kill other life and damage resources, even if we do not notice it immediately.
Those in charge of conflict are paying attention to their own short-term goals and are not considering the capacity of this planet to supply the needs of all life now and into the future. Nearly forty years ago, the United Nations published “Our Common Future”, which set the global challenge of urging humanity to achieve Sustainable Development but warfare and armed conflict just contribute to our collective unsustainability.
The creation in which we live sets limits through ‘natural laws’, that are beyond any level of government to change or even influence, whether individual leaders believe it or not! Economics is the study of how the energy needs of all humanity can be supplied; energy, as defined by physics, is the basic constituent of everything; therefore, all economics is subject to the Laws of Thermodynamics, which scientists have been seeking to understand and develop for approximately three hundred years.
Unfortunately, in our present situation, instead of measuring the energy we use, we have for several thousand years used “money”, which is very much a human tool, that enables people to exchange goods and services with others prepared to pass them on, as the basis of our economic evaluations. This only works within human economies, and although the price of goods and services is affected by the second law of thermodynamics via the ‘so called ’ laws of supply and demand’, monetary values do not, in the very short-term, reflect the energy value of the global resource that humanity, all life and vital processes on this planet rely on.
It will not be easy, but for our common good we need to adopt an economic model that enables us to measure the movement of the energy involved in providing the goods and services we need (which give money its apparent value) and the resources that support the non-human planetary systems we rely on. This aspect of human responsibility has been highlighted, in a recent television program, by King Charles III, and written about by him and others over, at least, the last fifty years.
Integrating Physical Principles into Economic Theory
The concept of creating a new economic model based on the Laws of Thermodynamics is not new and many people have explored this idea. Therefore, I decided to use the Artificial Intelligence (AI) programme Copilot within Microsoft Word to help me summarise the principal arguments and the potential benefits in a way that I would have struggled to do otherwise, so this valuable contribution to my argument is shown, in italics, below: –
The traditional approach to economics often treats resources and energy as abstract entities, frequently overlooking the physical constraints inherent in our world. By grounding economics in the Laws of Thermodynamics, we can develop a model that better reflects the realities of resource consumption, energy transformation, and waste production. This thermodynamic economic model recognises that all economic activity is subject to the fundamental principles governing energy: the conservation of energy (First Law), the inevitable increase in entropy (Second Law), and the unattainability of absolute zero (Third Law).
In this framework, economic processes are viewed as energy flows, where production, consumption, and exchange are constrained by the availability and transformation of energy. The First Law ensures that resources cannot be created or destroyed, only converted; thus, economic growth must account for the limits of energy input and the efficiency of conversion. The Second Law introduces the concept of entropy, highlighting that every transaction or transformation generates waste or disorder, which implies a natural limit to the recycling and reuse of materials. The Third Law, though less directly applicable, reinforces the idea that perfect efficiency is unattainable, and some energy will always be lost as heat or other unusable forms.
By applying thermodynamic laws to economics, policymakers and businesses can better assess the true costs of production, including environmental impact, and devise strategies that promote sustainability. This model encourages a shift from perpetual growth towards circular economies, where resource use is optimised, waste is minimised, and economic value is maintained within the constraints of our physical world. Ultimately, a thermodynamics-based economic model offers a scientifically grounded, realistic approach to long-term prosperity and ecological balance.
Putting things right on behalf of the Globe
Since mankind ventured into space, both with satellites and manned missions, we have become used to seeing our planet from the outside and measuring its capacities and resources remotely. Therefore, we already have the technical ability to create a better global economic model and this has been enhanced by the addition of AI and Quantum computing.
At present, the mechanisms set up by the United Nations in the aftermath of both the Brundtland Report “Our Common Future”, mentioned above, and the first Global Conference, also known as the “Earth Summit”, held in Rio de Janeiro in 1992, have tended to calculate both the cost of past damage and remediation in US Dollars. It should, perhaps, prove more beneficial to their efforts if the UN and their scientific advisors decided to pioneer a system of energy measurement for the purpose of evaluating economic activity that incorporates the scientific principals described in the AI summary above.
If this is done, it should provide a clearer picture of the true economic cost of warfare and conflict, as well as identifying adverse economic actions undertaken by all sections of the human economy. This is, surely, the only way to achieve human development that is actually sustainable.
How we should obtain the energy resources to power the global economy
Many people understand that it is more sensible to live on monetary income rather than consume financial capital. However, the same is true when considering energy resources. One of the greatest discoveries of the twentieth century is that we can measure energy potential within our universe and the resulting calculations reveal resources greater than previously imagined. Unfortunately, one of the first applications of this knowledge was used, destructively, through the creation of the atomic bomb.
Energy income is a far greater concept than the technologies people are currently beginning to harness that are sometimes described as ‘clean’ or ‘renewable’ because it includes everything that could be generated from the forces that drive the planet and its immediate surroundings: firstly, the Sun; all forms of gravity, including that resulting from the interactions of the Earth and the Moon; the motion of the Earth; and, notably, harnessing energy already available on this planet, which has been increased by what we have released through burning fossil fuels and creating explosions. Because humanity has already ventured away from the surface of our planet, consideration has been given to how people could be based beyond Earth, for example on the Moon and Mars. Thus, technologies that can provide the energy resources needed are already being designed. It is possible to expect that in a matter of decades we will have improved the efficiency of the technologies that can provide power, heat and light without resorting to the use of fossil fuels.
The current conflict in the Middle East has shown how vulnerable the infrastructure, which supplies us with oil and gas, is. Therefore, we must hope that commercial pressures to move towards obtaining greater security from ‘income’ energy will grow, even if some governments, for various reasons, remain wedded to our present fossil fuel and money based economic models.
Paul Newman
March 2026
