Fallen Leaves
This runoff event finally floated the leaves that had fallen into the stream channels this year. Leaves have high surface areas and wet leaves adhere to one another to create strong yet malleable structures. Fallen leaves within runoff are like the clotting factor in blood, able to quickly create light yet resilient structures to staunch the flow. In the following image (taken about 36 hours after the storm), you can see how the fallen leaves began adhering and accumulating to the side of the runoff. Each leaf created a wet surface for the next floating leaf to stick to and soon leaf levees many centimeters high were constraining the runoff within two specific channels. (Classic feedback spiral: does the flow of water shape the levees or do the levees shape the flow of water?) If I’m out there during heavy runoff, I can push large stretches of the levees around to lead more of the runoff where I want.
What makes this particular spot interesting is that a large streambed lies at the top of the picture, flowing from left to right. Though you can’t see it, a one meter high cut bank lies just beyond the green grass about three meters beyond the furthest leaf levee. This whole side drainage used to flow about five meters to the left of this view, straight to and over the cutbank into the stream, eroding a gully into this terrace. All the runoff and all the floating leaves used to end up in that stream where they flowed away. But now the stones I’ve placed to the lower left have diverted almost all that runoff so that it now flows to the right for about two hundred meters along the terrace, slowly soaking in. Hardly any of it contributes to the surge of runoff within that streambed during a storm. Now, all the leaves “get stuck” in this area. Year after year, a leaf delta is building up, decomposing into a deeper absorbent sponge. You can appreciate this when you compare the above picture with one taken almost exactly two years ago when I first diverted the runoff onto the terrace. This second picture faces a bit more to the right, allowing you to see how the runoff turned to the right and flowed along the terrace, rather than pouring over the cutbank (which is outlined by lines of rocks I had recently placed along its edge to help turn the runoff to the right).
Notice how thin the vegetation was back then and how the leaves were washed out over a broader area because the terrace originally had less surface area for the leaves to adhere to.
The deeper idea behind these specifics is that though we must accept that water will flow downhill (because we live within a universe shaped by the Second Law of Thermodynamics), we (and allies) can influence how that water flows downhill. The runoff can flow quickly and definitively back towards the sea, carrying away leaves and other products of the earth’s fertility. But we also can lead that runoff onto slower paths along which much of it soaks into the ground, never reaching even the nearest stream. In the soil, the water (and the decomposing leaves) nourish life to grow more richly which, in turn, makes the soil more absorbent so that increasingly more of the runoff will soak in. This fundamental idea underlies the next section…
Three Approaches
Paul Krugman, a Nobel Prize winning economist whom I hold in high regard recently wrote in his bi-weekly New York Times op-ed column:
“One side of American politics considers the modern welfare state — a private-enterprise economy, but one in which society’s winners are taxed to pay for a social safety net — morally superior to the capitalism red in tooth and claw we had before the New Deal. It’s only right, this side believes, for the affluent to help the less fortunate.
“The other side believes that people have a right to keep what they earn, and that taxing them to support others, no matter how needy, amounts to theft….
“There’s no middle ground between these views.”
His “no middle ground” crystallized thoughts that have been brewing up in the fields for years. There is a middle ground. It lies with seeing money flowing within an economic culture as like water flowing within an ecosystem. In past Cairns, I have often brought up this analogy between water and money. Krugman’s comment led me to focus on a new aspect of the analogy. Analogies don’t prove anything but they are great for inspiring hypotheses and experiments. I know a lot about how water flows in a storm but I’m neither physicist nor economist. I’m sure my analogy has limits so please read the following with a warning light flashing “analogy ahead.”
The new part of the analogy between water and money is “why do they flow?” By flow, I do not mean water’s ability to be pumped through pipes. I mean water’s ability to spontaneously flow downhill. When I am digging channels with my trowel, there is a fine but fundamental difference between one that successfully leads water along a slightly downhill direction and one that futilely attempts to lead water along a slightly uphill direction. Flowing downhill is spontaneous; it does not require an input of energy. The spontaneous flowing of water reveals a direction which the Second Law interprets as moving towards an increase in entropy, towards “less possibilities.” Things spontaneously flow towards greater entropy. A sound spontaneously fades away. A ball spontaneously bounces lower and lower until it comes to a stop.
In this sense of the word, does money flow? Is there such a thing as “slope” in the economic landscape? Is there an economic equivalent to a “direction” so that unconstrained money would spontaneously flow that way? I hypothesize there is because I see money converging in ways that remind me of runoff converging within a drainage network as it flows down from the ridges into the increasingly larger channels. Greater concentrations of money gather into a smaller area. Some people will be situated downslope where flows have converged into great abundance washing over them while many, many others will live high on the slopes or the ridgetops where the only “moisture” they receive is from just the rain and dew that falls upon them. The rich grow richer is a pattern common through history. Some celebrate this pattern; other deplore it. In this discussion, I simply note it as suggestive that there has been a direction of spontaneous flow within money that leads to the heart of the analogy: that money, like water, flows towards greater entropy. In thermodynamics, the amount of energy does not change as it flows. What changes is that the amount of work the energy can accomplish declines. This leads me to wonder: does the amount of “potential energy” within money decline as it flows towards greater convergence?
I can think of at least two ways in which this appears true. First, money undergoes inflation as it converges so that money becomes worth less further downstream. A simple example that you might think facetious: it will take several thousands of a wealthy person’s downslope dollars to clothe that person (sometimes for a single event) while it takes only a few hundred upslope dollars to clothe a poor person for a year. One rich person’s downslope dollar buys less of the “clothing need” and is therefore worth less (inflation). Some will say there is no equivalency between a high quality suit and thrift store worn-out clothes. True in some ways. However, when I examine the relationship between cost and value, I conclude that a significant amount of the cost of a shirt bought with downslope dollars lies in announcing that this product was purchased with large quantities of downslope dollars. Part of the “value” in a two hundred dollar shirt as opposed to a fifteen dollar shirt is that wearing the expensive shirt distinguishes one as having enough money to be able to spend two hundred dollars on a shirt. The two hundred dollar shirt might last longer and fit better but that difference does not account for the entire $185 difference between the two shirts. Part of that $185 price difference lies in the value of the higher price itself. As money converges, a greater percentage of each purchase goes towards demonstration of wealth rather than the product itself. We usually think of inflation as applying equally to all money within an economy but I think that location within the “watershed” also influences it. Money has a different “potential energy” depending on its location within the “watershed”.
A second way money decreases in “potential energy” as it flows towards convergence is that more of it flows into leverage and speculation which creates economic bubbles. This loss of potential energy is currently glaringly obvious in billions of dollars worth of half-built housing tracts. Why does some of the converging money flow into leverage and speculation? Because as money converges, some people acquire far more money than they need so what are they to do with it? The answer that has evolved within our culture is to invest it – and industries have arisen to help one do that. Concentrations of money have financed many worthy projects that would otherwise be difficult to accomplish. I acknowledge this. However, the financial industry is strongly shaped by a powerful reinforcing feedback spiral: those firms that can earn a higher rate of return on an investment attract more money to invest. (This feedback spiral is similar to one with water. A stream that gathers more water can cut downwards, steepening adjacent slopes so that more of the rain runs off into the stream.) This reinforcing feedback spiral can focus investment companies to do solid research that lead to culturally-enhancing, profitable investments. But the same reinforcing feedback spiral can also twist off into another direction. The easiest way to increase rate of return is through leverage. Therefore, the more that money flows towards highest rate of return, the more that some of it will flow into leverage. This reinforcing feedback spiral can be hijacked by speculation. Bubbles develop when rates of return on an “investment” are driven by how much money is flowing into that investment which is driven by perceived rates of return. Leverage increases the amount of money flowing in which increases the perceived rate of return which increases the amount of money flowing in. Money flowing into bubbles is another way it loses its “potential energy” within a culture.
Once we start thinking of money as flowing towards less “potential energy,” then the water cycle becomes illuminating. Only about 40% of the rain that falls on the land came directly from evaporation off the sea. 60% is “recycled rain”: fresh water that, as it flowed downslope back towards the sea, evaporated or, more likely, was transpired through plants back into the clouds to fall again as rain. This almost double recycling of the fresh water changes the average terrestrial rainfall from a desert grassland amount (what it would be without recycling) to enough rain to support forests. This is an appropriately powerful image to focus our economic discussions. Do we want to evolve a richly-cycling economic system that is capable of sustaining an economic forest or do we want to settle for a draining economic system that sustains only an economic desert? It is in the self-interest of an economic culture to develop ways to keep as much of its money cycling high in the drainage as possible.
This is where I see a middle ground between Krugman’s “two sides.” His “two sides” both see wealth as dollars which are possessed rather than as potential energy which is flowing. This creates a zero-sum game in which every transaction, every “game” has a winner and a loser. Both sides are arguing whether some of the dollars of the rich should be transferred over to the poor. The one side justifies this transfer as creating a more “morally right” society. The other side resists this transfer as theft, something they see as morally wrong.
But in the middle ground, we look not at dollars but at the amount of potential energy within an economic culture, its true wealth. In the middle ground, the emphasis is not on transferring amounts of money currently in the possession of one “faction” into the possession of another “faction.” The emphasis is on developing and shifting the paths by which money flows and cycles through the system so that, like fresh water, more of the potential energy within money accumulates within the system – to everyone’s benefit. The discussion fundamentally shifts away from a zero-sum game mentality of winners and losers toward something more expansive in which all can experience benefit.
A cat can twist in mid-air without violating the conservation of angular momentum. In a similar way, my plays in the rainy fields feel like runoff flowing towards greater potential energy – without violating the Second Law. I lead runoff from areas of saturated ground (usually channels) to areas of unsaturated ground (somewhere on the adjoining slopes). I do this with channels sloping gently down across the slope. Much of the water is absorbed into the soil as it flows across the slope. So though the water is always flowing downward along my new path, the water ends up far higher on the slope than it would have. From this point of view, the runoff seems to have moved up the slope. (Image of such a play.) The same thing can be done with money, leading flows to accumulate higher within a culture’s economic drainage, increasing that culture’s “potential energy” to bring new possibilities into existence.
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