This is for those of you who might want to further your interest in Technocracy.   First, the name Technocracy has been used for example, as a synonym to advertise as a game, and other insignificant oddities in the attempt to discredit Technocracy the concept.

Technocracy the conception, is based on the reality that because of the increased use of advanced technology, drastic changes taking place economically and socially, are forcing the need to adapt to these changes.   The longer we try to ignore that need, places us in jeopardy of a chaotic future of disruption in all aspects of life.

Technocracy Inc.’s concept, is a design that adjusts the antiquated economic / social structure, which was conceived and functioned for a way of life that existed long ago.   Technocracy is not a panacea, but a system that supports decision making that is equitable, efficient, effective, and sustainable.


What is science and how does it relate to Technocracy Inc.’s plan.

The immediate activity of Technocracy directs itself towards two general ends.   The analytical purpose and a synthetic purpose.   We shall study, not Technocracy, as such, but science itself.   What is science and how does it differ from ‘not science’?

A Fact

  • What is meant by a scientific mind, a scientific viewpoint, and a scientific approach to a problem. What about the word ‘fact’?  To a scientist, ‘fact’ has a very specific and rigid meaning.
  • Please remember this definition, in essence if not in exact words. A fact is a close agreement of a series of observations of the same phenomenon.  
  • Now, what about those ‘facts’ that cannot in any manner be observed by man; those that, because of their character lie outside the field of currently available mechanical perception. Whatever such remote things are, they are not facts at this time until we find a way to measure and observe repeatedly.

Defining Words

Why this insistence on exact meaning?  A scientist pays attention to the exact definition of terms.   Now, contrast a rigidly defined scientific term with the expressions used in fields other than science—in finance, in politics, law, etc.
A definition is an agreement, wholly arbitrary in character, among men; while a fact is an agreement among investigations carried out by men.

The Postulates

  • Postulates are agreements other than those of fact or definition. These are the foundations of science.
  • The first postulate states that the external world actually is.
  • The second postulate states that nature is uniform.
  • The third postulate states that there are symbols in the ‘mind’ which stand for events and things in the external world.  


  • We have not spoken of branches of science as separate such as biology, chemistry, etc. Why not?  Simply because there are no ‘sciences’, there is only one science.

Scientific Prediction

  • The two aspects of Technocracy, analytic and synthetic are characteristic of the whole field of science.
  • Science is in a dynamic sense, essentially a method of prediction. It has been defined as being the method of the determination of the most probable.


  • A scientific laboratory is not always a single place. More often the dimensions of a laboratory coincide with the boundaries of a city or a nation.   On the basis of established facts, the solution that is probably the best must be found for each question.
  • There is only one science, and there is no essential difference between science and engineering. The stoking of a Bunsen burner, the stoking of a boiler, the ‘stoking’ of the people of a nation, are all one problem.


  • There are five senses through which the external world is perceptible to us.
  • We have a mind to reflect upon what is perceived.
  • We need that mind to be a critical mind, unwilling to accept information until inquiry is made into the source, and verified.
  • Science is a dynamic and powerful tool to use to gain knowledge, information and solve problems.


The earth and everything upon it is composed of matter.   Matter can change from one physical state to another: solids, liquids, gases.

  • Molecules: A small particle of any pure substance – such as water, iron or salt that can exist without changing its physical properties.
  • Elements: There are 118 chemical elements.   Chemical elements are the building materials of which everything else on earth is composed.  The smallest particle of a chemical element is called an atom.   Chemical elements combine to form chemical compounds, but, by themselves, each chemical element cannot be further subdivided.
  • Change of Physical State: When matter moves from one physical state to another the individual atoms are not destroyed; they are merely being continuously reshuffled.   The earth and everything upon it is composed of matter.   Matter can change from one physical state to another: solids, liquids, gases.


Mass Length and Time.  The three quantities that we deal with most frequently and hence are obliged to measure most often are mass, length, and time.

  • Mass gives a body weight,
  • Length is length,
  • Time is measured in the motion changing at a uniform speed (earth’s rotation)

The Metric System.  The standard of length a (specific and specially made) bar is engraved transversely three fine parallel lines.  The distance from the middle line at one end of the bar to the middle line at the other end when the bar is at the temperature of melting ice is defined to be 1 meter.

The most common gradations of size used are:

  • Micron
  • Millimeter
  • Centimeter
  • Meter
  • Kilometer

The commonly used gradations of weight/mass are:

  • Gram
  • Kilogram

The English System.  For the standard of length, a bronze bar with 2 gold plugs with transverse lines, when the bar is at a temperature of 62 degrees Fahrenheit.  This distance measured between the lines is the standard yard.

The gradations of length measurement are:

  • Inch
  • Foot
  • Yard
  • Mile

The gradations of weight / mass are:

  • Ounce
  • Pound

Derived Units.

Size Units

  • Area
  • Volume

Motion Units

  • Speed
  • Velocity
  • Acceleration

Force.  Strength or energy exerted or brought to bear: cause of motion or change: active power.   Measurements of Force:

  • Dyne: The unit of force that would give a free mass of one gram an acceleration of one centimeter per second for each second force is applied.
  • Newton (N) The unit of force that accelerates a mass of one kilogram to 1 meter per second squared.

Work.  When a force acts upon a body and causes it to move, work is said to be done.  Terms in Work:

  • Erg

Power.  Power is the time rate of doing work.

  • Watt
  • Kilowatt
  • Horsepower

Conversion Factors.  Using mathematical calculations to convert large or very numbers to easily read formulas.   Examples:

  • Gravity = 980.665 cm./sec.2
  • Erg    = 1 x 10-7 joules


If anything has the capacity to perform work, it is said to possess energy.  The amount of its energy is measurable in terms of the amount of work it can perform.  Energy is measurable in units of work—ergs, joules, or foot-pounds.

  • Potential Energy. The amount of work it can do changing from one position / configuration to another.
  • Kinetic Energy. Work by movement or energy due to motion.
  • Heat is a form of energy.  (Since friction is never completely eliminated energy in the form of work is continuously dissipated and heat is produced.)
  • Measurement of Heat. Gases, liquids, and solids change volume as their temperature is changed.  Through the expansion / contraction of a given material between these fixed temperatures we can measure intermediate temperatures.  To measure the amount of heat, we require a unit of measurement, whether Centigrade or Fahrenheit.
    • In the Metric system the amount of heat required to raise the temperature of 1 gram of water 1° C. is called the gram calorie.  A kilocalorie is 1,000 gram-calories.
    • In the English system the corresponding unit is the British thermal unit, defined as the amount of heat required to raise the temperature of 1 pound of water 1° F.


Thermodynamics is the study of the relations between heat, work, temperature, and energy.  The laws of thermodynamics describe how the energy in a system changes and whether the system can perform useful work on its surroundings.  Thermodynamics is a branch of science that studies how energy changes in a system.  Source

There are 4 laws to thermodynamics, and they are some of the most important laws in all of physics.  The laws are as follows:

  • Zeroth law of thermodynamics – If two thermodynamic systems are each in thermal equilibrium with a third, then they are in thermal equilibrium with each other.
  • First law of thermodynamics – Energy can neither be created nor destroyed. It can only change forms.  In any process, the total energy of the universe remains the same.  For a thermodynamic cycle, the net heat supplied to the system equals the net work done by the system.
  • Second law of thermodynamics – The entropy of an isolated system not in equilibrium will tend to increase over time, approaching a maximum value at equilibrium.
  • Third law of thermodynamics – As temperature approaches absolute zero, the entropy of a system approaches a constant minimum.  Source


  • When there is friction (which in reality involves all cases) heat is produced, and the amount of heat produced is proportional to the loss of kinetic and potential energy by the system.  Since heat is a form of energy and 1 gram calorie of heat is equivalent to 4.18 joules of work, if the heat loss be stated in terms of joules instead of calories, it will be found that the energy appearing as heat is exactly equal to the loss of mechanical energy—potential and kinetic—by the system.
  • Energy of Evaporation. When water boils at a pressure of 1 atmosphere the temperature remains constant at 100° C.   The amount of heat required to vaporize a known quantity of water it has been determined that 539.1 gram calories of heat.   If the steam is made to condense back to water again at 1 atmosphere pressure and 100° C., it has been found that 539.1 gram calories of heat must be extracted.  The heat of evaporation has not been lost but stored in the vapor.
  • Chemical Energy.  Some [chemical reactions] release energy; others require the addition of energy.  In all cases, however, if a chemical change when proceeding in one direction releases energy, then an exactly equal amount of energy would have to be supplied if the constituents of the system are ever to be restored to their initial state.
  • The First Law of Thermodynamics.  [First law of thermodynamics – Energy can neither be created nor destroyed.  It can only change forms.


  • Direction of Energy Transformations. We must inquire whether energy transformations occur with equal facility in opposite directions, or whether there is a favored direction in which energy transformations tend to occur.
  • Entropy is simply a quantitative measure of what the second law of thermodynamics describes: the spreading of energy until it is evenly spread.  The meaning of entropy is different in different fields.
  • Conversion of Heat into Work. A transfer of energy to or from a system by any means other than heat is called “work”.   Work can be completely converted into heat (by friction, for example), but heat can only be partially converted to work.   Source
  • Reversible and Irreversible Processes.  A reversible process is in reality an idealization and occurs only in those cases for which the entropy change is zero.  All actual cases involve friction or its equivalent and therefore result in an increase of the entropy of the system.  Such systems are said to be irreversible, and the entropy increase is a measure of their degree of irreversibility.
  • Transformations in an Isolated System.  Thermodynamically the matter in the system is constant; the energy is constant; but both the matter and the energy are undergoing continuous transformations.
  • The Second Law of Thermodynamics.  Second law of thermodynamics – The entropy of an isolated system not in equilibrium will tend to increase over time, approaching a maximum value at equilibrium.   


Engines do not create work or energy; they are instead converters of energy —they convert energy from one form to another.

  • Definition of an engine: An engine may be defined as any type of machine which takes energy in any form (mechanical, chemical, electrical, radiant) and converts it to work.   Engines do not create work or energy; they are instead converters of energy — they convert energy from one form into another.
  • Efficiency of Engines. The efficiency of an engine is defined as the ratio of energy converted into work, to the total energy initially supplied.  (Efficiency= work output)
  • Efficiency of Heat Engines. To measure the efficiency of a heat engine we measure the fuel used; then we can determine the heat input.
  • Heat Value of Fuel.  The production of heat by the burning of a fuel results from the chemical reaction of fuel with oxygen.  Fuel plus oxygen equals waste products plus heat.   BTU or British thermal units (heat value) is the number of gram calories produced by burning 1 gram of the fuel.
  • Earth as an engine: All matter on earth is composed of 118 chemical elements. Whether this matter is in the form of living organisms or rocks, its movement involves a change / use of energy.   The human body itself is an engine that converts energy into heat and work.


  • A steam engine takes in coal and oxygen and gives out water vapor, carbon dioxide, and cinders.   It produces heat and work in driving the steam engine.  In an analogous manner, the human body takes in food and oxygen, and gives out carbon dioxide, water vapor, and waste products.  Human food is just as much a fuel as is coal or gasoline, or wood.
  • Heat Value of Foods. Food is taken into the body, oxygen in the air is taken in by breathing, and combines chemically inside the body with the food.  Energy in the form of heat and work is released.  It is possible to determine exactly how much energy is contained in various kinds of foods, and then after they are eaten to determine how much heat and work they produce.
  • Efficiency of the Human Engine. The maximum efficiency of the human engine has been found to be only about 25 percent.   When physical work is done the rate of energy consumption very rapidly increases.  A human body takes the chemical energy from food and converts it into heat and work on a 24-hour basis.  Rarely is as much as 10 percent of this energy converted into work.


All movement of matter on earth involves a change of energy.  Energy manifests in various forms, such as heat, chemical energy, potential energy, kinetic energy, etc.   And may be changed from one form to another, none of it is lost but is eventually dissipated into waste heat.  Engines do not create energy but utilize available energy for doing work.  The available energy occurs in two forms—mechanical and chemical energy.

  • Energy of Running Water. The energy of a waterfall is originally derived from the energy of sunshine.
  • Energy of Plants and Animals. Where does the energy contained in food and fuels come from?  Most of the energy contained in our food and fuel is derived directly from plants.
  • Chlorophyll The green substance in the leaves of plants is called chlorophyll. In the presence of chlorophyll solar energy is converted into chemical energy, as water and carbon dioxide combine to form plant substance.
  • Cellulose plus lignin, a similar material, compose the woody material of plants. The chemical combination of wood with oxygen releases heat
  • Solar Radiation. Almost all of the energy used by man, whether derived from wind or water, from coal or oil, or from other animals or plants, is derived ultimately from the sunshine.  Exceptions to this are energy derived from tides, or from volcanic heat from the earth’s interior.  The average sunshine per day on one square mile at Washington D.C., if converted into mechanical work would equal 20 million horse-power hours.
  • Flow of Solar Energy. As energy is not destroyed, we must now determine how, with such an enormous amount of heat arriving daily from the sun the earth does not get continually hotter and hotter.   Therefore, the earth must be losing energy at about the same rate it is receiving it.

Summary of Lesson 8

  • Solar radiation undergoes a series of energy changes, each one of which, in accordance with the Second Law of Thermodynamics, is at a lower scale of degradation than that preceding it. Finally, it is re-radiated back into space as spent long wave radiation.   As a consequence of this process, the wind blows, rivers flow, and plants and animals grow and is continuously changing.  This change is itself unidirectional and irreversible; that is to say, it never repeats itself.


Every sort of mechanism, both inanimate and organic—plant, animal, and steam engine—is an energy dissipating device.  Plants require solar energy; animals require chemical energy in the form of food derived either from plants or other animals; steam engines require fuel.  Energy-consuming devices use energy only in specific forms.  of Plants and Animals

  • Dynamic Equilibrium of Plants and Animals. Imagine an area of land in a temperate region having the usual array of vegetation peculiar to that area.   We introduce a pair of rabbits, one male and one female, without any other animals within the region.  Rabbits breed rapidly; one pair of rabbits produce about 12 offspring per year.   If no deaths and constant growth rate: 1st year 14, 2nd year 98, 3rd year 685 rabbits etc.
    • Is there any upper limit to the number of rabbits that can live in a given pasture area? If the rabbit population grew larger than the available food the surplus rabbits would starve to death.
    • When the rate at which rabbits eat grass is equal to the rate at which grass grows in the region, a state of dynamic equilibrium between rabbits and grass has been reached. If other factors (carnivores) are introduced the balance is upset and will need to reach another dynamic equilibrium.
  • The Dynamic Equilibrium of Man. The principles discussed above are just as valid for the human species as for rabbits.
    • Man initially survived by what he could glean or kill with his hands. Tools were introduced and gave man an advantage in killing which increased population.
    • With the discovery of fire, a totally new source of energy was tapped, and use for the first time was made of extraneous energy—energy other than food eaten. Fire as energy was conquered and increased lifespans and ability to create more tools, expand the geographic areas inhabited and eventually create machines that replace human energy for work.


The human species, as we have seen, exists as a part of this dynamic ‘web of life’.  Man has learned how to deprive a larger and larger share of the sun’s energy from the other animals and direct it into his own uses.  This has resulted in the ascendancy of man and has wrought unprecedented havoc among the other animals of the earth.

  • Domestication of Plants. This cultivation consists chiefly of two things:  The removal of competing plants from the area under cultivation.  The loosening of the soil to increase the yield of the plants cultivated.
  • Domestication of Animals. Out of all the animal species in regions inhabited by man only certain ones were suitable for human food and domestication.  Others were suitable for other uses than food, such as carrying burdens or other work.
  • Discovery of Metals. Metals provided better tools and weapons, both of offense and defense.   This further disturbed the biologic balance in man’s favor.  This increase in the use of metals had the social effect not only of increasing the prowess of man but also of increasing the technical problems presented by the mining methods themselves.  This required power and the crying need for newer and larger sources of energy.

Lesson 10 Summary

  • We have found that every new technical device—the domestication of plants and animals, the use of tools, and finally the use of metals—have contributed to an ever-increasing part of the sun’s energy into uses for humans.
  • This resulted in a disturbance of the equilibrium within the human species in favor of those with the greater command of energy.


Matter is continuously undergoing changes and harvesting that energy at minimal energy loss to itself is an organism’s goal.

  • Food, Fire, Animals, Wind, and Water. Before man learned to use fire, his sole available source of energy was that contained in the food he ate.   Extraneous energy—energy other than food eaten—was introduced; There was fire, the work of animals, use of the energy of the wind and running water.   The increase of the standard of living, of energy consumption, was almost negligible.   Those who did have a high standard of living almost always used slaves.
  • Fossil Fuel. A totally new era in this unidirectional progression was entered when man began to tap a hitherto unused energy resource, that of fossil fuel—coal, natural gas, and oil.   Coal was the most widely used fuel in the industrial world.
  • Another use of extraneous energy was the invention of gunpowder.  Gunpowder was composed of charcoal, saltpeter, and sulfur.  Not only did this provide easier food acquisition but was a tool for war and mining.   The mining of course increased the amount of fuel available.
  • New Problem. In the introduction of a new technique, new and unsolved problems were created.  The first coal mines, as pointed out, were shallow, open pits.   Water infiltrated when the mines became deeper, it took enormous horsepower to just keep the water from flowing into the mines.


With the learning to use the energy contained in coal and other extraneous fuels, there seemed to be a quickening of societal growth.  The increasing uses for coal created a greater demand for coal.   The costs of upkeep for the horses threatened the profits from selling coal.   Aa better and cheaper method of mining was needed.  Development of the Steam Engine

  • Development of the Steam Engine. Savery, in 1698, devised an engine consisting of a boiler and two steam expansion chambers.   This engine was not very satisfactory and was followed shortly after by the ‘atmospheric engine’.   James Watt invented a condenser and then a double acting piston.   From that time on this form of steam engine has increased rapidly in size and usefulness.
  • The Railroad. Not only did coal mining create a problem of pumping water, but the coal had to be hauled varying distances.   This created a serious problem in transportation, and early in the sixteenth century rails of timber were laid at the coal mines.   New lightweight, streamlined trains followed.
  • The Steamboat. John Fitch ran the first successful steamboat in America.   1838 John Ericson introduced the screw propeller, followed by Diesel-electric engines.
  • The Automobile. About 1895 the development of motor vehicles propelled by internal combustion engines or by electric motors began in earnest, leading to the modern automotive transportation.
  • Transportation by Air. The first abortive attempts at transportation by air began about the year 1783.  Since that time aviation has developed by leaps and bounds.
  • Summary
  • The textile industry was the first to use the steam engine for business. Corresponding developments beginning at various times can be traced in communications and transportation and energy production.   The Mechanical Industrial Revolution has been followed in succession by the Electric, Technical, and currently a technology that blurs the lines between physical, digital, and biological arenas.


In this lesson we are presenting the growth curves of a number of our basic industries. 

  • Industrial activity has been based in the few industrial metals as the essential materials for machinery, and the use of basic sources of energy the mineral fuels, coal, oil, natural gas, and solar and water powers.
  • In physical terms each depression since 1894 has been progressively bigger than the previous.
  • Economic soothsayers assure us that as older industries decline newer and bigger industries rise.
  • The faster machinery is made to operate, the smaller it needs to be. This relationship is true, whether the equipment be individual machines, a whole factory, or a whole industry

Basic Industries in 1933 

  • Pig Iron.
  • Growth of railroads.
  • Production of Automobiles.
  • Radio

Basic Industries in 2015

  • Health Care
  • Technology
  • Construction
  • Retail


  • Fallacy of Economists. It has come to be naively expected that such a rate of growth was inherent in the industrial processes.  This naive assumption that ‘normal’ conditions were to be a steady industrial growth at the rate of 5 percent or more per annum.  Such conditions being ‘normal,’ it was further assumed, that such normal growth would continue indefinitely.  The facts warrant no such assumption.
  • Had our rate of coal consumption continued to grow at 7 percent per annum, all the coal reserves of the United States would be exhausted by the year 2033, almost exactly 100 years hence.
  • Theoretical Growth Curves. The exhaustion of coal or of any other mineral resource occurs very gradually instead, by a process which is somewhat analogous to the dipping of water from a pail, when one is allowed to take only one-tenth of what remains each time.
  • Social and Industrial Results. There is a definite limit as to how much an individual can consume in a given time.
  • Foreign trade: Under our present Price System, or monetary economy, an unbalanced foreign trade can only be maintained for a comparatively short length of time. Foreign trade has been discussed implicitly as a ‘favorable balance of trade,’ which implied that the amount exported will be in excess of the amount imported.  Physically a ‘favorable balance of trade’ consists in shipping out more goods than we receive.  Following this logic, a ‘perfect trade balance’ should consist in a state of commerce wherein everything was shipped out and nothing received in return.


High-energy civilizations depend upon the existence of abundant resources—energy and industrial metals.  Mineral resources only occur in large amounts in specific to them geological environments.

  • Methods of Discovery. The old-fashioned prospector, with burro, pick and hammer, has been replaced by the modern highly trained geologist and mining engineer.
  • In 1929 the United States, possessed approximately 51 percent of the coal reserves of the entire world.  [2020 ~24% SOURCE
  • the United States in 1929 was producing 69 percent of the world’s total production.  [2019 U.S. is 20%  SOURCE)
  • Foreign iron ores are the greatest abundance. In 1929, the U.S. produced less than 48 percent of the world’s total production of pig iron. [2019 the U.S. is down to ~ 6%]
  • In 1929 the total world production of copper was 2,100,000 short tons, of which the United States produced slightly less than 50 percent. [2017 total production ~20 million tons – U.S. 6% or ~1.3 million tons SOURCE
  • The Ferroalloys. The United States is largely devoid of highly essential industrial minerals, the group known as the ferro-alloys— manganese, chromite, nickel, and vanadium. So essential are these alloys that they have come to be known as ‘key’ minerals.
  • Movement of Supplies. Supplies of individual minerals occur in quantities sufficient to be important in the world production. Transportation and trade of these are vital to the continuation of a high energy society.
  • Unequal Distribution of Resources. Industrial minerals play significant roles in industry, but they are unequally distributed.  The social significance of this unequal distribution of the world’s minerals is that industrial equality of the various areas of the earth’s surface is a physical impossibility.
  • The North American Continent. Industrially, and from the point of view of resources, the North American Continent comprises the most nearly self-sufficient high-energy industrial and food production resources.


It was no accident that industrial growth occurred in Western Europe and North America rather than in Asia or South America; large scale industrial growth requires mineral resources.

  • S shaped growth curve (S-shaped growth curve (sigmoid growth curve) A pattern of growth in which, the population of an organism increases slowly, then rapidly; but then declines until the population stabilizes.: biological populations of all kinds, as well as industry.
  • The ‘Decline’ Curve. This is a type which decreases as those above increase.  This is still a growth curve as ‘growth’ means a change of magnitude – whether smaller or   An example of this type of growth phenomenon is that of the ‘man-day.’
  • The Man-hour. The objection to the man-day as a unit of measurement is the fact that man-days are not the same length of time. To accurately measure anything, one requires a unit of measurement which remains essentially the same.  A man-hour represents one man working one hour.  100 years ago, one man could mine ~ less a ton of coal in 12 hours; in other words, it took 12 man-hours to mine one ton.
  • Mechanization of Industry. Technocracy has previously called attention to some of the more spectacular instances of mechanization of industry. Although, Industry has not attained the level in its own best practices, the trend in every field is in that direction.  The faster equipment is made to operate, the smaller it will be in proportion to its output. A similar relation holds good in office floor space.
  • Decline of Man-Hours. The man-hours per unit in the early stages declined but slowly, and then more and more rapidly as industry expanded and became more mechanized. The trends depicted point inexorably to an ever-increasing unemployment or else to an indefinite shortening of the length of the working day.


Basic matter and energy conform to the rules and properties the physical world.   While this kind of analysis is fundamental in engineering when dealing with small-scale problems, it has not been recognized that the same technique is applicable to the intricate problems of a human social complex.

  •  If the performance of (an) engine is much poorer than its maximum potential; it is known a better engine can be built.   When the material and energy resources available to a social community are known, the maximum way of functioning can be established.   If the operation functions at an inferior level, we know there is room for improvement.   The widespread poverty and squalor, the wastage and destruction of resources, the destruction of products and enforced scarcity, and the level of unemployment display that the operation of our social mechanism is inferior to its potential.
  • Design and Operation.  The fundamental elements of design and operation of our social structure grew up thousands of years ago to meet the needs of an agrarian economy, the transition from such an economy to our present state of technological advance has made the social structure ripe for unrest.   A high energy civilization has needs peculiar to itself which must be recognized in any design.  One of the most deeply rooted of all these agrarian concepts is that of property.
  • The rights of property are quite relative and are by no means the fixed and rigid privileges that in a more agrarian society.   In a high energy society discontinuance of private property is less worrisome.
  • Trade  The simplest form of trade is that wherein one exchanges or barters.   What actually is exchanged is the property rights in these goods.   Trade consists in those exchanges in which there is an exchange of property rights.
  • Value is aligned with trade. Value is subjective.   The value of a product -the number of other products for which it is exchangeable- increases with scarcity.   The value of a thing has no relation to its social importance.   Both air and water are indispensable for life.   Air is so abundant that one need not exchange any commodity for its use.   Since the relative abundance of water varies from place to place, its value varies also.
  • Money constitutes a form of debt which is exchangeable for any purchasable product. Money is not a commodity but is instead mere tokens representing debt owed.   It is customary to adopt a metal, usually gold, as the base of the monetary system.  The value of gold as coin is taken to be equal to the value of an equivalent amount of gold.   Nations have gone on or off the gold standard at will, and currently most transactions are of fiat money.
  • Price: The amount of money exchangeable for a commodity is said to be its The person who exchanges the commodity for money is said to sell the commodity; the person paying the money is said to buy the commodity.
  • Price System. Any social system whatsoever that effects its distribution of goods and services by means of a system of trade or commerce based on commodity valuation and employing any form of debt tokens, or money, constitutes a Price System.


Money is an expression of debt or of deferred payment; a given amount of money represents a general debt of society to the holder,

  • Negotiability of Debt. Certificates of debt, whether in the form of money, of promissory notes, or personal I.O.U.’s, are negotiable, and can be bought and sold or traded in the same manner as property rights of physical equipment.  Other forms of debt certificates are bonds, mortgages, bank deposits, insurance policies, and bank notes.
  • Certificates of Ownership. In a primitive society, ownership of physical property is maintained largely by unwritten social agreement or by the physical prowess of the owner. In the more advanced stages, during the transition from a low-energy to a high-energy state of industrial development, a change in the form in which ownership rights are now legally tendered. A corporation is defined legally as a fictitious individual.
  • Wealth. The term wealth signifies the monetary value of physical assets of all sorts and kind. Wealth is not a measure of physical assets. It is a statement of the contemporary monetary value of that physical equipment.  And there is no fixed relationship between any physical object and its value. In other words, value does not, and cannot, establish a measure of anything.
  • Creation of Debt. Individual wealth consists largely in debt claims—money, bank deposits, bonds, etc. Debt always signifies a promise to pay at some future date.  Any incomplete barter where goods are delivered with the understanding that the goods in exchange will be received at some future date— establishes a creation of debt.
  • Banking and Credit. By far the largest single type of debt in the United States is bank debt, and banks are the largest creators of debt. The essential mechanism of banking is as follows: a banker is a human being or corporation with a ledger and a vault for the safekeeping of money and other debt certificates.  A bank deposit does not signify money, but instead, a debt due by the banker to the customer.  Each deposit merely represents the legal right of the customers to demand money from the bank up to the amounts of their deposits.
  • The Compound Interest Property of Debt. Not only is debt created out of thin air, but according to the present rules of the game of the Price System also creates interest. Debt is expected to increase at a certain increment of itself per annum.
  • Growth of Debt. Because of the characteristics of generation of debt out of nothing the total debt structure of a Price System will try to increase indefinitely. The physical expansion of industry from the Civil War to the World War [WW1] was a straight compound interest rate of growth at about 7 percent per annum. Debt structure was also expanding at a similar rate. The rate of physical expansion has been declining but debt structure has continued to expand.


We shall use the term ‘money’ merely to signify a circulating medium indiscriminately as to whether this medium be coin, currency, checks, or any other form of negotiable paper.  For our purposes, the significant thing about money in this broader sense is that while it has the property of being created out of nothing or contracted into nothing.

  • The Flow of Goods. All consumable goods have their original source in the earth. From the earth matter is moved by some process into manufacturing, the consumer, then waste, and at times, recycling.
  • The Mechanism. This is where money enters the picture. The consumer hands the retailer cash and receives consumable goods.  Ideally, the rate of manufacturing should equal the rate of consumption.  What determines this rate of monetary flow?
  • The Process. The retailer must pay capital and operating costs as well as investment returns or business improvements.  Goods move in one direction, from the earth to the consumer, and back to the earth again; money moves from the consumer to the retailer, the wholesaler, and the manufacturer to landowner.
  • Corporations only pay out a portion of profit as dividends, the remainder being held as corporation surplus. The decreases the flow of money from 100% of the money exchanged to (say 90%). With the second flow the consumer would only be able to buy nine tenths as many goods.  Industrial operations be nine-tenths as great.  Decreasing with each round.  This assumes that the saved money was hoarded.
  • Instead of hoarding corporation often take the profits not disbursed as dividends and build more.  In this manner all the money otherwise withheld is fed back through the system into wages etc.
  • Results of the Process. Under the Price System it is imperative that both individuals and corporations save.  If they save by hoarding, processing shuts down; if they save by building new plants the process only works if the manufacturing is continuously expanded at an accelerating rate.  That the latter policy is impossible to continue indefinitely.


The Inevitable Inflection Point.  It would appear that our physical production should expand indefinitely until blocked either by a physical limitation of the ability to produce or by a saturation of our ability to consume.

  • Attempts to Maintain Production. The ability to produce more than U.S. consumers are able to purchase has caused loans made to countries (who are unlikely to repay) to purchase U.S. goods to create a ‘favorable balance of trade’.  This creates a false sense of economic recovery and artificially increases industrial production curve.
  • The Financial Structure. The question is, ‘Why did the purchasing power not keep pace with production capacity?’ There is no very little ‘hard money’, money that is backed by physical items. The fiat money (not backed by gold, etc.) is more easily manipulated and therefore sales and savings for industry does not correspond to an increase in wages for the workers.
  • The Process of Investment. When individuals and corporations ‘save’ through the process of reinvesting, these funds are not invested except in a small part in plant maintenance and construction. Instead, common stock has been issued and given as bonuses, (to banks, promoters, and insiders) not to gain further funding for the company.  The profit those groups gain do not return to the employees or the company.
  • This ‘reinvesting’ produces an increasing disparity in the distribution of the national income. Industry is geared to revolve at the rate at which people spend money for consumable goods and is set up to fail if the wages do not allow purchasing power from the lowest earners.
  • Profits, Technology, and Purchasing Power. Businesses are in business for the purpose of making money.  Mechanical power is produced at the rate of one kilowatt hour and costs about 4% of that of a human.  Replacing man with machine is effective at increasing profit but decreases purchasing power and therefore increases a countries debt by selling goods to countries that cannot pay their debt.
  • New Industry. If present industry is not providing enough purchasing power to enable the public to buy its products when running at capacity, will a new industry make the situation better or worse? The same technological factors that have enabled us to produce more goods with fewer men, have rendered it impossible to sell the goods locally.
  • Debt Creation. Following the natural curve of industry growing slowly, quickly, leveling off and then declining was interrupted by the creation of debt. When the public does not have purchasing power, we grant it a fictitious purchasing power through the mechanism of installment buying.  To maintain a constant price level would require that industry expand at a corresponding rate.  This is impossible and leads directly to a decline in the nominal rate of interest, which in turn increases inflation.


NOT only has industrial growth followed the now familiar S-shaped curve, with a rapid rate of growth at first followed by a leveling-off process, but population, we shall now see, is doing the same thing.  Every business was expected to expand, if for no other reason than that the population was expanding. Every roadside village was expected to be bigger ten years with a corresponding enhancement of real estate values and increase in the business of pioneer merchants of the place.  This is unsustainable and will cause recessions, depressions, and other chaotic economic times.


Under Price System operation and control it is becoming increasingly difficult to maintain industrial operation within the limits of social tolerance.

  • Inferior Goods for Large Turnover. From the point of view of making money by the manufacture and sale of a given commodity the more units manufactured and sold the greater the profit. Intentionally providing an inferior product so that consumers must purchase again and again is about profit – not what is best for society in general, the consumer in particular, nor especially the environment.
  • Foreign Trade and War. Foreign trade and a ‘favorable trade balance’ have already been mentioned. It is not amiss in this connection to mention the relationship between war and the munitions sales.
  • Curtailment and Destruction. We have mentioned previously that a Price System economy is of necessity an economy of scarcity. As values decline in the presence of abundance.  Farmers getting paid to kill their animals or to not produce crops were an effort to artificially increase value.  The fact that 20 or 30 million people did not have enough to eat was of no consideration—not under the Price System.
  • Low Load Factors. The load factor of a given piece of equipment may be defined as its actual output in a given period, say a day or a year, as compared with its output under continuous full load operation for the same period.  For the Price System production must maintain false scarcity to keep prices up.
  • From the point of view of the physical cost of operations the inefficiency of our present structure is so great that, if we should tear them all down and rebuild them on a technically efficient basis, it is estimated that the energy saving in the operation of the new structures would repay in about twenty years’ time the entire cost of demolition and reconstruction.
  • Interference by Business Expediency. There is probably no branch of our social activity in which this sabotaging influence for reasons of business expediency is more keenly felt and more socially detrimental than in the domain of scientific research and technological development.
  • Institutional and Traditional Interference. The Billings hospital was opened in 1928. This would be a very important contribution to the public health service provided for the people in that part of Chicago. The technical staff of this hospital was amongst the best that could be obtained it would also maintain free or low-priced clinical service to the local community.  The most violent objectors to this hospital were the local members of the American Medical Association, who took such strenuous action that they finally succeeded in having the entire staff disbarred. In other words, an adequate health service administered to the South Side of Chicago was ‘busting up their racket.’
  • Legal Interference. The term ‘crime’ is itself completely ambiguous, and there is no important distinction between socially objectionable activities that are legal and those that are illegal. One of the fundamental properties of money, however, is that it constitutes a reward to any individual who ‘gyps’ the public successfully. ‘A criminal is a human being with predatory instincts but without sufficient capital to start a corporation.’
  • Political Interference. Commonplace knowledge is the incompetence of government officials. Notable exceptions to this general statement are to be found in the purely technical bureaus. It is significant that the technical staffs of these bureaus are not elected by popular vote, nor are they appointed by the political chieftains of the present or past administrations, and hence are not subject to political contamination.  A system whereby governmental officers are chosen by popular ballot is immediately open to all the political deception that we are already familiar with.
  • Just how powerful the press has been, can be seen when we review the propaganda which we were fed during the late World War.  The American public had no hatred of the Germans or a love for the French.  Such love and hate had to be created synthetically.  To this end the best liars that could be obtained were set to work grinding out lies about the atrocities of the Huns and disseminating them to the American public.
  • Summary
  • What we have tried to make clear is that it is the Price System itself, and not the individual human being, which is at fault. Because of the system, the human beings are obliged to act in accordance with its dictates, with the results we have enumerated above.  It is the Price System itself—the rules whereby the game is played—and not the individual human being which is at fault.


The Price System rules of conduct’ are rapidly forcing us to an impasse, due to the fact that these rules were developed during an age of primitive technology characterized by scarcity and low energy rates of operation. In a high-energy technologically advanced system with the potentialities of plenty, the needed artificial scarcity of the Price System rules is no longer adequate for a functioning society.

  • The Solar System. A terrific furor was created when Copernicus had the audacity to suggest the sun were regarded as fixed at the center of the solar system.
  • The Age of the Earth. John Hutton dared to suggest that the streams’ waters made the valleys and canyons in the Scottish Highlands over millennium.
  • Supernaturalism of Man. Instead of being something mysterious or supernatural, man’s body is composed of identically the same chemical elements as are found in air, water, rocks, and other common substances.  The human body obeys identically the same laws of energy transformation as an engine.
  • Objective Viewpoint. Real scientific progress is based upon the correlation of objectively observable (see, feel, hear, taste, smell, etc.) phenomena. When we subject such concepts as the human ‘mind’ to this sort of test they rapidly fade out of existence.
  • Stimulus and Response. Pavlov’s Reflexes and Response Study. The sight and smell of a steak in the dog is just as a mechanistic a process as the pressing of the button is to start the car.
  • Thinking, Speaking, Writing.
    • Thinking: Man can sustain a higher number of orders of conditioned reflexes that produce thought about an item than a dog can. It is of this that a superior intellect consists.
    • Speaking: If a certain object is placed in front of a human being and at the same time a certain sound is uttered, and this process is repeated a number of times, then if the sound is uttered without the object being present, the human being ‘thinks’ of the object.  This is the basis of all language.
    • Writing: Now suppose that the word ‘sound’ is spoken, and simultaneously the individual is shown a certain configuration of black marks on paper. After a few repetitions, this particular configuration of marks will evoke the same response. This is the physiological basis of writing.
  • Suppression of Responses. Stimulus responses can be suppressed.
  • Involuntary Process. Through a process of repetition or conditioning, formerly irrelevant stimuli can be made to set off inborn reflexes.  All habit formation, language, ‘thinking’ is nothing more than the human being’s response to miscellaneous stimuli, internal and external, in accordance with his existing conditioned reflexes.
  • Control of Behavior. Practically all social control is affected through the mechanism of the conditioned reflex. If they are taken young enough, human beings can be conditioned not to do almost anything under the sun.
  • Glandular Types. It has long been recognized, however, that there is a very fundamental difference in patterns of behavior in response to similar external circumstances by various human beings of the same sex, and an even more marked difference of response between members of opposite sexes.
  • The Endocrine Glands. Distinct behaviors, as well as bodily differences of form, are due very largely to a difference of internal secretions of the endocrine glands in the various cases.  It is found simply that minute amounts of chemical substances, such as adrenaline and various others by the other endocrine glands that to a great extent shape the state of health, of the body, and behaviors.
  • Results on Behavior. It is very important that one distinguish the difference between modes of behavior resulting from external conditioning and those occurring as a result of glandular and similar differences which are frequently inherited. All this has nothing to do one way or the other with the superiority or inferiority of one variety of race of human beings with respect to another. It is merely an observation that human beings differ, both individually and racially, and that such differences are fundamental.
  • Pecking Rights. It is a common observation, for instance, around any barnyard that certain individuals for no apparent reason, assume priority and take precedence over other members of the same species. If a stranger is introduced there may be a bit of fighting until rank is established but then remains fixed until a new ‘disruptor’ is introduced.
  • Functional Priority. The greatest stability in a social organization would be obtained where the individuals were placed as nearly as possible with respect to other individuals in accordance with ‘pecking rights,’ or priority relationship which they would assume naturally. Conversely, the most unstable form of social organization would be one in which these ‘pecking rights’ were most flagrantly violated. Examples of this instability are found in many business organizations at the present time.
  • Social Customs. Human beings, through the mechanism of conditioned reflexes, all react to their environment with a distinct cause and effect relationship; and second, that while human beings all react to their environment in this manner, there is considerable individual variation in the specific reactions of various individuals due to endocrine function. In spite of individual differences, however, the degree of uniformity of reactions in a large cross section of people to similar environmental conditions is truly remarkable.
  • Social Change. Social change comes about spontaneously. Human beings, when living in a manner which is reasonably comfortable, and permitted normal relationships among themselves, tend to crystallize their routine activities into non-varying social habits.  Attempts made to change these will produce a reactionary response.  If these habits become incompatible with the biological necessities of food, clothing, etc., the social habits are readjusted to allow the fulfillment of those necessities.  ‘Social change,’ Howard Scott has succinctly remarked, ‘tends to occur at a rate directly as the approach of the front of the stomach to the spine.’

Lesson 21 Summary

  • Little by little, as scientific knowledge has advanced, human ignorance and superstitions have retreated, until now, for the first time, we are able to view fairly objectively the fundamental nature of this human animal which we may summarize as follows:
  • The human animal is composed of chemical atoms which are derived from the ordinary inorganic materials of the earth, and which ultimately return to the place from which they come.
  • The human being is an engine taking potential energy contained in food, and converting this potential energy into heat, work, and body tissue.
  • The human animal responds to its external environment through the mechanism of the conditioned reflex.
  • There are basic physiological differences among individuals which are inherent and partly acquired through differences in diet, secretions of the endocrine glands, etc.
  • Human social habits and institutions tend to remain stable or else to undergo change extremely slowly, except in the case of a rapid change of the external environment.


Society has changed from a primary dependence upon agriculture for a livelihood to a primary dependence upon a technological mechanism, constructed principally from metals obtained from minerals and operated mostly from the energy contained in fossil fuels.

  • The Arrival of Technology. In the past we operated as independent productive unitsHuman labor was so essential that, an increase in production only worked with increase human labor.  Today an increase of production is accompanied by a decrease in man-hours.  Manufacturing now happens in large singular plants that if they were to shut down greatly affect a whole geographic area, and most, having no land to work, are strictly dependent upon the distribution of manufactured goods.
  • The Trends. The North American Continental population has designed, built, and operates the largest and most complex array of technological equipment with a high percentage of technically trained personnel and the highest average consumption of extraneous energy per capita.  If we were to proceed in a technically efficient, effective manner of production and distribution – not a profit centric manner.
  • The Solution. Since progress conflicts with past social norms, it is not to be found surprising that impeding measures are desperately put in place.  Society is in a conflict between physical reality and the antiquated ideology of a bygone age.  Technicians will help to guide the way into more efficient, effective, and equal norms.
  • What must this organization do for personnel?  Work with nature, leaders emerge naturally – not bosses, but leaders.  Each individual has a propensity for a type of work, let that emerge naturally, not chosen and forced by society.  The organization must be dynamic, changing with the situation and personnel.
  • What are the characteristics of a highly functional organization?
    • It maintains in continuous operation a complex array of physical apparatus.
    • It is dynamic in that it is continually changing the apparatus and guidelines.
    • The right persons are placed in the right job. A worker gets their job by appointment, and the people making the appointment are those who are familiar with the requirements of the job and qualifications of the person.
  • Organization Chart. The basic unit of this organization is the Functional Sequence.  A Functional Sequence is one of the larger industrial or social units, the various parts of which are related one to the other in a direct sequence.  Due to the fact that no Functional Sequence is independent of other Functional Sequences, there is a considerable amount of looseness in the location of the boundaries between adjacent Functional Sequences.
    • Industrial Sequences we have transportation, communication, agriculture, and industrial.
    • Service Sequences are education, public health, and other institutions.


Freedom of action is determined by the industrial system in which the individual finds himself rather than by legalistic restrictions.  The most fundamental social control technique is ease of use.  Leave the physical environment unaltered, and any effort to alter the behaviors of human beings is doomed to failure.  Alter the immediate physical environment of human beings, and their modes of behavior change automatically.

  • Load Factor. One of the first things to be considered in manufacturing is the *load factors.  (*The ratio of actual output to the theoretical maximum possible.)  A high load factor results in a diminution in the amount of productive equipment needed per unit produced and results in a reduction of the energy cost per unit.
  • Quality of Product. Still another factor is the quality of the product.  Products are produced for the purpose of use or service.  It is possible to find an optimum quality of product for which the cost per unit is minimum and the quality, according to our criterion, is the best.  Poor quality products are produced to give maximum profit to owners.  Optimum quality and energy cost criterion would eliminate enormous wastage of natural resources.
  • The Calendar. When everybody works on and off the same days, this introduces traffic jams and periods of peak loads on our transportation system, our places of recreation, as well as on the equipment.  Technocracy calendar’s work period would use every day of the year and would run for four consecutive days for each individual, followed by three days off.  The effect of this calendar on the societal load factors would be tremendous.
  • One of the great problems that would have to be solved is which mode of transportation involves the least energy cost per mile.  All supplies for a geographic area should be shipped in bulk quantities to a Distribution Center goods of a single kind going together.
  • Under an energy criterion the question arises; namely, of two equally effective modes of communication which has the least energy cost per unit? The unit in this case is a given number of words transmitted a given distance.  Technically there is no question that all communication of the entire Continent could be conducted by telephone [Internet] if the energy cost is not too expensive.
  • From a technological point of view, agriculture is still probably our most primitive industry.  Soil, as such, is of no importance except as a container of plant foods and as a support for the growing plant.  Any container with properly proportioned plant foods, used in conjunctions with a suitable support for the growing plant, would constitute an alternative to an agriculture based upon tilling of the soil. [Aquaponics and other alternate growing forms]
  • Designing buildings in accordance with the functions they are to perform seems rarely to have occurred to architects.  This brings us to the technological foundation; what are the buildings for? What do we locally have to build them with? What does it cost to maintain them? And how long will they last?  Using standard components in construction would increase efficiency and reduce the use of resources (energy costs).  Individuality could be expressed with landscaping, design, color, and other accoutrements.
  • The end-products of the unit (how it should function) needs to be taken into the design blueprint before any details are set.  Work from overview to detail not the reverse.  The trouble with design in a social mechanism is that the design has ever gone beyond the stage of minute details.  We have designed individual transportation, but no one has ever designed a continental system of transportation.  There are a number of essential design elements that must be considered in the design of a town or a city:  There must have adequate:
    • Housing and recreation facilities.
    • Distribution systems.
    • System of waste disposal.
    • Facilities for local traffic.
    • Facilities for local communication.
    • System of utilities supply.
    • Trunk connections.
    • Ability for expansion with a minimum of readjustment.
  • Most of our industrial progress up to the present time has been rendered possible through standardization.  The price system encourages non-standardization to sell the same formulas differently to increase profit.  This comes at a great energy cost.
  • Unnecessary Activities. With a re-design of our social mechanism more jobs will cease to exist than new jobs created.  This does not imply that there would be unemployment.  If the system were to run on the optimum output, the jobs that disappear due to technology would increase individuals free time and the ability to increase their knowledge, create tighter social bonds, and create in beautiful or practical ways.