(This is Part 16 of a series. Go back to Part 15.)
All open systems, including life itself, exist far from equilibrium. They maintain their complex order not by being static like a rock but by continually flowing some external source of energy through the system. This energy must be acquired, processed and ultimately excreted in order for the system to maintain its existence.
Economists in the 19th century formulated the concept of
diminishing returns, a concept which derives from the practical fact that we human beings, in seeking external energy, follow our internal programming of conservation of energy. That is, we always seek out first those sources of energy which are the easiest to obtain.
So for instance, we'll pick the low-hanging fruit on the tree before we'll pick the more-difficult-to-reach higher fruit. We'll use coal found on the ground, if it's available, before we'll expend the effort to mine underground for it.
Why? Internally, our brains are always making a benefit/cost analysis. How much benefit am I getting from this— whatever it is—versus how much is it costing me to get it?
The law of diminishing returns clarifies this calculation of benefit-vs-cost by using the concept of marginal return. The marginal return on something is simply the amount of extra benefit we'll get from it for the next, marginal unit of cost in acquiring it. It's the rate of change in the benefit for the next unit of effort or cost in acquiring it.
As a new energy source is obtained, the marginal return goes through three stages: In the first stage the marginal return increases faster than the cost. In the second stage
the benefits are still increasing but at a slower and slower rate of increase. And in the third stage further investment actually brings decreasing benefits.
To understand this better, let's look back for a moment at the area of diet discussed earlier:
Let's suppose that the average human being needs 2000 calories a day to experience physical well-being. Now imagine someone who is starving and emaciated and getting only 1000 calories a day (this is, of course, the actual situation for over a billion people every day).
Now let's say that this person is able to increase their caloric intake to 1500 calories a day. For only an extra 500 calories daily their well-being, health and vitality will hugely increase; that is, their marginal return or benefit will be increasing faster than the extra cost in calories.
Now let's suppose that this person gets a further increase, to the normal 2000 calories a day. Will their health and vitality increase? Yes, but almost certainly not as much as with the first increase in calories. They will be in the second stage now, where their benefit is still increasing but at a slower rate.
And what if they have a further increase in calories and go from 2000 calories a day to 2500 a day? Now their benefit will actually decline as they suffer from obesity and the various diseases put in play by obesity. A further investment actually brings a negative marginal return now.
(This is the end of Part 16. Go to Part 17.)
—jim sloman, 10.12.04 for Jan 16
|
