Energy Is The Real Currency Of Power — And The World Is Running Out – Book Review

How energy flows, entropy, and EROEI explain the decline of the West, China’s strategic rise, and the new era of energy wars.

What if the endless financial crises, geopolitical flashpoints, and waves of misinformation aren’t separate problems, but symptoms of one deeper reality: declining energy quality and the relentless march of entropy? In Thermoeconomics in a Time of Monsters, Warwick Powell delivers a bold, unifying framework that reveals why societies rise and fall, why the old world order is crumbling, and why control over energy flows has become the ultimate strategic imperative.

Dr Warwick Powell is an Adjunct Professor at Queensland University of Technology (QUT) in Australia. A supply-chain expert, blockchain pioneer, and long-time analyst of China and international political economy, Powell brings decades of practical experience in global trade, digital technologies, and economic governance to his writing. His work sits at the intersection of material systems, innovation, and geopolitics.

In his ambitious new book, Warwick Powell offers a radical reframing of economics, geopolitics, and the trajectory of global civilization. Drawing on over 300 years of economic thought—from Adam Smith and Karl Marx to Giovanni Arrighi—while integrating thermodynamics, information theory, and heterodox monetary analysis, Powell treats human societies not as abstract market systems but as energy-transformation machines. Economies, in this view, are open metabolic systems locked in a perpetual struggle against entropy. The core driver of prosperity, stability, and power is the flow, quality, and surplus of energy. When that surplus erodes, societies face structural stress that manifests in financial bubbles, institutional decay, misinformation, and geopolitical conflict.

The Thermoeconomic Core

At the heart of Powell’s framework is a thermodynamic understanding of economic activity. Societies require two fundamental inputs: biological energy (food) for people and mechanical/chemical/electrical energy (fuel) for machines. These inputs enable production, social reproduction, and—most critically—the generation of surplus energy. Without sufficient surplus, complexity collapses.

Thermodynamics imposes iron laws on this process. The first law reminds us that energy can only be transformed, not created. The second law dictates that entropy—disorder, degradation, and waste—inevitably increases. Human civilizations counteract this through negentropic interventions: building infrastructure, organizing supply chains, developing institutions, and creating ordered systems that temporarily generate large energy surpluses. Civilizations rise when these interventions succeed; they decline when they fail to sustain or renew energetic efficiency.

Powell introduces Energy Return on Energy Invested (EROEI) as a central metric. A declining EROEI—getting less net energy from each unit invested in extraction or production—creates mounting systemic stress. Traditional economic models that ignore energy flows and material constraints are, in his view, fundamentally blind. They treat price as the sole measure of value, detached from physical reality, and therefore cannot anticipate energy shocks, financial instabilities, or the deeper limits to growth.

The Three Circuits of Social Reproduction

Powell analyzes societies through three interlocking circuits that must remain balanced for stability:

• The Material Circuit: This is the “real economy”—agriculture, industry, infrastructure, and supply chains—where energy is physically transformed into useful output. It is constantly challenged by entropy through wear, waste, and degradation.
• The Financial Circuit: Finance serves as a claim on future value and a mechanism to mobilize resources for large-scale projects. However, financial claims tend to grow faster than real energetic output, producing “fictitious capital,” asset bubbles, and eventual deleveraging crises. Financialization cannot solve underlying energetic shortfalls; it only masks them temporarily.
• The Information Circuit: Information is often assumed to reduce entropy by creating order and coordination. Powell argues otherwise: creating, storing, and validating information itself consumes energy. When the energetic cost of information exceeds its stabilizing value, it turns into entropic “noise” or misinformation. In an era of information overload, excessive noise destabilizes societies by undermining coordination between material and financial systems.

Imbalances among these circuits—especially the dominance of finance and noisy information over material reality—characterize periods of decline.

The Historical Shift: From Classical Economics to Neoliberal Blindness

Powell contrasts classical political economy (Smith, Ricardo, Mill, Marx) with the neoclassical revolution that took hold around 1890–1920. Classical thinkers emphasized value creation, surplus, labor, and the material conditions for societal reproduction. They warned against rent-seeking and unchecked financialization.

Neoclassical economics, however, collapsed use-value and exchange-value into a single abstract price signal, erasing distinctions of energy quality, labor, and physical constraints. By the neoliberal era of the 1970s–1980s, policy assumed markets were near-perfect, prices reflected all relevant information, and resource limits were irrelevant. The result was chronic underinvestment in productive capacity, obsession with financial markets, infrastructure decay, and Western deindustrialization. Powell argues that this ideological shift left the West epistemically fragile and unable to perceive real shifts in global power—most notably China’s rise.

Energy Sovereignty in an Age of Energy Wars

In Powell’s analysis, global power ultimately derives from control over net energy surplus. When a great power’s domestic EROEI declines, it loses structural strength and increasingly relies on financialization, followed by imperial strategies to secure external high-quality energy sources.

The United States, he contends, is in this phase. Despite abundant hydrocarbons, U.S. shale oil suffers from falling EROEI. Extraction and refining costs are rising energetically, while infrastructure lags: aging grids, transformer shortages, copper constraints, and surging electricity demand from AI data centers all signal growing entropy. The response, Powell argues, is thermodynamic imperialism—using military and financial leverage to control foreign energy resources and chokepoints while denying them to rivals. Examples include pressure on Venezuela (with heavy crude suited to U.S. refineries), tensions over Iran, and strategic focus on the Strait of Hormuz and other maritime bottlenecks.

China, by contrast, recognized its vulnerability decades ago—particularly dependence on U.S.-controlled sea lanes like the Strait of Malacca. Starting in the early 2000s, it pursued a deliberate strategy of energy sovereignty through massive investment in renewables, electrification, domestic supply chains, and the Belt and Road Initiative to diversify import routes. By the mid-2010s, China had achieved competitive EROEI in solar, batteries, and electric vehicles, becoming the global leader in these technologies. It is now advancing toward next-generation systems, including thorium reactors, fusion research, and large-scale storage and recycling. Powell sees China as actively refreshing its energetic base and maintaining an upward EROEI trajectory, giving it a structural advantage in the emerging multipolar order.

The “Time of Monsters”: Transition and Turbulence

We are living, Powell suggests, in Antonio Gramsci’s “time of monsters”—an interregnum between a decaying U.S.-led, hydrocarbon-centered unipolar order and a rising multipolar world grounded in new energetic foundations (electricity, renewables, and integrated industrial systems). This transition produces systemic turbulence:

• Financial bubbles and deleveraging
• Social chaos and institutional collapse
• Explosive growth in misinformation and ideological radicalization
• Geopolitical conflicts over energy resources and chokepoints
• Contradictions between material reality and outdated ideological dogmas

Conflicts such as those involving Iran or Venezuela are not primarily ideological or narrowly “security” driven. They reflect deeper structural pressures: declining energetic efficiency in the West drives attempts to secure or deny access to high-EROEI resources, control strategic geography, and externalize internal entropy. Energy disruptions, in turn, cascade into food crises (via fertilizer shortages) and broader instability, creating a self-reinforcing spiral of entropy and conflict.

Why Thermoeconomics Matters

Powell’s synthesis is not merely academic. It explains why conventional economic models repeatedly fail to predict energy shocks and systemic crises. It reveals how credit expansion and fictitious capital serve as temporary bandages over energetic constraints. Most importantly, it grounds geopolitics in material reality rather than abstract ideology: competition between states is, at root, a struggle over who can best organize and sustain high-quality energy flows in a world governed by thermodynamic laws.

Energy sovereignty—secure control over one’s own high-quality energy sources and infrastructure—is therefore not optional but existential. Nations that successfully build negentropic capacity (robust, ordered energy systems and supply chains) will be better positioned for the future. Those that cling to outdated models and rely on external dependencies or coercion risk fragility and decline.

In Powell’s telling, the world’s interlocking crises—economic, political, informational, and geopolitical—are not separate phenomena. They are interconnected expressions of one underlying process: the struggle to maintain or regain energetic sovereignty as the old energy order decays and a new one struggles to emerge. Understanding this thermoeconomic lens may be essential for navigating the turbulent “time of monsters” ahead.