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For newcomers to this blog, I must explain that I follow Dr Tim Morgan’s SEEDS analysis.

Dr Morgan is the former head of research at Tullett Prebon, a major British financial brokerage.

Morgan uses the acronym SEEDS to mean the “Surplus Energy Economics Data System”. It is the economic model he developed to analyse the economy as an energy system rather than as a purely financial one.

The central idea behind SEEDS is:

The economy is not really driven by money.
It is driven by surplus energy.

Money is only a claim on what the real economy can produce.

Morgan argues that orthodox economics gets this backwards because it assumes growth can continue indefinitely if central banks and governments manage money correctly. SEEDS says this is impossible if the surplus energy available to society is shrinking.

The model revolves around several key concepts.

The economy is energy

SEEDS starts from the idea that every good and service requires energy to exist:

• food,
• transport,
• buildings,
• hospitals,
• computers,
• the internet,
• financial services,
• everything.

Without energy, there is no economy.

• Surplus energy matters, not total energy

This is probably the most important part of the theory.

Morgan says that what matters is not how much gross energy exists, but how much is left after obtaining the energy itself.

For example:

• oil wells,
• pipelines,
• refineries,
• wind turbines,
• batteries,
• electricity grids,

All require energy to build and operate.

So society must “use energy to get energy”.

The remaining amount is called surplus energy.

• ECoE – Energy Cost of Energy

Morgan measures this using a metric called ECoE.

ECoE is the percentage of energy consumed to obtain usable energy.

He argues that:

• In earlier industrial times, ECoE was very low,
• cheap coal and oil created enormous surplus energy,
• This enabled industrial growth, welfare states, consumerism, and financial expansion.

But now:

• resources are harder to extract,
• systems are more complex,
• renewables require extensive infrastructure,
• therefore ECoE rises.

As ECoE rises, surplus energy shrinks.

• Prosperity is shrinking even if GDP rises

SEEDS distinguishes between:

• financial growth, and
• real prosperity.

Morgan argues governments disguise declining prosperity through:

• debt,
• money creation,
• asset inflation,
• low interest rates,
• expanding credit.

So GDP may still rise while real living standards stagnate or decline.

• Essentials squeeze discretionary spending

One of Morgan’s major conclusions is that as surplus energy declines:

• essentials become more expensive,
• households spend more on food, energy, housing and taxation,
• discretionary sectors shrink.

SEEDS therefore predicts long-term pressure on:

• tourism,
• hospitality,
• leisure,
• luxury retail,
• non-essential transport,
• much office employment,
• and many financial activities.

Meanwhile, essentials become dominant again.

• Finance becomes detached from reality

Morgan argues modern finance increasingly represents claims on future prosperity that may never exist.

So:

• debts expand,
• pensions become difficult,
• asset prices become unrealistic,
• governments borrow to preserve living standards,
• but the underlying energy base is weakening.

Eventually, he believes, the financial system must “de-financialise” and reconnect with physical reality.

This is why many people are interested in:

• peak oil,
• collapse theory,
• degrowth,
• localism,
• resilience,
• and post-growth economics,

To follow the SEEDS official site:

Surplus Energy Economics

And the introductory PDF explaining SEEDS is:

The Surplus Energy Economy – Introduction PDF

Tim Morgan’s latest SEEDS analysis (19/05/2026) reveals that

“…. fiscal strains are going to get relentlessly worse – the costs of social support will carry on rising even as the taxable economy shrinks.

As well as stretching social cohesion, this will undermine whatever monitoring or coercive powers states might have:

The implications might be localism, if we’re fortunate, or chaos, if we’re not.”