(Applying two primeval trade rules to maintain thriving economies in a turbulent century)
Earth’s ecosystems provide endless insights for our economies, but the most impactful rules many not be the ones we often envision when walking through a prairie or a jungle. For instance, three foundational components are continually interacting to govern the healthy functioning of economies and ecosystems: diversity, energy, and trade. The focus here is trade, and its two primeval rules.
The Ecological Insight
The biotic pyramid in figure 1 is a common way to envision the movement of resources (trade) in ecosystems. Energy is embodied in all species on Earth, so this is also referred to the energy pyramid. Two simple rules govern the movement of matter and energy in the pyramid, with implications for issues such as energy security, resilient and productive economies, employment, buffers to global turbulence, and even carbon emissions.
The first trade rule has to do with the transfer of biomass (i.e., biological matter) through the pyramid. Nearly 99% of the biomass produced and cycled through a forest, prairie, or other habitat exists at the bottom of the biotic pyramid.[1] The bottom of the pyramid, the foundation of life, is where plants convert light and water into a vast abundance of resources for the entire system.
Bacteria also thrive at the base, to convert elements like nitrogen into resources like ammonium, essential for plant growth. Fungi are an even larger portion of soil life, decaying leaves and roots, and increasing soil fertility in the process. Fungi and bacteria comprise about 15% of all biomass on Earth. The soil is also crawling with beetles, millipedes and other detritivores that consume dead leaves and feces, in effect cycling it back into the pyramid.
Ecologists refer to each step in the pyramid as a trophic level (from Greek, troph, meaning food or nourishment). As resources move up each level, such as a snake eating a frog, energy is lost as heat waste.[2] Once all the energy accounting is done, only a fraction of the system’s total energy is available to top consumers such as hawks or lions. Nearly all the usable energy (i.e., biochemical energy) found in the pyramid is generated within the system. In other words, it is endogenous,[3] or locally produced. This becomes obvious when we recall that about 99% of the pyramid’s biomass and energy is found at the base, in organisms that do not migrate very far—if at all.
Figure 1. Biomass/energy pyramid of a self-regulating ecosystem. Energy and resources are concentrated near the base, and are lost through metabolic activities in each step in the pyramid.
The second primeval trade rule governs energy and biomass transfers across system boundaries, such as from Colorado’s shortgrass prairie to its ponderosa pine forest. The further one gets from a center of biomass production, the less likely they are to find evidence of that production elsewhere. Elk, warblers, and other animals certainly migrate back and forth across ecological boundaries. But hose species comprise far less than 1% of the ecosystem’s total biomass. Only a fraction of the total is imported, or exogenous.[4] In economic terms, very few biological goods are imported or exported.
The Economic Insights
A basic function of economies is to cycle usable energy and matter (e.g., electricity, food, water, timber, recycled products, appliances) throughout the system, in a way that meets society’s needs into perpetuity. Economists simply use different terms. Rather than trophic levels, they use terms such as sectors and industries. An economy is often partitioned into four sectors: resource extraction, manufacturing, services & retail, and knowledge (e.g., education, consulting, information technology, etc.). I add a fifth sector called waste-to-resources (i.e., recycling, circularity), due to the critical role this sector plays in meeting society’s needs efficiently and into perpetuity.
While ecologists study the cycling of resources through the pyramid by measuring energy and biomass, economists typically measure the monetary value or employment of a particular sector or industry (e.g., the dollar value of all vehicles produced in Michigan, or the number of people employed by Colorado’s steel industry). And for the vast majority of human history, a balanced trade pyramid was the norm. Extractive and manufacturing sectors provided the bulk of total productivity (i.e., most jobs occurred in these sectors, and these sectors supplied the bulk of a region’s or nation’s gross domestic product, or GDP). A small fraction of total goods produced on Earth were traded across national borders.
Not until the late Industrial Revolution did total global trade exceeded 10% of all goods produced on Earth.[5] Most goods remained in the domestic economy. So important is a nation’s domestic economy that Adam Smith professed that the foreign trade is a reflection, not a cause, of the wealth of any nation.[6] This sentiment was echoed by America’s founding father, Thomas Jefferson, who proclaimed in the Federalist Papers:[7]
An equilibrium of agriculture, manufacture, and commerce, is currently become essential to our independence. Manufactures, sufficient for our own consumption (and no more). Commerce sufficient to carry the surplus produce of agriculture, beyond our consumption, to a market for exchanging it for articles we cannot raise (and no more). These are the true limits of manufacture and commerce. To go beyond is to increase our dependence on foreign nations, and our liability to war.
Lifting Europe and the U.S. out of the Great Depression, John M. Keynes also advocated for stronger domestic economies. The notable Austrian economist Joseph Schumpeter was even more critical, arguing that a “restraint of foreign trade would produce steadier growth for a nation, as well as greater total output, compared to a system of uncontrolled global trade, which cannot fail to be “studded with catastrophes.”[8] Subscribing to the ecological and economic insights, we can envision a balanced trade pyramid resembling the biotic pyramid of life (Figure 2)
Figure 2. The balanced (sustainable) trade pyramid.[9] The blue levels (various sectors and industries) comprise the total economic value within a domestic or regional economy. Each level rest upon the productive capacity and value of the levels below. Conceptual image from “Ecosystems as Models for Restoring our Economies (To a sustainable state).”7
It was not until the end of World War II that a sequence of trade rules—the Bretton Woods agreement of 1946, the Washington Consensus of the 1980s, the North American Free Trade Agreement, the US Mexico Canada Agreement—began shifting humanity far away from a balanced trade pyramid. Today, over 60% of all goods a nation consumes is produced elsewhere (Figure 3), and nearly 99% of goods a city consumes is imported.[10] The closer we get to a point of consumption, the more likely we are to find products produced elsewhere.
Figure 3. Global Trade Index: 1500 to 2023. The total value of world exports and imports, divided by world GDP. Of all goods and services produced on Earth, this is the percentage of those products that is exported and imported. Data based on the monetary value of products, not the quantity of products. This is also referred to as the Trade Openness Index. Data by Ortiz-Ospina, 2024. Graph by John H. Giordanengo.[11]
The base of the pyramid has eroded. In its place, America has built an epic trade balloon, with 82% of GDP comprised of the service and knowledge sectors. Less than 11% of GDP is supported by agriculture and manufacturing. This is a thin, weak, tenuous position for any nation to find itself in during this turbulent century. Learn more about trade balloons and their socio-economic implications in The Pins that Popped Sri Lanka’s Trade Balloon.
Trade is a Foundational Component of Economies, but it Doesn’t Act Alone
Highly-evolved ecosystems have developed proven energy and trade rules, with clear instructions for Earth’s economies. In a world of unpredictable global energy markets and declining fossil fuel reserves, energy security can only be sustained by increasing reliance on a diversity of renewable energy resources. Energy lies at the foundation of a balanced (sustainable) trade pyramid, which must be sufficient to sustain the quantity of goods and services consumed. In this light, energy sovereignty is the lynch pin of economic sovereignty, which is a prerequisite to national sovereignty.
Renewable energy is just one means to attain energy sovereignty. Another means, economic diversity, is an overlooked means to meeting an economy’s productivity needs with less energy. Trade is another means. For instance, policies that stimulate more domestic trade (instead of global trade) provides a financial incentive to recycle domestic materials into usable products. Recycled materials reduce energy consumption dramatically,[12] while long global supply chains of heavy materials (e.g., food) can consume over twice as much energy than local supply chains.6
Attaining critical social, environmental and economic goals in this turbulent century requires a fundamentally different approach. Policies and programs must shift to support thriving regional and national economies, where diversity, energy, and trade are in balance with the local context. The Economic Restoration Institute is continually investigating novel policies and programs, and helping our partners understand how they might apply to restoring their business, industry, or economy. Learn more at www.EconomicRestoration.org.
About the Author
John Giordanengo is the author of Ecosystems as Models for Restoring our Economies (To a sustainable state), and the president of the Economic Restoration Institute. His research and investigative interviews from around the U.S. and the globe also support his policy and program work, books, and articles. John’s work is inspired by the awe of nature, music, and our shared human struggle.
Publication Note
Portions of this article were originally published in Eco-Nomics by J.H. Giordanengo, and are approved for cross-posting here.
Notes and Literature Cited
[1] Bar-On, Y.M., R. Phillips, and R. Milo. 2018. The biomass distribution on Earth. PNAS, 115(25), 6506-6511, May 21, 2018. https://doi.org/10.1073/pnas.1711842115
[2] Calories are consumed in support of metabolism, physical exercise, digestion, and other activities that produce heat waste.
[3] Endogenous Energy and Materials: Energy and materials that are consumed by entities in the same boundary in which they are generated. Renewable energy that is generated and consumed in Colorado is endogenous to Colorado. Note: The sunlight striking a given patch of land is fixed, and is part of an ecosystem’s environmental context.
[4] Exogenous Energy or Materials: Energy and materials that are produced by one ecosystem or economy, then transferred to a homologous system (e.g., another economy or ecosystem) for consumption. One example is fossil fuels, created hundreds of millions of years ago by ecosystems that are now extinct, and which are typically transferred to regions far beyond the point of extraction. Less intuitive, electricity generated by nuclear power plants in France, and then transported to Italy for consumption, is exogenous to the Italian economy.
[5] Ortiz-Ospina, E., D. Beltekian, and M. Roser. 2024. ‘Trade and Globalization. How did international trade and globalization change over time? What is the structure today? And what is its impact?’ Our World in Data. Accessed on 10 September, 2025. https://ourworldindata.org/trade-and-globalization#:~:text=Today%20the%20sum%20of%20exports,value%20of%20total%20global%20output.
[6] Smith, A. 2019. The Wealth of Nations (5th ed.). Ixia Press. (Original work published in 1776).
[7] Randall, H.S. 2015. The Life of Jefferson, Volume 3. Bibliolife DBA of Bibilio Bazaar II LLC.
[8] Schumpeter, J. A. 1950. Capitalism, Socialism, and Democracy (3rd Ed.). Harper and Brothers.
[9] Sustainable refers the ability of a community, region, or nation to meet its economic and social needs into perpetuity, without jeopardizing the ability of other communities or nations to meet their needs, and without impairing the health of ecosystems we rely upon. The terms self-regulating and sustainable are used interchangeably herein, for a self-regulating economy cannot, by definition, exist via continual external resource inputs from beyond its boundary. Nor can a self-regulating (sustainable) economy persist from activities that continually degrade the social and environmental resources required for its survival.
[10] Giordanengo, J.H. 2025. Ecosystems as Models for Restoring our Economies (To a sustainable state). Anthem Press.
[11] Giordanengo, J.H. 2025. ‘Is Capitalism the Scapegoat for a Poorly Structured Economy? If so, did the recent Gallup poll ask the right question?’ Eco-Nomics. Sep 16, 2025. https://johngiordanengo.substack.com/p/is-capitalism-the-scapegoat-for-a
[12] Goldstein, J., C. Electris, and J. Morris. 2011. ‘More Jobs, Less Pollution: Growing the Recycling Economy in the U.S.’ Natural Resources Defense Council. https://www.nrdc.org/sites/default/files/glo_11111401a_0.pdf
US Energy Information Administration. 2014. ‘Recycling is the primary energy efficiency technology for aluminum and steel manufacturing’. US Energy Information Administration, Independent Statistics and Analysis. Accessed 01 February, 2024. https://www.eia.gov/todayinenergy/detail.php?id=16211
