Societies, just as software systems and other dynamic systems, have the potential to operate at multiple levels of abstraction. Government is an abstraction, for instance - you can't point to a particular building and say that is the government - it may house the officials and the record stores, but the government is in fact the interaction of a set of laws and rights with the participants of that government, and the officials in question essentially serve to make government happen. Government isn't a thing, its a process - and as such it uses energy.
Abstraction is the process of hiding complexity under a metaphor (or interface). Once the abstraction exists, it becomes a thing, and can interact with other things at the same level. This can be seen in the settlement metaphor. A person leaves a city and journeys into the wilderness. There he sets up a farm. Others, driven by the same pressures, set up farms nearby - the resource base is extensive (though not infinite). The farmers initially farm to produce enough goods to feed themselves, but eventually may reach a point where they produce more than they consume and they can start trading.
A trading post is set up within comfortable transportation range, and they are soon able to specialize in producing different products. Other amenities spring up - smiths to handle shoeing of horses and production of localized implements, chandlers to produce candles for light, coopers to build barrels and storage bins, taverns to provide food and drink (and occasionally companionship) and so on. A certain degree of energy is required to reach this stage, and the degree of dissonance rises with the number of interactions, until eventually, a group of people get together and set up a set of rules to create a "town", providing basic services (such as law enforcement) at the expense of certain activities (such as robbery or murder being "allowable"). It takes a certain level of energy to get to this new level of abstraction, but once it's achieved, it's stable - it's a quantum electron state within a metaphorical atom.
So long as the energy is supplied (taxes or services on the part of the members), the town continues to exist - and can even exist for a certain period of time after the energy is removed (thus, it's actually quasi-stable). This is why gold mining towns often died out - once the energy (in the form of gold sales) was removed, the town eventually couldn't maintain a sufficient level of complexity to continue. The building might persists, but no one was in them to do the business of governance.
Eventually, if the energy is maintained, other towns spring up in the same general vicinity. Advances in technology become possible as people specialize, and as edge effects motivate innovation. The towns begin to trade with one another, and as they grow, their boundaries eventually overlap. These towns (or townships, as they are now increasingly called) are able to produce more, are able to devote more energy to communal activities - the development of schools, of watersheds, of roads, of sanitation facilities. The towns become a city, forcing a higher level of abstraction (and more energy).
The interactions of cities with other cities is similar to, that of towns with other towns, but it is usually at a much higher level; ad hoc rules become the foundation of formal legal systems, universities spring up, as does the rise of a formal peace-keeping militia (a police force). At some point, if there are indigenous peoples in the same area, the expanding towns will eventually end up reaching one of three states - if they are at a sufficient level of abstraction to expend the energy, they will wipe out the indigenous population. If they aren't, then the will either assimilate the other culture and be changed by it in turn, or they will marginalize the other population - literally push them to the margins of the existing system. This is part of the reason why cultures with lower levels of societal abstraction (energy draws) tend to end up living in typically harsh and forbidding lands when such expansion occurs.
In time, the various cities in a region also form abstractions - provinces. Provinces (in the general sense, not specifically Canadian provinces) differ from cities in a qualitative way, and again they require a certain energy level to function properly. This nesting process can be carried up the line. Moreover, you can have other abstractions that have their own plateus - the structure of business, from sole proprieterships to transnational corporations, follow a very similar progression, and are in many ways fueled by the same energy derivatives - the movement of money in the economy.
It's worth addressing that issue here. Energy is required to convert resources into usable form, energy is required to transport those goods to either other processors or to consumers, who in turn use that energy to handle the processing of those goods either physically - a foundryman pouring steel into ingots, a truck drive driving those ingots to a construction site, a construction worker using the beams as piles the foundational support of an office building - or virtually - the bank manager who arranges finance for the office building, the graphic artist who puts together a brochure about the office building for prospective buyers, the programmer who writes the program that handles the finances. Money, then, can be seen as a proxy for either energy or resources (and usually a combination of both), while technology should be seen as a way to convert this money back into energy in some fashion.
Note, however, that this process of nested abstraction does not place all at once. A higher level of abstraction can only exist once the need for that abstraction arises - while you can call a new town in a virgin region a province, can draw maps, and put together flags, the abstraction level will remain that of a town until such time as you have enough of the actors (towns in this case) to even make a city, let alone a province. Similarly, a conqueror can take control over a number of cities in a region, but if he doesn't do anything to make those cities work together in a cohesive fashion (and doesn't supply the energy to make this possible on a continuous basis) then his empire will crumble within a few years.
So what happens when the amount of energy available drops? At first, not much. You get discontent among the participants, but there's also a certain amount of momentum that exists at each plateau that keeps the abstractions going. Call it cultural memory - its the reluctance that people have to give up what they have in terms of their own binding to the abstraction. Moreover, the energy levels of the highest abstractions tend to have higher priority than lower level abstractions. This means those at the lowest levels of abstractions usually feel problems first.
Individual towns first reduce staff and services, then reach the fateful day when they can't meet payroll, and disincorporate. Services disappear, and people leave. Opportunities diminish. In time, the town becomes a ghost town. The same things begin to happen at former townships that are now suburbs. The cost of commuting becomes too high compared to the benefit of living away from the action. Individual stores begin to fail, then malls begin to fall vacant. Housing prices drop, foreclosures rise, and crime levels (a break down of the authority of the state to maintain order) rise along with it. The wealthiest neighborhoods become increasingly isolated, gated communities that effectively maintain their own separate identity (energy levels are higher here) but the allocation of energy (via wealth distribution and services) to those outside these gated communities begins its own steady decline.
Eventually, whole sections of a city go dark, lives become increasingly desperate, and those with the means to do so flee the city to get closer to centers of power (and hence of energy). This urban flight only exacerbates the situation, diminishing the tax base. Deserted areas increasingly go to seed, their resources stripped, their infrastructure devastated. Communication and transportation routes begin to fail due to vandalism and lack of maintenance. Educational levels drop, and the few areas that remain at a higher potential eventually become separate towns Urban centers, may see a brief uptick in their fortunes as suburbanites move closer, but unless they can find a new equilibrium from alternative energy sources (either directly or indirectly) then they become more and more townlike themselves.
At the higher level of organization, the provincial control begins to falter as energy is shunted to the political center. Unrest begins to rise, and at the edges of the province, where control is weakest, if a particular group of cities are able to gain a new source of energy, then they may in fact attempt to break away. This will usually result in armed conflict and civil war, as provincial authorities end up investing ever more energy into building up the military and police, yet the more that regions break away, the smaller the tax base and the less energy that the capital can allocate. Eventually, the province fragments into smaller abstractions, and with that loses political power.
Again, note that the same thing is true for any form of abstraction. Small companies merge or are acquired to provide more services, branch offices are added, which eventually requires regional management, which in time extends out to extra-provincial activities. This brings more money in but also increases its need to sustain that monetary flow. This means that most companies ultimately can get only so big before they become unwieldy, unable to respond rapidly to change in the markets, and consequently energy outflow exceeds energy inflow.
During tough times, companies close branch offices, spin off divisions, become increasingly specialized - in other words, they shift down to the previous level of abstraction, even while potentially seeding their future competitors. This also affects business partner and supply chain channels. The best and the brightest - the innovators in the company, who are in effect energy multipliers, realize their opportunities are limited, and leave to form their own ventures. In other words, as energy recedes, things become more primitive.
Note that this isn't necessarily an up and down process - technology can make new sources of energy viable, reversing a decline, structural changes in the economy (which can create temporary drawdowns) can be resolved, particularly draining activities (such as wars) can end, reducing demands upon energy and so forth. Moreover, once a given abstraction level is achieved, even if it is temporarily lost, the energy necessary to rebuild is usually less than it was initially (less need for expensive innovation).
On the flip side, environmental degradation can serve as friction towards the utilization of new energy. Environmental degradation in this case usually means that the cost of extracting energy into usable forms goes up, and tends to be a major drag upon any system. One way of thinking about this is that such degradation is systemic turbulence. The role of both technology and environmental degradation will be covered in the next column.