Is Capitalism Dead?

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But if an alternative can't be found in time disaster follows (and round and round we go again).

I'm not saying there aren't worse systems I'm just saying it has problems and it shouldn't be held up and idolized as perfect because it is far from that. We should always be looking for something better.

I was assuming that savings = investment.

Well, not really, it isn't as if there will be a sudden disappearance of a product. Instead, we will see a certain product get more and more expensive over a period of time, and it is unlikely that the product would ever disappear in the meantime either, and while this is going on, a search for alternatives would also occur so as to make profit. I mean, I don't think that the system is very problematic in dealing with these situations, at least, historically there haven't been many problems, and for the most part, the costs of resources have been declining, I think, even with oil actually historically being volatile but relatively constant in inflation adjusted prices. Of course, there are questions on how we will get past oil, but nobody has a solution, and it is unlikely that an institutional framework for coordinating information will arise to replace capitalism any time soon either, as the system, actually does some very impressive work(even if we argue that the mechanisms show occasional flaws)

In general, for a given resource or product this is true. Even for most common-pool resources this is true, but energy is unique in that it is the back-bone of the economy and our society. If we were talking about running out of sheep to make wool, then we'd except wool alternatives to arise. But rising costs of energy slow everything down, including research. Then there is the time required to convert to a new energy economy. As the cost of energy and material transportation increases, the conversion process will slow down, not speed up.

Economics, like any other science, is subject to the conservation of energy.

I think the most practical alternative is nuclear power (at least on a national grid energy level). With breeder reactors and reprocessing of fuel, the dangers of nuclear waste are nearly completely diminished, as opposed to the modern moronic method of burying the stuff. However, there are political barriers to converting to nuclear power, as well as the initial costs of building a new plant. If we merely relied upon the market to motivate the conversion, it might be too little too late.

But even with the implementation of nuclear power, there is still the issue of transportation energy. Nothing has the energy density of fossil fuels. Even with the best hypothetical fuel cell imaginable, one will not be able to replace jet fuel with batteries. Bye-bye cheaptickets.com. However, if we converted to nuclear sooner, it would at least slow down the rise in cost of fossil fuels as the demand will drop faster than the supply does.

Ok, I recognize that rising costs of energy slow down research by increasing costs, however, substitutes for gasoline for powering electrical networks exist, such as geothermal energy, hydro-electric energy, solar energy, wind energy, nuclear power, etc. And research would be more constrained by the costs for maintaining their equipment. The major threat that fossil fuels bring up is in transportation, where energy often must be stored in vehicles for use. The cost of transportation is less relevant to research costs though, as it would be more applicable to employee salaries.


Economics has very little to do with the conservation of energy, so even though this is true, the overlap between economics and physics or chemistry is usually rather small, and mostly with technology than abstract principles of either field.


Definitely a practical alternative, but the political process causes problems for all of this. In any case, I am pretty certain that the market currently has rights to create nuclear power plants anyway. In any case, a major factor that would slow down the change in power grids would likely have a lot to do with the immense cost of such a conversion, and it is difficult to determine when it would be optimal to do this.

Ok, whatever. Frankly, I would bet that fuel cells might be a terrible way to go anyway because those things are hella costly, and pipeline maintenance is hella costly as well as hydrogen is not easily contained due to it's size and necessary levels of compression. It might end up being an alright way to go, or even the way we end up using, as I am not an energy expert, but to be honest, there are multiple methods proposed, each advocate of one of these methods seeks to debunk their opponents, and thus to the average person, no source of energy wins hands-down. Thus, the market has an edge, as the conventional manner by which politicians tend to want to solve the energy crisis is through the use of corn, even though corn is not a good, and perhaps one of the worst crops for biofuels to choose.

There is an overall look at energy production possibilities at http://www.sciencedaily.com/releases/20 ... 171908.htm

Nuclear power has always provided greater dangers and higher expense than proves worthwhile. Although a nuclear plant has zero carbon output the mining and of the fuel and disposal of highly dangerous waste and auxiliary processes do not grant any advantages. Also there must be large government financial support for construction of nuclear stations which no insurance company will back considering the dangers.

This article http://www.counterpunch.org/stclair12122008.html clearly indicates the incompetent care and feeding of an operating nuclear facility which is more typical than not and the dangers to residents surrounding the plant are more than any civilized nation needs to undertake.

American electrical grids already predominately use coal, whose natural sources are nowhere near the depleted levels of petroleum. However, as coal plants rely upon constant refueling, they are directly susceptible to transportation costs. Natural gas is another fossil fuel alternative, and one that is more well suited as a gasoline substitute, however even the current transportation costs of natural gas are quite prohibitive. Thus, there are, even now, alternatives to gasoline, but it is not the cost of production that make them costly; its the physics that does.

Market forces alone will only lead to a switch to grid energy alternatives when the costs of the old technology become prohibitive. Whereas, an earlier artificial (and assumingly "efficient") switch to alternative grid energy will slow the rise in overall energy costs. Basically, if we started using and needing less petroleum now, then the demand decreases faster than the free market scenario, thus prolonging petroleum reserves and slowing the rise in petroleum costs. Thus using the same market forces on transportation energy technology, there will be more time to develop alternatives, and the impact upon society as a whole will be decreased.




The immediate concern is petroleum reserves, which IS our transportation energy infrastructure. But switching to a different transportation energy technology is much further away than switching to a different grid energy technology. But as stated earlier, American electrical grids use predominately coal, which is a petroleum alternative. What is needed is not simply "alternative energy" technology, but rather alternative energy technology not heavily reliant upon transportation technology. Coal technology is heavily reliant upon transporting coal.




To suggest that the only real research costs are employee salaries is rather hilarious. It paints a picture of all scientists and engineers as pencil pushers sitting behind a desk. Researching requires actually building stuff. Big expensive stuff by even today's standards. Research, coal power, and all of society are heavily reliant upon transportation energy.



haha. I did not say economics was the science of energy. I merely said it was subject to the constraints of energy conservation. Market forces are great for creating cost effective efficient solutions to problems. However, energy is not simply a matter of efficiency, and energy use is subject to the limits of energy conservation and entropy. No matter how energy efficient you make an engine, there are strict physical limits on how efficient that engine can become. Economists do not study the physics of energy, and usually do not. However, in a strained market of energy production and use, their ignorance of the physics of energy reinforces their faith in physically impossible scenarios.




In america, no new nuclear reactors have been built in the last 40 years. Only recently have licenses been granted to build 30 new nuclear reactors nationwide. But the process of slowed by political hurdles and the public's perception of nuclear technology. Additionally, the use and development of certain technologies still remains expressly prohibited due to politics and the nuclear non-proliferation treaty.

Everything I have stated so far was in the ideal case where there were no adverse political pressures on the market. So even in the ideal case, the market cannot do it alone. But with these adverse socio-political conditions, it is even worse.



Yes. From the perspective of the free market, in the ideal case, the change to nuclear power is merely prohibited by the expensive costs of building new power plants. However, even if the costs of building the plant were incorporated into the cost of energy production, it would STILL be cheaper or competitive with coal, which currently benefits from coal subsidies. If the market is unwilling to convert to a cheaper technology now, why would it be more willing when everything costs more later?





Fuel cells are not simply about hydrogen. In fact, the notion of a hydrogen economy has been discredited for years.




Yes, most economists are not energy experts because they don't need to be. Except in this special case situation where the physical limits of energy production and use become relevant, heh. From the perspective of the free market, it is simply about competing technologies striving to be the most efficient and cost effective. No matter how efficiently you store energy, there are physical limits to that which come from the physics of energy, in particular energy conservation and entropy. Fuel cells are just complicated batteries. No matter how good your battery is, if you have nothing cheap to charge it with, you are merely left with a paper weight, heh. The market has no edge over mother nature.

It has been shown, years ago, that complete conversion from petroleum to biofuels would require an increase in crop production several times that currently used for food production. It does not matter which biofuel is the best, you are still subject to the conservation of energy.

The current methods used by most governments to switch to alternate technologies does not work. But the free market will never be able to perform the switch efficiently.

use algea

Mystyc, have you ever heard of Julian Simon? During the last oil scare (around 1980) he made a bet that the inflation-adjusted price of oil, copper, tin, and some other metals would drop in the next ten years. He won the bet, despite all the doomsayer's prophecies of mass collapse. The imminent end of the world due to a human population expanded beyond the carrying capacity has been prophecied nonstop for the past couple centuries, and the pessimists have proven wrong every single time. Why is this any different? The market will find ways to innovate. Worst-case scenario, energy is highly expensive for some time. In that case, there would be a sudden worldwide Manhattan Project to find new energy sources, and governments would find ways of insulating the general public from the costs of that project for some time by incurring debt and distributing the financial impact over a lengthy period. Given that there is already significant push to find alternative sources of energy, I doubt it will really be the Earth-shattering Apocalypse that people are worried about. Especially considering that there are already several alternatives that are almost viable in their present state, and a combination of several of them would certainly be enough.

heh. The market is always right, except when it is wrong....

Did I come off as a doomsayer? Or perhaps it is that any suggestion of forethought and planning should be dismissed as "doomsayer prophecy".

The economy is not a perpetual motion machine. While it can distribute debt and financial impact over time, it cannot do that to energy. It does not simply cost money to develop technology and to distribute energy, it costs energy to develop technology and it costs energy to distribute energy. No matter how cleverly you hide this fact with Enron-style accounting schemes, you will still get the metaphorical equivalent of "rolling black outs", heh.

Hmm... the statement "its the physics that does" seems inherently false. There is no physics from an economics perspective, only costs of production and technological change. The economy doesn't care what science everything comes from.

I wouldn't be so sure that the switch would be efficient. You are invoking the idea that politicians will be able to get a bunch of money to change everything without corruption, favoritism, or even changing the problematic powerplant to another problematic one. Now, you are right, this might slow the rise in energy costs, however, there really seems no short-run concern about energy costs. The rise in gas prices has for the most part been blunted, but transportation has already adapted somewhat to the earlier rise. This will increase the time allowed to develop the alternatives, it will decrease the apparent need though, and to be honest, I don't see a mechanism designed as such where this will likely happen. I could be wrong, but the political process, like the market, is a mechanism, and it must be treated as such.


Ok, I knew about the coal, however, I would not imagine that transportation costs would tend to be prohibitively high, nor would I think that the situation "Oh no, we can't transport our coal" would ever emerge simply because of the existence of various transportation technologies.



Yes, everything is dependent upon transportation energy, however, the major costs are often not based upon transportation, so when allocating costs, we wouldn't consider transportation costs unless they became excessively high. I wasn't assuming that the entire energy infrastructure would collapse overnight, that notion seems inherently ridiculous, but rather that the energy infrastructure would become more costly with time, and even if gas where more expensive by a multiple, I don't see it being the most significant factor in research costs, perhaps I don't have an accounting break down of current transportation costs, however, I do not think them the highest costs.


Well, the point you make really ends up being the same. Economics has very little to do with physics. Energy is a matter of efficiency, as all we are dealing with is a particular resource. Economics has little to do with engines as well. In fact, to be honest, the amount of energy that the world receives is enormous and nowhere close to being fully tapped, the major concern is tapping it and switching it's forms as necessary, so I don't see how "physics" has any importance to the economist, nor how conservation of energy actually fits into this question. I mean, economics is a social science, energy is as abstract to the economist as it is to the behavioralist or the sociologist, and really just an external.


I know about this, I actually took a class on radiation, where this fact was mentioned.

Well, ok. I really don't think that an educated person has to agree with you. Economist David Friedman actually tends to think that the market is sufficient to handle all situations, and he has a PhD in physics. In any case, I see the political situation as being likely to be less effective than the market.


The net present value of the switch must be high enough to justify this and "competitive with coal" really does not show a good outlay in capital, not only that, but you already mentioned the prohibitive socio-political conditions preventing nuclear production. Things costing more will likely not be that much of a concern, as they still will be able to pass-off some of these costs, and the length in time that the greater cost will be incurred is still an unknown, and the highest present value of a resource is more important than a future value, as a general economic fact.


Hydrogen is still the major one that people bring up. Makes sense, however, I still read an article within the year that acted as if people still believe in hydrogen.


Ok. I still don't see the physical limits of energy production and use being important. Even if there are physical limits in energy conservation and entropy, that does not mean much as we are currently under-utilizing the current potential sources of energy there is not perfect knowledge on the amount of oil in existence, and to be honest, it is not as if


Conservation of energy is pretty irrelevant is the major concern is just creating an energy source for transport. In any case, I don't see how conservation of energy is relevant if this involves the use of energy found in crops, we are clearly drawing energy from a continual source of energy as we are not in a closed system. In any case, I wouldn't be surprised if technology could drive biofuel cost down as plants engineered to just be fuel plants could become more possible.

Right, and the issue is one of comparative efficiency. All a pro-market person has to prove is that the market system is better than all other systems.

Sure it can. That is why energy is stored by companies to be used throughout a period of time, or left in the ground. That is why there are speculators on these matters, who allocate a resource over time in the market. It costs energy to develop technology, I don't have to deny that, but the problem still never ever falls down to a physics problem. It is an economics problem of distributing a resource, and even if we accept that energy is a constraining resource, the problem is still one of economics, not physics, as it always involves getting resources to the most valued use.

To me, capitalism is obviously dead - but that's not wholly a bad thing. No, I'm not a socialist or communist or anything-ist.

Moderation seems best.

<sarcasm>
Hah, yes, brilliant! LOL

So here's what we do when demand for petroleum outstrips production for some time, such that energy costs become bothersome. Governments take out huge loans to switch everything to using more batteries, because batteries are cheap to make! Of course, we need factories to make these batteries, and that energy has to come from somewhere, so we will just make those factories battery powered too! But then we have to make other factories to build batteries for the battery making factories, but then we need to build more factories to build batteries for.... ad nauseum.
Oh wait, but there is more! Then we need to transport all these batteries, so we need to build batteries for trucks to transport batteries. So we need battery powered factories to build batteries for trucks that transport batteries! Brilliant! Its all so simple! No need to think about any complicated "abstract" physics here.

Yes, its just like the market for iron. Everything uses iron! Power plants use iron, cars use iron, and farms use iron. So when the demand for iron outstrips the production rate, then we just have to make more efficient use of iron, or switch to a cheaper substitute through some sort of manhattan style project. That exactly how the energy market works! Well, except that we can't eat iron, and our cars don't run on iron, and our power plants are not powered by iron... Oh, and then there are limits to how efficiently you can use and convert energy.... Oh, also, there finite supplies of energy in any given form.... Oh, yeah, and you don't necessarily do more, with less energy... Yeah, and on top of that, it takes energy to do anything...

Energy is no different than any other constraining restricted resource!
</sarcasm>

Yeah, I'm gonna stop there. I am not the type to devote much effort to convincing people of things they profess they do not need to even think about... Even though while talking to them they are thinking about it.... Just poorly....

Mystyc, all resources are scarce. That's pretty much the point of economics. Capitalism is, in theory and in practice, the most efficient method yet devised of allocating scarce resources. Unless you have a better suggestion...

Umm... mystyc, hardly a rebuttal. Here's one reason: Supply = Demand, a simple basic issue from microeconomics, if you aren't supplying it, their want for it doesn't matter. Let's see, energy costs become bothersome. That's a *great* thing to happen! Then people use energy less, then people start looking for different sources of energy. If energy costs involving batteries are high, then those are problematic as well. And energy costs will become bothersome long before they become a real hindrance.

In any case, *none* of what your sarcastic example suggests even shows any need to use *any* physics at all. Everything you invoke would be covered by price mechanisms. In *any* case, here's the issue, energy sources deplete heterogeneously, you've admitted that, this means that all that must be done is cover transportation costs for now, and this could be done with mass production of battery factories, quite easy. Not only that, but even then, bothersome costs do not mean a lack of energy, they just mean bothersome costs, this means that existing production methods could be used to create the new working scheme until it is fully established.

Mystyc, the part about iron doesn't add anything. Ok, energy is a more important resource than a number of other resources, got it. Nothing more is added. Ok, there are issues with energy conversion? So what? We just build a ton of powerplants, and then use those powerplants to create a new energy source, at an energy cost. I mean, let's be honest, the amount of energy it takes to transport coal is LESS than the amount of energy within the coal itself, so there does not seem to be an inherent problem. Ooh, finite supplies! Greater use of sun power, which is unlimited, this includes wind, solar, hydroelectric, all of which can be used at the cost of land. Ooh, wow! As for "more with less energy" well, you can increase the efficiency of energy use, which would be the same, unless you'd argue that we have reached the utmost pinnacle of engineering perfection(little hint, we haven't). Ooh, it takes energy to do everything! Ok, very important resource, got it, still doesn't really change the microeconomic problem very much, just seems to indicate that there might be some macroeconomic issues of adjustment, but unless we argue that the energy situation will suddenly collapse(which there is no reason to suspect), then there is no problem. Unless, we also assume that there is no means of addressing the energy issue, and if we assume the latter, then why the heck would it matter what system we are talking about? I mean, really, do you actually have a position worth advocating?

Here's the only positive suggestion I remember seeing. "Whereas, an earlier artificial (and assumingly "efficient") switch to alternative grid energy will slow the rise in overall energy costs."

And to be honest, that really is somewhat unrelated to the topic as you have NO MECHANISM that can be TRUSTED to implement this action. Only a hypothetical "well, if *somebody* did this", and what is the point? To suggest that markets aren't God-like? In any case, given that the remainder of your statement is that you want "more time to develop alternatives", I don't see how your invocations of physics really follow or matter, as you have admitted the problem to be soluble by physics, so the question thus has *nothing* to do with physics, only with economics and market processes. As for the argument: "energy costs are increasing and that impacts everything", that makes the situation different, certainly, but no 2 markets are perfectly alike, but where this goes from energy costs rise to "research and production will suddenly become impossible and society will collapse" seems to be a rather unexplained leap.

Not only that, but heck, what do you really expect me to have for a plan? Some complicated national energy plan that nobody will *ever* implement? I might as well start naming my back hairs, as that would be about equally productive. You don't really have much of a position from what I see, as even if you have a plan, you know it probably would never be implemented by the political apparatus, and probably not even so if you were recognized as the most accomplished expert in the world on energy policy.