Is Capitalism Dead?

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I find it funny that economists know nothing about energy or the laws that govern it when the money they do supposedly know about are basically vouchers exchangeable for units of energy.

Take iron for example. The scarcity of iron doesn't necessarily effect the price the energy it takes to extract a resource becoming scarce increases so it takes more money to provide that energy.

Turning that iron into a car requires energy to transport the iron, reflected in the transportation costs, the energy to melt down and mold that iron, reflected in the manufacturing costs, and the energy needed to create items to maintain your workers health and food to give them energy like machines, reflected in their pay.

Nothing is free because nothing requires zero energy and the price is always close if not exactly the same as the total cost in energy to produce it.

Economists try to treat energy like any other resource not realizing it is the resource that creates all other resources. It is as much the economy as the money they use to represent it.

If energy stops flowing everything stops including money flow and the economists economy screeches to a halt.

But because they don't really understand what they are doing they will be left wondering "what happened?".

As someone else said if energy production drops suddenly the production of everything drops and the economy crashes so waiting for alternatives to arise wont work as there are no alternatives to energy just alternative ways to produce it. The problem is tapping into it. We've grown our economy (and therefore energy consumption) based on reserves of stored energy.

We've been running on batteries to use mystyc's example.

The renewable energy on earth is far from meeting the amount of energy we are using.

For algae for example we would need to clear huge amounts of land of vegetation to replace with algae farms which requires huge amounts of initial energy to create.

So at the start algae farms would be energy negative.. they use more energy than they produce.

After a decade or two they would start to pay for themselves with actually producing energy but in order to replace coal, oil and natural gas you would need something like the entire surface area of the US to cover it's energy needs.

As for nuclear its great but if it were to replace all the worlds energy production and we dug up all the uranium in the earth the fuel would last about 20 years. Add another decade if they're all breeder reactors (law of conservation of energy means you can't produce more fuel than you spend).

... what? Where do you come up with this?


That really is not how pricing works...


False. The labor theory of value was refuted a long time ago.

Yeah bad examples I'm distracted at work with a headache but really energy is not just another resource, like I said it's the prerequisite for everything so economists really should know more about it.

capitalism can never die

Unless it's forgotten.

the relgion of goblins and ferangi

Why? Energy may be more important than other resources, but that doesn't necessarily make it fundamentally different. But anyways, there are some economists who specialize in studying energy markets.

Not enough energy....

harvest more vespian gas...

Not enough energy....

harvest more vespian gas...

Umm.... the major problem with this idea is that money is not a set number of calories, but rather it is just a measure for exchanges themselves. This notion you put forward is basically just a restatement of the labor theory of value, except with a different objective value-giver.


Hard to say. If something *did* require 0 energy to produce it, but only did so in a limited quantity, then how would the total energy cost really come into effect? Not only that, but how do you actually quantify labor as an energy cost? There is no reason to suppose that smarter people burn more calories in the process of doing their work, so I don't see how it follows.


Well, no, actually humanity is the resource that creates all other resources, that's why we measure human interests with money, as money represents what people are willing to do for exchange.


If energy stops flowing then the planet is dead, as the sun must have assuredly burnt out.


Right, I should take some time to note that there are economists with a background in physics, who still use economics models as relevant to the topic.

In any case, I am not dealing with the rest of the post as I feel like I've already dealt with the matter.

*shrug* I've already stated that the energy market effects all other markets as it is the one resource that can't be replaced with something else and is required for everything.

Sure there are exceptions to the rule but generally the rule of thumb is that the cost of an item will be directly influenced by how much energy it takes to acquire and transport raw materials, produce, market and distribute. All other costs are secondary modifiers.

Well, actually, cost has a lot to do with marketing. Some places add a set amount onto cost, and this accounts for a lot of the every day goods we buy, however, a lot of other goods use different pricing strategies, and there are 4 categories of pricing strategies: cost-oriented strategies(like the one you put forward), demand-oriented strategies, competition-oriented strategies and profit-oriented strategies. To say that the former is the only one that exists seems questionable.

True but cost-oriented is the one that uses the least speculation. The other schemes are more akin to gambling.

All schemes involve some speculation, cost-oriented involves the least thinking work though, but still, 15% markup vs 14% is still a matter of speculation and gambling, as it getting into the business in the first place. Risk is an essential part of the economy, as is managing it(if you manage it well, you shouldn't be taking much of a risk).

the bailouts and fed interest rate cuts* show that socialism is very much alive in the US.

too bad it's socialistic policies that are directed with a corporatist agenda.




*free money is fairly socialist, right? or is that just straight communist?

Well, it is for the rich, so if it succeeds, then it is socialist, if it fails, then it is capitalist.