Most (not all) economists are scientists to the extent that they carry a mental model of how the world works in their heads.

They claim that observations within the real world validate their model.

This is the point, however; where I see their "invisible hand" playing dirty tricks. It covers up the fantasy third, all seeing eye on top of the foreheads of econmists and pretends that well documented failures of "the market" never happened. In other words, see no evil and the evil does not exist.

By contrast, for a true scientist, even a single lab experiment that proves the model to be in error, trumps the model. Not so in the wonderful world of economics. Every failure can be erased through "rationalization". The tulips never happened. Easter Island never happened. The dot.com bust never happened. Economists proclaiming how the internet will single handidly carry the world in to the next paradise, that did not happen either. It is an infallible science because all its fallibles are conveniently marked down in price and ultimately erased with the faded memories of each new, gullible generation. (Yes you 20 year olds out there, who have no real life memory of the 1973 oil shock. It happened. People shot each other at gas stations. Anything it takes, is done to get the fluid of our addiction.)

Let's start with the most fundamental feature of micro-economics: a willing, able, and knowledgeable seller (S) meets with a willing, able, and knowledgeable buyer (B) in a pool of similarly situated actors, S2, B2, S3, B3, etc.

The buyer (B) and seller (s) negotiate, each in his own interest (using the aid of the invisible hand covering up the invisible 3rd eye), and they ultimately settle on a fair "price".

This microscopic act is repeated many times. Zoom the microscope back to a macroscopic view of the Petri dish, and suddenly you are face to face with this fuzzy wuzzy thing called "the market". With all the germ like actors digging away down there (S1 thru Sn AND B1 thru Bs), each in their own best interest, a magical force takes hold of the Petri dish and miraculously the Petri dish is levitated to a higher plane of consciousness, of intelligent design consciousness. We call this magical force that lifts the Petri dish, "the invisible hand". We call its intelligently created consciousness, "the wisdom of the markets".

No one sees the "invisible hand". But just like the Emperor's clothes, trust us, it's there. And if you can not see it, surely you are neither as wise nor as patriotic as the degree carrying professors that do see it. Ditto for "the wisdom of the markets".

OK. So remember we said it all starts with:
(1) a willing, able, and knowledgeable seller (S), and
(2) a willing, able, and knowledgeable buyer (B)

Well what if one of those 6 assumptions is not true?
What if the seller is not able to provide the oil?
What if the buyer (Joe Public) has no knowledge of the impending Peak Oil (PO) situation?

Does the seller of an SUV tell the buyer about PO? Duh, NO.
Does the buyer buy the SUV? Duh, Yeh.
Are the markets wise?

We just report ... YOU decide.

There is no point arguing about the market mechanism per se. It will work after the Peak Oil and Peak Energy. But we don't know if it can "fix" the problem. It has never done that before. The markets have never really met a worldwide energy shortage. The market mechanism has been able to keep up growth by adding more fuels (oil to coal, natural gas and nuclear to oil). The growth has enabled new investments to realize this change.

In a real energy shortage the investments will collapse. The energy efficiency will not increase but deteriorate. Old vehicles and machines will be used longer. Maintenenace will suffer. Lots of energy "stored" in the infrastructure will be lost. There will not be enough resources  available for transition to the alternatives. Technology doesn't help without investments. The world will see a long period of negative growth.

The world will not end. The world "we" in the developed world know will end, but not the world "they", the rest of the world population, know. "We" will only learn to know "their" world better. My point is that there is a lot of experience in the world about living with less energy. If we want to know what happens after the Peak Oil and how to cope with it, we should look at that.

$300 per peak watt? No, it's somewhat better than that: ^_^;

WindPower.org places it at " 1,000 Dollars per Kilowatt Average" That's about $1 per watt

I fail to see why we have to get used to "a world of less" instead of a world of "more from that other thing".


Either the present world equates cost to value or it does not.

Either the present world has a lower cost associated with oil in the near past or not.

If the world equates money to value, and oil has been priced cheap VS other power sources, then are not consumer goods set at a lower price when oil is abnormally cheap?

Your "vision" (wishfull thinking really) is that economic growth and more goods will exist with MORE economically expensive energy.

So, please explain how, when long-long-term renewables like oil/coal become priced like short term renewables (wind,solar,hydro,1 growing season or less crop mass) how consumer goods are going to be the same or less priced than when oil was abnormally cheap?

I'm sure everyone is awaiting your wis-dum.

We can ratchet back, but if we all get horses, we're going to have a feed shortage.  Since we have all that pavement already, perhaps the bike will be the new horse.  How long will it be before the pavement becomes too decrepit for road bikes?

As far as who survives, I think Asians, Europeans and even Africans should worry about China and/or India.  Maybe they could threaten Australia, too.  They could assemble very large land armies, but I can't see them putting together enough of a navy to get past ours to the Americas.  

Americans should worry about each other.  Many of us are armed, and many feel entitled to take what they want.

Of course if nuclear weapons are used, we're all hosed.

I think it will be a long period of up and down, jerky reactions to the end of cheap oil. I do believe that we are seeing the effects of population overshoot COMBINED with cheap oil getting scarce and even climate changes (not going to argue CC origins, but to deny their existence is stupid). We cannot support continued exponential growth in either population or economies without cheap energy. Therefore, both will have to slow down due to lack of energy input. Yet every system and methodology we use today assumes cheap oil as the primary energy input in developed countries.

I think that people will survive, even thrive. But I cannot see population continuing to increase at the same pace without the support of cheap oil. I don't think metropolitan cities will look the same - maybe mutated into some form using electricity but resembling the early 1930's in terms of transportation. I cannot see how jet airlines will survive the transition at current people-moving levels - trains are the logical replacement.

But your point about massive energy use actually replacing TIME - that is very valid. I think the time issue can be dealt with via internet and telephone for communications, but that we will have to accept increased travel time and other such "time expense" due to the future expense of oil.

I'm going to think about the time issue some more.

This is not necessarily bad - slowing the clock down a little makes people nicer and less harried. IMO, it provides a better quality of life.