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.