<DrumBeat: October 6, 2008 The Oil Drum The Borg: A Financial Allegory>

199 comments on Energy/Credit/Currency Crisis Open Thread

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jeppen on October 6, 2008 - 7:56am Permalink | Subthread | Parent | Comments top

Japan functions by importing commodities and exporting finished products. In a global economic downturn demand for such produce (which does not include food or energy) decreases, so one countries export gain is necessarily another's export loss.

Mistermarko, the downturn is temporary, whatever you may believe. Think like this instead: When it is too expensive to buy extreme gas guzzlers, what do you do? Well, you probably pimp your small car more instead!

Growth is a function of technical progress and sound economic policies. Energy plays a role, of course, but there is a lot of room to rearrange current energy consumption to allow for added growth. We need not even force it - markets will take care of this by themselves. (Of course, it would help if the US slowly introduced European gas taxes, but I realize this won't happen.)

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mistermarko on October 6, 2008 - 8:54am Permalink | Subthread | Parent | Comments top

Jeppen, the first Great Depression was temporary - it ended with the Japanese invasion of China in 1937 and the German invasion of Poland in 1939. You say 'there is a lot of room to rearrange current energy consumption to allow for added growth.' This does not contradict my point, the economic problem is not rearranging current energy consumption, it is coping with falling energy consumption. And energy consumption is falling because energy has become too expensive. Economic growth could only take place in this situation if society and industry became more energy efficient and at the moment this is not happening enough. However, I agree with you that growth is (sometimes) a function of technical progress; but nothing short of molecular engineering will get us out of this predicament. On that note: www.myidea.net/ideas/node/326

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jeppen on October 6, 2008 - 3:29pm Permalink | Subthread | Parent | Comments top

Mistermarko, oil use per capita has actually fallen 10% since 1980, so we are already coping with falling energy consumption in some sense. During this time, average world GDP per capita has risen around 50% in constant prices.

Granted, the fossil oil per capita will decline faster after peak oil, but as I have argued in other comments, I believe we will cope quite well.

(Sorry, but I don't understand the relevance of your reference to molecular engineering.)

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199 comments on Energy/Credit/Currency Crisis Open Thread

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