[QUOTE=Alex_Dubinsky]
People have a hard time envisioning the global economy as a closed system. They see the price of oil rising and the price of everything else rising, and they assume it must be inflation. Yet because the total amount of money doesn’t change (unlike when the Fed prints it), many things will actually be forced to cost less. Also, it may seem that if costs oil a lot then no one can afford to use it, but in fact the total amount of oil won’t change. The same number of cars will stay on the roads and ships in the ocean.
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Zero sum game, ehe? If you had just thrown in a couple of ‘means of production’ statements, and something about ‘workers and peasants’ it would given it just the right touch…
Of course, the amount of wealth (and even of ‘money’) DOES change…the total amount of usable energy DOES fluctuate and the total amount of oil as a commodity CAN also change. Other than that and your assertion that the same number of cars will stay on the road (something that is going up presently as China and India put millions of new cars on the road a year)…well, other than those minor things you are spot on.
[QUOTE=Alex_Dubinsky]
A spectacular jump in the oil caused by inelastic demand cannot directly do anything to civilation, except shift the distribution of goods and services. A lot of the world’s production will be for the benefit of the people who control the oil. All the citizens will possess a lot less, but the world will produce the same. But when you look at the world today… that’s exactly the reality. We fat western fucks roll around in our civilization while the rest of the Earth roams its dirt highways like a lame version of Mad Max. The “end of civilization” already exists in all the places that never had it to begin with. What we fear is that the tables may turn, or at the fucking least we’ll have to share our wealth with the rest of the world. Oh, the humanity.
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Rather than address this line by line (because after reading especially the last few lines I had to admit…what’s the point?), or even directly, I’ll just indirectly address it.
As oil rises in price and become more scarce (if that in fact happens) the competition for oil is going to increase…to a certain point. At a certain point the price and scarcity of oil will simply enable alternatives to become viable…especially when it becomes clear that we aren’t in another oil bubble as we’ve been in the past, that oil really is going to become more scarce and cost more permanently. When that happens, civilization isn’t going to collapse, the Big Oil Kings™ aren’t going to rule over a population willing to give up their first borns for a tank of gas…we will merely switch to some alternative and eventually oil will be, if not worthless, at least worth less.
[QUOTE=Alex_Dubinsky]
That’s not to say there won’t be consequences, especially consequences for Western Civilization (altho it’s easy to argue the status quo won’t change, and just be reinforced). That’s not to say there can’t be secondary effects. GDPs will plummet if the oil kings don’t spend their new money for some reason and don’t keep the economic wheel turning. But no whole-world variable (ie, the total GDP) will change directly because one good is now suddenly more exensive. In the economic cycle, more money will flow through that good, but the money will keep flowing in a circle anyway.
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Spoken like a true believer in the zero sum game. Wealth is a fixed commodity (that must be seized by the state no doubt…for the good of the workers and peasants and such), etc etc.
Here is my own take (as a good and faithful believer in The Market™…long may it rule! Now bring me some peasants so I can light up my cigar…): Wealth is not a fixed entity but constantly shifts, and new wealth is constantly created. It’s not a fixed pot, it’s not a flowing circle. Wealth is dynamic.
As the price of oil rises new wealth will be created by the companies who market and eventually win the alternative fuels war. Perhaps our children will be talking about Big Hydrogen™, or Big Battery™…or Mr. Fusion for all I know. Whatever it is (and it may be Big Oil™…in the form of Canada with it’s tar sands and the US with our shale oil. Be a bit ironic if the US stays a superpower, much to the disappointment of many 'dopers, because of our vast oil reserves) civilization will chug on…and as is happening now, the technology will continue to flow into those third world nations you mentioned…who never had it, but conversely don’t have a vast investment in what may become antiquated technology.
The whole Peak Oil disaster scenario is built on a massive lack of understanding of how the market actually works. Unless something caused production of oil to pretty much grind to a halt the price of oil will simply continue to rise until some pressure point is reached…at which time alternatives will either be ramping up to take over or already in place. This isn’t magic or humanitarian concern for their fellow man…it’s because literally billions (maybe trillions) of dollars are at stake for the group or company (or nation) that comes up with the alternative that supersedes oil as the personal transport fuel of choice. I put my complete faith in greed as a motivator. SOMETHING will replace oil…that’s a given, unless there is some kind of global disaster or major war.
-XT
