The Future, Vol. 1
Everything will be fine.
If you know me or read this website, you know that I have a propensity to warn everyone of the impending doom soon to reach us. The reason, I’ve said, is the end of cheap oil. Well, today I’m singing a different tune. Even though we will eventually move on from cheap oil, it won’t be all strum und drang. Rather, the power of the free market and globalization will enable our civilization to gracefully move beyond oil.
“Why Tad,” you ask. “That’s a rather bold statement. Why the change of heart?” Simple, really. Worldwide, there are thousands of individuals who collectively have the power to influence the direction of popular economic and political thought. These individuals hold two key distinctions that separate them from mere mortals like myself: They are very well educated and well aware of the issues facing the world in the coming decade and they have billions of dollars invested in the current system and would like those investments to continue to earn money. In short, they are too well educated, well connected, and wealthy to let a thing like oil shortages creep up unnoticed.
Not only do the “influential individuals” mentioned above have the knowledge to avoid an oil catastrophe, they have the means. This is where the beauty of the free market comes into play. As oil becomes less and less abundant, it will naturally increase in price due to the supply/demand curves you learned about in Econ 101. The magic thing about the free market is that consumers will (almost) always seek out the cheapest way to fill a need. If gasoline is selling for $5 a gallon, and ethanol is selling for $3, you’d better believe that more and more consumers will be filling up with ethanol.
Oil’s held tenure as energy boss for so long because it is so cheap and easy to extract. Once the price of oil starts to rise, something new will come in to fill its place. We might see some reconfiguration of energy use, such as a renewed interest in public transportation, but in general our lives won’t need to radically change. Smith’s invisible hand will gracefully clear oil off our table and replace it with whatever is next.
And it will be good.
Filed under Uncategorized : Comments (0) : Sep 23rd, 2005 by tadfad
