ourfiniteworld | Most of us are familiar with the Politically Correct (PC) World View. William Deresiewicz describes the view, which he calls the “religion of success,” as follows:
There is a right way to think and a right way to talk, and also a
right set of things to think and talk about. Secularism is taken for
granted. Environmentalism is a sacred cause. Issues of
identity—principally the holy trinity of race, gender, and
sexuality—occupy the center of concern.
There are other beliefs that go with this religion of success:
- Wind and solar will save us.
- Electric cars will make transportation possible indefinitely.
- Our world leaders are all powerful.
- Science has all of the answers.
To me, this story is pretty much equivalent to the article, “Earth Is Flat and Infinite, According to Paid Experts,” by Chris Hume in Funny Times. While the story is popular, it is just plain silly.
In this post, I explain why many popular understandings are just plain wrong.
I cover several controversial topics, including environmentalism,
peer-reviewed literature, and climate change models. This post pretty
much excludes religion. It was added for people who find it hard to
believe that a scientific article could also touch upon religion. If you
want the complete discussion, as the post was originally written,
please see this post.
Myth 1: If there is a problem with the lack of any resource, including oil, it will manifest itself with high prices.
As we reach limits of oil or any finite resource, the problem we encounter is an allocation problem.
As long as the quantity of resources we can extract from the ground
keeps rising faster than population, there is no problem with limits.
The tiny wedge that each person might get from these growing resources
represents more of that resource, on average. Citizens can reasonably
expect that future pension promises will be paid from the growing
resources. They can also expect that, in the future, the shares of stock
and the bonds that they own can be redeemed for actual goods and
services.
If the quantity of resources starts to shrink, the problem we have is almost a “musical chairs” type of problem.
In each round of a musical chairs game,
one chair is removed from the circle. The players in the game must walk
around the outside of the circle. When the music stops, all of the
players scramble for the remaining chairs. Someone gets left out.
The players in today’s economic system include
- High paid (or elite) workers
- Low paid (or non-elite) workers
- Businesses
- Governments
- Owners of assets (such as stocks, bonds, land, buildings) who want to sell them and exchange them for today’s goods and services
If there is a shortage of a resource, the standard belief is that
prices will rise and either more of the resource will be found, or
substitution will take place. Substitution only works in some cases: it
is hard to think of a substitute for fresh water. It is often possible
to substitute one energy product for another. Overall, however, there is
no substitute for energy. If we want to heat a substance to produce a
chemical reaction, we need energy. If we want to move an object from
place to place, we need energy. If we want to desalinate water to
produce more fresh water, this also takes energy.
The world economy is a self-organized networked system. The networked system includes businesses, governments, and workers, plus many types of energy, including human energy. Workers play a double role because they are also consumers. The way goods and services are allocated is determined by “market forces.” In fact, the way these market forces act is determined by the laws of physics. These market forces determine which of the players will get squeezed out if there is not enough to go around.
Non-elite workers play a pivotal role in this system because their
number is so large. These people are the chief customers for goods, such
as homes, food, clothing, and transportation services. They also play a
major role in paying taxes, and in receiving government services.
History says that if there are not enough resources to go around, we can expect increasing wage and wealth disparity. This happens because increased use of technology and more specialization are workarounds for many kinds of problems.
As an economy increasingly relies on technology, the owners and
managers of the technology start receiving higher wages, leaving less
for the workers without special skills. The owners and managers also
tend to receive income from other sources, such as interest, dividends,
capital gains, and rents.
