Hydrocarbons And Funny Money

Economic trends can always be seen either in terms of materials or in terms of money. One can say that the future will be one of diminishing fossil fuels, and hence diminishing gasoline, plastic, paint, asphalt, fertilizer, and electricity. Or one can say that it will be a period of stagflation: rising prices and falling wages


There are parallels between the Great Depression of the 1930s and the Oil Shock of the future, but there are also important differences. The Great Depression was caused by over-speculation in the stock market, which led to the 1929 panic. The rapid sellout of stocks caused the collapse of many businesses. These businesses then laid off many workers. The workers then had insufficient income to buy whatever was available, even though prices were low. The Great Depression, in other words, had an amazingly “artificial” cause, although the ensuing suffering was by no means artificial.

The oil shock will be quite different. Its cause will not be artificial; in fact, its cause will have little to do with money. Although many people will lose their jobs, there will at first be no overall reduction in the prices of goods.

Will life be better or worse in a world without money? That