[Wildwell]

Joseph Schumpeter was an Austrian Economic theorist. Although controversial and critical of Adam Smith and John Maynard Keynes he formulated ‘The Theory of Economic development’ around the idea of business cycles. These business cycles started with important new innovations (see below), and created much of pace of innovation and the acceleration of economic growth. Central to this was his theory of ‘Creative destruction’. In other words, companies that once revolutionised industry and created new spurts of growth, see their profits fall and their dominance disappear as rivals launch new designs or get more efficient. Traditional creative destruction has also hurt, causing layoffs of workers, crushing of industry, loss of skills, and, importantly for Peak Oilers, ever accelerated growth and consumption. It may also explain why returns can get less and less for each dollar invested overall, complexity increases more, needing more education, energy, law and capital to service the economy.

Interestingly Schumpeter also believed socialism would have to replace capitalism, as ultimately capitalism would destroy itself. What are people’s views on this, I especially want to hear from Montequest?

http://www.businessinnovation2005.com/a ... n_rema.htm

[whereagles]

Well, that capitalism self-destructs and socialism takes over was already predicted by Karl Marx more than a century ago

[gego]

Rose Wilder Lane, daughter of Laura Ingalls Wilder (Little House on the Prairie) wrote a book entitled "The Discovery of Freedom". She chronicled the long history of mankind in terms of periods of freedom and periods of slavery. The periods of freedom were characterized by innovation, improvement in the human condition, and a distribution of wealth that more approached a bell curve. The periods of slavery were characterized by economic stagnation, human suffering and a concentration of wealth in the hands of a few.

Free markets are part of freedom. Controlled markets are a part of slavery. Socialism is a form of slavery. Fascism (which most misintrepret as capitalism) and socialism is much of the economic system in the USA and in the UK today. The failures you see today are the failures of fascism and socialism and these systems have replaced most of freedom already. It was not capitalism that destroyed freedom as capitalism is freedom. What destroyed freedom was the manipulation of politicians and business men who wanted protection from free markets who instituted laws that granted economic advantage to the few at the expense of the many. Contributing to this destruction of freedom was the easy manipulation of the mass of humanity.

[EnergySpin]

$this->bbcode_second_pass_quote('whereagles', 'W')ell, that capitalism self-destructs and socialism takes over was already predicted by Karl Marx more than a century ago

[aldente]

$this->bbcode_second_pass_quote('gego', 'S')ocialism is a form of slavery.

[jaws]

Total socialism is slavery. Where you have no options in life but what the state decides for you, you are a slave. Partial socialism is only oppression, and the closer you are to 'total', the more oppressed you are.

Nazi Germany was almost entirely socialist. The illusion of private property remained, but the Nazi Party was in command of everything. The USSR was a slave state however.

[gego]

Cycles have much more effect in human life than Schumpeter ever imagined.

The now defunct Foundation for the Study of Cycles identified hundreds of cycles operating in many, many areas, from stock prices to wild animal populations. These cycles occur simultaneously much like many waves rippling through a pond from the splashing of multiple rocks of various sizes; waves are additive. These cycles are difficult to detect from simple observation because the combined effect does not seem to form a consistent, recognizable repeating pattern, but when the data is analyzed statistically, the individual waves can be isolated and measured. Theoretically, it is possible to project these individually tested and measured waves into the future, add them all together and make a reasonable prediction of the future. For example, it is possible by analyzing the price history of gold over the past 40 years to know in advance that the current bull market in the price of gold will see a temporary peak at the beginning of 2007, significantly higher than the current $540 price, before it enters a period of retracement of this price advance.

It is erroneously thought that random events are significant factors. While it is true that there can be random events so significant that they overwhelm the effect of cycles and trend, these significant random events are rare. Most random events are small, accounting for less than 2 1/2% of the measured results, and most random events have a tendency to cancell oneanother out since they are occuring randomly. So, events are highly predictable, and the future is knowable; it is just the science of doing very accurate predictions that is yet undeveloped.

[Wildwell]

Guys, the question I posed wasn't to discuss the merits of socialism and capitalism as each system has its problems, upsides and down. And just to put the record straight, capitalism isn't the same as free markets and like socialism each system requires a certain amount of state control...Anyway, I digress, how do you see Schumpeter's waves affecting the peak oil problem? Will it be our saviour through increased innovation or our demise through increased consumption?

[Doly]

$this->bbcode_second_pass_quote('Wildwell', 'h')ow do you see Schumpeter's waves affecting the peak oil problem? Will it be our saviour through increased innovation or our demise through increased consumption?

[Chaparral]

I would expect Schumpeterian destruction in places like the airlines and apparently, some farm-animal stupid American car makers. The sprawl industry looks to be a deader as well.

If nat gas scarcity puts industrialized agriculture out of business then we would expect a wholesale movement back to the land at the expense of urban and suburban population numbers. Whole megalopolises and sprawl corridors could be rendered as economically obsolete as the steel mills were back in the 1980s. That would be a 100 megaton Schumpeterian bomb.

[aldente]

$this->bbcode_second_pass_quote('jaws', 'T')otal socialism is slavery. Where you have no options in life but what the state decides for you, you are a slave. Partial socialism is only oppression, and the closer you are to 'total', the more oppressed you are.

Nazi Germany was almost entirely socialist. The illusion of private property remained, but the Nazi Party was in command of everything. The USSR was a slave state however.

[aldente]

$this->bbcode_second_pass_quote('EnergySpin', '
')Do not forget the US economist Thornstein Veblen .