[MrBill]

The invisible hand responds whether prices are arrived at through a free market price discovery mechanism or by dictat and collusion. There is nothing contradictory about the invisible hand and monoplies or anti-competitive pricing practices. They are one party's attempt to capture excess economic rents - in this case - at the expense of the (captive) consumer.

That does not change supply and demand. Higher prices mean that consumers adjust their consumption accordingly reducing demand (in their own perceived best interest). In the same vain collusion to artificially limit supply drive up prices and reduce demand. Whether or not that is in the producer's best economic interest depend on a trade-off between per unit profitability and volume. Either way the consumer usually ends up paying more for less choice.

If the US was successful in suppressing OPEC's anti-competitive pricing policies then this resulted in lower prices for consumers, and therefore (artificially) higher demand. Including the externalities of energy consumption many would argue (correctly) that the price of oil has been below its true economic value (or cost) for a long-time. Not what we would expect from monopolies or from anti-competitive practices.

Similiarly fuel prices have doubled in the past year, and yet the IEA estimates that three-fifths of that price increase has been shielded from consumers (notably in the developing world) in the form of subsidies. Again keeping the true price (artificially) lower than it should be and encouraging over-consumption. That sounds like a failure in government policy and not a market failure? But you're obviously the expert! ; - ))

[threadbear]

Market forces respond or react to crises, so are doomed to failure when the best strategy is to anticipate crises. If failure to anticipate a crisis ensures windfall profits, there is further disincentive to act appropriately. The market should NEVER be relied upon to solve any kind of infrastructure problem, based on current market theory.

The pro- market premise rests on the idea that the markets, acting in their own selfish interest, tend to serve their customer's interests, in a kind of automatic reflexive way. Just shows how blinkered ideology can be.

[cube]

$this->bbcode_second_pass_quote('threadbear', 'M')arket forces respond or react to crises, so are doomed to failure when the best strategy is to anticipate crises. If failure to anticipate a crisis ensures windfall profits, there is further disincentive to act appropriately. The market should NEVER be relied upon to solve any kind of infrastructure problem, based on current market theory.

The pro- market premise rests on the idea that the markets, acting in their own selfish interest, tend to serve their customer's interests, in a kind of automatic reflexive way. Just shows how blinkered ideology can be.

[threadbear]

$this->bbcode_second_pass_quote('cube', '')$this->bbcode_second_pass_quote('threadbear', 'M')arket forces respond or react to crises, so are doomed to failure when the best strategy is to anticipate crises. If failure to anticipate a crisis ensures windfall profits, there is further disincentive to act appropriately. The market should NEVER be relied upon to solve any kind of infrastructure problem, based on current market theory.

The pro- market premise rests on the idea that the markets, acting in their own selfish interest, tend to serve their customer's interests, in a kind of automatic reflexive way. Just shows how blinkered ideology can be.

[cube]

$this->bbcode_second_pass_quote('threadbear', '.')..
So you don't disagree with the gist of my post? As far as infrastructure goes, the ability to eschew narrow angle focus on shareholder profits and fiscal quarterly earnings, is of great benefit for research and development and implementation of mega projects. The status quo just won't do. The Europeans will continue to beat the US at the alternative energy game, because they are more pro-active than (market driven)reactive. No system is perfect, but the philosophy underlying markets, as applied to energy, is being revealed for the steaming pile of dung that it is.

[threadbear]

$this->bbcode_second_pass_quote('cube', '')$this->bbcode_second_pass_quote('threadbear', '.')..
So you don't disagree with the gist of my post? As far as infrastructure goes, the ability to eschew narrow angle focus on shareholder profits and fiscal quarterly earnings, is of great benefit for research and development and implementation of mega projects. The status quo just won't do. The Europeans will continue to beat the US at the alternative energy game, because they are more pro-active than (market driven)reactive. No system is perfect, but the philosophy underlying markets, as applied to energy, is being revealed for the steaming pile of dung that it is.

[cube]

$this->bbcode_second_pass_quote('threadbear', '.')..
I don't disagree with market theory for the production of many services and products. The theory has obvious limits if it's use extends beyond widgets and into energy sectors that require preventative measures. I also agree that govt can screw up and am perfectly happy to call it that--a pure govt. screw up, when it occurs. But the market screws up as often, and many who are in thrall to free market theory, will somehow blame it on "too much regulation" or too much govt, or their fave, too much tax. But never ever is it simply free markets screwing up, so their prescriptions for the markets screwing up is somehow freeing them up even more. It's alot like Communist theory that way.

[f2tornado]

The invisible hand is telling me I can sell my city house then buy an equivalent home in the sticks for one-third the price and use the remainder to buy an all electric Tesla Roadster. Solar can always be installed if the electric coop gets too expensive. Who says small town living is dead?

Note the invisible hand is not fully at work when it comes to oil and gas in the U.S. or elsewhere. China and Venezuela are chief examples where the the supply/demand curve is being upset through subsidized pricing. The demand for oil in the U.S. would be higher is subsidized corn ethanol was not blended into the mix. Oil exploration itself got some $18 billion in U.S. gov't subsidy in the 2005 energy bill. Off topic but what the heck: Obama voted in the affirmative; McCain and Hillary voted no.

[threadbear]

$this->bbcode_second_pass_quote('cube', '')$this->bbcode_second_pass_quote('threadbear', '.')..
I don't disagree with market theory for the production of many services and products. The theory has obvious limits if it's use extends beyond widgets and into energy sectors that require preventative measures. I also agree that govt can screw up and am perfectly happy to call it that--a pure govt. screw up, when it occurs. But the market screws up as often, and many who are in thrall to free market theory, will somehow blame it on "too much regulation" or too much govt, or their fave, too much tax. But never ever is it simply free markets screwing up, so their prescriptions for the markets screwing up is somehow freeing them up even more. It's alot like Communist theory that way.

[cube]

$this->bbcode_second_pass_quote('threadbear', 'Y')ou misunderstand me. Govts can and do act preventatively, to positive effect, in key areas, if there is a consensus and collective will for them to do so.

[MrBill]

"Now if the market theory holds," is a complete strawman argument. There is no market theory. There are free markets. There are mixed markets. There are regulated markets. There are economic theories (plural). But there is no such a thing as The Market Theory.

We live in a mixed economy with a heavy dose of government intervention in all sectors of the economy, and taxes that distort many price mechanisms. Starting by reducing discretionary income by close to 50% right off the bat through direct and indirect taxes that flow to the government to spend at its discretion with or without any regard to economic efficiency.

A market economy is the most efficient allocator of resources through the pricing mechanism and the feedback that gives producers and consumers. Period. The role of government is to create and ensure a level playing field and prevent fraud and market abuse. If government did not play a useful role in the functioning of the economy it would not be necessary.

The assertion that EU countries lead and will continue to lead in alternative energy technologies due to government intervention in the economy is not really supported by the facts. The same governments that (rightly) support public transportation initiatives are the same that (wrongly) over-subsidize energy intensive industries like fishing and trucking. But the backbone of new energy efficiency technologies are not coming out of government sponsored labratories or universities, but from the private sector.

EU governments play an important role in incubating those firms through, for example, alternative energy subsidies. However, under the guise of such good intentions they also shovel public money at national champions along the way that reduce competition and force higher prices and less choice on their domestic voters. EU governments love to tinker in the economy under the motto that the nanny state knows best. That fact is that they do not know which technologies are the best, they just love big government to have control over the economy.

[threadbear]

$this->bbcode_second_pass_quote('MrBill', '"')Now if the market theory holds," is a complete strawman argument. There is no market theory. There are free markets. There are mixed markets. There are regulated markets. There are economic theories (plural). But there is no such a thing as The Market Theory.

We live in a mixed economy with a heavy dose of government intervention in all sectors of the economy, and taxes that distort many price mechanisms. Starting by reducing discretionary income by close to 50% right off the bat through direct and indirect taxes that flow to the government to spend at its discretion with or without any regard to economic efficiency.

A market economy is the most efficient allocator of resources through the pricing mechanism and the feedback that gives producers and consumers. Period. The role of government is to create and ensure a level playing field and prevent fraud and market abuse. If government did not play a useful role in the functioning of the economy it would not be necessary.

The assertion that EU countries lead and will continue to lead in alternative energy technologies due to government intervention in the economy is not really supported by the facts. The same governments that (rightly) support public transportation initiatives are the same that (wrongly) over-subsidize energy intensive industries like fishing and trucking. But the backbone of new energy efficiency technologies are not coming out of government sponsored labratories or universities, but from the private sector.

EU governments play an important role in incubating those firms through, for example, alternative energy subsidies. However, under the guise of such good intentions they also shovel public money at national champions along the way that reduce competition and force higher prices and less choice on their domestic voters. EU governments love to tinker in the economy under the motto that the nanny state knows best. That fact is that they do not know which technologies are the best, they just love big government to have control over the economy.

[cube]

threadbear:

I think you are confusing free market with something else.
If you look at the encyclopedia description of the basic tenets of the free market you'll see that we're getting a bit off topic here.
Whether or not some mega-corporation "buys" a couple politicians, influences public policy, or gets bailed out by the gov. has zero to do with the "free market". As what MrBill said, we don't live in a market economy. If we go back 100 years ago in the USA I would say yes, but certainly not now.

Your statement interests me threadbear, you seem to be suggesting that the EU is in a better position to adapt to a PO world than the USA. I remember years ago this was debated. There were endless talks about how Europe's superior public transit system and "efficiency" would give it an edge over the USA. I think the recent meltdown with the trucker's strike in Spain pretty much blows a hole through that theory.

If I understand correctly the unions are quite powerful in Europe. Don't worry, PO is going to change that.

[threadbear]

$this->bbcode_second_pass_quote('cube', 't')hreadbear:

I think you are confusing free market with something else.
If you look at the encyclopedia description of the basic tenets of the free market you'll see that we're getting a bit off topic here.
Whether or not some mega-corporation "buys" a couple politicians, influences public policy, or gets bailed out by the gov. has zero to do with the "free market". As what MrBill said, we don't live in a market economy. If we go back 100 years ago in the USA I would say yes, but certainly not now.

Your statement interests me threadbear, you seem to be suggesting that the EU is in a better position to adapt to a PO world than the USA. I remember years ago this was debated. There were endless talks about how Europe's superior public transit system and "efficiency" would give it an edge over the USA. I think the recent meltdown with the trucker's strike in Spain pretty much blows a hole through that theory.

If I understand correctly the unions are quite powerful in Europe. Don't worry, PO is going to change that.

[cube]

$this->bbcode_second_pass_quote('threadbear', '.')..
Have you actually been to Europe, Cube? And please--Spain is a country with more in common with the U.S, in terms of levels of corruption, so let's delineate there, please.

[threadbear]

$this->bbcode_second_pass_quote('cube', '')$this->bbcode_second_pass_quote('threadbear', '.')..
Have you actually been to Europe, Cube? And please--Spain is a country with more in common with the U.S, in terms of levels of corruption, so let's delineate there, please.

[TheDude]

$this->bbcode_second_pass_quote('threadbear', 'I') appreciate the fact that you have ceased implying that I'm a socialist democrat because I'm poor and have a parasitic relationship with govt, or that I am a Communist. So you've come a long way. Thank you. And I do find your posts interesting if I take preemptive migraine meds.

[cube]

$this->bbcode_second_pass_quote('threadbear', '.')..
The US is regarded internationally as having one of the highest, if not the highest levels of corruption in the developed world.

As for your other thoughts, do you know who "invented the internet". Govt. Panama canal?-Govt. Interstate highway system?--Govt. Bridges, national parks? Govt. Navigation aids and systems, global positioning systems? Govt.

[MrBill]

threadbear wrote:
$this->bbcode_second_pass_quote('', 'W')hen I use the term "market theory" I think you can take from the general gist of my posts that I mean free market theory as proposed by individuals who would eschew all forms of govt. regulation. You seem to enjoy confusing the theme of my posts to launch your soliloquies on economics. I appreciate the fact that you have ceased implying that I'm a socialist democrat because I'm poor and have a parasitic relationship with govt, or that I am a Communist. So you've come a long way. Thank you. And I do find your posts interesting if I take preemptive migraine meds.

[BlueGhostNo2]

$this->bbcode_second_pass_quote('MrBill', 't')hreadbear wrote:
It is really nothing personal. I am only here to talk about post peak oil resource depletion economics. Period. Everything else is a waste of my time and energy. I already know what I know about banking, finance, economics and markets. I may pick-up some useful information here from other posters, but not enough relative to the time I invest here. However, if our goal is to talk about resource depletion economics then we have to speak a common language. I cannot let untrue statements or over-generalizations go unchallenged as that is tacit approval. This is not a peer reviewed academic journal, and personal opinions are welcome, but I intend to hold this forum to a certain minimum standard. Otherwise it is a waste of everyone's time to post here. I promise that I will never follow you or anyone else into the Open forum or anywhere else, so you can post anything you like there.