by venky » Thu 21 Aug 2008, 13:05:41
Most people would agree that in most cases a Market economy tends to out perform a central command and control economy as is generally the best system that human beings have developed to distribute and allocate resources , products and wealth to the general betterment of society. It also can be agreed that are entering this era of resource constraints and depletion with, atleast in the Western world but also in other places in the world to whatever degree, with institutions and systems in place that are predominanly free market and capitalist in their orientation, with varying degrees of goverment programs and schemes in addition depending on the country.
Many of those on the left assume that in an era of resource depletion, the government will automatically take a larger role, especially in the allocation of ever scarcer and declining natural resources, mostly energy resources and in the distribution of products and supplies to keep the population in relative or modest comfort, that will already be greatly affected or perhaps say battered by what we can assume to be widespread unemployment, economic turmoil and decline, in some cases conflicts and flare ups.
However there are many , especially those who trust in the efficacy of free markets as the best system of organization of the economic activities of a society, view with suspicion any further enroachment of government power. It is also well known that in an economy where a large portion of economic activity is controlled by a central authority, it is affected by uncompetetivenes, corruption, being technologically outdated due to lack of innovation, and with no incentives the lack of entreprenaural spirit, and the enroachment of bueracratism.
While I have moved from a more left wing view to a belief in the superiority of the Capitalist system and a market economy; I still believe that Capitalism and a free market system has not worked out any reasonable answer to the question of declining natural resources and any limits to growth; and also the harmful effects of human activities on the enviroment and the planet. While I believe it to be a good thing that in a market economy most individuals are free to engage in activities that may lead to their betterment and well being; such a system will always have an upward pressure that will result in economic growth in the presence of abundant natural resources and lack of any disincentive to further growth.
I think most people on this forum (with maybe very few exceptions like John Denver) believe that resources are finite for all practical purposes from our point view and it is most likely that we shall face the pinch of resource constraints starting with oil, sometime early this century. I want to explore the question of how an economy that is and will be in the near future atleast predominantly market oriented and capitalist be able to cope with what is to come.
In an economy that is declining, where growth is no longer considered a favorable outcome, how do we deal with those who are still trying to expand their business for instance? Do we put no restrictions on their activities? Or should depend on how much energy they might use and correspondingly give a preference to a business that predominantly uses less fossil fuels and more alternatives? Or do we follow something like strict quotas on extending ones economic activities in any given time period? Who is going to enforce these constraints on our behaviour? Do we trust the government? And what should be its role in developing alternatives to fossil fuels for instance?
I play the cards I'm dealt, though I sometimes bluff.
Only Man is vile.
We shall see.
