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PeakOil is You

PeakOil is You

THE Economists and Oil Thread (merged)

Discussions about the economic and financial ramifications of PEAK OIL

Re: Economist goes doomerish

Unread postby Micki » Thu 11 Jan 2007, 22:37:58

N.S. Miller seems to be someone who died back in the 50s.
And Dr Nathan S Lewis works for Caltech so that is probably some other guy.
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Re: Economist goes doomerish

Unread postby MrBill » Fri 12 Jan 2007, 05:02:06

$this->bbcode_second_pass_quote('JustinFrankl', 'T')here are some good ideas here, but I'd like to think things through a little further.

So we have an extremely efficient system of food delivery that, per crate, uses less energy than the person uses in getting to the store. The ease with which we get food contributes to uncontrolled population growth. So "efficient food delivery" contributes to both the feeding of humans and growth.

MrBill:
$this->bbcode_second_pass_quote('', 'U')nfortunately most the growth in terms of human population is taking place in the developing world. This has little to do with the efficiency of manufacturing and storing food in the western world, and has more to do with cultural, religious, ethnic and status reasons.

But you are right. Out of moral grounds we often perpetuate acute problems like draughts and the famine they bring by delivering emergency food aid that turns these problems into chronic ones as the local population then do not adjust to the new realities of perhaps living in an area incapable of sustaining high population numbers.

I think it was pop55 who wrote about Scrooge saving Tiny Tim who went on to produce 142.000 offspring in the next century. Clearly there is a link between saving a life and the chain reaction of uncontrolled population growth exacerbating a pre-existing problem.


Spoiled food isn't waste. You can compost it, put it back in the field, thus depleting less than you would have otherwise.

MrBil:
$this->bbcode_second_pass_quote('', 'U')nfortunately, we do live in an age of waste. And much of the food that is spoiled either in the supermarket or at home is not composted but simply thrown away.

For anecdotal evidence I can say this. In a company cantine in Germany for example food has to be thrown away. Employees cannot take it home. They cannot donate it to charity to feed the needy. It is against the law. All unserved food has to be thrown away whether it is edible or not.

That is not a sensible policy, that is decadence. Post peak oil energy depletion will hopefully put an end to useless laws and regulations that serve no purpose whatsoever. They also have nothing to do with efficiency. So therefore what is is not what can be.

I will state this once again because I think it is crucial to understanding post peak oil energy depletion. Efficiency matters. Doing more with less. Feeding 'extra' workers or 'surplus' labor to perform the task easily done with stationary power is not efficient. It is a luxury we can enjoy now because we have an abundance of cheap energy. That will change because it will have to.


Food storage is certainly necessary in many parts of the world, where the seasons don't accomodate farming and hunting year round. But why is most of our food "wasted" (unused by humans) in the first place? Addressing root causes, and not the symptoms, will use less overall energy than efficient crating.

The storing of resources breeds hoarding and exploitation.

Again, why is food processing efficiency beneficial for the planet as a whole?

MrBill:
$this->bbcode_second_pass_quote('', 'H')uman history in the past 6000 years since we stopped being hunters and gathers as a whole and settled into communities has been about nothing but food processing and storage. Being able to store an agricultural surplus is what lead to a division of labor in the first place.

People stopped being hunters and gathers approximately when existing supplies of wild game were insufficient to support approximately 300 million inhabitants. We are now 6.5 billion and headed for 9 or 10 billion.

To talk about not producing and storing food is nonsense. Even if we hope to manage a controlled shrinking in population against a backdrop of not just post peak oil depletion, but a collapse in marine stocks as well as climate change and other challenges, we have to address basic needs such as food, clothing, shelter and a means of distribution. Otherwise in the words of Jarrod Diamond those that do not have will be swamping the life rafts of those who do.




Machines need maintenance to keep them working. Machines need to be built. Machines break down and need to be repaired and replaced. All of which could be said about humans as well. Machines, intrinsically, need a specific industrial infrastructure that supports their maintenance, production, replacement. Oh, and all that unrenewable fossil fuel upon which we have built our world.

MrBill:
$this->bbcode_second_pass_quote('', 'F')orm follows function. Machines run on petroleum or power derived from fossil fuels because up to now it was cheap and abundant.

I am quite aware, as in anyone who has spent more than 10 minutes at peak oil dot com, that alternative energy cannot replace petroleum to keep our existing infrastructure operating at its current capacity much less provide for unlimited growth.

However, if you have ever used a chainsaw versus an axe you will realize that some sources of power are 'almost' infinitely superior to muscle power. That is not to say that a man cannot walk 10-days with a 100 pound pack on his back. Clearly the porters between Tibet and Nepal do this everyday for pennies. But all that manpower still needs to be fed.

Stationary power built around renewables like wind, solar, geo, etc. will not replace petroleum. Not even coal to liquids. However, they will be still more efficient than human labor. Therefore, in the demise that we call post peak oil depletion machines will be more important than they are today. Even if they are fewer in number and clustered around sources of stationary power.

Preserved, canned food that has a long shelf-life can be transported a hell of a long way by water or rail and then distributed from central depos. On the other hand fresh fish without refrigeration is spoiled in less than 3-days.

If you do not think that creating an agricultural surplus and then perserving it is central to the problem of post peak oil depletion then we are not even reading from the same script.


Humans, intrinsically, do not have any of these additional specific requirements. Humans require food, and the majority of work required to grow food ultimately is provided by the biospehere.

Unfortunately, humans also don't really like to work.

Efficiency, again, needs to be looked at in situ. In this frame, efficiency is still spurring uncontrolled growth.

MrBill:
$this->bbcode_second_pass_quote('', 'A')gain you are comparing an age of indulgence fuelled by cheap and abundant energy. Where luxury goods have become common place necessities. Suffice it to say, and I hate to carp on about post peak oil depletion, but that will hopefully end non-essential consumption. What we want to consume today versus what we need to consume to preserve life and limb are two different pairs of work boots.


Industrialized agriculture most of the time feeds people, but it will also breed famines, because when crops do fail, the people previously supported by those crops now have no food. Food transported from another region requires extra energy costs, and either depletes another region's resources or requires stockpiles. Stockpiles, in times of no famine, will again encourage hoarding and exploitation. To manage hoarding and exploitation through laws and government, again requires extra energy costs. It also consolidates power, thus promoting corruption, abuse, and further exploitation of resources.

MrBill:
$this->bbcode_second_pass_quote('', 'S')torage is a means to an end. Hoarding is a human desire if you will. You may well say that all private property is the root cause of crime as the have nots covet what they do not own? In fact laws that protect private property actually lead to order and to prosperity not vice versa.

Then you see that even in our prisons there is crime, and drugs and cigarettes are used as a form of currency. Because people are by nature both bad and good. No matter how small the advantage people strive to become part of the pecking order. Look at academia. The fights are so great because the stakes are so small.

Government, laws and all those customs developed over 6000 years of living together in communities did not happen by accident. They were by their very nature a means of survival of the group. Only by subjugating individual rights and creating obligations in their place could the collective survive.

Peak oil depletion is not going to change human nature. Quite the opposite. It will reinforce lessons learned and long since forgotten. Again blame cheap, abundant energy for running a quasi-welfare state where everyone seeks to live at someone else's expense. Now strip out the easy means of production and you will see it is luxury an energy poor state cannot afford and one that workers will not tolerate to pay for.


It seems to me that the system is the reverse of deus ex machina, in that it contains the seeds of its own demise, rather than any long-term solution.


MrBill:
$this->bbcode_second_pass_quote('', 'T')o all life comes death. This is a timeless truism. Nothing lasts forever. Man will replace man. Machine will replace machine. I would be much, much more worried about a collapse in fish stocks then I would be about man forgetting how to build the next machine.
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Re: Economist goes doomerish

Unread postby Doly » Fri 12 Jan 2007, 05:37:14

$this->bbcode_second_pass_quote('JustinFrankl', '
')Industrialized agriculture most of the time feeds people, but it will also breed famines, because when crops do fail, the people previously supported by those crops now have no food.


Famines happened a hell of a lot more before industrialized agriculture. And they happened even more before agriculture. Each step was an effort to reduce famines.
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Re: Economist goes doomerish

Unread postby Ludi » Fri 12 Jan 2007, 08:03:32

$this->bbcode_second_pass_quote('JustinFrankl', 'H')umans, intrinsically, do not have any of these additional specific requirements. Humans require food, and the majority of work required to grow food ultimately is provided by the biospehere.

Unfortunately, humans also don't really like to work.


I think they LOVE to work, instead of letting the biosphere do it for them. Thus they cut down trees, collect and burn crop "wastes," and plow, plow,plow. Much of this work is not only unnecessary, it has proven extremely harmful to the future of humans.
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Re: Economist goes doomerish

Unread postby MrBill » Fri 12 Jan 2007, 09:43:05

Has anyone calculated the EROEI on humans, yet? I haven't, but I bet it is really lousy! My plan is to drastically reduce the human population from 6.5 billion to 3 instead of letting it increase to 9 or 10 billion in the next several decades. It is very similar to working with fruit flies, so that they can think they're having sex to reproduce, but they're sterile. I figure massive amounts of my serum dumped into all the world's potable water supplies ought to be the ideal medium. Old folks will just have to save for their own damn retirement instead of waiting around for the next generation to pay for it. My only problem is getting enough willing volunteers to sign-up to my program to put it into action.
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Re: Economist goes doomerish

Unread postby DesertBear2 » Fri 12 Jan 2007, 16:48:53

$this->bbcode_second_pass_quote('MrBill', ' ') Old folks will just have to save for their own damn retirement instead of waiting around for the next generation to pay for it.


Yes righto.

But you are neglecting the possibility (probability?) that we will see three generations of a family living together as in old times.

Instead of gramma and grampa kicking back in Sun City and soaking up a cool million or so of public funds, they will end up either living with their children or in collective homes with other oldersters. Older people can contribute quite a bit to a household in terms of gardening, repairs, home-schooling, child-sitting, and numerous other tasks. This would combines households and save heating and general energy waste.

Their contributions are now largely wasted.
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Re: Economist goes doomerish

Unread postby JustinFrankl » Sat 13 Jan 2007, 01:27:11

$this->bbcode_second_pass_quote('Doly', '')$this->bbcode_second_pass_quote('JustinFrankl', '
')Industrialized agriculture most of the time feeds people, but it will also breed famines, because when crops do fail, the people previously supported by those crops now have no food.


Famines happened a hell of a lot more before industrialized agriculture. And they happened even more before agriculture. Each step was an effort to reduce famines.

I am under the (perhaps incorrect) understandings that:

Industrialized agriculture centers around a few major foods and provides the overwhelming bulk of food to a society. When a crop failure happens or a disease sweeps through feed animals, it is potentially devastating because of the reliance on that resource. I'm thinking potato famine, mad cow disease. Most of the time, however, famines are not an issue, and the surpluses produced by this type of agriculture promote population growth. The space needed for food production is the least.

Primitive agriculture is an adjunct to hunting/gathering, resulting in less reliance on given crops, but more variety. Crop failures or animal migrations are difficult on people, but the larger variety of diet means there are other foods to be eaten. Modest food surplusses may support modest growth.

Hunter-gatherers possibly have the hardest lives overall, but the overwhelming majority of their "working" time is spent doing just that: hunting and gathering. The hardship of the lifestyle takes its toll on the population, but (given enough territory in which to hunt and gather) lack of "food" itself is not the problem. Having virtually no durable settlement, and no food stockpiles, population growth is exceedingly difficult.

So are these understandings incorrect, and why? I never said that famines happened more under industrial agriculture. I suggested that the effects were more devastating to more people under industrialized agriculture.

I would say that each step (hunter-gatherer -> primitive ag -> industrial ag) was in an effort to make things easier overall, but each step brought new problems.

Despite Ludi's claim that:$this->bbcode_second_pass_quote('Ludi', 'I') think they LOVE to work, instead of letting the biosphere do it for them. Thus they cut down trees, collect and burn crop "wastes," and plow, plow,plow. Much of this work is not only unnecessary, it has proven extremely harmful to the future of humans.

The farmer, the one who actually works the fields and tends the animals, physically works the hardest of most of the people in our culture. I don't think that most of them do so, however, by choice. Our culture, because of how it's built, always has people in it who will work harder for less money because they lack the resources, skills, smarts, background, connections, confidence, or education to do something that takes less effort. I don't see it as being their fault, as society takes advantage of them or neglects them in some way. Most of the people directly involved in resource acquisition fall into the category of difficult work with little pay, like farmers and miners. Most of them come from poverty and remain in poverty, and the system as a whole continually reinforces this condition.

There is a process that nearly all living things adhere to: the process of keeping yourself living. At a bare minimum, people need breathable air, drinkable water, food, and shelter. Air is usually never a problem, the big three are water, food, and shelter. Most people never give a second thought to these fundamental processes, because food doesn't come from the environment, it comes from the market. Water doesn't come from the rivers or the rain, it comes from the tap or a bottle. Shelters aren't made out of trees and rocks, they're made out of wallboard, two-by-fours, nails, and cement, and all the pieces come delivered on trucks and are assembled by professionals.

My point is that it is usually only the farmer who really understands where the meat and potatoes come from, and how much work and energy went into producing them. The secretary who works 9 hours a day 5 days a week may be tired at the end of it, she may hate her boss and her job, but her food takes only minutes to get and prepare. And her work is a lot less than the farmer's 14 hours a day 6-7 days a week. The work the farmer does means that the secretary doesn't have to spend hours after work each day in the field tending to her own food.

But the secretaries, the lumberjacks, the farmers, and the miners, they all work at their jobs because that's how they get money, and money pays for food, keeps the water flowing, keeps a roof over their heads. It is because the system demands it, not because biology does. And certainly not because most of them want to.
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Bahrain Economist says Geology to push Oil price beyond $90

Unread postby DantesPeak » Mon 08 Oct 2007, 23:14:05

It's not about mostly about politics but geology, says Bahrain economist. It's also about rising internal energy demands for five major oil exporting countries.

And yes, he did also say oil production has reached its peak.

P.S. Investing in the U.S. dollar doesn't seem like a good idea to Bahrain Economic Society senior economist Mohammed Habib Ali.


Bahrain Gulf Daily News

$this->bbcode_second_pass_quote('', 'O')il to soar above $90 next year says expert
By MARK SUMMERS

MANAMA: Oil prices will soar above $90 per barrel next year, a Bahraini economist has predicted.

"Oil will reach above $90 next year and the problem is not politics or economics as much as it is geology," he said.

"Oil by many estimates has reached its peak and both production and the number of new oilfields found are decreasing - but at the same time world population is growing and is estimated to reach its peak around 2030.

"Therefore we can only gather that we will witness prices continue to shoot up in the next few decades to come unless the world economy goes through a tough economic depression or a breakthrough in some competitive alternative energy is found leading to immediate and sudden adopting of its usage - something which at the moment you would say appears very unlikely," he added.
It's already over, now it's just a matter of adjusting.
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Re: Bahrain Economist says Geology to push Oil price beyond

Unread postby Jack » Tue 09 Oct 2007, 00:45:26

Fascinating news. Amazing, is it not, how little attention such an announcement gets.

Thank you, DantesPeak.
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Re: Bahrain Economist says Geology to push Oil price beyond

Unread postby M_B_S » Tue 09 Oct 2007, 02:14:10

It is what it is !

The truth:

PEAK OIL


Money printing will not help...... :!: (DOW)


Energy is ruling the world
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The Economist Has no Clothes

Unread postby Mastodon » Wed 09 Apr 2008, 01:58:39

For those who might like a small insight as to why the human spp is in such deep Expletive deleted..
$this->bbcode_second_pass_quote('', 'B')ecause neoclassical economics does not even acknowledge the costs of environmental problems and the limits to economic growth, it constitutes one of the greatest barriers to combating climate change and other threats to the planet here

And for more try this item

And a short quote to help in the digestion:
Ravaioli: Of course the discovery of new oil wells has given the illusion of unlimited oil …
Nobel Laureate Friedman: Why an illusion?
Ravaioli: Because we know it's a limited resource.
Nobel Laureate Friedman: Excuse me, it's not limited from an economic point of view. You have to separate the economic from the physical point of view. Many of the mistakes people make come from this. Like the stupid projections of the Club of Rome: they used a purely physical approach, without taking prices into account. There are many different sources of energy, some of which are too expensive to be exploited now. But if oil becomes scarce they will be exploited. But the market, which is fortunately capable of registering and using widely scattered knowledge and information from people all over the world, will take account of those changes. [/quote][ p. 33, ECONOMISTS AND THE ENVIRONMENT, Carla Ravaioli; Zed, 1995 ]
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Re: The Economist Has no Clothes

Unread postby seldom_seen » Wed 09 Apr 2008, 02:49:03

Everything has somewhat of a silver lining.

When it comes to PO, climate change, economic and ecological collapse. We can at least take some solace in the fact that economists will be finally and permanently discredited. All of their pretentious theories and their pseudo-religious cargo cult will be exposed as a fraud and they will be ostracized and chased out of town with pitchforks and shovels.
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Re: The Economist Has no Clothes

Unread postby Gvil » Wed 09 Apr 2008, 03:30:26

And this comes from Nobel Laureate! He is not a stupid but more like medieval church dogmas believer. Very sad and such people are dragging us into oblivion.
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Re: The Economist Has no Clothes

Unread postby MrBill » Wed 09 Apr 2008, 03:49:16

It probably escapes most of you dimwits that everytime you disagree with an economist or one of their theories that you are yourself proposing an alternative economic theory. One that should be able to be back tested and found either true or false. Unfortunately, you do not understand economics (or finance) well enough to be able to do that.

Of course, you are usually more than happy to borrow from any economic forecasts that support your own biases. Especially the pseudo-economic rants about unlimited growth; fiat currencies; fractional banking; or whatever else is popular to hate at the moment.

Physical Reality > Economic Consequences > Social Reaction > Political Response > Feedback Loop > New Reality > Etc.

If post peak oil resource depletion did not have any economic consequences then it would be a non-issue. Big mouths. Small minds. A waste of time.
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Re: The Economist Has no Clothes

Unread postby Mastodon » Wed 09 Apr 2008, 04:41:31

$this->bbcode_second_pass_quote('MrBill', 'I')t probably escapes most of you dimwits that everytime you disagree with an economist or one of their theories that you are yourself proposing an alternative economic theory. One that should be able to be back tested and found either true or false. Unfortunately, you do not understand economics (or finance) well enough to be able to do that.


Bill, A little twitchy methinks....

Personally I am not here proposing anything except to suggest the current system is broken and has no way of addressing the world in which we live. Other people seem to be coming to the same conclusion.


$this->bbcode_second_pass_quote('', 'O')f course, you are usually more than happy to borrow from any economic forecasts that support your own biases. Especially the pseudo-economic rants about unlimited growth; fiat currencies; fractional banking; or whatever else is popular to hate at the moment.

Physical Reality > Economic Consequences > Social Reaction > Political Response > Feedback Loop > New Reality > Etc.

If post peak oil resource depletion did not have any economic consequences then it would be a non-issue. Big mouths. Small minds. A waste of time.


Bill ignore the economic consequences, the real effect of peak energy is peak humans and dieoff.

And I can see (unlike yourgoodself) that money is a myth, its a con, the new religion. Neoliberal economics has only one task, to assist in the transfer of "assets" from the many to the few, in this of course it has been extremely successful.

Caution with the big/small comments, the future will be either eaters or eaten, I intend to be in the first group! And please dont waste your time on our account.
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Re: The Economist Has no Clothes

Unread postby MrBill » Wed 09 Apr 2008, 06:35:01

Good luck, Mastodon! Strong backs and weak minds are always useful. Enjoy your eat or be eaten fantasies! ; - ))
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Re: The Economist Has no Clothes

Unread postby kuidaskassikaeb » Wed 09 Apr 2008, 11:09:39

Mastadon is of course right that neoclassical economics cannot recognize environmental costs, but I don’t think this means that economists have no clothes. There are plenty of economists that are working on the problem of including the environment in prices. They are aware of that and many other market failures. I think that the problem is that much of what passes as economics in these arguments is either chapter 1 economics, which misses all the subtleties, or opinion that is dressed up as economics. Also Milton Friedman is an economist not economists. Paul Krugman is also a famous economist.

For instance, I don’t think there is any real theory that says that commodity prices always have to fall. This was the experience of the last 150 years, and if knowledge is always expanding, it makes sense, but there is really no reason that it couldn’t go the other way. Similarly, there is really no reason that growth has to be exponential for ever, in fact chapter 1 economics is static, and I think theories of the causes economic growth are controversial.

The substitution argument of Friedman is more basic to economics, because economics purports to explain general theories, and if oil or some other commodity is really special that would require some adjustment. But in the end economics is about getting the incentives right to maximize human welfare, and would not be falsified by peak oil.
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Re: The Economist Has no Clothes

Unread postby MrBill » Wed 09 Apr 2008, 11:28:21

Also, practitioners do not win Noble Prizes. These are usually reserved for new theories and/or new insights some of which may not stand the test of time.

They have as much to do with the politics of the selection committee as anything. Sort of like Yasser Arafat and Shimon Peres sharing a peace prize, although there was never any end to fighting in the ME. Or Al Gore getting a Noble prize despite doing nothing to end climate change.

I am sure that someday Jeffrey Sachs will get his Noble Prize, and I personally disagree with many of his suggestions with regards to development economics, although one cannot argue that he is not influential. Almost as influential as Bono! ; - )

But worst of all is when politicians of all stripes use pseudo-economic arguments to justify their poor policies. This is just based on cherry picking the bits of theory that they like while conveniently ignoring those parts that they find uncomfortable. Not unlike the way many of Keynes' arguments on supply side economics have been bastardized to justify deficit spending.

However, it is not enough to say Friedman, Keynes or Sachs are wrong or are idiots. One then has to prove why or provide alternatives. Otherwise it is academically dishonest and intellectually lazy! ; - ))
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Re: The Economist Has no Clothes

Unread postby Iaato » Wed 09 Apr 2008, 12:45:05

That's Nobel prize, Bill.

$this->bbcode_second_pass_quote('', '')$this->bbcode_second_pass_quote('', '"')Some critics argue that the prestige of the Prize in Economics derives in part from its association with the Nobel Prizes, an association that has often been a source of controversy. Among the most vocal critics of the Prize in Economics is the Swedish human rights lawyer Peter Nobel, a great-grandnephew of Alfred Nobel.[25] Swedish economist Gunnar Myrdal and former Swedish minister of finance Kjell-Olof Feldt have also advocated that the Prize in Economics should be abolished.[26] Myrdal's objections were based on his view that the 1976 Prize in Economics to Milton Friedman and the 1974 Prize in Economics shared by Friedrich Hayek (both classical liberal economists) were undeserved, on the argument that the economics did not qualify as a science. If he had been asked about the establishment of the Prize before receiving it, Hayek stated that he would "have decidedly advised against it."[26][27]
"


http://en.wikipedia.org/wiki/Nobel_Prize_in_Economics

Instead you could try the Crafoord prize, also awarded by the Royal Swedish Academy of Sciences, which has sought to remedy some of the damages done by the Economic Nobel by awarding bioscience prizes in Ecology, particularly, for scientists who have done work in ecological economics.

http://en.wikipedia.org/wiki/Crafoord_Prize

$this->bbcode_second_pass_quote('', '"')The annual Crafoord Prize is a science prize established in 1980 by Holger Crafoord, a Swedish industrialist, and his wife Anna-Greta Crafoord.
Administered by the Royal Swedish Academy of Sciences, the Prize "is intended to promote international basic research in the disciplines of Astronomy and Mathematics; Geosciences; Biosciences, with particular emphasis on ecology and Polyarthritis (rheumatoid arthritis)," the disease from which Holger Crafoord severely suffered in his last years. According to the Academy, "These disciplines are chosen so as to complement those for which the Nobel Prizes are awarded."[1] Only one award is given each year, according to a rotating scheme (Astronomy and Mathematics; then Geosciences; then Biosciences). In polyarthritis, a Crafoord Prize is only awarded when a special committee decides substantial progress in the field has been made."


One question for you, Bill. How on earth do you describe complex system function with this tool?

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Re: The Economist Has no Clothes

Unread postby Tyler_JC » Wed 09 Apr 2008, 12:59:08

Just because you don't understand it doesn't mean it doesn't work. 8)

I don't understand how my microwave oven works by my Hot Pockets still come out warm after I play around with the knobs.

The supply/demand model is actually remarkable versatile.

It allows us to judge the effects of taxes, subsidies, production interruptions, changes in income, changes in demand patterns, technological innovation, cost changes of raw materials, and so on.

After all, Peak Oilers manage to turn the following chart into a complex model for how society will collapse.

Image

:roll:
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