Did a quick search, but didn’t find any discussions on this topic. Wanted to get a feel for what the Mises community had to say:
Does this imply some sort of inherent insatiability in our current social structures?
Why is this a paradox? And why would this imply some sort of inherent insustainability of our current social structures?
If an energy source becomes cheaper - through more efficient supply and/or use - then the initiation and expansion of certain enterprises will be seen as more affordable (all other things being equal), leading to increased consumption of the energy source. But this, in turn, would raise the demand for the energy source, and the increased demand would raise the cost of the energy source back up.
Gotlucky,
It is a paradox because increases in efficiency lead to increases in consumption.
I’m asking if it does, because no matter how efficient processes become, consumption of resources will forever increase, which is unsustainable. I was wondering what the community had to say about this.
Autolykos,
Doesn’t the increased resource cost spur research into higher efficiency? That would just start the cycle over again, until the resource is completely exhausted.
Capital accumulation and advances in technology drive down the cost of production → it becomes possible to profitably sell whatever you’re making for a lower price → more and more people can afford your product, and so more and more people buy it.
This isn’t a paradox; this is capitalism. The whole point is to make what people want as cheaply as possible - to drive that which is scarce towards non-scarcity.
It can lead to increases in total consumption, yes. But the per-firm consumption could actually decrease.
It can also spur research into alternative energy sources.
See above. Also, when would e.g. coal be completely exhausted?
Why is that a paradox? Think about it in terms of gas and cars. When the cost of gas rose, people drove less. When gas prices go down, they drive more. Why is this a paradox? If something costs less to use, then - depending upon the good - people will use more of it. They might not use more if it is something that is fixed, such as the amount of insulin a diabetic requires, as he gains nothing by purchasing more of it. But there are things that people would like to use more if they can, and energy is one of those, as energy enables them to do more things.
I just don’t see the contradiction here.
You are missing some extra variables here. Autolykos already mentioned one, which is that as more people demand the resource, the price goes up. Even if it is a resource than can be mined super cheaply, if the demand increases, the price will increase. However, I think you are asking about over a long period of time, such as one or two hundred years. But this point still stands. If there is not a lot of coal left, the price will go up because the supply is lower. This will slow down the use of coal.
This leads me to my next point. When the price of a resource rises, the result is that other resources become more profitable to make. This leads to people finding other sources of energy. And as the saying goes, necessity is the mother of invention. If there is no need to use other resources, then there really won’t be any research into using these other resources.
This is one of the main problems with subsidizing corn and ethanol. It’s not really cheaper to use ethanol as a fuel, but because of the subsidies, people waste resources into making and using ethanol as a fuel. There is no necessity in using ethanol as a fuel source, and it is currently a waste of resources to use it as one. What people need are a reason to come up with other energy sources, and that reason can only come from wanting to spend less money on energy. But you can’t dictate what should be the next energy source. Subsidizing energy sources only wastes resources and time for looking into something that isn’t profitable. If you want there to be a real solution, subsidies need to be eliminated so that entrepreurs can see what solutions are profitable (and therefore not a waste of resources). Anyway, this paragraph is quite the tangent.
Basically, coal will not be a main fuel source forever. There will be research and technology that allows us to use other sources of energy more efficiently. People are already doing this, but the subsidies distract entrepreneurs from profitable (i.e. not wasteful) uses of energy towards unprofitable (i.e. wasteful) uses of energy.
Increased efficiency leads to increased assumption, that sounds like common sense not a paradox.
consumption of resources will forever increase, which is unsustainable.
Consumption of resources isn’t elimination of matter. Consumption therefore implies transformation. Why is transformation of matter unsustainable?
EDIT: Also, it appears Jevon didn’t understand economics (plus I didn’t read the entire wiki). Increased demand for a resource will cause, to the extent possible (much greater extent without government intervention), increased production of that resource, which as the resource is used up will cause increased exploration into alternatives. It seems he, along with most other economists, are guilty of the fallacy that we are stuck with a certain structure and no technological progress will solve the problems, but that’s just plain ignorant of history. The problem of course is government intervention; government is the primary impedement to production of scarce resources and exploration into alternatives.
DOUBLE EDIT: As expected, the wiki doesn’t discuss the fact that as a resource becomes more used, its producers become more rich and capable of expanding production and seeking alternatives. Apparently, they assume static production? Static production in the face of increased demand, that’s the paradox, and the answer as always is to remove the roadblock: government.
gamma_rat,
Does your statement imply that capitalism is unsustainable given a world of scarcity? Does the “end of capitalism” necessarily equate to a complete satisfaction of desires? Does this presuppose that “what people want” is necessarily material?
[quoteuser=“gamma_rat”]
The whole point is to make what people want as cheaply as possible
[/quote]
Does market failure contradict this statement?
Addressing the alternative sources argument:
If we remain on energy, I can’t fathom how this is sustainable. Any sort of fossilized hydrocarbon energy source (coal, oil, natural gas, etc.) is essentially stored solar energy (sunlight > photosynthesis > plants > fossil fuel). We have built our entire economy around this stored energy. It’s almost as if industrial civilization runs on this huge battery.
Much like fossil fuels, renewables have the sun as their genesis (solar, biomass, wind, etc.). The problem with this is that it is rather daunting to match renewable production levels with current non-renewable consumption levels. Only so much sunlight hits the planet, only so much of it can be harnessed, and the current conversion methods (pv cells, plant photosynthesis, etc.) are not very efficient, and we need somewhere to do everything else, so it would be tough to devote the planet entirely to energy production. Also, allowing for market failure, and the NAP, it become difficult to envision everyone single-mindedly acting towards this goal.
Addressing the conservation of matter argument:
This assumes current industrial production is cyclical, which it isn’t for the most part (see: landfill). Also, when resources are exploited, the landbase typically degrades (soil erosion, groundwater pollution, species extinction, etc.) meaning that the second go around is rarely as productive as the first (Jordan was a forest once, for instance. Now it is a salty desert.). Even if that were to change to a completely cyclical method of production, due to the impossiblility of perpetual motion, there still must be an external energy input. This leads back to the second paragraph of this post.
Well that’s the beauty of innovation. Just because you can’t fathom increased efficiency of energy sources (and making use of currently unprofitable sources) doesn’t mean that someone else out of the billions upon billions of people that are currently alive and yet to be born can’t fathom it too.
Gotlucky,
How poetic. Seems to completely disregard the whole physics of the issue, though.
Not really. There are oil wells that have refilled, despite people believing they were near empty. There is a lot of information that we just don’t know. Why are you assuming we know everything now?
LOL, no. My epistemological skepticism has been hashed out here in the past. But this seems like a goofy escape hatch into utopianianism. Imean, who knows? Maybe Jesus and Krishna will head on down and turn the world into a swingin’ luau! We must presuppose some constants to have any sort of discussion, so how about it? This just seems like a big red herring.
In the course of a year, Earth receives 3.85 x 10^24 joules of energy from the Sun.1 As of 2008, human civilization supplied only about 5.18 x 10^20 joules and used only about 3.53 x 10^20 joules in the course of a year.2 Assuming a solar-cell efficiency of 14% (and not counting other energy-conversion inefficiencies)3, a single square kilometer of solar cells would generate, “on average”4, about 1.06 x 10^15 joules of energy per year. Nearly 333,000 square kilometers would then be needed to be covered with solar cells in order to generate enough energy for current human needs. A square with sides a little more than 577 kilometers long would form such an area. This area represents less than 0.07% of Earth’s surface.
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http://en.wikipedia.org/wiki/Solar_energy#Energy_from_the_Sun
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http://en.wikipedia.org/wiki/World_energy_consumption#Energy_supply_and_end_use
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http://en.wikipedia.org/wiki/Solar_cell_efficiency#Comparison_of_energy_conversion_efficiencies
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The phrase “on average” is here used as shorthand for dividing the total yearly solar energy input to Earth by Earth’s surface area.
Well, first I’d like to say that Autolykos made a great post right above. There really are alternative energy sources to natural gas (nuclear and solar come to mind), and as Autolykos showed, theoretically we could supply current human needs with solar power. But at what cost? That is the important point. Solar power is simply too expensive with the current technology. As there are advances in knowledge and technology, solar power will probably continue to get cheaper. I don’t know how much cheaper, but surely it won’t remain as expensive as it is now forever?
Second, I’d like to quote a little bit from Michael Crichton’s lecture Aliens Cause Global Warming. I know that the main subject is off topic, but what I am about to quote is not:
So, I understand that you might like to straw man my position and talk about Jesus fixing the world’s problems, but that’s not really what I’m getting at, which is quite clear in the quote above.
How poetic. Seems to completely disregard the whole physics of the issue, though.
You can’t present a non-argument built on fallacies and then say anyone who points out the fallacy is disregarding physics.
Addressing the alternative sources argument: If we remain on energy, I can’t fathom how this is sustainable.
The idea was that as a scarce resource is diminished, alternatives are sought. The fact that you can’t fathom alternatives and still argue like you have a clue is entirely irrelevant.
Addressing the conservation of matter argument: This assumes current industrial production is cyclical, which it isn’t for the most part (see: landfill****).
Again, your lack of creativity has no bearing on the fact that as a resource is diminished, alternatives will be sought and, if humanity is to persist, will be found.
So you posit a landfill. If that’s all we’re left with in the future, then if humanity is to survive we will find a way to produce the desired resource from landfills.
There is no paradox. The problem is lack of thinking.
Doesn’t this assume that demand for the good increases or that the consumer perceives that there are no subsitutable goods for the end in question? I mean, what if the production of kerosene increased to such little cost so as to be $.01 per unit, down from $2.50 per unit, but I didn’t care because I preferred to use electricity or gasoline (for whatever use for which kerosene, electricity, or gasoline can be used)?