[beefstuinit]

I'm a big picture guy, which is why PO appeals to me. I get it. it makes so much more sense than my economics class.

I'm a smart guy. at one thing, understanding a system. its to the point where when i was 8 i was calling bullshit on my "science" classes because i wanted to know more detail. dont tell me a cell divides, i need to know how it does it first.

Anyway, my economics classes tell me, the economy grows.

because.

that makes no fucking sense.

everything in this universe is fueled by entropy. it needs power. man didnt just suddenly start this constantly growing economy. there had to be fuel from somewhere.

up until the mid 1850's things happend slowly.

then we dug up coal, made steam with it, and thus began the industrial revolution.

then we discovered liquid petrouleum.

and 150 years later we have this super modern society.

150 years is a BLIP. its nothing. we act like we've been doing this for a long time.

fact of the matter is, all this growth, all this super modern shit, its all oil. its all energy. its eletrcitiy, its plastics, its exploration, its agriculture, its construction, its medicine... all of it needs a power source. and its oil.

if we're hitting the peak after 150 years then WHAT THE HELL!?

150 years and we werent planning for this!?

Its ridiculous, look at human history, all of this growth/advancement coincides with the massive increase in available energy available in liquid petrouleum. didnt we think it was gonna run out?

money, wealth, 99% of the shit we use comes from petroleum. not just petroleum, the growing amounts of it.

just blows my mind.

[willjones4]

Welcome and congrats on your first post! denial is a very dangerous thing isnt it?

[newhunter-gatherer]

It blows my mind too, without oil, western civilisation would be thrust into a new stone age

[bobbyald]

Welcome.

You get it but you're in the minority.
This site is a great resource and it has many smart people.
Enjoy.

(also have a look at DieOff.org, I think you'll find some articles to interest you)

[Doly]

Its ridiculous, look at human history, all of this growth/advancement coincides with the massive increase in available energy available in liquid petrouleum.

Correct. But I don't think energy equals money in a direct way.

I have been wondering about the exact relationship between economic growth and oil/energy for a while, and I'm still not entirely sure I got everything right. I'm new to economics.

But this is the way I see it right now:
I think money essentially represents wages, or the time somebody takes to do something, with specialist skills getting more money than generic skills. External energy allows people to get the same things done in a shorter time, by using machines. Initially (while others don't have the same machines) companies can keep charging the old prices while having to pay less people and make a profit. As soon as other companies get the trick, they start competing and prices go down again. So, to keep making nice profits, companies need to invent new machines that use up more and more energy.

I believe this is what fuels economic growth.

Interestingly enough, IT hasn't brought about significant economic growth (see "Solow computer paradox" in Wikipedia). In theory, processing information should do for the service sector what machines do for the industry sector. But it hasn't.

What I believe happens here is that the people who lose their jobs to machines in the industry or agriculture sector go to services. Services are usually more specialized (therefore better paid). But if you lose your job to a computer, there's no other place to go but another service. And it isn't very likely that you will get a better paid job. So computers may improve efficiency and bring momentary profits to companies, but they don't really raise average wages, the way machines eventually did.

On top of that, computers don't increase the amount of available products, only the amount of available services. So they don't increase the material wealth of a country, though they can increase the intellectual wealth.

[julianj]

Good post Doly! I like this analysis.

And welcome to our newbies! You've taken the red pill, (unfortunately) and things aren't going to be the same again. The rest of the Blue Happy Pill people don't have these importunate thoughts going round in their heads.

[Battle_Scarred_Galactico]

Welcome.

It's a pretty daunting picture when you zoom out a bit isn't it...