Where do we go from here? That is the question that is nagging at me. Capitalistic economic thought states that human desires are unlimited. Resources are scarce so choices must be made (more guns or more butter, as the old argument goes). The production possibilities frontier must always be advanced outward, and revenues equal expenses – according to economic theory.
Capitalistic economic thought is wrong, however, because 24 hour machine production has proven that demand cannot keep up with supply. People do, sooner or later, get their fill of consumption. When that happens, inventories build up; and companies start laying off workers to cut back on productions. Demand cannot out pace the machines. The economy goes into a constant cycle of boom and bust. Aristotle would call this bad household management.
I think Karl Marx tried to address this problem in some tacit sort of way. His solution of course was communism. That is, the means of production would be owned by the people through the state and production would be controlled. Everyone would receive the units of production according to their need. This obviously will not work because a fundamental right of nature is for people to own property. So communism will not work.
A better solution is to nationalize those industries that overproduce due to machines. In the energy industry this is not enough, however. The world is floating in oil. Demand cannot outrun the machines. An oil trust is needed that includes nationalized oil companies from around the world. It needs to operate like the old trusts did in the days of Rockefeller and Carnegie. Here is how.
- Production is controlled to make sure oversupply does not occur and that prices are acceptable.
- All players in the global market cannot be producers because this causes oversupply. Some must be shut down.
- Efficiency determines who operates and who shuts down.
- In most cases, countries will not shutdown completely, just there most inefficient plants and processes.
- Counties within the trust must follow the rules or be fined.
This type of rhetoric does not sit well with the pro-capitalism crowd. But yet, OPEC works closely with the West to peg oil prices. At least in the recent past, if not currently, all the major oil producers like Russia, Saudi Arabia, and Nigeria have cut production while the USA continues to increase production. In a trust, that makes since since our fracking technologies produce light sweet crudes very effectively. A secret trust is probably already in effect.
I say all this because there cannot be any doubt that man made pollution is burning up the earth. Growing up in Houston during the 1970s, the summer temperatures rarely hit 100 degrees. A hot day back then was between 93 and 96 degrees. Now, 100 degree days are commonplace. Hurricanes are becoming more vicious. Houston streets get flooded over what used to be called a short mid-day summer shower.
Where do we go from here? I tell you where. World wide cooperation to save our planet. Not only in energy but nuclear weapons, human migration, and a host of other things too.