Thoughts on economics and liberty

Oil is “infinite” and here’s why (because soon no one will want it).

There is continuing misapprehension among the improperly educated (which is most of the "educated") that resources are "finite".

Giving examples doesn't seem to help such improperly educated people, so how about a bit of trivial algebra:

Let annual demand for resources = D and total "remaining" global supply of resources = S.

"Remaining" number of years of supply = S/D.

Now assume that D=0

The remaining number of years of supply = S/0 =  [i.e. at least till the solar system blows up]


Does that make sense to the world's millions of improperly educated people?

In brief, EVERYONE needs to understand TWO basic things about resources:

1. Resources are ONLY things that humans use (demand). Things we don't use are NOT resources. A pile of mud is not a resource until someone wants to use it to fill the foundation of his home. When there is NO demand for a  "resource" its supply effectively becomes INFINITE. It might instead become a nuisance.

2. When resources become "scarce" (because these are being used for a particular purpose)  then humans will BOTH recycle the resource (e.g. the mud from below one's house will be used after 40 years for a second house) or substitute it (use stilts instead of mud). The price system and technology both influence and react to the "scarcity" to ensure both these options. HUMANS are adaptive animals. They are not stupid.

Indeed, when technology changes sufficiently, things considered to be "resources" at one time can suddenly no longer be needed. They can quickly become a nuisance. 

What about oil?

When we use oil, we want ENERGY. We can replace it with a million other things. Anything that produces energy is fine. And there are at least 1000000 alternatives.

As a result of alternative technologies and more efficient ways to use oil, the oil DEMAND is now dropping on a per capita basis. In the next 10 years the GLOBAL demand for oil could very well peak. 

No matter how much human population grows thereafter (and human population is GUARANTEED to fall dramatically as the level of freedom increases), oil consumption will keep falling incrementally till finally oil will only be used for a few minor things.

Oil SUPPLY is virtually infinite (at least 100 times more than currently known "reserves"), and demand is already starting to fall.

What then? 

S/D (for oil) will increase sharply and tend towards INFINITY.

It will have the same fate as coal and the steam engine. Basically junk. 

Don't believe me? Even now!!

Well read this.

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