Question about Free Market Economic problem that I haven't been able to figure out

[TheOraclePaul]

Problem: High prices not diminishing demand - example: 'peak oil myth' - so oil prices are going up, which means people will use less, and alternative forms of energy will become viable. Ok I get that. But what if, despite the high prices, a select group of people is willing to pay until it's gone? A more applicable example of this happening might be a certain kind of animal meat - say some rare, exotic species. Super rich people might not care if it's going extinct and still want to buy it to the very end. How can this be reconciled without legislation prohibiting it - is there a free market alternative?

[The Gold Standard]

Why would it need to be reconciled? Prices would be high enough long enough for alternatives to be developed. It's not like overnight the price of oil would jump to $1,000,000 a barrel (unless there was hyperinflation, but that is not what you are asking). The price would rise to $150, then $200, then $250, and probably over several years would get high enough that only the richest would be able to afford it, but at that point why wouldn't the rich buy one of the alternatives? It isn't like oil has some magical properties that people would always want it. People want it to make energy. If they can get energy more efficiently for less money doing something else, they won't want oil anymore.

As far as the rare animal meat, the same principle applies. Eventually the item would be so scarce that the price would be too high to justify paying that much for it. If you are worried about the species going extinct, you could also raise money to buy the animals and not eat them. Make a zoo for them or something. We don't need a government solution for these issues.

[hazek]

Heh rare animals. I wonder if those so vehemently trying to prevent species from going extinct realize how many had to go extinct since the first life appeared until today, yes HAD to go extinct..

[TheOraclePaul]

that all makes sense - my concern though is of those ultrarich folks who don't care about the price mechanism. those that are willing to pay until the last drop. it isnt hard to imagine a lunatic with too much money to spend possibly doing it just for fun.

[fisharmor]

You can already see the economic reality behind rare animals.
In Botswana, where safaris are legal and westerners show up to pay big bucks to hunt elephants, elephants are common.
People manage their numbers for that reason.

In Kenya it's illegal to kill elephants.
Therefore it's impossible to assign economic value to them.
An elephant in Kenya is a crop-eating machine. What they don't eat, they trample.
So a farmer has two options: abide by the law and let the elephants live, and starve to death, or break the law, protect his farm, and about a literal ton of extra meat out of the equation.

And elephants are understandably not doing as well in Kenya.

[gerryb]

In the case of oil -- we will pump it till it's gone.

In the case of animals -- if people don't have ownership over them, thus stewardship -- they will be over-harvested and go extinct.

Look at Haiti vs. Dominican Republic -- No ownership vs. better land rights -- one has not a single tree -- the other has lush forests. Same island.

[Cabal]

If something like an animal becomes a rarity in demand, seems to me like it would be a good opportunity for someone to begin breeding said animal in order to satisfy that demand.

[Watch]

If you want to keep something abundant you must make it marketable.
The reason 8-tracks are so scarce and "extinct"(let us say, no new ones being produced) is because they are not marketable; though you'll find them in used goods outlets everywhere.

A free market problem, in principle, implies a problem with people(as we are markets); legislation doesn't "fix problems".
To elucidate the idea of things being marketable being abundant take trees for instance:
http://nafoalliance.org/forestry-jou...-wood-is-good/

[Steven Douglas]

Super rich people might not care if it's going extinct and still want to buy it to the very end. How can this be reconciled without legislation prohibiting it - is there a free market alternative?

Energy is going to be hoarded, there is no getting around that. Ultimately, however, it's about super-rich countries, not people, and whatever they can't reconcile with global legislation, they will more than make up for with war. You can have all the money in the world, but without the gears of war to back it up, you've ultimately got nothing. But that's the end game, which i have no doubt will a) get very ugly, and that b) we will get past it, with major changes to how the entire world conducts its affairs.

Oil is a finite commodity, and we are already at the point where major countries are aggressively vying for claims to existing reserves (think we're really worried about Iran getting a stupid nuke?). All major powers have their eye on the oil - who controls the spigots, and where they are aimed at all times.

Debt-driven global Ponzi monetary policies all have an exponential economy growth requirement/expectation factor which only serves to accelerate an end game that was already inevitable from the moment we found uses for oil and started extracting it from the ground. There's an ENORMOUS normalcy bias where oil is concerned, and a serious lapse of understanding just what "exponential" means, and how rapidly and destructively an end game collapse plays out once it reaches a kind of critical mass.

The "easy" oil has all been pretty much found. Even all the so-called major finds are a proverbial drop in the bucket in terms of what is known, pumped and already spoken for. We are after the harder and harder to get stuff now. This requires increasing amounts of energy (not money, energy) to get the same oil out of the earth, which can be expressed as a simple energy in/energy out ratio. When we reach the point (and we are fast approaching it, based on artificial exponential economic growth requirements) where the amount of energy required to extract equals the amount of energy we receive in return, money will become irrelevant.

The point is, you need energy to get energy, and that is the real "cost", which has nothing to do with currency exchange value, and which cannot be left out of the equation. But that gets ignored by most (especially economists, who only think in terms of monetary costs). A barrel of oil could cost $1 or $1,000, but if a barrel of oil in energy is required to get that same barrel out of the ground, what do you have? Nothing. Zero sum, and that has nothing to do with price in terms of money, but rather costs in terms of energy alone. That is the curve we were on from the beginning, with ratio that is getting exponentially closer to unity.

[PaulStandsTall]

I don't know about the rest of you but I'm crossing my fingers and knocking on wood for the E-Cat to actually work as described. Although I'm not too optimistic about it, life sure would be great if the price of energy were to nosedive over a new technology like this one.

What I can't understand is even though we are in this debt money fiat ponzi scheme, there are hardly any debt notes allocated to proven nuclear technologies. If we are going to create money out of thin air, let's at the very least put it to good use. China has 25 nuclear reactors in the making. USA has none. Nuclear power is 15% of electricity. It seems foolish to not be investing in this.

And don't say we can't do it because Chernobyl, or Fukushima happened. While those are sad, they are also learning opportunities. When planes were invented, they were terribly unreliable and today they are generally regarded as safe. If we improve the designs, we can make the nuclear disasters a thing of the past. This holds true for every technology.