> Most value is actually created by chemical processes such as nature
> produces,
The argument about whether all wealth is produced by human labour or
whether nature 'contributes' to wealth-creation is based on wrong
premises. Of course, nature produces material wealth. In his 1875
critique of the German social-democrat party's programme, which opened
with the statement, 'Labour is the source of all wealth,' Marx
commented, 'Labour is *not* the source of all wealth. Nature is just
as much the source of...material wealth.' He insisted that 'Labour
depends on nature', and said the 'natural conditions of labour [was]
the earth as the original instrument of labour, both laboratory and
repository of its raw materials'.
BUT altho labour is not the source of all material WEALTH it IS the
source of all economic VALUE. Monetary value accrues to commodities
only because they incorporate some quantity of human labour-time.
Completely pointless and idiotic arguments about this matter are the
staple diet of economists everywhere. On Pen-L recently (in fact, on
Pen-L forever) they debated whether or not 'forces of nature' can add
'value' (eg whether windmills add 'value' to flour, which then accrues
to the owner as 'rent'). Ecological economists and fans of 'natural
capitalism' like the fanatical gung-ho optimists of the Rocky Mountain
Institute waste endless hours debating this non-existent issue. There
have even been attempts to resurrect it here on the CrashList (Tony's
last post is only the most recent attempt to do so). It is a waste of
time. What matters from the point of view of the crisis of capitalism
and the dynamics of the Crash, is the interplay of market recessions,
booms and slumps, with the availability at any given time of finite
resources, eg fossil fuels.
For example, if the economy crashes next year, in part because of high
oil prices this year, then oil prices might also collapse again;
economists will say this proves there is no energy crisis, no shrtage
of oil!
In fact, this ricocheting of cause and effect like squash balls in a
squash court makes the business of prediction difficult, but not
impossible, and prediction is what we are here to do.
Energy is material wealth. But it only acquires economic value when it
is produced, ie when human-labour time is applied to make it available
(marketable). Oil is material wealth but only acquires a value when it
is pumped out of the ground which, as Shaikh Yamani recently said,
does not happen by magic. It requires huge efforts, immense
investments of social capital (=stored labour-time) and the live
labour of hundreds of thousands of men and women, from geologists to
pipeline fabricators to accountants to gas station attendants. It is
the cumulative value of all their combined labour-times which gives
oil its econonmic value and every time you buy a litre of gas you pay
a pro rata fraction of that value. Market prices fluctuate around real
values, and are determined by the vagaries of supply and demand. In
fact, in constant dollars the real price of oil has been stable at
around $15/bbl (1991 dollars) since 1870, when Rockefeller's Standard
Oil first imposed 'order' on what was still then a chaotic market.
Spikes or slumps do no mroe than register the impact of the chaotic
disturbance-patterns which result from the effect on demand of the
interaction of many different variables, from the weather, to war, to
new technologies etc.
As oil becomes more difficult to extract and scarcer, its value
increases *because the necessary labour-time required to pump it
increases*. Productivity improvements and technological advances can
offset this trend by reducing the amount of labour-time required, but
the effect of this is only to hasten depletion and thus to bring
forward the day when real shortages bite. Even then, shortages may not
soon or at all be reflected in higher market prices, because of hidden
subsidies (for example, the US 5th and 7th Fleets which control the
vital sealanes are paid for out of general taxation, but their purpose
is to control the Persian Gulf and keep the oil flowing; this is only
one of the ways in which oil is subsidised; equally, the externalities
of the oil industry are hidden or not paid at all; pollution has many
costs including damage to buildings, health ect, but the costs are not
borne by the oil industry). Equally, prices may not rise because of
economic slump. It is entirely possible that most of the oil now in
the ground will NEVER be pumped at ANY price, because society lacks
the social capital to extract it; meanwhile, the market-clearing price
may still be around $15/bbl, because the market will have disappeared
due to economic collapse. Falling production and falling consumption
can indeed go together with falling prices. Shortages do NOT
necessarily lead to increased prices. Note that TECHNOLOGY
IMPROVEMENTS ONLY HASTEN THE CRASH. THEY DO NOT AVERT IT.
Since economists do not factor in any of these considerations (or only
rarely) almost everything they say and write about energy is worthless
rubbish. To substitute for their abysmal ignorance of the real issues,
they engage instead in religious hairsplitting debates about 'value'
and 'wealth' and the 'contribution' of 'nature'. It is an utter waste
of time and I want none of it here.
BTW, what is true of energy is also true of all other staples,
including food, raw materials of all kinds, textiles etc. It is not
just energy economics which is worse than useless, it is ALL
economics.
Mark
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