Debunking some myths about Energy and the Economy
Joseph Tainter in his groundbreaking book The Collapse Of Complex Societies makes the following trivial, but nonetheless tantalizing observation: "The number of challenges with which the Universe can confront a society is, for practical purposes, infinite".
It will probably be noncontroversial to formulate a follow-up to the Tainter's observation thus: "The range of possible responses of a society confronted with the Universe's challenges is also, for all practical intents and purposes, infinite". We know from history that past societies have used (with a mixed success) a whole range of responses to their problems -- from sacrificing vestal virgins to invading and enslaving their neighbors, and from institutionalizing infanticide as a population control mechanism to reorganizing their industry and food production systems.
If the responses of our political and economic mainstream to the challenges presented to our particular society, in that very special slice of space-time that we happen to inhabit, truly represent our best shot, we are virtually guaranteed to enter a very interesting period in history (interesting as in the well-known ancient Chinese curse, May you live in interesting times). A dispassionate observer from outer space may watch with amazement how an incredibly complex and resourceful society of Homo economicus, armed with the most advanced technology and all of the knowledge amassed through their entire history, that voluntarily, with determination, even enthusiastically is painting itself into a corner and reduces its future options to what in the game of chess is termed zugzwang (compulsed move) -- by deferring the recognition of the Universe's challenge until the crisis that is currently clearly visible on the horizon becomes detectible through economic and monetary mechanisms, signals from which in this particular peculiar civilization apparently take precedence over the other six senses.
[I follow the modern philosophical tradition and count rational reasoning, which clearly distinguishes our kind from the rest of flora and fauna, as a sixth sense. However, it appears as if it almost doesn't matter whether we possess that prized and unique sixth sense or not, as we choose to ignore what it tells us, unless, of course, the message also becomes recognizable as a signal from the free market.]
This unique form of behavior -- idealization and absolutization of the free market -- is especially puzzling considering that inability of the market signals to reliably serve as a long term indicator of anything at all has been established beyond any controversy, as lakes of ink have been spilled over documenting the minutia of phenomena such as Enron and LTCM collapses, the hazards of the current real estate bubble and other market phenomena, and as the same breed of analysts who in 1999 were seen busily convincing the public that, say, the common stock of Intel Corp. had been a bargain back then at the price of $80 a share, were spotted in 2000 spreading the message that the same Intel stock had a long way to fall at a price of about $25 a share.