The Real Danger

Peak oil, peak food…..but the real danger is here:

Mr Currie said investment cycles in energy typically last about 10 to 12 years as producers struggle to catch up with demand. However, this cycle has been short-circuited by politicians after barely six years.

"The political environment is extremely hostile. The world is looking like the 17th century under mercantilism when countries saw economics as a zero-sum game. They exported as much as they could to get gold, and erected enormous barriers. China looks like that, so does Russia, the Mid-East and most of Africa and Latin America," he said.

While the West has much of the skill for developing energy projects, it is blocked by nationalist petro-states from investing directly.

Mercantilism, that dreadful beast that we thought Ricardo had slain.

Sigh, economics and trade are not zero sum games, it\’s the imports you want, the imports that make you rich. Idiots.

4 comments on “The Real Danger

  1. I don’t understand why that is. I thought exports were the key. Please explain.

    Tim adds: This has been dealt with at greater length all over the place but in short.

    We buy imports (whether into the home, the family, the town, the country) because it is cheaper for us to do so than to make the things or services ourselves. If this wasn’t true then we wouldn’t buy the import would we? We’d make it ourselves.

    Yes, we could turn the back garden into a wheat field, thresh and mill it ourselves and bake our own bread. However, it’s cheaper to go to the supermarket and import bread from there. We get the bread, plus a garden, plus untold hours of not doing backbreaking work in our wheat field.

    Importing bread in this manner makes our household richer.

    However, we also need to export something from our household to earn the money with which to buy the bread. For almost all of us, we rent out our labour (ie, we export our labour from our household) in order to earn the money to buy the bread. But it is the bread that we want: it’s those imports that make us richer, not our exports of our labour.

    In this clearly ridiculous example, the £365 a year we pay the supermarket for a loaf of bread each day is a much smaller sum than the land and labour we’d have to put into growing our own wheat and making our own bread.

    Where importing costs us more than doing it ourselves, then we do it ourselves. Say, putting up a shelf, doing the washing, doing the washing up maybe….whatever.

    The imports are the thing we want, the imports are what make us richer (ie, give us more of whatever for the resources we have available). Exports are just the dreary shite we have to do to be able to buy the imports.

  2. Pingback: Banditry » Blog Archive » Economics manifesto

  3. “Imports are what make us richer… exports are just the dreary shite we have to do to be able to buy the imports.”

    Yes – good – I like this one… quoted on my blog.

  4. Is china indulging in mercantilism though ?

    After all in 2000 china imported around $225 billion from the rest of the world. By 2006 that was up to 791 billion.
    A 350% increase in imports in 6 years doesnt look like classic mercantilism to me.

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