Economic theory and physical reality

The Peak Oil guys keep trying to tell the economists that there’s a drop-off in oil production coming (the ‘peak’), and the economists keep saying that the market will solve the problem when it arrives. Left unsaid is that sometimes market solutions involve “demand destruction” in the form of recession, depression, or worse.

Most of the energy optimists though think the market will wave its magic wand and incent the development of alternative technology. This is foolish – economics can’t trump physics (especially energy density), but it’s hard to sell this to economists. But I just had an idea, after hearing an old Spin Doctors song on my itunes shuffle.

What amount of money would I have to give you right now to develop a technology that would allow me to achieve Superman-like powers of flight, heat vision, super strength, etc? After all, if the power of the market can solve any problem, presumably there is a ‘bid’ I can make at which it will be able to solve THIS one, right?

(If the answer is “not an infinite amount of money, but considerably more than exists in the entire world economy” then you might as well treat it as an infinite amount of money for all intents and purposes. The same logic applies for oil – how much money will it take to get a portable energy storage mechanism which can achieve goals X, Y, and Z? Answer: money can’t beat physics – there are some problems that no amount of money will ‘solve’ for given acceptable values of ‘solution’).