Chapter III, Section B, Item 1.  The Unlimited Supply Fallacy

Economic models fail miserably if an assumed resource is gone. Most economic models accommodate resource scarcity in the supply and demand price balance, albeit with considerable short-sightedness in predicting commodities futures, and with an operating assumption that supply can always meet demand at some price. The system is periodically shocked when the resource assumption fails, but at least most economic models adjust to the new condition. The assumption that energy resources are nothing but commodities bought and sold in an economy of unlimited growth is nothing short of an assumption of perpetual motion. Coupled with population spurring demand, the end of finite fossil-fuel resources portends the economy’s complete collapse, and is thus the greatest threat to ever face humanity.

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