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Capitalism: The great western experiment that has proven the most humane, peaceful and fair of all government models.

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Capitalism's love of efficiency (lemy.lol)

submitted 2 years ago by [email protected] to c/[email protected]

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Resources are expensive, so the fewer you need to produce a good, the cheaper the good. Thus capitalism naturally strives to use as little as possible.

Efficiency here is more dollars out per dollar put in, but because resources such as land, raw goods, time, and labor (especially unpleasant labor, since it costs more) all cost money, it ends up pushing for using as little as those as possible.

There's another positive outcomes of this drive toward efficiency as well though, it encourages recycling. Garbage is an extremely cheap resource, since not many people want it, and if you can figure out a way to utilize it, you're making a product from very cheap resources, and can make a cheap product.

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[–] [email protected] 2 points 2 years ago

I've never heard of Jevons Paradox, seems interesting though.

It doesn't seem to apply when you find an abundant substitute resource that's more efficient though. If you discover that you can use hydrogen to produce far more energy than natural gas for a far lower cost, every time you make a new power plant you're going to make it hydrogen powered. Even though you could still use natural gas, there's no reason to. Energy production overall might increase, but natural gas usage drops considerably.

In the case of more efficient ways to use existing resources, it seems extremely difficult to say whether or not the jevons effect applies. The supply curve shifts to the right, the demand curve doesn't move, this results in far more goods being bought at a lower price. Does this mean more usage of the raw resource? I don't really know. It does seem that we'll have more of the good, for a lower cost, for probably (on average) the same amount of raw resource usage.

To answer your question, I think you would use all the resources you already had, making them each more efficient, but there's a limit. Supply could increase so much that the price drops below the cost of production, at which point no one would increase production. The demand curve has to move toward the right before it becomes profitable again.

In any case, if demand is going to increase, it's extremely vital to increase efficiency. Capitalism has built-in mechanisms for that. If demand isn't going to increase, jevons may or may not apply, it's really hard to know.

I'll look more into jevons in the future.