Category — Energy Transformation
It is the second most famous term in the history of economics after Adam Smith’s metaphor invisible hand. It describes the competitive market process in the real world. It was coined in 1942 by the famous, iconoclastic Austrian-American economist Joseph Schumpeter, who would reminisce:
I set out to become the greatest lover in Vienna, the greatest horseman in Austria, and the greatest economist in the world. Alas, for the illusions of youth…. As a horseman, I was never really first rate.
“Creative Destruction” …
The best businesses rise to the top in consumer-driven markets. Less competitive firms contract and even disappear. Creative destruction is the process whereby the bad is eliminated, the better replaces the good, and past performance gives way to new strategies and victors. No firm is forever, and financial loss is a characteristic of capitalism, as is the more used term profit.
Protesting against the textbook “perfect competition” model, under which a multitude of price-taking firms were optimally efficient at equilibrium rest, Schumpeter focused on the real world of change. “[C]apitalist reality, he said, is “the new commodity, the new technology, the new source of supply, the new type of organization … which strikes not at the margins of the profits and the outputs of the existing firms but at their foundations and their very lives.”
He famously continued: [Read more →]
January 15, 2013 3 Comments
[Editor Comment: Previous posts at MasterResource (see here and here) have critically reviewed Moore's Law applied to energy systems. Mr. Lightfoot revisits the issue below based on his article in Engineering Dimensions (May/June 2013). His views about the need for government direction to achieve energy transformation are the author's alone.]
In a 2009 speech before the United Nations, Israeli Prime Minister Benjamin Netanyahu spoke about hope for the future:
“It took us centuries to get from the printing press to the telephone, decades to get from the telephone to the personal computer, and only a few years to get from the personal computer to the internet. What seemed impossible a few years ago is already outdated, and we can scarcely fathom the changes that are yet to come. We will crack the genetic code. We will cure the incurable. We will lengthen our lives. We will find a cheap alternative to fossil fuels and clean up the planet.”
Mr. Netanyahu was expressing a commonly held assumption – that the history of telecommunications and microelectronic development will predict the development trajectory of a low-carbon energy future.
The phenomenon described by Mr. Netanyahu is called Moore’s Law, named after the co-founder of Intel, Gordon E. Moore, who described the trend of accelerating computing development in the 1960s. He noted that the number of transistors that can be placed inexpensively on an integrated circuit has doubled approximately every two years. This trend has continued for more than half a century.
Vaclav Smil, a widely recognized energy expert, has written extensively on the history of energy technology development, taking a multi-disciplinary approach. He has given due consideration to the viability of applying Moore’s Law to energy systems. His views on this subject can be summarized as follows from his 2006 speech “Energy at the Crossroads,” given at the 2006 OECD Global Science Forum:
“[F]uture technical developments will not conform to simplistic notions of accelerated development and exponentially declining costs of new conversions”…. Energy transitions span generations and not, microprocessor-like, years or even months: there is no Moore’s law for energy systems.”
Professor Smil has even given a name to the belief that transitioning to a low carbon/sustainable energy future will follow a Moore’s Law like trajectory – Moore’s Curse. Moore’s Curse, leads to several negative outcomes: [Read more →]
November 29, 2012 3 Comments