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.
Efficiency is more a side effect of the profit motive, but it’s not the driving force nor is it a justification.
Capitalism at its very core is meant to produce as much as possible (aka, profit), and to allow that production to continuously grow (return on investment). Technological efficiency as a tool enables the same production with less resources- but if you already have those resources, why not use more resources to increase production exponentially and get the most profit?
This results in the Jevons Paradox. Efficiency is great, but regardless of how efficiently we use resources, capitalism will grow to fill its container and eventually burst it.
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.
Okay, but when political power becomes captured by the extremely wealthy elite, capitalism becomes oligarchy: A system of exploitation that no longer produces measurable efficiency and benefit to society as a whole, but is more oriented to protect the elite and their interests, including further concentrating wealth and political power.
Which is why I’d be very strongly against people seizing political power to protect their own personal interests. The wealthy buying/bribing the government to bring legislation in their favor is an anti-capitalist thing though. Capitalists don’t want that.
You could argue capitalism inevitably brings about a system where the government is controlled by the elite, but I suspect that happens in systems where the government controls resource acquisition and distribution much faster. In that case, the elite starts out as the government and is immediately difficult to wrangle control from, but in capitalism, the elite have to bribe and siphon control from the government before an entrepreneur upstages them and takes their place.
I know this is a Pro Capitalism community and I will respect your views. I do have to say though, super PACs and political lobbying is essentially buying/bribing the government.
oh absolutely. 100%
Capitalists don’t want that.
Lol, this is pure delusion. Capitalists are those greedy enough to exploit others. They don’t believe in some grand system. They believe in self-enrichment.
bad wording, apologies. The wealthy absolutely want that, people who believe in and want capitalism don’t.
I’d also say capitalists want competition, but of course wealthy CEOs don’t. The word is used for two different things I guess (or I’m using it incorrectly).
