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Foreshadowing Irrational Exuberance, ca. 1866

12 June 2009

Well, after a pretty rough night weather-wise, Samuel’s safely in the Frank Denius Bubble at football camp learning not to hitch a half-step at the end of a three-step drop.  Old habits die hard, but the difference between a completed slant and an intercepted one is measured in milliseconds, so we’ve got some work to do before August workouts start.  We’ve reached the piont where it hurts to catch his passes, but it hurts even more to miss them (see also bruised sternum)!

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From the eminent economist W. Stanley Jevons, in his prophetic The Coal Question published in 1866 (see text widget at right), come these observations:

Applying Pascal’s Wager to the question of urgency:

When I commenced studying this question, I had little thought of some of the results, and I might well hesitate at asserting things so little accordant with the unbounded confidence of the present day.  But as serious misgiving do already exist, some discussion is necessary to set them at rest, or to confirm them, and perhaps to modify our views.  And in entering on such a discussion, an unreserved, and even an overdrawn, statement of the adverse circumstances is better than weak reticence.  If my conclusions are at all true, they cannot too soon be recognised and kept in mind; if mistaken, I shall be among the first to rejoice at a vindication of our country’s resources from all misgivings… (pp. 6-7)

On energy as the ultimate source of material wealth and as the engine of cultural development:

This question concerning the duration of our present cheap supplies of coal cannot but excite deep interest and anxiety wherever or whenever it is mentioned:  for a little reflection will show that coal is almost the sole necessary basis of our material power, and is that, consequently, which gives efficiency to our moral and intellectual capabilities.  England’s manufacturing and commercial greatness, at least, is at stake in this question, nor can we be sure that material decay may not involve us in moral and intellectual retrogression.  And as there is no part of the civilized world where the life of our true and beneficent Commonwealth can be a matter of indifference, so, above all, to an Englishman who knows the grand and steadfast course his country has pursued to its present point… (p. 2)

On the moral dimension:

Reflection will show that we ought not to think of interfering with the free use of the material wealth which Providence has placed at our disposal, but that our duties wholly consist in the earnest and wise application of it… (from the Introduction)

On the limited capacity of government to achieve where moral self-restraint demurs:

The general conviction must force itself upon the mind, that restrictive legislation may mar but cannot mend the natural course of industrial development… (p. 6)

On the rebound effect, also known as the Jevons Paradox:

It is shown that the constant tendency of discovery is to render coal a more and more efficient agent, while there is no probability that when our coal is used up any more powerful substitute will be forthcoming.  Nor will the economical use of coal reduce its consumption.  On the contrary, economy renders the employment of coal more profitable, and thus the present demand for coal is increased, and the advantage is more strongly thrown upon the side of those who will in the future have the cheapest supplies.  (pp. 4-5)

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qb

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