Alternative energy and the Automobile Industry

[Jamougha]

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Chevron is standing in the way of electric cars being produced in the same way as you are standing in the way of more people not working at McDonalds. Because a market participant chooses not to produce does not mean they are standing in the way of production. Look at any supply curve and you will see points below a market clearing price where suppliers don't sell. You are tring to create and define a "public" good, electric cars. Maybe I don't think that it is a public good to use "dirty" coal to generate electricity and then create a potential landfill nightmare with electric batteries. Maybe I feel Hydorogen cars should be produced and electric cars are a waste of resources. The point is You and I don't decide, market participants competing for scarce goods and resources decide. You may mot like the outcome, but that does not make the outcome sub optimal.

When you tell someone you disagree with, that they simply parrot others and need more education you are insulting. You don't know me, my educational or professional back ground yet you tell me "I" need more education. I am telling you things you should have learned in Econ 1.

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OK, so you know some econ. Do you understand the difference between -

my personal preference and pareto optimality?
my not working at McDonalds and an actor with a licensed monopoly choosing not to produce a good for which there is proven demand at a profitable price?

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pareto optimality, like beauty, is in the eye of the beholder. Many people believe that electric cars will never be a viable option for personal transportation and our resources and efforts should be directed elsewhere.

I do not believe Chevron has a monopoly on electric cars. But let's suppose they do. Lets further suppose that their technology will make oil obsolete (simplified example). Their patents expires in 2014. What would be their most profitable course of action? I certainly don't think sitting on the patents would be their best course of action at all. Developing the car and becoming a leader in an industry that will wipe out oil would be a huge money maker. Since oil companies, as we all know, are greedy its hard for me to believe Chevron would make such an obvious blunder.

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Here's the rub; pareto optimality isn't in the eye of the beholder. It has nothing to do with anyone's perspective, it's an expression of the efficiency of the market in making trades that benefit the actors. When I say 'market failure', I'm not talking about my not liking the results.

Any clearer now?