>It's not going to work that way.
I know it's a just figure of speech, but it's a figure of speech that reveals what underlies everyone's opinion. We each have our own idea of "how it's going to work" and that is the basis of what we accept as the "true facts". Nobody knows how it's going to work. But those who know they don't know at least have the incentive to try to be creative about their uncertainty rather than dogmatic about their certainty.
We can, for example, think about the example of the Soviet Union, which in the 1950s and 1960s sustained "alarming" rates of industrial growth based on the false economies of input force-feeding and an inadequate accounting system. I would argue, aside from any issue of peak oil, that the US accounting system is broken -- has been for decades -- and that nominal economic "growth" in the US has been an artefact of the massily subsidized over-consumption of energy, including the excess energy-consumption effects of running huge current account deficits. For example, China has an atrocious ratio of energy consumption per unit of GDP. That doesn't count directly in US energy consumption statistics -- but the goods that are produced with that energy are imported to the US and financed with foreign holdings of US dollars.
As the old Technocrat Hubbert knew, energy substitutes for labour in the performance of physical "work". And it does so in a capacity that dwarfs the physical contribution of human labour. The industrial workers mainly superintends the work that the machine does. The substitution of energy for human labour in industry would have made possible the profound reduction of working time -- Keynes in 1930 spoke of 3 hours a day or 15-hour weeks by his grandchildren's generation. Well 2005-1930 = 75 years, a good solid two generations plus. Where's my 15-hour week?
Advertisers and economists had a better idea: consume more. Every time the substitution of energy for human labour threatens to reduce the hours of work, persuade or coerce people to buy more stuff, some of it, like cars, consuming even more energy. And then the economists can explain the increased consumption and the failure to reduce the hours of work as an expression of the workers' "preference" for income over leisure. Let's forget -- for the sake of the economists' argument -- that the energy consumption that has underpinned this "preference" has itself been accelerated by state subsidies so were not talking about exchange at market prices. No let's forget that inconvenient fact because if we remembered it, it would render the neoclassical economists' whole argument null and void.
That's the way I think it works. Now if somebody can prove me wrong, I'd be mighty grateful and rather surprised. And be sure to tell Gorby the news, too.
The Sandwichman