The Old World Order Is Being Challenged By Lower Oil Prices

Khaled al Otaiby, an official of the Saudi oil company Aramco, watches progress at a rig at the al-Howta oil field near Howta, Saudi Arabia, in this Feb. 26, 1997, photo. LJWorld

The Telegraph: The collapse in the price of oil is a challenge to the old world order

We’re awash with the black stuff – so we should celebrate the fact that the pessimists got it wrong

It is one of life’s mysteries that being wrong about everything has never been much of a barrier to success. Take Thomas Malthus, the British theologian: his big idea was that the number of human beings would necessarily grow faster than the supply of food, leading to calamity. There was little difference, in his mind, between people and rabbits: both were doomed to over-breed, over-consume and starve.

Yet this theory, expounded in 1798 in An Essay on the Principle of Population, one of the most influential books ever written, and now also routinely applied to oil and other resources, is bogus. Unlike rabbits, who are powerless to control their environment, the more we need, the more we eventually find a way of producing: the availability of food and oil are determined by technology and economics, not by some law of nature. Modern techniques (such as fertilisers, genetic selection or fracking) mean that agriculture and the extraction of commodities have become hugely more efficient.

WNU Editor: The big economic story for 2016 will be debt and rising interest rates. That (I predict) will be shaking the "Old World Order" more than oil.