It is the second most famous term in the history of economics after Adam Smith’s metaphor invisible hand. It describes the competitive market process in the real world. It was coined in 1942 by the famous, iconoclastic Austrian-American economist Joseph Schumpeter, who would reminisce:

I set out to become the greatest lover in Vienna, the greatest horseman in Austria, and the greatest economist in the world. Alas, for the illusions of youth…. As a horseman, I was never really first rate.

“Creative Destruction” …

The best businesses rise to the top in consumer-driven markets. Less competitive firms contract and even disappear. Creative destruction is the process whereby the bad is eliminated, the better replaces the good, and past performance gives way to new strategies and victors. No firm is forever, and financial loss is a characteristic of capitalism, as is the more used term profit.…

“While incremental improvements can be expected with biomass, wind and solar, what is needed for them to become viable is an order of magnitude increase in productivity…. As significant future energy sources these technologies are dead ends, which is why the government, and not the private sector, is funding them.”

When it comes to power, density is the key. Energy density. The reason that solar power, wind power, and ethanol are so expensive is that they are derived from very diffuse energy sources. It takes a lot of energy collectors such as solar cells, wind turbines, or corn stalks covering many square miles of land to produce the same amount of power that traditional coal, natural gas, or nuclear plants can on just a few acres.

Each of these alternative energy sources is based on mature technology.…

“In the current energy debate, the diligent amateurs are often the real pros, and too many ‘pros’ are amateurish.”

MasterResource continues apace as a movement-wide voice of free market energy scholarship. Nearly 150 different authors have been featured at our site since its inception in late 2008. Total views have surpassed 1.3 million, with many visits by those searching on a topic relevant to past posts.

MasterResource is rated a top 30 (of 10,000) “green blog,” and a “Top 100” Science blog, according to Technorati.

With 435 categories in our extensive index, MasterResource is a research tool, not only a timely contribution to energy scholarship and current political debates. We are Google friendly with many energy terms (try one with ‘masterresource’).

I have lauded our ‘talented amateurs’ in previous activity reports.…

Much of today’s energy policy assumes that regulations mandating greater energy efficiency will reduce energy use. But that isn’t always the case, and energy efficiency improvements are seldom as large as promised by engineering calculations because of “rebounds.” Such is the most general conclusion from hundreds of studies pertaining to the effects of energy efficiency, whether market or nonmarket.

Such is the message from my literature review published by the Institute for Energy Research (pictured here):

For example, people who install lighting that is 50 percent more efficient frequently leave the lights on longer, negating some of the energy savings from greater efficiency. This is called an energy efficiency rebound. Sometimes these mechanisms even bring about net increases in energy use known as backfires.

Rebounds have a direct implication for energy efficiency mandates and incentives.…