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Tuesday, April 11, 2006

Who is MA Adelman?

An associate and apparent mentor of Peak Oil skeptic Michael Lynch, emeritus professor M.A. (Morris) Adelman has a long track record in the economics of oil. Perhaps best known as a sort of pricing cornucupian, I would characterize Adelman's ideas as representative of another era when we had a historical week oil exploration stimulus in the anticipation of strong negative feedback. This theoretically would result in an "endless" supply of oil as producers only funded new explorations when the need arose. I would further compare it to a "just-in-time" application of maintaining an oil inventory, before that phrase became fashionable in manufacturing circles.

Well, we all know how that turned out. Adelman also didn't have much success in pricing predictions:
Adelman underestimated both the growing demand for oil and the power of OPEC's robber states to police their ranks. His 1972 forecasts remain the most stupendously inaccurate in recent academic history.
And even earlier, a workshop participant said this about Adelman's views on monopolistic practices:
And I have uncovered antecedents much earlier than the 1970s. The following passage I'm going to read, and from which I have just edited out a few words to make it shorter, was written by Morris Adelman in 1953. "In asking, 'What is the market,' we must ask, 'What substitutes exist at what price for the product or service in question. Assuming that a single business concern were the only occupant of the allegedly separated market, would it have the power to raise price?'’ If the answer is yes, then the separate market exists within which competition can be lessened."
I really only included that last passage because I really could not find much else on Adelman's background. Quite the enigma, it appears that he still has an office at MIT (the perk of emeritority) and writes the occasional white paper. He also writes the occasional opinion piece, which reflects his views on oil as a strategic asset and to the benefits of globalization:
In fact, recovery after World War I was slow and incomplete. Trade and investment were stifled. The global economy became ever more fractured. To my generation, which came of age in the great depression and World War II, further breakdown looked all too likely. But the quarter-century after 1945 saw a great expansion, and restoration of world trade.
This puts him in his 80's. Staying at the game this long, I believe he did have the ear of many decision-makers over the years. With books such as "Genie out of the Bottle" and "The Economics of Petroleum Supply (1962-1993)", he has to take at least some responsibility for our long-standing procrastination and naivete.
For a branch of study sometimes known as "the dismal science," economists such as Adelman, Lynch and Odell are remarkably cheerful about the future of oil. Odell even discusses the theory that oil is a renewable resource (Odell 2000, 199). When I asked Michael Lynch about this he wrote: "Oil is effectively a non-renewable resource. (About 3 million barrels a year are created by geological processes, according to current estimates, which is trivial.) But oil reserves are a renewable resource, as they are replenished by drilling. M.A. Adelman often makes this point, but it confuses some not familiar with the nomenclature."
Not to put all of the blame on Adelman, but this caught my google-eye, courtesy of the Warren Commision:

Evidently, no one could track a certain Morris Adelman down at the time, not even a little Birdie.

I don't think we can blame MIT's Morris Adelman for Jack Ruby's demise. Too much of a reach, IMHO. I would just as soon blame his doppleganger, or perhaps the first anonymous doomer among us to spread vicious rumors, circa 1964. So can anyone place King Hubbert's whereabouts at that time? He may just have struck the first blow between the long-running verbal battle between the pessimists and the cornucopians.

Kind of a cheap shot, I know, but what we face now does not classify as a practical joke.

The joke is real and it is on us.

Check out this informative paper which maintains a neutral viewpoint on Adelman.


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