Salvador Peniche
Professor
University of Guadalajara
Mexico
Abstract
The presentation explores the importance of petroleum in the development of Mexico. Special emphasis is made on the economic aspects of development, but also we analyze the impact of petroleum exploitation in population growth, land use change, and public health.
We argue that the new reality of Mexico's oil situation inevitably leads us to the need to understand the relation of less cheap oil to all things economic in Mexico and to start thinking of what kinds of economic tools would be needed to face it.
In the final section we discuss the inadequacy of current economic theory and approaches to deal with the new energy context, and then we develop a case for biophysical economics as a good place to start to understand, face up to and perhaps deal with these new economic problems that are coming at Mexico.
In 1871, Jevons published The Theory of Political Economy, replacing an objective theory of value grounded in production, and requiring human labor and the throughput of material and energy, with a subjective theory of value based on exchange a marginal utility. This theory of value formed the basis of neoclassical economics, which many biophysical economists reject. This paper asserts that there was no epistemological break between The Coal Question and The Theory of Political Economy. Jevons had enunciated marginal utility theory before he commenced work on The Coal Question, and his paradox makes most sense in the context of marginal utility.
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