On Wednesday, Paul Krugman kicked things off by pondering the sad state of alternative energy technology development and concluding that, “For the last 35 years, progress on energy technologies has consistently fallen below expectations.”

Shortly thereafter, libertarian economist Tyler Cowen followed up by complaining that we wouldn’t have been able to build today’s energy infrastructure if we’d been saddled with “the current regulatory and NIMBY burden.” We need more deregulation, he says, to solve the problem.

On Thursday, BusinessWeek chief economist Michael Mandel weighed in with a cheerier take: It’s no wonder progress has been so pathetic, since neither the U.S government nor the private sector has been spending enough money on research and development. “The share of GDP going for federal R&D on energy, environment, and natural resources has been steadily falling over time, under both Democrats and Republicans, despite our energy worries.”

And on Friday, economist Jeffrey Sachs contributed his own platform, reinforcing Mandel’s point about the R&D decline and making specific suggestions as to where investment should be targeted: solar power, plug-in hybrids, and carbon capture and sequestration.

Personally, I have a very hard time understanding how deregulating the energy industry is going to solve our energy problems without vastly increasing the challenges of environmental devastation and climate change. But I’m actually more inclined to take issue with Krugman’s assertion that technological change appears to have plateaued.

He writes:

I’d actually suggest that [the fact that progress has fallen below expectations] is true not just for energy but for our ability to manipulate the physical world in general: 2001 didn’t look much like 2001, and in general material life has been relatively static. (How do the changes in the way we live between 1958 and 2008 compare with the changes between 1908 and 1958? I think the answer is obvious.)

I would posit that the emergence of a worldwide network of billions of people tapping away on personal computers vastly more powerful than the state-of-the-art for governments and the biggest corporations in 1958 constitutes a pretty drastic change in the way we live. But I also think Krugman is underestimating the likely consequences of the incredible advances that scientists have made in just the last ten or fifteen years in understanding and manipulating the building blocks of both matter and life itself. Synthetic biology and nanotechnology, alone, will offer humanity almost unlimited power to rebuild nature and the physical world. The real threat, to my mind, is not that there won’t be progress, but that we will screw up in some appalling, catastrophic way as we rush to apply our new powers.