Yes. read the link...realize it is china, but I think it is relevant. Much like our efforts to spur certain industries, the chinese govt gave large sums of cash directly to the company who then (since the government was now taking a large part of the risk) used that cash to over supply a market that didn't have sufficient demand. While china's economy is more controlled and subsidized than our own it is still essentially a capitalist system.
If the cash had been used to stimulate demand, perhaps by giving rebates to the end users or perhaps they just raised regular energy prices to make solar attractive as an alternative, then the customers would have chosen solar, and then the customers would have picked the best solar provider rather than the government picking the winner by giving the cash to the company.
charlos: I really didn't say that supply is unnecessary. I said demand was more important. The economy will eventually need someone to supply what it's demanding in order for there to be an economy BUT demand can exist without supply...for a long time (eg. your teleporter example) but supply that exists without demand is the equation for bankruptcy. It is demand signals that drive innovation, startups, entrepeneurs most of the time. There is the occassional off-the-wall idea that creates supply before we even knew the product existed. But even then I would argue that the deman was there, just not expressed because it was deemed impossible to satisfy.
so occassionally supply can lead demand by introducing intrepid new products. But even in that case, the supply will be short lived if it does not soon generate demand.
