Please note the two key phrases: "for a while" and "a certain time interval." My argument is generally rejected, because most people focus on the here and now, and forget that a few decades are less than a blink of an eye in history of humanity. In the more sophisticated circles of "main-stream" economists, my argument is summarily dismissed as Malthusian.
Thomas Robert Malthus was one of the most influential economists of all times. His anonymous Essay on the Principle of Population was published in 1798. The second edition, revised in 1803, had a longer title too: ..., or a View of its Past and Present Effects on Human Happiness; with an enquiry into our Prospects respecting the Future Removal or Mitigation of the Evils which it occasions. It contained an analysis of the unequal nature of food supply to population growth. The exponential nature of population growth is today known as the Malthusian growth model: "This natural inequality of the two powers, of population, and of production of the earth, and that great law of our nature which must constantly keep their effects equal, form the great difficultly that appears to me insurmountable in the way to the perfectibility of society."
|The Reverend Thomas Robert Malthus FRS (13 Feb 1766 – 23 Dec 1834). The first modern professor of political science, the first faculty fully endowed by a corporate chair and - according to some - a unique scoundrel.|
Enter the famous bet between Julian Simon and Paul Ehrlich.
Julian Lincoln Simon was a professor of business administration at the University of Maryland and a Senior Fellow at the Cato Institute at the time of his death, after previously serving as a longtime business professor at the University of Illinois at Urbana-Champaign. Simon strongly believed that the infinite Earth can support an infinite human population and infinite consumption of resources over infinite time. I summarize such views as cornucopian, a term derived from the cornucopia, the "horn of plenty" of Greek mythology, which magically supplied its owners with endless food and drink.
|Julian Lincoln Simon (February 12, 1932 – February 8, 1998)|
Paul Ralph Ehrlich is an American biologist and educator who is the Bing Professor of Population Studies in the department of Biological Sciences at Stanford University and president of Stanford's Center for Conservation Biology. Ehrlich is best known for his dire warnings about population growth and limited resources. Ehrlich became well-known after publication of his controversial 1968 book The Population Bomb. Paul Ehrlich's views can be summarized as Malthusian.
|Paul Ralph Ehrlich (born May 29, 1932)|
In 1980, Julian Simon and Paul Ehrlich decided to put their money where their predictions were. Ehrlich had been predicting shortages of various natural resources, while Simon claimed natural resources were infinite. Simon offered Ehrlich a bet centered on the market price of metals. Ehrlich would pick a quantity of any five metals he liked worth $1000 in 1980. If the 1990 price of the metals, after adjusting for inflation, was more than $1000 (i.e., the metals became more scarce), Ehrlich would win. If, however, the value of the metals after inflation was less than $1000 (i.e. the metals became less scarce), Simon would win. Ehrlich agreed to the bet, and chose copper, chrome, nickel, tin and tungsten. By 1990, all five metal were below their inflation-adjusted price level in 1980. Simon won, based on this particular snapshot of commodity prices, and the world sighed with relief. So here is my update.
The plot above illustrates the dynamic nature of resource prices, their direct link to the price of oil, and the generally increasing prices of all commodities since the year 2000. A decade is less than a tick of a clock, and one cannot draw permanent conclusions based on a snapshot of global economy at any given time. Trends over years or decades are far more important.
Today, the prevailing wisdom still is that the Earth's resources are infinite. If, on the other hand, one admits that the Earth is finite, all resources must eventually become scarce in absolute sense. The fundamental inability of "main-stream" economics to deal with absolute scarcity is probably the main reason why so many economists have wished it away and buried Malthus so many times. But as the another famous ecologist, Garrett James Hardin, once said, "anyone who has to be reburied so often cannot be entirely dead."
|The standard macro-economic model of global economy.|
P.S. Professor Albert Bartlett has send me this text of his 1996 paper that is very pertinent to this blog.
P.S.P.S. (06/01/2019) And here is the Simon Abundance Index. It is human folly in full display, especially troubling in 2019, when most of the high-grade human resources are becoming exhausted, and we are forced to go after the second- and third-tier resource deposits. Never mind, the Earth is still infinite according to the dogmatic economists, whose religious faith in infinities solidified into hard concrete in the nineteenth century.