The Ultimate Resource: Difference between revisions
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==Population== |
==Population== |
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A large section of the book is dedicated to showing how population |
A large section of the book is dedicated to showing how population decreases ultimately creates more resources. The basic argument echoes the overarching thesis: as resources become more scarce, the price rises, creating an incentive to adapt. The more people a society has to [[invent]] and [[innovate]], ''[[ceteris paribus]]'', the easier the society will raise its living standards and lower resource scarcity. People, on average, add to a civilization more than they take away. |
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==Criticisms== |
==Criticisms== |
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Revision as of 09:21, 19 February 2007
| Author | Julian Simon |
|---|---|
| Language | English |
| Genre | Nonfiction |
| Publisher | Princeton University Press |
Publication date | 1981, 1996 |
| Publication place | United States |
| Media type | Print (Hardback & Paperback) |
| Pages | 734 (1996 edition) |
| ISBN | ISBN 0-691-00381-5 (Revised 1996 edition, pbk) Parameter error in {{ISBNT}}: invalid character |
The Ultimate Resource is a 1981 book written by Julian Lincoln Simon challenging the notion that humanity was running out of natural resources. It was revised in 1996 as The Ultimate Resource 2. Since this revised version repeats and expands on the old version, this article focuses on the 1996 book.
Overview
The overarching thesis on why there is no resource crisis is that as a particular resource becomes more scarce, its price rises; this rise of price creates an incentive for people to discover more of the resource, ration it and, eventually, develop substitutes. The “ultimate resource” is not any particular physical object but the capacity for humans to invent and adapt.
Scarcity
The work opens with an explanation of scarcity, noting its relation to price. High prices denote relative scarcity and low prices indicate low scarcity. Since prices for raw materials (notably copper) have fallen between 1800 and 1990 (adjusting for wages and adjusting for inflation), Simon argues that this indicates those materials have become less scarce.
Forecasting
Simon makes a distinction between "engineering” and “economic” forecasting. The former consists of estimating the amount of known physical amount of resources, extrapolates the rate of use from current use and subtracts one from the other. Simon argues that these simple analyses are often wrong. While focusing only on proven resources is helpful in a business context, it is not appropriate for economy-wide forecasting; there exists undiscovered sources, sources not yet economically feasible to extract, sources not yet technologically feasible to extract, and unconceived resources that could prove useful but it is not yet worth trying to discover.
To counter the problems of the former method, Simon proposes an economist’s method. It proceeds in three steps in order to capture, in part, the unknowns the engineering method leaves out (p 27):
# Ask whether there is any convincing reason to think that the period for which you are forecasting will be different from the past, going back as far as the data will allow;
- If there is no good reason to reject the past trend as representative of the future as well, ask whether there is a reasonable explanation for the observed trend;
- If there is no reason to believe that the future will be different from the past, and if you have solid explanation for the trend—or even if you lack a solid theory, but the data are overwhelming—project the trend into the future.
Infinite Resources
Perhaps the most controversial claim in the book is that natural resources are infinite because they can’t be measured. Simon, however, never argues that there is an infinite amount of, say, physical copper, but for human purposes that amount should be treated as infinite because they are not bounded or limited in any mathematical sense. The ever-decreasing prices (and thus decreasing scarcity) despite population growth suggest an enduring trend that will not cease in the foreseeable future.
Evidence
A plurality of the book consists of chapters showcasing the economics of one resource or another and proposing why this resource is, of human purposes, infinite.
Historical Precedent
Simon argues that thousands of years, people have always worried about the end of civilization brought on by a crisis of resources. Simon lists several environmental fears have proved to be nothing more than scares in order to back his claim that modern fears are nothing new and will also be disproven.
Some of the “crises” he notes are a shortage of tin in the 1200s BCE; disappearing forests in Greece in 550 BCE and in England in the 1500s to 1700s CE; food in 1798; coal in Great Britain in the 1800s; oil since the 1850s; and various metals since the 1970s.
Population
A large section of the book is dedicated to showing how population decreases ultimately creates more resources. The basic argument echoes the overarching thesis: as resources become more scarce, the price rises, creating an incentive to adapt. The more people a society has to invent and innovate, ceteris paribus, the easier the society will raise its living standards and lower resource scarcity. People, on average, add to a civilization more than they take away.
Criticisms
My take on new Wikipedia articles is that supporters of a controversial topic should write the initial version of the main article and edit the initial version(s) of the criticism section and critics should start the criticisms section and edit the main article. I thus invite a skeptic of the book to fill in this section.
See Also
Sources
- Simon, Julian. The Ultimate Resource 2. (1996).