I’m a day late with Nate Hagen’s piece, but I just have to link here – it has a beauty and elegance I really admire, and Id do wish him the very best of luck in his new venture. In fact, I’m starting to think that maybe I can cash in too!
OK – here it is in a nutshell – though I used to think the main problem with economic theory was that it ignored biology on the demand side and ecology on the supply side, I now see the reality is that neither biology nor ecology has incorporated enough economic theory. Basically, my efforts at falsification of positive economics even down to the day to day micro level have come up wanting. There are more people, more wealth, more stuff and more novelty in the human sphere of influence then ever before. After all humans are separate from and above all others in the animal kingdom and as such adhere to different rules. . The physics of money works – Malthus and Odum RIP. My friend George Gilder said it best:
‘The United States must overcome the materialistic fallacy the illusion that resources and capital are essentially things which can run out, rather than products of the human will and imagination which in freedom are inexhaustible.’ –George Gilder
And here are some quotes from a few other books Ive had the opportunity to read after spending less time on TOD that have had an influence on me:
‘The world can, in effect, get along without natural resources– Robert Solow – Nobel Prize winner in Economics – ‘The Economics of Resources or the Resources of Economics.’ Journal of Economic Literature 6 11. 1974.
and this book, which everyone at my school used to criticize, but I never had a chance to actually read the air-tight logic throughout the book until last Thanksgiving:
‘On average, human beings create more than they use in their lifetimes. It has to be so or we would be an extinct species. This process is, as the physicists say, an invariancy. It applies to all metals, all fuels, all food, all measures of human welfare. It applies in all countries. It applies in all times.’ Julian Simon and Norman Myers from “Scarcity or Abundance”? New York Norton. 1994. pp.133-134.
First, let me say that I’ve learned an amazing amount talking with energy and ecologically minded folk on this site – they (you) are truly a great bunch of people, though in the end, I think a bit misguided about resource depletion prospects. My key ‘aha’ moment was when I was in a conversation last year with new TOD contributor Art Berman discussing the amount of affordable unconventional natural gas in the US. He has (mostly convincingly) debunked the standard view that there are 100 years of natural gas remaining by hypothesizing that it will be extremely costly to produce. His, (and others) logic is then, that we won’t be able to procure this resource because consumers won’t be able to afford the $10, $15, $20 etc per mcf needed to pay the energy companies. But guess what – technology is getting better. But much more importantly, even were tech improvements to stagnate, we can print the money to pay for it.
I have seen the light too! I’m opening a new technology start up that will work to replace fresh water with a benzene-processed liquid substance that is almost as good as water. Anyone want to invest?