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The Infinite Supply of Natural Resources Julian Simon Natural resources are Tlot finite. Yes, you read correctly. This. chapter shows that the supply of natural resources is not finite in any economic sense, which is why their cost can continue to fall in the filture. Oil the faee of it, even to inquire whether natural resources are finite secms like nonsense. Everyone "knows" that resources are finite, from C. P. Snow to Isaac Asimov to as many other persons as you have time to read about in the newspaper. And this belief has led 1lIany persons to draw hlf-reacbing conclu- sions about the future of our world economy aJld civilization. A prominent example is the Limits to Grolvth group, who open the preface to their 1974 a sequel to the Limits, as f(lllows: :\1ost people acknowledge that the carth is finite .... Policv makers assume that growth will provide them tOlllorrow with the resources with today's prohlems. .. Becelltly, however, ('oneem about the consequences of growth, inereased cnvironmental pollution, and tht' depletioIl of fossil fuels has efIst doubt UPOll the belief that continuous growth is either possible or a panacea. I in the first sentence of the quotation. That word suggests that tbe statement is a fact, that anyone who does not "acknowledge" it is simplv rf'filsing to aceept or admit it.; The idea that resources are finite in snpply is so pervasive and influential that the President's 1972 Commission on Population Growth and tIl(' American Future based its policy recommendations squarely upon this assumption. Right at the heginning of its report the commission asked, "\Vhat does this nation stand f()r and where is it going':' At sOllle point in the future, the finite earth not satisfactorily accommodate more human beings-llor will the United the rhetorical device embedded in the term From "The lnllnik Supply of "Jatmal Resources", pp. 42-:30, from The Ultimate Resource by L. Simon. Copyright [91l t by Princeton University PH'SS. Reprinted by permission of Princeton University PI'''ss. Portions of the text and some footnotes havc been omitted. THE iNFINITE SUPPLY OF NATURAL RESOURCES 559 States .... It is both proper and ill our best illterest to participate fully in the worldwide search f(JI' the good life, which must include the eventual stabiliza- tion of our numbers."2 The assumption of finiteness is responsible for misleading many scientific forecasters because their condusiolls follow inexorably from that assumption. From the Limits to Growth team again, this time' 011 f()()d: "The world model is based on the fundamental assumption that there is all uppl'r limit to the total amoullt of food that can be produced annually by the world's system.";) THE THEORY OF DECREASING NATURAL-RESOURCE SCARCITY We shall begin with a far-out example to see what contrasting possibilities there are. (Sneh an analysis offar-out examples is a lIsehd and £lIVorite trick of('cono- mists amI math('maticians.) If there is jllst onc perSOll, Alpha Crusoe, on an island, with a single copper mille 011 his island, it will be harder to get raw copper next year if Alpha makes a lot ofcopper pots amI bronze tools this year.
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This note was uploaded on 11/29/2010 for the course IR 109 taught by Professor Heinz during the Spring '10 term at Rochester.

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