Is the world running out of resources?

Short answer: NO.

The average price of the fifty most important natural resources between 1980 and 2018 has increased in nominal price. What does this mean? The nominal price of a good is its value in terms of money, such as dollars, French francs, or yen, and is unadjusted for inflation. As you should know, currencies become less valuable every year because more and more of them get printed. The relative or real price is its value in terms of some other good, service, or bundle of goods. The term “relative price” is used to make comparisons of different goods at the same moment of time.

In terms of nominal dollars, the fifty commodities have become more expensive over the last forty years. However, once you adjust the cost of commodities—oil, gas, chicken, beef, lumber, shrimp, oranges, etc.—and account for inflation, what you find is natural resources are much cheaper today than they were in 1980.

Time price is a better price reference than the other two because it also takes into account wages. Wages tend to increase above inflation because people become more productive. For example, if inflation in the United States is 2% a typical wage increase will be 3% because people have become more productive over the course of the year. Once you start comparing prices of resources relative to wages what you see is they have fallen even more.

Despite more people, urbanization, a hypothetically decreasing prevalence of resources, and a slew of other problems typical to the mainstream apocalypse narrative, there’s been a 70% decline in basic global commodity prices, adjusted for wages from 1980-2018; far from what anyone was predicting in the 1960s by any stretch of the imagination, where they were believed to have been started.

Even though the population of the world has increased dramatically, the prices of natural resources have declined by 70%, which means that every additional person born on the planet has made things cheaper for us by about 1%. In other words, more people means more wealth—some even believe it means more ecological preservation because richer people generally speaking care more about the environment. Once GDP gets to a point where people are no longer struggling to survive, approximately $5,000 per capita, environmental concerns start to manifest.

The cleanest environments are in advanced countries, or western capitalist societies generally speaking. When you see tremendous attacks on the environment they are usually in poor countries; when the Venezuelan economy collapsed, they started eating animals in zoos, and In Zimbabwe, they started slaughtering the wildlife. So, if someone has to choose between killing a giraffe or having their baby die, we’ve seen what happens.

For the longest time, people thought that if the population kept growing, we would run out of resources—this is not what has happened. Resources are cheaper, which in itself is an indication that they are more abundant than before. This is because human beings are not just consumers of resources we are also creators of resources, of ideas. On average we produce more than we consume, otherwise, we would die.

Not only can we get access to new resources but also we can replace resources that are becoming scarce. For example, people use to make candles out of spermaceti or fat in the brains of whales. We used to murder them by the thousands and scrape out that spermaceti and make candles until we realized that it was expensive and stupid to do so because we could produce electricity by burning coal. Then we decided we could switch from coal to gas, and eventually to other sources like nuclear, and so on. That’s how humanity manages to constantly produce more, through innovation.

In fact, in western countries today, we have reached “peak stuff,” (referring to Andrew McAfee’s book, More From Less). This means even though the American and British economies continue to grow and produce more GDP per capita in absolute terms, the amount of resources that go into it has actually peaked off 10 years ago and is now declining. We have become so incredibly productive that we can now use much fewer resources to produce more wealth or GDP and that has been, objectively speaking at the very least, a really good thing.

SOURCE: Dr. Marian Tupy via the Jordan Peterson Podcast, econlib.org, cato.org