“If resources are not fixed but created, then the nature of the scarcity problem changes dramatically. For the technological means involved in the use of resources determines their creation and therefore the extent of their scarcity. The nature of the scarcity is not outside the process (that is natural), but a condition of it.”
– Tom DeGregori (1987). “Resources Are Not; They Become: An Institutional Theory.” Journal of Economic Issues, p. 1258.
The above quotation from one of my mentors goes a long way to explain the paradox of how “fixed” mineral supply (gold, silver …. oil, gas) expand rather than contract in a global free market.
A back-page current from the Wall Street Journal–just business-as-usual in the industry and in reporting–reminded me of Professor DeGregori’s insight. …
“Milton Friedman’s timeless energy insights should be appreciated for all time.”
Born on this day 106 years ago, free-market economist Milton Friedman (1912–2006) was one of a kind. Even the dyspeptic Paul Krugman called his rival “the economist’s economist…a very great man indeed—a man of intellectual courage who was one of the most important economic thinkers of all time and possibly the most brilliant communicator of economic ideas to the general public that ever lived.” The Economist (November 23, 2006) called him “the most influential economist of the second half of the twentieth century… and possibly all of it.”
Milton Friedman’s major professional mark was in monetary economics. But as a public intellectual, writing popular books and a biweekly Newsweek column, he became conversant in different fields, including energy.
Friedman understood how, for much of US history, major energy regulation was sponsored by some segment of the industry.…
“We have no room for error…. Barring a major reversal in U.S. policies in the very next decade, come the 2020s, most everyone will know the grim fate that awaits the next fifty generations.”
“[The alternative to inaction] is a [later] massive, sustained government intervention into every aspect of our lives on a scale that far surpasses what this country did during World War II.”
Dr. Exaggeration… Dr. Doom… Dr. Wrong. Part I yesterday examined Joe Romm’s 1996 co-authored piece in The Atlantic Monthly, “Mideast Oil Forever?” Today’s post examines quotations and predictions from Romm’s book, Hell and High Water (Morrow: 2007).
The book’s opening quotation comes from James Hansen. “We are on the precipice of climate system tipping points beyond which there is no redemption.” And then Romm’s opening:
…Imagine if inland United States were 10℉ hotter, with many states ravaged by mega-droughts and the widespread wildfires that result.