How Malthus Got It Wrong

Something that seems obvious if you think about it for a minute is that a growing population pushing on a finite planet means that resources will become pricier and people will become, on average, poorer.

but

In their article, Blackman and Baumol give some striking data on five minerals: tin, copper, iron ore, lead, and zinc. They show world reserves in 1950, world production between 1950 and 2000, and reserves in 2000. If we were running out of ihose resources, all of the reserves should have been smaller in 2000 than in 1950. In fact, all were larger.

The big error in Malthusian thinking is not overlooking that we somehow keep finding more reserves of finite resources — telling the Malthusians that never convinces, because the resources being finite still must run out someday, they’ll tell you, QED.  The big error in Malthusian thinking is that it assumes economic growth and development comes from more material consumption instead of less.  In fact, most of the enlightened critics of Malthusian thinking pretty much overlook this point too, and miss their own most convincing argument.

Economic growth comes from increasing productivity — and “increasing productivity” is getting more from less, definitionally.

When Greenspan was King of the Fed he gave an enlightening speech about how the physical mass of the USA’s  GDP, its weight in tons, had been declining for a hundred years.  Formerly people traveled across country in big rail coaches, over massive rail structures, pulled by deca-ton engines consuming tons of coal.  Now they fly in light aluminum tubes. Formerly the manufacturing plants producing the most value were those of US Steel, consuming giga-tons of coal and iron ore to produce megatons of steel. Now they are chip-making plants reshaping bits of silicon.  Etc.

Well, that reminded me that I was old enough to have bought ballpark refreshments being sold in steel, then tin cans that needed a “church key” to open them, then in aluminum cans with pop tops, then plastic. That inspired me to do some of my own research.

[] New York City weighs the amount of trash it takes to the dump.  In the late 1940s it was 2,000 pounds per person, in 2010 it was 900. Real income in New York City tripled over that period, as trash per capita declined by more than half — so trash per dollar of income fell by about 83%:

[] I put together and published a table of the per-capita GDP & consumption of the 32 most consumed minerals (by tonnage) in the USA, 1965 to 2005:  real GDP per person +125%, mineral consumption per person -40% (per dollar of GDP, down by more than 70%).

Again, tell Malthusian doomsters that we’ll always find more and they’ll say, “Until you run out, no economy can keep consuming more forever, it’s arithmetic you dumb reality denier”.  But show them that the more an advanced economy grows the less it in fact consumes, and they go “Huh??”, their eyes get big, they get befuddled for a while … and you may have a real impact.  I’ve seen it a bunch of times.

I blame the public schools, which force students to study subjects like algebra and geometry, which 90% will never use a day in their lives — instead of basic economics and statistics, which all of them would use every day of their lives … but I digress.

“Save the physical world! Grow the economy! Faster! Faster!”

Keep in mind that the kind of reserves used in this comparison are an accounting concept, and don’t really tell you how much is actually left

See https://www.adamsmith.org/research/the-no-breakfast-fallacy for the wider argument.

People often confuse reserves and resources. Reserves are usually defined as the resources which can be profitably extracted at the current price. Resources includes everything. The distinction is important because reserves increases automatically with price. Resources also increases with price to some extent because of more exploration activity with higher prices.

Tin, iron, copper, lead, and zinc are all elements. There is a fixed amount of these on Earth and the elements cannot be consumed like meat and potato. These elements do oxidize when exposed to oxygen, but may be reduced back to the pure form. Iron will always be iron, even if it rusts. The only problem I see with rust is that it may be spread out in such low concentrations (by wind and water) that it never becomes profitable to reuse it (but that must be a small fraction of the total iron stock).