Here’s a letter to YahooNews.com: (HT Chris Meisenzahl)

Eric Pfeiffer reports that “A new study from researchers at MIT … says that the world could suffer from ‘global economic collapse’ and ‘precipitous population decline’ if people continue to consume the world’s resources at the current pace” (“Next Great Depression? MIT researchers predict ‘global economic collapse’ by 2030,” April 4).

Such doomsday predictions are so common – and so commonly mistaken – because the scientists who make them do not understand what resources are or where resources come from.

Resources are not defined strictly by their physical properties.  The likes of bauxite or the electromagnetic spectrum are not ‘naturally’ things that serve human purposes.  Physical materials in the earth and atmosphere become resources only if and when human creativity mixes with them in ways that transform these materials into resources.

So we humans not only consume resources; we also create them.  Supplies of resources, therefore, rise with increased applications of human creativity.  And since the dawn of bourgeois capitalism in the 18th century, the rate at which we create resources – both in the sense of creating more sources of supplies of familiar resources such as petroleum, and of creating entirely new resources such as the worldwide web – has skyrocketed.  Nothing in studies such as this latest from MIT gives us any reason to suppose that this rate of resource creation will slow.

Sincerely,
Donald J. Boudreaux
Professor of Economics
George Mason University
Fairfax, VA 22030

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