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The Deficit Is in Economic Understanding

Although the competition is stiff, here’s one of the most economically uninformed notions that I’ve ever encountered – namely, that nature has an annual “budget” of resources out of which humanity consumes.  (HT Daniel Hackney – who, I quickly add, recognizes the absurdity of this notion)

Naturally (pun intended), the purveyors of this economic and historical illiteracy insist gravely that we denizens of modernity are “overshooting” our budget.  For much of the year (somehow calculated now to be from August 20th through December 31st), we are operating with an annual “ecological deficit.”  Here’s a slice:

Just as a bank statement tracks income against expenditures, Global Footprint Network measures humanity’s demand for and supply of natural resources and ecological services. And the data is [sic] sobering. Global Footprint Network estimates that in approximately eight months, we demand more renewable resources and C02 sequestration than what the planet can provide for an entire year.

Rather than rely upon only my own scarce – although, even that, not strictly quantitatively limited – set of ideas for explaining the many faults with this notion of an “ecological budget,” let’s demonstrate the truth of the insights of scholars such as Julian Simon, Deirdre McCloskey, Israel Kirzner, and Matt Ridley by relying upon you, dear readers – in decentralized competition and cooperation with each other – to fill the comments section with your creative ideas on why the notion of an “ecological budget” is so fallacious.

Following Bryan Caplan’s practice at EconLog, I will compile the best answers into a post (with proper attributions, of course).