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Quotation of the Day…

… is from page 115 of UCLA economist William Allen’s 1989 collection of the transcripts of his radio addresses, The Midnight Economist; the quotation within the quotation below is from economists Gerhard Anders, Phil Gramm, and Charles Maurice, Economics of Mineral Extraction (1980):

Specific resources can be depleted, of course, even if never physically exhausted.  New resources come into use as old ones lose value.  When not hamstrung by government, the community adjusts to changing circumstances reflected in the market, and the aggregate of available resources increases.  “The only … non-substitutable resource,” conclude the economists, “is the set of institutions, known as market order, which eliminates crises with respect to physical resources.”

Anyone who is doesn’t understand how a resource can be depleted although not physically exhausted should read Russ’s example of a room full of pistachios – as explained here by George Will.  The deep point is that the very concept of “resources” is not a physical one, but an economic one.  The ultimate resource is, as Julian Simon taught, the minds of free human beings.  (See also here.)