On scarcity

Economists like Don Boudreaux are fond of pointing out that we’ll never run out of oil — and not that we can start tossing hippies into the cracking towers when the wells run dry, but that the wells will never run dry because we’ll price ourselves out of the oil market long before we extract the last drop.  It’s technically possible that this will happen in isolation and everything will go all Mad Max, but it’s more likely that we’ll either find substitutes for oil (and I think we can do better than corn ethanol), or that we’ll develop more efficient ways to use oil (increasing the effective supply) — or, most likely, both.  Dr. Boudreaux explains:

Consider petroleum.  Is its stock strictly limited?  For a physicist the answer is yes.  But not so for an economist, who asks different questions than does the physicist.  The economist asks: “How available is this particular substance – petroleum – for the continuing satisfaction of human desires?”

Suppose a brilliant physical scientist invents a very low-cost means of powering cars, airplanes, boats, and electricity-generating plants with seawater, and also a means to turn seawater into plastics and lubricants – indeed, a means to replace all uses of petroleum.  The available economic supplies of petroleum would fall quickly to zero.  Petroleum would become worthless; it would no longer be a resource.  It’s physical presence in the earth – as measured by weight or volume – wouldn’t change.  But its status as a resource would change.

Now consider a different scenario.  The brilliant scientist invents not a means of turning seawater into a near-perfect and dirt-cheap substitute for petroleum, but, instead, a low-cost means of quadrupling the amount of energy that can be extracted from each ounce of petroleum.  Economically the stock of the ‘natural resource’ we call petroleum is thus multiplied by four.

Both scenarios seem rather far-fetched, and indeed they’re oversimplified to make a point.  But while betting against progress will sell a lot of fiction, it’s not a winning strategy.

Now consider a different resource.  While glib dilettantes like me may point in horror, it turns out that really smart people think of this as a problem to be solved rather than an apocalyptic end-game in which to wallow in flesh-mortifying ecstasy.  Not only is it a problem to be solved: it’s a paper to be published, baby!

Here, Dr. Lowe discusses a recent article from the Proceedings of the National Academy of Science.  It turns out that “kill the (infection|tumour) ASAP!!!11one” is both a common course of treatment and a spankin’-hot way to select for resistant lines of bacteria and cancer cells:

The harder you hit a population of infectious disease organisms, the harder you’re selecting for resistance. The key, they say, is that in many cases there’s genetic diversity among these organisms even inside single patients. So you can start off with a population of bacteria, say, that could be managed by less aggressive therapy and the patient’s own immune system. But then aggressive treatment ends up killing off the great majority of the bacterial population, which you’d think would be a step forward. But what you’re left with are the genotypes that are hardest to kill with antibiotics. They were in a minority, and might well have died out under competition from their less-genetically-burdened cohorts. But killing those off gives the resistant organisms an open field to work in.

Don’t bet against progress, kids.

3 Responses to “On scarcity”

  1. June 28, 2011 at 06:08

    Kudos on the roll you’re riding. I’m scratching my head trying to come up with something to add but keep coming back to “thanks for nailing these.”

  2. June 28, 2011 at 07:19

    You know, every once in a while, while I’m sitting here multitasking between three applications, it can be easy to forget for a moment which blog I’m google-readering my way through. That happened today for about two minutes. But when I hit this…

    While glib dilettantes like me may point in horror, it turns out that really smart people think of this as a problem to be solved rather than an apocalyptic end-game in which to wallow in flesh-mortifying ecstasy.

    …”Oh, this must be Blunt Object.”


  3. June 28, 2011 at 08:07

    Thanks, folks! Happy to oblige.

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anarchocapitalist agitprop

Be advised

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