Re[2]: ECON: Simon vs Ehrlich

Guru George (
Mon, 28 Apr 1997 23:39:46 GMT

On Sun, 27 Apr 1997 18:03:38 -0400
Michael Lorrey <> wrote:

>Hal Dunn wrote:
>> >From: "Laws, David" <>
>> >Date: Sat, 26 Apr 1997 20:29:18 -0400
>> >I am no geologist. I am no economist. To say we are running out of any
>> >mineral (except oil) just basically seems silly. The earth's crust should
>> >be strewn with every mineral known to man (and then some....wood and air is
>> >a far more known limiter).
>> Julian Simon is an economist and I think one of his main points is that
>> throughout history scarcity itself has helped to preserve the Earth's
>> natural resources. As long as a resource is considered useful, it is
>> considered valuable (and worthy) and it will have a price. The more scarce a
>> resource becomes, the higher the price will go.
>> As the price goes up, the number of buyers who think it is still worth the
>> price will go down. This has a similar effect as conservation, i.e., fewer
>> users of a resource.
>> Simon uses fossil fuel as an example. He says we will NEVER run out of oil.
>> Technically, he's probably right. As oil becomes scarce, the price rises. By
>> the time the price becomes cost-prohibitive, other useful alternatives or
>> substitutes will be invented or discovered. By the time we have very little
>> oil left, it will be so expensive that no one will want to buy it, so we
>> will never really run out.
>There is also the effect of increased prices on recovery cost
>effectiveness. WHenever you hear of someone saying there is only 30
>years worth of oil left, they mean that there is that much in reserves
>available that are cost effective enough to recover at today's market
>prices. Obviously there is plenty of oil that is too expensive to
>recover right now, but as demand rises and prices inflate, those other
>reserves become cost effective. This is one of the little lies that
>environmentalists and conservationists tell to get support, because they
>imply to the less intelligent people that there is ONLY 30 years worth
>of oil at ANY price left. There is literally a HUGE supply of oil in
>the ground, enough that it will be a few thousand years before we use it
>all up at a minimum.
An abstraction just occurred to me related to the above:- that the
supply is virtually infinite because matter could, at the extremest limit,
be transformed (recycled?) into oil, if we really wanted it, and had the

Guru George