What are the best examples of catastrophic resource shortages?

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Roots of Progress

The Roots of Progress

by Jason Crawford


In this update:
  • Reminder: Meetup in San Francisco, May 10, with Adam Thierer
  • What are the best examples of catastrophic resource shortages?

Reminder: Meetup in San Francisco, May 10, with Adam Thierer

Join special guest Adam Thierer and the SF Progress Studies Meetup group for a conversation on where the progress studies movement might (and should) be heading.

Adam is an author and senior fellow at the Mercatus Center. He also serves on ​​the U.S. Chamber of Commerce’s Artificial Intelligence Commission. He is in town from Washington DC, and we’re using this as an opportunity to have this discussion in person. Everyone is welcome. This is a casual environment to meet new friends and reconnect with old ones and have some interesting discussions.

Schedule:

  • 6PM – Light dinner
  • 7PM – Remarks by Adam and Jason Crawford on
  • 8(ish) – more mingling

Details and RSVP on Meetup.com.

What are the best examples of catastrophic resource shortages?

A while ago I posed a question on Twitter:

What's an example of a significant resource that the world has actually run out of?

Not a local, temporary shortage, or a resource that we gracefully transitioned away from, but like a significant problem caused by hitting some limit we didn't prepare for?

Here, in essay form, is the discussion that followed:

Lots of things were predicted to have shortages (food, metals, Peak Oil) and they never quite arrived. (Julian Simon was famous for pointing out this kind of thing.) But a common argument from conservationists and environmentalists is that we are running out of some critical resource X and need to conserve it.

Now, it’s true that specific resources can and sometimes do get used up. Demand can outpace supply. There are various ways to respond to this:

  • Reduce consumption
  • Increase production
  • Increase efficiency
  • Switch to an alternative

Increasing production can be done by exploring and discovering new sources of a material, or—this is often overlooked—by reducing costs of production, so that marginally productive sources become economical. New technology can often reduce costs of production this way, opening up resources previously thought to be closed or impractical. One example is fracking for shale oil; another is the mechanization of agriculture in the 19th and 20th centuries, which reduced labor costs, thereby opening up new farmland.

Increased efficiency can be just as good as increased production. However, if the new, more efficient thing is not as desirable as the old method, I would classify this as a combination of increased efficiency and reduced consumption (e.g. low-flow toilets, weak shower heads).

When supplies are severely limited, we often end up switching to an alternative. There are many ways to satisfy human desires: Coal replaced wood in 18th century England. Kerosene replaced whale oil, then light bulbs replaced kerosene. Plastic replaced ivory and tortoiseshell. Again, if the alternative is less desirable along some key dimension, then this is also a form of reduced consumption, even if total volumes stay the same.

However, the conservationist approach is always some form of reduced consumption: typically a combination of reduced absolute consumption, efficiency improvements that reduce quality and convenience, and/or switching to less-desirable alternatives. The arguments that people have over resources are actually a lot less about whether resources are getting used up, and much more about whether we should, or must, reduce consumption in some form.

The alternative to the conservationists is to find a way to continue increasing consumption: typically new sources or high-quality alternatives. Again, it’s not about the resource. It’s about whether we continue to grow consumption, or whether we slow, stop or reverse that growth.
 



The conservationist argument is a combination of practical and moral arguments.

The practical argument is: we can’t keep doing this. Either this particular problem we’re facing now is insoluble, or the next one will be.

The moral argument takes two forms. One is an extension of the practical argument: it’s reckless to keep growing consumption when we’re going to crash into hard limits. A deeper moral argument appeals to a different set of values, such as the value of “connection” to the land, or of tradition, or stability. Related is the argument that consumption itself is bad beyond a certain point: it makes us weak, or degrades our character.

Also, there is an argument that we could keep growing consumption, but that this would have externalities, and the price for this is too high to pay, possibly even disastrous. This too becomes both a practical and a moral argument, along exactly the same lines.

But if we don’t accept those alternate values—if we hold the standard of improving quality of life and fulfilling human needs and desires—then everything reduces to the practical argument: Can we keep growing consumption? And can we do it without destroying ourselves in the process?

The question of severe externalities is interesting and difficult, but let’s set it aside for the moment. I’m interested in a commonly heard argument: that resource X is being rapidly depleted and we’re going to hit a wall. As far as I can tell, this never happens anymore. Has there ever been a time in recent history when we’ve been forced to significantly curtail consumption, or even the growth rate in consumption? Not switching to a desirable alternative, but solely cutting back? I haven’t found one yet.

(Of course, that doesn’t mean it won’t happen in the future! There’s a first time for everything; past performance does not guarantee future results; Thanksgiving turkey metaphor; etc. But historical examples are a good place to start learning.)
 



Why don’t we hit the wall? There are various things going on, but one of them is basic economics. Resource shortages increase prices. Higher prices both reduce demand and increase supply. The increased supply is both short-term and long-term: In the short-term, formerly unprofitable sources are suddenly profitable at higher prices. In the long-term, investments are made in infrastructure to expand production, and in technology to lower costs or discover high-quality alternatives. Thus, production is increased well before we literally run out of any resource, and any required short-term consumption decrease happens naturally and gently. (Assuming a market is allowed to function, that is.)

But does this simple story always play out? What are the most compelling counterexamples? On Twitter, many people offered ideas:

  • The best examples in my opinion are important animals and plants that we drove to extinction, such as many large game animals in prehistory.
  • Many people also point to a lost plant known to the Romans as silphium.
  • Wood, for various purposes, has also been a problem in the past. A few people mentioned that the people of Easter Island may have wiped themselves out overconsuming wood. In Britain, wood shortages led to government controls on wood and a shift to coal for smelting.
  • Quality soil has also been a limited resource in the past, and may have led to the collapse of some ancient civilizations. A 20th-century example mentioned was the Dust Bowl.
  • The most compelling modern-day example seems to be helium: a significant, limited, non-synthesizable, non-substitutable resource. We haven’t run out of helium yet, but we don’t seem to be managing it super-well, with periodic temporary shortages.
  • The American Chestnut, a great resource that we pretty much lost (it’s not extinct, but now endangered), is another. Technically, this wasn’t from overconsumption but from blight, but that is still a part of resource management.
  • We should probably also note significant resource shocks, even if we didn’t totally run out, such as the oil shocks of the ’70s. In the modern era these seem to always have significant political causes.
  • There are a few more examples that are fairly narrow and minor: certain specific species of fish and other seafood; one species of banana; low-radiation steel.

(And, tongue in cheek, many people suggested that we have a dangerous shortage of rationality, decency, humility, courage, patience, and common sense.)

Overall, the trend seems to be towards better resource management over time. The most devastating examples are also the most ancient. By the time you get to the 18th and 19th centuries, society is anticipating resource shortages and proactively addressing them: sperm whales, elephants, guano, etc. (Although maybe the transition off of whale oil was not perfect.) This goes against popular narratives and many people’s intuitions, but it shouldn’t be surprising. Better knowledge and technology help us monitor resources and deal with shortages. The “knowledge” here includes scientific knowledge and economic statistics, both of which were lacking until recently.

Many people suggested to me things that we haven’t actually run out of yet but that people are worried about: oil, fertilizer, forest, sand, landfill, etc. But these shortages are all in the future, and the point of this exercise is to learn from the past.

That leaves the externality / environmental damage argument. This is much tougher to analyze, and I need to do more research. But it’s not actually a resource shortage argument, and therefore I do think that literal resource shortage arguments are often made inappropriately.

Anyway, I think it’s interesting to tease apart the arguments here:

  • Increased consumption is impossible long-term
  • It’s possible but it would hurt us in other practical ways
  • It’s possible but it would hurt us in moral ways
  • Increased consumption is not even desirable

(“And,” one commenter added, “this is usually the order in which the arguments are deployed as you knock each of them down.”)

Original post: https://rootsofprogress.org/catastrophic-resource-shortages

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