The arguments always center on the notion of finite resources. Are earth’s resources finite? Of course they are. The earth is a roughly 8,000 mile diameter ball which has no means to increase the resources within or immediately surrounding it.

But what does that have to do with capacity to sustain human life?

The argument would go something like, “Well, we need so much land and water to produce food. At our current rate of growth and at some point we’d simply run out of one, the other, or both.” Coincidently, the current hysteria resides with “running out” of water. With over two-thirds of the planet covered by water, and current claims of rising oceans, running out of water would seem a bit overstated.

Oddly, these viewpoints are usually couched in pseudo-scientific terms such as the current craze “sustainability.” And the very group who bandies about the “science doesn’t lie” ideology is the same group who totally ignores the most basic tenets of science known as the Laws of Conservation of Matter and Energy.

In short, these long held scientific axioms declare that neither energy nor matter can be created nor destroyed. Paraphrased, this simply means: “The total quantity of matter and energy available in the universe is a fixed amount and never any more or less.”[2]

This is fundamental material was once taught in high school science class during quantitative analysis studies. But, regardless of their lip service, politicians and their minions have little use for scientific truths. After all, it’s the half-truths that get them elected.

So while it’s true that our resources are finite — in economics we say “scarce” — our capacity to use our resources in new more efficient ways is limited only by our minds. I don’t know about anyone else but that tells me the possibilities are endless.

Our well being is directly attributed to our efficiency at using our multiple scarce resources, not the least of which is our minds. Cave dweller thinking assures no better than a cave-dwelling lifestyle.

Addendum: April 21, 2009
Some will likely take issue with my statements about there being plenty of water, so it’s appropriate to add a quick link to the U.S. Geological Service (USGS) Quick Summary of the water cycle.[3]

Another water point warrants reader attention: sublimation. Sublimation[4] is the process by which, depending on humidity, ice and snow converts from solid to vapor without melting. I mention this because so much attention is disproportionately focused on the loss of ice and snow as being caused by global warming. In fact, snow and ice may be lost even though temperatures have dropped. For anyone without an automatic ice maker in their refrigerator, this effect can be readily witnessed as ice evaporates from the ice cube trays or other uncovered storage units.

Coming back to my original point: we have all the resources we need to support a much higher population on earth. Our biggest problem is not lack of resources. It’s the continual efforts to block development of our abundant resources by those who achieve political power, at the expense of our liberty.

Sources…

[1] Thomas Robert Malthus wikilpedia entry

[2] The Laws of Conservation of Matter and Energy

[3] USGS Quick Summary of the Water Cycle

[4] USGS The Water Cycle: Sublimation

Coming soon: Exploring the buy local/buy American myths

Wealth depends on how efficiently we use our resources, not on how busy we are.

Video: Why the meltdown shouldn’t have surprised anyone.

Even if you already understand these principles, Schiff’s presentation is entertaining while possibly offering you some new perspectives. — C.

http://blog.mises.org/archives/009620.asp

In normal spoken conversations, we interject our queries when a point puzzles us. We usually do it without giving it a second thought. There’s no reason to not do the same in this format.

So, please, if something doesn’t seem understandable, just ask. I’ll be happy to explain. All I ask in return is that you leave the politics out of it. The ideology of big government is what causes problems; not political parties, proper. Once politicians begin accepting big government as a cure, or worse still, in order to be reelected, freedom becomes a mere mythological fairy tale.

Updated: Apr. 6, 2009 22:23

Inflation is the increase in money supply without a corresponding increase in goods and services (sometimes referred to as “output”). Nowadays, credit accounts for most of this increase.

“…to hold down interest rates artificially is to encourage borrowing, and thereby to increase the money-and-credit supply. It is this increased money supply that raises prices (and costs) and constitutes the heart of inflation.” — Henry Hazlitt [1]

Since money is a medium of exchange, its value is determined by the units of goods and services it can buy. If we chose ten pounds of beans to represent the total units of goods and services, and ten dollars to represent total money supply, beans would be worth one dollar per pound.

But if we increase just the money supply — lets say “double” it for simplicity — twenty dollars now must be exchanged for the same ten pounds of beans.

Since money takes its value from the units of goods it can buy, how has increased money supply affected the price of beans?

Twenty dollars still buys only ten pounds of beans, making beans now worth two dollars a pound. Higher prices result from an inflated money supply. This is why we have laws against counterfeiting. It devalues our currency. Yet, through the machinations of the Federal Reserve — i.e., “the Fed” — government does it every day.

Someone usually asks: What if we didn’t use all the money? What if we stashed some for a rainy day?

Why pay interest on borrowed money to save when you could just save the money and earn interest?

These days, the rainy season arrives the minute people have cheap money — i.e., dollars which required little effort to obtain. Additional spending drives up demand for the limited supply of beans, driving up prices. Showers turn to storms as remaining money holders race to buy before the prices go still higher.

If this sounds familiar, it should. It’s what caused housing prices to go off the charts, beginning in 2001 when the Fed began lowering interest rates.

The next installment will go deeper into inflation and, space permitting, touch on deflation.

——–

Recommended reading, available online for reading or downloading:

[1] What You Should Know about inflation, by Henry Hazlitt p. 80

Counterfeiting versus Monetary Policy, by Walter Williams

Economic Freedom and Interventionism by Ludwig von Mises, Ch. 18: Inflation and You — Reprinted from Mercury, July 1942

Updated: Apr 7, 2009 @ 11:18

When we confuse the vagaries of fate with the sins of man and look for “leaders” to redress this unfairness, we are setting ourselves up to become dupes of those who know how to arouse emotions and promise the impossible. That lesson is written in blood across the history of the 20th century. — Thomas Sowell: Controversial Essays — Hoover Press 2002

Economics is not rocket science, since math is not essential to its understanding. Economics is simply the study of how we use our resources; all of them. Resources include time, knowledge, skill, materials, tools, labor, and, yes, even money. Our wealth is directly correlated to how efficiently we use these scarce resources.

Just looking at this list of resources should give us a clue as to the real nature of our economic explorations: our actions.

There’s a wealth of excellent information already available for the price of an Internet connection. So why do so many remain so astonishingly uninformed? Two reasons: 1) many believe the subject requires some high-level education (it doesn’t); 2) intellectual laziness. Ouch!

Getting all one’s information from news media is not the path to knowledge. Knowledge must be actively sought, not eaten a spoonful at a time, fed by those who are driven by ratings, not correct information.

For more than two years I have vowed to do this blog. It’s truly hard to find time.

Since the Internet is such a rich source of genuinely good information for those willing to ingest and test the principles, I will call your attention to appropriate in-depth resources as I write on a particular topic. Whatever you learn here will be because you made the small effort required to test the principles. Most of all, I will do my best to keep my posts concise and around 300 words which should require little of your time.

So, hello, world!