Why are so many people pessimistic about the world population and believe we are devouring all of our natural resources despite the progress we as a race have made in the last 50 years? As the Joker asked in the film The Dark Knight, “Why so Serious?” Pessimists (mainly left-leaning neo-socialists) ask for governments to intervene, but the interventions are either unnecessary or harmful to the progress made possible by the market economy.
According to the Global Footprint Network, humans have already used a year’s worth of Earth’s resources in 2018. “Earth Overshoot Day” has crept up the calendar from December 29th in 1970 to August 1st 2018. “The date of Earth Overshoot Day is calculated by comparing humanity’s total yearly consumption (Ecological Footprint) with Earth’s capacity to regenerate renewable natural resources in that year (biocapacity).” – See Global Footprint Network.
This sounds pretty bad, like we are a giant spider sucking the life out of the planet. Of course, most that comment on Earth Overshoot Day typically blame capitalism and overpopulation as root causes of our resource overconsumption. You know, private businesses have no incentive to maintain resources — greed leads them to exploit the earth for profits today with no regard for our future. The lack of government-provided birth control and sex education have caused birth rates in some parts of the world to remain high, putting undue strain on our scarce resources.
Let’s pump the brakes on that–entrepreneurs disregard the future availability of some productive resources because they are not in the business of making money today — they are interested in earning profits across time and they will use their resources as need be.
If a resource is exhausted, that means that the entrepreneurs have satisfied consumer demands when consumers wanted them satisfied. Producers are subject to the consumers.
But, we as consumers are also interested in the maintenance of resources. The way we balance the use of resources today and tomorrow depends on the premium we place on present consumption over future consumption.
We are more likely to save and maintain resources when we expect the future consumption to be greater or better. This is why we don’t eat all of the grapes today but use some to make wine or jelly for future consumption. It’s also why farmers are careful to rotate crops and not over-farm their land so that it will be as productive as possible for as long as possible.
As a policy, promoting private property and allowing entrepreneurs to utilize and experiment with new technologies that might decrease costs (using fewer resources) and increase production (making the future payoff greater) is really the best way to maintain our resources. Productivity is not a drain on the Earth’s resources, but a great incentive to entrepreneurs and consumers to save and invest for the future.
Central baking, which uses expansionary monetary policy can be the fly in the ointment. Inflationary environments lead to higher rates of consumption because holding on to cash while prices are rising is a value losing endeavor. Credit expansion also causes entrepreneurs to waste productive resources by pursuing the wrong lines of production — consider the empty mansions in the wake of the Fed-fueled housing bubble that popped in 2007–2008.
It really ain’t so bad
Indicators of human well-being show that the world is much better off with 7.6 billion people in 2018 than we were with half that in the early 1970s. Earth’s population has doubled, but the share of the population in extreme poverty has been slashed from about 60% in 1970 to less than 10% today. The illiteracy rate has shrunk from 44% to 14% since 1970. The number of people without access to improved water sources has halved just since 1990. The global average life expectancy has increased by over 12 years since 1973. If you are doubtful that humans are broadly and significantly better off compared to 1970 (see ourworldindata.org).
BP estimated that there are 1696.6 billion barrels of proved oil reserves(good for about 50 years). That’s how it appears now, however, demand will more than likely fall, while technology will make production more efficient. New technologies will make inaccessible oil reserves accessible.
As a note, net electricity production from nuclear sources has increased 3473% from 1970 to 2013, based on data from the Earth Policy Institute.
We are wealthier and more productive than ever and we seem to be maintaining and even expanding Earth’s capacity to meet our needs.
It is the abject pessimism of the left about the world population and our natural resources, despite the progress we’ve made just in the last 50 years, that will lead us into darkness. They want less individual control, and more statist governmental control.
This will lead to less overall prosperity and will negate the progress made possible by the market economy.
Why so serious?