Raw Materials - Supply
Raw materials include things such as water, land, oxygen, and trees. Some raw materials, such as oxygen, are abundant. We can use as much of it as we want without risking using it all up. The economic system doesn’t need to interfere with how abundant raw materials are used. Economics only needs to worry about raw materials that are not abundant enough to meet everyone’s needs.
The first challenge is to figure out exactly how much of a raw material is available. Our ability to extract a resource is usually high enough that, if we work flat out, we can cause serious environmental problems. It is concern about the impact that resource extraction has on the environment which limits how much we can use, not limits in the extraction method. Deciding how much of a raw material can safely be used needs to be addressed by both scientists and politicians. Scientists are needed because the ecosystem is complex. It is difficult to understand the full impact of extracting resources. Politicians need to get involved because trade-offs need to be made between environmental damage and resource extraction. It is the politicians who ultimately decide what an acceptable level of damage is.
Once politicians understand the impacts of resource extraction and have imposed restrictions, the total amount of a raw material that is available for use is set. The way I see it, the scientists and politicians define the scope of resource extraction, setting the boundaries of economic activity. The economy is then responsible for producing the things we want within these fixed constraints. The question then is how to use the raw materials that are available.
Navigate
Comments
To add comments, use the form below.
While comments are posted immediately, they are reviewed periodically. If they are found to be offensive or inflammatory, they will be removed.
If you provide your email address, you will be informed if your comment is changed or deleted. Your email address will not be distributed to others. I will only use it if I make changes to your comments and for one notification message when my book is in bookstores.
Comments powered by the Website Comments System ® v1.0