Natural resources in a high-tech economy : Scarcity versus resourcefulness

Abstract

The special contribution of land and natural resources to production and the distribution of wealth has been a prominent theme in two centuries of economic doctrine. Economic thinkers since Adam Smith and Thomas Malthus have argued that the limited supply of land and resources will constrain economic growth, and this idea recurs in modern writing about the environment and the economy. History has not confirmed these predictions about inevitable scarcities and their limits to growth. On the contrary, the output of food and primary resource materials has continued to grow and their relative prices, far from rising, have declined. The limits of nature's endowment have been overcome by advancing technology which has increased supplies, broadened the range of substitute materials and reduced requirements for particular purposes. These continuing trends have important implications for economic policies of resource rich regions and countries.