The No Breakfast Fallacy

The depletion of mineral reserves poses no serious threat to society, this new report from the Adam Smith Institute concludes.

The No Breakfast Fallacy: Why the Club of Rome was wrong about us running out of resources” argues that outcries over resource availability from environmentalist groups are based on a misinterpretation of numbers and a misunderstanding of what mineral resources actually are.

The monograph, written by Senior Fellow and rare earths expert Tim Worstall, says that groups that have warned about the world running out of rare mineral resources, such as The Club of Rome, have been using the wrong sets of data, mistaking the exhaustion of mineral reserves for the exhaustion of mineral resources.

Mineral reserves, the monograph explains, are simply the minerals that have been prepared for use for the next few decades; they are minerals that can be mined with current technology at current prices. Some reserves are going to run out in the near future, but this is a normal process. Every generation runs out of mineral reserves.

Mineral resources, however, refer to a concentration of minerals of a certain quality and quantity that have shown reasonable prospects for eventual economic extraction. These are much larger than mineral reserves.

Organic farming, for example, may be a useful idea, the monograph asserts, but the idea that it is a necessity because we’re about to run out of inorganic fertilisers is based on a falsehood. The reserves for minerals used in fertilizers may exhaust in the next few hundred years, but the exhaustion of resources is not estimated to occur for 1,400 years for phosphate and 7,300 years for potassium.

The report concludes that efforts to conserve and/or recycle mineral resources are wasteful and often end up being net harms to society, by diverting economic activity from more productive uses.

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Pivotal People at Pivotal Times: John Blundell

John Blundell (1952-2014) was a very critical individual in the world-wide advance of classical liberal ideas in the 1980s and beyond.  As a young student in the UK, John played an instrumental role in spreading the ideas of the Austrian School of Economics among college and university students.  In his 30s who would assume a leadership role in the US in organizations such as the Institute for Humane Studies, and the Atlas Economic Research Foundation. And in the 1990s and 2000s, John would return to the UK and serve as the General Director of the Institute for Economic Affairs.  Along the way, he published a book on Margaret Thatcher, and a book on the important contributions of “Ladies of Liberty”.

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In memoriam: John Nash

It is with great sorrow we hear that one of the greatest minds in human history died this weekend in a car crash with his wife while they were returning home from an airport. John Forbes Nash Jr., was widely known as one of the founders of cooperative game theory whose life story was captured by the 2001 film “A Beautiful Mind”, is truly one of the greatest mathematicians of all time. His contributions in the field of game theory revolutionized the way we think about economics today, in addition to a whole number of fields – from evolutionary biology to mathematics, computer science to political science. 

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Do we need the FCA?

Students of the Financial Conduct Authority will appreciate the FCA’s Business Plan 2015/16 which mostly sets out what it does, but also touches on what it achieves and its value for UK citizens.  It is as close to accountability as the FCA gets.

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QE-a Culpa

Recently I’ve been looking through some of the articles I’ve written about QE over the last few years. I spent much of the post financial crisis period learning about monetary theory and wondered about the extent to which this was reflected in my commentary. I feel that my understanding has increased significantly, and so I should reassess my previous claims. (more…)