Buy land, they're not making it any more


So went the old investment advice: as the supply of land is fixed the price can only ever rise. This isn't of course true as those financing the housebuilders' land banks are finding out but we've also an illustration of a much larger point here. We're continually told that the earth is "running out of resources", that there's just no more out there for us to use. To which the economists keep saying, but, but, we create resources by inventing the technology that makes them available. Yes, even land is, in this sense, created.

Don't get me wrong, I'm not saying that there are not physical limits to this planet we inhabit: only that they are so huge that they're not the relevant limits. Those relevant limits are obviously the ones that are important to us: how many copper atoms there are is not the relevant limit concerning how many telephones we can make: how many copper atoms we can mine at what price might be.

And yes, this does even applpy to land, as the development of Brazil's cerrado shows:

When Embrapa started, the cerrado was regarded as unfit for farming. Norman Borlaug, an American plant scientist often called the father of the Green Revolution, told the New York Times that “nobody thought these soils were ever going to be productive.” They seemed too acidic and too poor in nutrients. Embrapa did four things to change that.

Lime the soil (a centuries old technique), play clever with breeding both nitrogen fixing soil bacteria and grasses, play clever with the breeding of the crops you're trying to plant and finally, change the way the farming is done to no-till agriculture.

Et voila, we have created tens of millions of hectares of new arable land and there's perhaps another 250 million susceptible to the same treatment.

No, we're really not running out of things, not in any sense that actually matters. For we really do create resources through human ingenuity.