FREE ESSAY ON THE TIME

THE TIME

CHAPTER 1
THE AMAZING THEORY OF RAW-MATERIAL SCARCITY 
The Great Toy Shortage
Forget it, Virginia. Santa won't be leaving a Star 
Wars R2-D2 doll under the tree this year - just 
an I.O.U. promising you one at some vague time 
between February and June. Don't count on a Mego 
Micronaut kit for building your own robot either, or 
a Milky the Marvelous Milking Cow, which drinks 
water when its tail is pumped, moos plaintively and 
squirts a tiny pailful of cloudy white milk from a 
detachable pink udder.... 
Not since the Grinch stole Christmas has there been 
such an unseasonable shortage.
Newsweek, December 19, 1977, p. 58
CHAPTER 1 - TABLE OF CONTENTS
The Great Toy Shortage
Between Pig Copper and Dentistry
What Do We Mean by Scarcity?
What is the Best Way to Forecast Scarcity and Costs?
Will the Future Break With the Past?
A Challenge to the Doomsdayers to Put Their Money Where Their 
Mouths Are
Summary
Afternote 1
The True Cost (Price) of Natural Resources
Afternote 2: The Ultimate Shortage 
The Great Toy Shortage of 1977 clearly was a freak event. We don't worry that a 
scarcity of Hula-Hoops, pencils, dental care, radios, or new musical compositions will 
last. And we don't fear that a larger population will reduce the supply of these 
goods; manufacturers will make more. Yet people do worry about an impending scarcity 
of copper, iron, aluminum, oil, food, and other natural resources. 
According to a typical pronouncement by Paul Ehrlich, the best-known contemporary 
doomster, In the early 1970s, the leading edge of the age of scarcity arrived. With 
it came a clearer look at the future, revealing more of the nature of the dark age to 
come. That we are entering an age of scarcity in which our finite natural resources 
are running out, that our environment is becoming more polluted, and that population 
growth threatens our civilization and our very lives - such propositions are 
continually repeated with no more evidence than that everyone knows they are true. 
Is there a fundamental economic difference between extractive natural resources and 
Hula-Hoops or dental care? Why do people expect that the supply of wheat will decline 
but the supplies of toys and drugs will increase? These are the questions that this 
chapter explores. The chapter draws examples from the metallic raw materials, which 
are relatively unencumbered by government regulations or international cartels and 
which are neither burned up like oil nor grown anew like agricultural products. 
Energy, food, and land will be given special treatment in later chapters.
BETWEEN PIG COPPER AND DENTISTRY
There is an intuitive difference between how we get Hula-Hoops and copper. Copper 
comes from the earth, whereas a Hula-Hoop does not seem to be a natural resource. 
Copper miners go after the richest, most accessible lodes first. Therefore, they dig 
into lodes bearing successively lower grades of ore. If all else were equal, this 
trend would imply that the cost of extracting copper from the ground must continually 
rise as poorer and less accessible lodes are mined. 
Hula-Hoops and dental care and radios seem different from copper because most of 
the cost of a radio, a Hula-Hoop, or dental care arises from human labor and skill, 
and only a small part arises from the raw material - the petroleum in the plastic hoop 
or the silver in the tooth filling. For good reason we do not worry that human labor 
and skill comes from progressively less accessible reservoirs.
But all this neat theorizing about the increasing scarcity of minerals contradicts 
a most peculiar fact: Over the course of history, up to this very moment, copper and 
other minerals have been getting less scarce, rather than more scarce as the depletion 
theory implies they should. In this respect copper follows the same historical trend 
as radios, undershirts, and other consumer goods (figures 1-1a and 1-1b). It is this 
fact that forces us to go beyond the simple theory and to think more deeply about the 
matter.
FIGURE 1-1a. The Scarcity of Copper as Measured by Its Price Relative to Wages
FIGURE 1-1b. The Scarcity of Copper as Measured by Its Price Relative to the 
Consumer Price Index
At the end of this confrontation between theory and fact, we shall be compelled to 
reject the simple Malthusian depletion theory, and to offer a new theory. The revised 
theory will suggest that natural resources are not finite in any meaningful economic 
sense, mind-boggling though this assertion may be. That is, there is no solid reason 
to believe that there will ever be a greater scarcity of these extractive resources in 
the long-run future than now. Rather, we can confidently expect copper and other 
minerals to get progressively less scarce.
WHAT DO WE MEAN BY SCARCITY?
Here we must pause for an unexciting but crucial issue, the definition of 
scarcity. Ask yourself: If copper - or oil or any other good - were much scarcer 
today than it actually is, what would be the evidence of this scarcity? That is, what 
are the signs - the criteria - of a raw material being in short supply?
Upon reflection perhaps you will not expect a complete absence of the material as a 
sign of scarcity. We will not reach up to the shelf and suddenly find that it is 
completely bare. The scarcity of any raw material would only gradually increase. Long 
before the shelf would be bare, individuals and firms - the latter operating purely 
out of the self-interested drive to make profits - would be stockpiling supplies for 
future resale so that the shelf would never be completely bare. Of course the price of 
the hoarded material would be high, but there still would be some quantities to be 
found at some price, just as there always has been some small amount of food for sale 
even in the midst of the very worst famines.
The preceding observation points to a key sign of what we generally mean by 
increasing scarcity: a price that has persistently risen. More generally, cost and 
price - whatever we mean by price, and shortly we shall see that that term is often 
subject to question - will be our basic measures of scarcity.
In some situations, though, prices can mislead us. Governments may prevent the 
price of a scarce material from rising high enough to clear the market - that is, to 
discourage enough buyers so that supply and demand come to be equal, as they 
ultimately will be in a free market. If so, there may be waiting lines or rationing, 
and these may also be taken as signs of scarcity. But though lines and rationing may 
Bibliography
Young and gifted , but not talented