If the resources are finite then how are economies growing?
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Because we are accessing those finite resources or becoming more efficient using those finite resources.
There is only so much water on earth, only so much farmable land, only so much gold, silver, nickel, iron, etc etc.
These are all finite resources.
But just because they are finite doesn’t mean we have already used all them. The earth in a massive, massive place. And human beings have just scratched the surface of it.
Resources aren’t finite.
There are two main categories of resources. Natural resources and labor. Natural resources are things like lumber or iron ore. We can grow more trees and while it might seem like the amount of iron ore is finite, our ability to extract it can grow. So, we have more iron ore available to us each year.
The other important resource is labor. The more people there are in the world, the more labor hours are available. This leads to more goods and services being produced which grows the economy.
Most resources are finite but we have yet to extract nearly all resources. And while we extract new resources the resources already extracted is still being used to grow the economy decades after they have been extracted. Say for example that your grandfather built a house using timber he fell from his own forest. That house is likely still standing today and providing home for people. It only requires some upkeep. This means that all that labor and woods he extracted back then is still providing value to the economy today. Meanwhile you can go into the same forest today and extract lumber from the trees your grandfather planted and build yourself another house. Even though you and your grandfather extracted the same resources, both in labor and lumber you are now twice as much worth as he because you have two houses. The economy have grown.
Even if resources are finite, we can do more with them… a pile of sand is worth $X. Turned into glass, it’s worth more. Turned into a mirror even more. Turned into a solar panel even more. Into a microchip, even more.
And even if resources are finite, we haven’t extracted them all, we have the ability to recycle resources.
But ultimately it’s human ingenuity, advancement, technology that allow economies to keep growing.
Let me introduce you to my friends exploitation and non-strategic devastation of the nature. People here talk about ingenuity and becoming more efficient, but in reality it comes down to either exploiting less fortunate people or devastating landscapes and eco systems.
There a two things going on.
First off, while a lot of resources are “finite” we haven’t used all of them in the first place. We are still mining for minerals and growing and cutting down more trees and stuff like that.
The earth is huge and as much damage to it as we have done. We can do even more.
Secondly, raw resources aren’t the only thing that matters. The other is labour making those resources more valuable.
For example raw iron is worth about $60-$80 a ton. If you add literal pennies of carbon to it to turn it into steel it’s now worth $150 a ton. Take that same steel and turn it into a bunch of razor blades and you can sell that same ton of steel for about $90,000
When currency was backed my gold, money was finite since gold was finite but after we moved away from the gold standard things took a turn for the worse imo. Now we can print infinite amount of money without thinking twice. So ig the growth we’re witnessing today is artificial growth and not real growth. I can be wrong so anyone is free to correct me.
The idea that an economy is based on resources is outdated.
Different economic systems are founded on different things, and even the same economic system can shift its foundations and adapt to new situations.
For instance, feudalism was based primarily on land ownership. This was tied to food production, but it wasn’t necessarily reducible to food production; land had many uses. The bubonic plague reduced the value of land, though, and feudalism couldn’t adapt and collapsed.
Capitalism replaced it and was first founded on a feudal land ownership economy (the landlord, which still exists today). As the industrial revolution got going, though, this transitioned more into natural resources and labor (that’s why working days more than doubled and the working day went up to 16 hours).
Unlike feudalism, though, capitalism adapted over time and shifted its foundations more towards speculation. This shift started in the second half of the 19th century, but didn’t really explode until the advent of telecommunication technology in the 1970’s.
Today, our economic system is founded more on speculative investment than on anything tangible like land, resources, or labor. This speculation can theoretically expand infinitely, as it’s not founded on anything material (and uses a fiat currency that’s no longer backed by anything material). In practice, though, the digital technologies and distribution networks tied to the speculative market cannot grow infinitely, so there are practical limitations.
As those limitations are reached, capitalism will once again attempt to adapt towards more infinite expansion. Intellectual property is a historical example of this, and data collection and modeling is a more contemporary example (think Amazon and its predictive systems to create an extremely efficient centrally managed economy that other companies cannot compete with).
Ultimately, all this expansion depends on some kind of expansion of resource exploitation, so it will inevitably collapse (this is ultimately the cause of climate change), but the fact remains that the economy has continued to expand far beyond imagination due to capitalism’s unique ability to appropriate anything and use it as a form of economic expansion.
Finite does not mean that it’s all in use. If there are 1000 units of a resource and we have only accessed 200 units then there are still 800 left to exploit.
Also currently the human population is still growing and population growth ultimately leads to economic growth. For at least a few more decades that is.
Developing new ways to use existing resources. Or… new ways to harvest fallow fields. Oil fields in US were shallow making oil very hard to exploit for a long time. With the advent of horizontal drilling and fracking, a finite resource considered tapped out is generating the largest record oil drilling. Usually renewable resources means growing them. Usually finite resources means higher efficiency.
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