What is The Limiting Factor?
In yesteryear’s empty world capital was the limiting factor in economic growth. But we now live in a full world.
Consider: What limits the annual fish catch – fishing boats (capital) or remaining fish in the sea (natural resources)? Clearly the latter. What limits barrels of crude oil extracted – drilling rigs and pumps (capital), or remaining accessible deposits of petroleum – or capacity of the atmosphere to absorb the CO2 from burning petroleum (both natural resources)? What limits production of cut timber – number of chain saws and lumber mills, or standing forests and their rate of growth? What limits irrigated agriculture – pumps and sprinklers, or aquifer recharge rates and river flow volumes? That should be enough to at least suggest that we live in a natural resource-constrained world, not a capital-constrained world.
Economic logic says to invest in and economize on the limiting factor. Economic logic has not changed; what has changed is the limiting factor. It is now natural resources, not capital, that we must economize on and invest in. Economists have not recognized this fundamental shift in the pattern of scarcity. Nobel Laureate in chemistry and underground economist, Frederick Soddy, predicted the shift eighty years ago. He argued that mankind ultimately lives on current sunshine, captured with the aid of plants, soil, and water. This fundamental permanent basis for life is temporarily supplemented by the release of trapped sunshine of Paleozoic summers that is being rapidly depleted to fuel what he called “the flamboyant age.” So addicted are we to this short-run subsidy that our technocrats advocate shutting out some of the incoming solar energy to make more thermal room for burning fossil fuels! These educated cretins are also busy chemically degrading the topsoil and polluting the water, while tinkering with the genetic basis of plants, all toward the purpose of maximizing short-run growth. As Wes Jackson says, agricultural plants now have genes selected by the Chicago Board of Trade, not by fitness to the ecosystem of surrounding organisms and geography.
What has kept economists from recognizing Soddy’s insight? An animus against dependence on nature, and a devotion to dominance.
To read the full article, please click here: http://steadystate.org/what-is-the-limiting-factor/
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