#77: Resources generally increase in abundance when we desire them
A counterintuitive but empirical fact about the interaction between knowledge and resources. Plus, new incentives for kidney donors.
This topic is highly counterintuitive, yet I feel it is an important, optimistic, and pro-human one. It comes with caveats, and does not imply that humans aren't the leading cause of habitat destruction. Fittingly, this week’s bite-sized science is also about an unusual idea:
- The amount of money a voluntary kidney donor would receive over 5 years under a new bill - the “End Kidney Deaths Act”.
This idea has a vaguely dystopian scent at first, but I’ve come to support the idea after reading this piece by Works in Progress. I’ll let their article do the work of explaining, but in short, this would reduce kidney deaths which remain frustratingly high, and reward the most altruistic individuals who choose to donate to save another’s life.
More people leads to... greater resource abundance?
It is intuitive to think of resources as nonrenewable materials that we harvest from the Earth's finite supply, until there are none left to harvest. However, the evidence thus far points towards more humans resulting in greater abundance for each additional human, rather than less. This is an optimistic fact from the perspective of human wealth, as it means we do not compete for finite resources in a zero-sum world, but share in the benefits of human innovation from strangers we will never meet.
The above chart shows the nominal, real (inflation adjusted), and time prices of 50 commodities, tracked by the IMF and the World Bank, from 1980 to 2017. The commodities are mostly raw ingredients like grains, metals, and energy, that are used to produce more complex goods. Time prices for these resources decreased by 58% for the median US worker, and 65% for the average person globally. That means that a US worker had to work less than half the time in 2017 to afford the same amount of the tracked resource as workers did in 1980.
This is true across the vast majority of commodities, even as they improve - like TV's and computers. This decrease in time prices can be compared to the increase in population over the same time, yielding an estimate for the effect more people have on time prices: for each 1% increase in population since 1980, time prices have decreased by 0.9% for the tracked commodities. The authors summarize this as, “more people, more ideas, more resources.”
Limits to abundance
Now for the caveats. Importantly, this basket of commodities does not include labor-intensive sectors like healthcare, childcare, and education. These are fundamentally different, as they rely directly on a set ratio of human labor, which generally becomes more expensive over time because of the opportunity cost to employ someone in that job.
A childcare worker today is paid many more real dollars than a childcare worker was paid 40 years ago, because the income they could earn from choosing an alternative occupation has increased. Therefore, to make childcare a worthwhile job choice, these people must be compensated for their time. Childcare is going to cost a lot if you want a lot of adult attention per child. That's manageable, as long as expenses that don't require human time are comparatively cheap, like... housing.
The current record-high house price to income ratio as a result of building restrictions (exacerbated by homes treated as speculative investments) certainly makes the trend of increasing resource abundance feel wrong. However, the data show a clear trend thus far in history: more humans has correlated with more resources. This is tracked annually in the Simon Superabundance index, named after the late economist Julian Simon who first made a bet in 1980 that the abundance of resources would increase over time, rather than decrease. He won that bet, and has continued to be right each decade thereafter.