The peak whatever FUD mongering.

Since the ‘population bomb’ fear mongering about having too many people and insufficient resources, there have been many who continue the alarmism that the supply of some resource or other will peak and we will run out of it and disaster will occur. Those folks tend to underestimate both the size of the earth and the ingenuity of man.

It appears that the latest example is noted by Mark Perry in discussing the The Finite World of Paul Krugman’s Thinking.

Paul Krugman claims that the commodity markets are telling us that we’re living in an Ehrlich-like finite world of resource scarcity where “the rapid growth of emerging economies is placing pressure on limited supplies of raw materials, pushing up their prices.”

That prompted a look at the Dow Jones AIG Commodity Index adjusted for inflation from 1934 to 2010.

Bottom Line: Over a very long period of time (76 years), there has been a significant downward trend in the real prices of commodities (see red trend line in graph), and the decline in commodity prices has taken place during a period when the world population increased by more than three times, from 2 billion in 1934 to the current population of 7 billion in 2010. Don asks the right question:

“If economic growth since the industrial revolution coincided with increasing resource supplies, why should we expect that continued economic growth will suddenly start to have the opposite, dreary effects predicted by Mr. Krugman?”

Some folks seem to hold disaster dear, despite any evidence that contradicts their beliefs. That can be an interesting study in itself.

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