catallaxy files

catallaxy in technical exile

Good news for our grandchildren

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In material terms, things are looking good for our children and grandchildren, even allowing for the increasing age of child-bearing which means that it takes longer for a generation to turn over. The driver is the Chinese economy and Ross Garnaut reports that the demand for our minerals is good for several more decades.”One only has to identify the possibility of China absorbing twice the amount of resource-based products as the currently developed world to raise some fundamental questions. Is it possible that Chinese economic growth will be hampered by exhaustible resource constraints? Are the energy and other natural resources available to allow China, India and other developing countries to achieve the living standards of the advanced industrial countries? Or will global living standards eventually be limited by a finite amount of essential, depletable natural resources.”

“Economists today, unlike other social scientists and the general polity, do not fear that the world economic growth will grind to a halt because the world runs out of potential for expanding production of energy, metals or other natural resource-based products. The experience of development, and not only our theory, informs us that higher prices will induce expansion of output and substitution in supply and demand for scarce resources, as well as some modification of the rate and pattern of economic expansion. But while, in the end, supply will equal demand at some higher level of global economic output, the process of adjustment is of great importance, and can affect economic activity in the rapidly growing economies and elsewhere.”

So in terms of the peace, freedom and prosperity, it looks as though we are OK regarding prosperity, barring serious shocks that are outside our control and major escalation of the worrying portents for Big Government from both sides of the House. As Adam Smith said, there is a power of ruin in a country, meaning that you can get a lot of things wrong as long as some of the settings reward people who are prepared to innovate and work effectively.

Peace and freedom are more of a worry. The world is still a dangerous place and there is the potential for disaster ranging from nuclear war in the Middle East to really serious terrorst activity involving nukes or biological warfare. The long term response to this is to spread ideas about the liberal order and undermine the destructive theories of collectivism and cognate errors regarding ethnic and national self determinism that give rise to intolerance and sectarian violence.

Theories of sovereignty need to be overhauled to come to grips with the abuses of power that arise from the new Leviathans of the European Union and the United Nations.

Big and intrusive government represents a threat to freedom, even in an affluent society and especially when threats of terrorism and war permit big government activists to ramp up security measures.

Environmental concerns will persist and this is a worry in China where the sky over their cities is dark in the daytime from industrial pollution. Technological advances and nuclear power are the obvious answers and the same applies to environmental policy in the west, backed up by market forces to promote efficiency in resource use. That is pretty much the oppposite of green left policy. It seems that free market environmentalism is still a distant rumour for many people who are sufficiently educated and literate to know better.

All in all, exciting times, as Wordsworth said in more poetic language in the first flush of excitement after the French Revolution. Boy, did he change his tune (to his credit)!

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Written by Admin

May 18, 2006 at 3:41 pm

Posted in Uncategorized

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