Free people are net producers
Last Friday, marked the 10th anniversary of the death of the great economist Julian
Simon. Although he never received the professional or popular acclaim of
economists such as Milton Friedman, Paul Samuelson or F.A. Hayek, Simon's
insights and work rank with those of history's greatest social scientists.
Simon's most
important contribution was to crystallize and explain an insight that even the
best economists before him only glimpsed -- namely, that human beings in free
societies are "the ultimate resource." Nothing -- not oil, not land,
not gold, not microchips, nothing -- is as valuable to the material well-being
of people as is human creativity and effort.
Indeed, there are no resources
without human creativity to figure out how to use them and human effort
actually to do so. Recognizing the truth of this insight renders silly the
familiar term "natural resources."
No resources are
"natural."
Take petroleum.
What makes it a "resource". It's certainly not a resource naturally.
If it were, American Indians would long ago have put it to good use. But they didn't.
I suspect that for Pennsylvania's native population in, say, the year 1300, the
dark, thick, smelly stuff that bubbled up in watering holes was regarded as a
nuisance.
Petroleum didn't
become a resource until human beings creatively figured out how to use it to
satisfy some human desires and other human beings figured out how to extract it
cost-effectively from the ground.
Or take land. For
at least 80 percent of Homo sapiens' time on earth, land was merely something
to trod and hunt upon. Land had no special value as a resource until about
10,000 years ago when someone figured out how to cultivate soil and to plant,
tend and harvest crops. Only then did land achieve the kind of status and value
that we associate with a resource.
The same, of
course, is true for magnesium, iron ore, bauxite, feldspar, trees, New York
harbor -- you name the "natural resource" and you'll realize that it
is a resource only because human beings creatively determined how to use it
productively.
An important
implication of this realization that humans are "the ultimate
resource" is that high and growing population -- in societies with
sufficient freedom to allow individuals to experiment and create -- is
desirable. If human creativity and effort are not only resources, but also the ultimate resource,
surely it's foolish to lament large and growing supplies of it.