Running dry?

There are two opposite schools of thoughts in economics concerning what may happen in human society when it keeps expanding while natural resource which growth depends on has a physical limit.

Essentially Malthus thought that with the expansion of human civilization and thereby exhaustion of natural resources, sooner or later there will be a negative feedback as simple as running out of oil or complicated as natural disasters like weather change to keep growth in check. As a result, a Malthusian favoured government policy often lead to neglect of famine as they believe it is a part of natural correction process since production capacity growth can never catch up with exponential growth of population (basic belief of Malthusian theory)

Famine caused by East India Company's policy

source: xTimeline

> quote from wikipedia in 2009 (now revised)
Malthus’s position as professor at the British East India Company training college, which he held until his death in 1834, gave his theories considerable influence over Britain’s administration of India through most of the 19th century, continuing even under the Raj after the Company’s dissolution in 1858. In a major result of this influence, the official response to India’s periodic famines (which had occurred every decade or two for centuries) became one of not entirely benign neglect the authorities regarded the famines as necessary to keep the “excess” population in check. In some cases administrators even banned private efforts to transport food into famine-stricken areas. However, this “Malthusian” policy did not take account of the enormous economic damage done by such famines through loss of human capital, collapse of credit structures and financial institutions, and the destruction of physical capital (especially in the form of livestock), social infrastructure and commercial relationships. As a (presumably unintended) consequence, production often did not recover to pre-famine levels in the affected areas for a decade or more after each disaster, well after the replacement of the lost population.
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Simon’s Cornucopian belief is the opposite, stating that “the problem is not a lack of resources but rather inadequate distribution through the current economic and political systems. Looking further into the future they posit that the abundance of matter and energy in space would appear to give humanity almost unlimited room for growth.” The rise in commodity price will drive demand for accelerated pace of research and better allocation of resources and in return a better yield of existing resources, and later, development of substitute.

What I think:

Since development of resources requires time, and may not always be successful, I think a more appropriate system lies in the middle of these two extremes.

I have a firm belief that most of the resources we spent today in research and development was not placed in the correct area. Who really needs a fast cell phone anyway? There are a lot of pressing human tragedies need to be addressed. In view of this, the correcting mechanism, or the negative feedback loop, as described in Cornucopian school of thoughts, shall become much larger for it to take effect.

The dilemma however is that these “mitigation” projects are usually very long term and their benefit may not be easily identified by the greed of venture capitalists and politicians. There is simply not enough incentive to direct world investment into research subjects in need. This unavoidably will be coupled by human tragedies associated with lack of resources as research’s pace can never catch up. With massive loss of human lives, the production capacity will be affected, making technological progress slower, but at the same time there will be less consumers. Human civilization shall prevail eventually, even in an event of thermal nuclear conflict.

Malthusian supports private philanthropic effort and I agree that this is probably a safer bet to channel money to research subjects with long term benefit in sight.

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