🚀 go-pugleaf

In article 26880@bnr.ca, bucknerb@bnr.ca (Brent Buckner) writes:
> They consistently omitted one of the major types of feedback loops in
> a market economy.  As a commodity is consumed and becomes more scarce,
> the price increases.  In response to the price increase, the rate
> of consumption declines.
> 
> It was pretty bold to dispense with the foundations of the field
> of resource economics.  This strikes me as a major flaw in the
> model.  They presented no argument in favour of such a radical
> move.  This is a critical flaw in the presentation of the
> study.
> 
> -- 
> at Bell-Northern Research
> voice:        (613) 765-2739
> Canada Post:  P.O. Box 3511, Station C, Ottawa, Canada, K1Y 4H7
> I do not claim that BNR holds these views.  


The Club of Rome model would have benefited from explicitly incorporating
pricing mechanisms, but they did not in fact ignore them, nor does their
lack of doing so invalidate their models for the limited purposes for which
they were done.

What conventional economists often neglect, in attacking models of this
kind, is that if the price of the minimum daily requirements for food, water,
shelter, clothing, etc., rise beyond what people can earn in a day to pay
for them (or produce their own), then consumption does indeed decline.

But so do the people. And it is decline of that kind that concerned persons
of the kind who do such models would like to avoid -- in favor of declines
that are less painful and less destructive of dignity and the fabric of
civilization.

Actually, there is some misunderstanding on the point of what economists mean
by resources -- usually proven or projected reserves -- and what ecologists
mean by it -- entropically accessible reserves, often discussed in terms of
price-productivity supplies, or the amount available as prices rise to the
level that the economy can support. The Club of Rome models are really about
price-productivity supplies, not proven reserves.

---

jdr@starflight.corp.sun.com, starflt@uunet.uu.net
Jon Roland
Starflight Corporation, 1755 E Bayshore Rd #9A,
Redwood City, CA 94063-4142, 415/361-8141