A Second Implication

It also follows from Menger’s two premises that the extent of the things which exist in nature but are not goods – yet which under the appropriate circumstances might become goods – is vast. Indeed, according to George Reisman, Julian Simon and others, given the astonishing results over the past 250 years of individuals’ trial-and-error discovery of knowledge, and the dissemination, cumulation and valuation of this knowledge via the market mechanism, it is reasonable to anticipate that the extent of the things which exist in nature but which are not (yet) goods is effectively limitless. 

Although it has improved drastically during recorded history, mankind’s physical command over natural resources remains confined roughly to presently-accessible parts of that third of the earth’s surface which is not covered by the sea. And in the ocean that command has been confined to depths that are measured in hundreds rather than thousands of metres and to distances from shore that are calculated in tens rather than thousands of kilometres. For most practical purposes, today mankind scratches a minority percentage of the earth’s surface and is ignorant to varying degrees about the remainder. On the other hand, mankind scratches far more ingeniously today than a generation ago; and for this reason it is plausible to suppose that nowhere is he scratching as effectively or efficiently as he will in the future.

In one sense, then – the sense of useable and accessible natural resources, i.e., of goods as Menger defines them – the contribution of nature to human welfare is virtually zero. Practically nothing comes to us from nature in a form that is accessible, ready-made and in a form that satisfies our wants. Virtually nothing in nature, in other words, is a consumer’s good. In another sense, however, the extent of resources in their natural state – the matter, in the form of all the chemical elements, known and presently unknown, and energy in all of its forms – is virtually infinite. It is in this second sense that nature’s potential contribution to human welfare is effectively boundless. 

Thanks to mechanical-powered drilling equipment, high explosives, steel structural supports for mine shafts, modern pumps, engines and a plethora of other innovations, for example, today’s miners can extract ore at a depth of one thousand metres more easily than they once could on the earth’s surface. Today a single miner operating advanced earthmoving equipment can move far more earth than hundreds of manual labourers with shovels were able to shift in the past. Other advances have enabled the extraction of much purer resources from ores previously unusable or too costly to process; and improved transport has made possible low-cost access to high-grade deposits in regions previously inaccessible or too costly to exploit.

According to George Reisman (Capitalism: A Treatise on Economics), there is little doubt that further advances along these lines are possible. Much more efficient and effective means of extracting petroleum from shale and tar sands can potentially expand the supply of petroleum by multiples over what it is today. It is not beyond the realm of possibility that means be devised to transform hydrogen, the most abundant element in the universe, into a viable source of fuel. Atomic and hydrogen explosives, lasers, satellite detection systems and space travel may provide new opportunities to increase the supply of economically useable supplies of minerals. Advances in technology which enable mining to be conducted economically at depths of 4,000 metres, or to mine on and under the ocean floor, would so increase the portion of the earth accessible to mankind that all previous supplies of accessible minerals would appear insignificant in comparison.

Reasoning from Menger’s premises thus draws our attention to the enormous and ever-expanding extent of the ‘things’ awaiting transformation by human action and ingenuity into resources that possess goods-character. Not only do individuals constantly use their ingenuity to discover and create the goods-character of resources; they also continuously discover, disseminate and cumulate knowledge of particular resources’ useful properties. By this process, inextricably intertwined with the mechanism of the market, Prometheus is loosening man’s bindings and is affording individuals the capacity vastly and indefinitely to increase the supply of natural resources possessing goods-character. 

Following from Menger, the supply of useable and accessible natural resources will expand as man expands his knowledge of and physical power over his external environment. This knowledge has increased and continues to increase by leaps and bounds; consequently, so too will the supply of resources that possess goods-character.