IF you studied history, humanity has always been on the brink of “doomsday.” Maybe there is something in the human psyche, like the fear of being eaten by a saber-tooth tiger, which keeps us on edge.
Maybe reinforcing potential doom is a survival mechanism that keeps us on guard. Other mammals have developed acute senses like hearing or sight that automatically kick in to recognize and react against danger.
Maybe, like the stubborn child, we must be constantly reminded not to touch the hot stove.
Animals are not as “smart” as humans. But a dog can distinguish friend or foe at a relatively long distance. The dog has no problem going on “attack mode” if what is first perceived as friend turns out to be an enemy.
We are so convinced of our superior intelligence that once on a particular path, we have trouble changing course even when evidence tells us we are wrong. John Kenneth Galbraith: “Faced with the choice between changing one’s mind and proving that there is no need to do so, almost everyone gets busy on the proof.”
But don’t assume Galbraith was immune to getting busy on the proof. During World War II, the US Strategic Bombing Survey assessed aerial bombing on Germany. Galbraith concluded that factory production increased after the bombings began. He held that position even after there was proof that the reason production increased was because it was not until late in the war that German factories went on war footing. Until then, factories had been on a single shift and were not operating at full capacity.
Thomas Malthus has shaped global thinking for 200 years with incorrect “Malthusianism” that population growth is exponential while the growth of the food supply is linear, eventually reducing living standards to the point of a population die off.
Paul R. Ehrlich in his 1968 The Population Bomb wrote: “The battle to feed all of humanity is over. In the 1970s hundreds of millions of people will starve to death in spite of any crash programs embarked upon now. At this late date nothing can prevent a substantial increase in the world death rate.” That statement was deleted in later editions, but he still receives accolades for his brilliant analysis.
The truth is, we live in a time of incredible abundance. The Earth was 570 percent more abundant in 2019 than it was in 1980. The Simon Abundance Index uses the time price of 50 basic commodities (from aluminum to zinc and bananas to tea) and change in global population to estimate global resource abundance. “Time-price” measures the cost of resources in terms of the amount of time that a person must work to earn enough to buy something. In terms of global average hourly income, commodity prices fell by 64 percent between 1980 and 2017.
“Between 1980 and 2019, the world’s population increased by 73 percent. The time price of commodities fell by 74 percent. The same length of time needed to work to buy one unit in our basket of 50 commodities in 1980, could buy 3.87 units in 2019.”
Note that if real prices are declining over time, then supply must be stable at worst, and increasing at best.
The doomsday predictors always discount human ingenuity. Fresh water supplies are declining. But with new technology, Israel now gets 55 percent of its domestic water from desalination, and at 48 percent cheaper than water consumed by the people of Los Angeles.
Supply is not the abundance problem. It is distribution. How do you get abundance to Yemen in the middle of a Sunni/Sharia war? Eritrea, Ethiopia, and the Tigray People’s Liberation Front are fighting. Insurgencies rage across most of the poorest nations.
As a planet we have never been wealthier. But “wise” has yet to catch up to “wealthy.”
E-mail me at mangun@gmail.com. Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis provided by AAA Southeast Equities Inc.