From Mark Perry
Perry writes:
"Bottom Line: Over a very long period of time (76 years), there has been a significant downward trend in the real prices of commodities (see red trend line in graph), and the decline in commodity prices has taken place during a period when the world population increased by more than three times, from 2 billion in 1934 to the current population of 7 billion in 2010."
This gets at a very difficult concept for many to understand: As long as we have markets, we will never "run out" of anything. The Stone Age didn't end for lack of stones, and the Bronze Age didn't end for lack of bronze. The oil age will not end for lack of oil.
As commodities become scarcer relative to demand, those who produce, extract, and process the commodities have a financial incentive to do their work more efficiently and cost-effectively. (Recycling is included as one way to "produce" more.) Mineral or oil deposits that may once have been considered too challenging to obtain become practical because of technological innovation.
As any commodity rises in price, one of two things happens. Either producers find ways to get more of it to market, or buyers begin finding substitutes for the expensive commodity. There can be disruptions in the short term (a few years), but the long-term trend is ever downward. The chart above begins in the 1930s. But other charts I've seen going back to the 1860s show the same continuous trends.
The challenge is that too many project present realities unaltered into the future and see a world running of this or that in X many years. But markets and human adaptation ensure that almost nothing in the present can be projected unaltered into the future.
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