Think of a world in which there are two kinds of growth. One is leap-ahead growth in which technologically advanced societies dream up even more advanced technology. The other is catch-up growth in which technologically backwards societies learn to use the advanced technology that already exists in the advanced countries.I think the point is a good one for a number of resources where there is a lot of supply, but current limits to extraction. However, with some other resources, oil being the obvious but not only place to start, there is an issue that there simply is not sufficient amount of it to extract. When the resource is a power source versus necessary material (think calories versus vitamins) the nature of the resource use is also much more different. With some energy sources (gravity) there is no cost to continually reuse the resource, it is all about maximizing extraction. Most of these resources, including gravity, eventually come back as some form of solar energy. So the first race is the race to extract solar power in its many forms before we run out, or over heat ourselves, on the other sources.
In the twentieth century we saw some instances of catch-up growth, but leap-ahead growth accounted for the majority of global growth in output. One result of that is that we got much much better at extracting natural resources (energy, food, metal) from the fixed supply of land, and commodity prices generally went down. But over the past ten years, catch-up growth in India, Brazil, and (especially) China has been the majority of world growth. Consequently, the rate of stuff-utilization is going up higher than the rate of stuff-production, meaning we’ll see rising commodity prices rather than falling ones.
For rich countries, that’s inconvenient but we’ll deal. For China, it’s fine—the whole point is that incomes will be rising faster than prices. But for poor countries that aren’t growing rapidly, it’s potentially a disaster. This kind of trend is what’s driving the current instability in North Africa and will probably be a major story for years to come.
Tyler Cowen and Matthew Yglesias had a friendly discussion on Blogginheads. There is a little bit of econo-speak, but most of it is simply speaking of adult subject matter at the adult level.