On Wednesday, November 10, 1999 at 11:00:00 AM UTC+3, S. Hales wrote:

There are two threads here currently dealing with scarcity. I thought I might interject a little:

Scarcity at a given point in time or temporal scarcity. Scarcity is a function of the limits on satisfaction of all wants at a given point in time giving rise to differentials in costs among economic choices.

Scarcity over time or intertemporal scarcity. Increasing scarcity over time is a function of declining stocks of raw materials available for extraction giving rise to an increase in resource prices because of increasing marginal costs of extraction as the resource is depleted.

The first definition of scarcity is an eternal problem the second definition is simply a rough statement of the Hotelling Theorem (1931) of the optimal path for scarcity rent over time for an exhaustible resource.

We take the first definition as a given or self-evident. The second definition seems to be disproven over the last century as resource prices in real terms have declined and not risen as the finite stocks of exhaustible resources have been further depleted. Though more of the finite stock of most exhaustible resources have been discovered and brought into public or private ownership still the resource owners sell their stocks of these resources even in the face of declining real prices. We must assume that resource owners have reduced their marginal costs of extraction over time. The only variable missing in the analysis is technological change. This seems to explain, if true, lower marginal costs and hence resource owners indifference to lower real resource prices.

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