They’re back. Those disciples of the dismal science, the neo-Malthusians, are knocking on our door. And they won’t go away.
Thomas Mathus was an 18th-century economist who predicted widespread starvation because food production can’t keep pace with population growth. He was wrong then, and his disciples, who keep banging the same drum, are wrong now.
Because speculators have recently driven the prices of oil, gold, copper, zinc, and other resources to record levels, the “Limits to Growth” crowd predicts that wars, famines, and economic disasters will result. They needn’t worry. The input Malthus failed to consider was human intelligence. As prices rise, ingenious and enterprising people adapt to higher prices by developing substitutes or using the materials more effectively. There’s no reason to think that the current resource crunch is any different.
The neo-Malthusians are often called modern-day Cassandras because, like the Trojan princess, they are always predicting disaster. But the difference is this: Cassandra’s prophecies, although not followed, were accurate. The neo-Malthusians have yet to get one right.
Douglas R. Tengdin, CFA
Chief Investment Officer
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