As the economy sputters into Q2, apocalyptic economic and environmental prophesies are splattered across the major newspapers. But as Canada’s National Post explains, there’s no reason to panic. Disaster has been forecast since time immemorial, and it never seems to happen. To the contrary, since the Industrial Revolution, the average quality of life across the globe has continued to rise by almost every meaningful measure.
Disaster scenarios are easy to fall for because almost any short-term crisis can be made to look forboding by extrapolating short-term trends indefinitely into the future:
The trouble with doom-and-gloom predictions — whether they be about oil shortages, food scarcity, water wars or population explosions –is that most are based on the linear extrapolation of short-term trends. If, say, rice prices rise, alarmists assume they will keep rising indefinitely at the same rate — and then produce scary-looking graphs that show trend lines veering up into the wild-eyed blue yonder.
But history shows that human adaptation invariably intervenes –especially in parts of the world that have the benefit of a market economy. Scarcity drives innovations that pull the world back from the brink. Consumers take high prices as their cue to consume less; producers take the same cue to produce more. A new equilibrium is reached, just as college microeconomics textbooks would predict.
When Thomas Malthus made his dire predictions about a population explosion he wasn’t wrong. His mistake was in assuming that societal and technological dynamics wouldn’t change over time. Malthus could never have imagined birth control pills or genetically modified food.
And just as Malthus didn’t imagine the kinds of technologies that would solve his disaster scenario, it’s similarly hard to imagine the kinds of technology that will mitigate reosource scarcity and climate change. This doesn’t mean that we shouldn’t take these problems seriously, or that we shouldn’t be willing to make sacrifices to tackle them. What it does mean is that we shouldn’t panic.
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