A Stitch in Haste

You know you've succeeded as an economics teacher when you can ask the following question on a final exam with no fear of receiving nothing but blank answer sheets:

Explain why the world will never run out of oil.
People do in fact generally posit that question in terms of oil, for the obvious geopolitical reasons.

But it doesn't just apply to oil:

Copper is used in everything from automobiles to ordnance. Copper allows electricity to be generated, transported and conducted to the various outlets in a modern home. Copper is also relatively scarce compared to other metals like iron or aluminum that make up a good portion of the earth itself. So copper serves as an excellent metallic bellwether for potential future resource scarcity, according to a group of researchers who compiled data on its extraction, use, recycling and discard to estimate whether there is enough copper available to make a developed standard of living available to all the world's people. The short answer is: no.
...
[R]esidents of Canada, Mexico and the U.S. required an average of 170 kilograms of copper per person. Multiply that by overall population estimates of 10 billion people by 2100 and the world will require 1.7 billion metric tons of copper by that date — more than even the most generous estimate of available resources.

This is, of course, utter nonsense.

It's quite simple really: Yes the world supply of copper is "fixed," in the sense that there's only so much copper ore in the ground. So what? The laws of supply and demand still apply — even more so, arguably, in the context of a finite resource. If the available supply continues to decrease with demand staying fixed, then the price will merely rise over time. And as the price of copper rises, eventually the global economy will adjust accordingly (i.e., it will no longer be the case that "copper is used in everything from automobiles to ordnance").

Copper pipe too expensive for residential plumbing? Switch to plastic pipe. Copper wire too expensive for electrical wire? Switch to another conductive metal — or to fiber-optics. Unless there is a vital use of copper for which there is no substitute (not just no perfect substitute, but no substitute of any kind) would there need be any worry about depleting the finite resource.

And, of course, high prices work in both directions. A major reason that "the Bronx was burning" in the 1970s was because the only material value of the empty buildings there was the copper plumbing, which could be sold for scrap after the building was demolished. Copper is recyclable and reclaimable, so if it becomes scarce enough, then people will start looking for it — and will start finding it. (Also consider another analogy — people having their gold fillings removed when the price of that metal skyrocketed during the Great Stagflation.)

Meanwhile, with higher copper prices, perhaps new methods of extracting ore will be developed, or chemical processes that will be able to extract copper from other compounds.

The real lament behind "dwindling resources" is not that "we'll run out of copper," but rather that poor nations won't be able to afford it. That's not the same thing and does not warrant the same policy response from the developed world. "Too bad so sad" may not be the correct response, but neither is panic, or rationing, or any other market-disrupting program. Copper is a private good that is (or should be) mined by private companies from private land. That's hardly is a mandate for global interventionism.

For Discussion: I have, on the other hand, essentially argued the exact opposite regarding the world supply of gold, insisting that it would be impossible to tie, as some more radical libertarians would like, the entire global economy to the extremely limited stock of gold that is available. Am I being inconsistent? Why or why not?

Fun Fact: The word "cop" derives from the old practice of issuing copper badges to police officers. Perhaps they became too expensive...

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