Finite Resources vs. Scarce Resources

Over at Cafe Hayek, Don Boudreaux reports on some great news: the amount of arable land in the wold has grown considerably since the 1960’s!  This is why I love economics: making the world a better place.

But there is another lesson to take away here other than that the world is getting better.  That lesson is the difference between what we mean when we say a resource is scarce vs. being finite.

Arable land is both scarce and finite.  There is only so much arable land in the world.  However, thanks to technological advances, arable land has become less scarce; it’s supply has increased. It is still finite, to be sure, but “more” land has been “created” making it less scarce.

And this is the sort of thing we’re talking about when saying oil (or other resources) are finite but can become more or less scarce.