Out of those 42 commodity prices, 19 have declined in absolute terms, which is to say that, adjusted for inflation, they were cheaper in 2016 than in 1960. Twenty-three commodities have increased in price over the last 56 years. However, of those 23 prices, 20 rose less than global per capita income (177 percent). Only three commodities (crude oil, gold and silver) rose more than income, which is to say that in a vast majority of cases commodities became cheaper—absolutely or relatively—in spite of population growth of 142 percent.
So, what's the moral of the story? Eighteen years after his untimely and much lamented passing, Julian Simon's wisdom continues to shine. As Simon argued in his 1981 book The Ultimate Resource, human beings, unlike other animals, innovate their way out of scarcity by increasing the supply of natural resources or developing substitutes for overused resources. Human ingenuity, in other words, is “the ultimate resource” that makes all other resources more plentiful.
This article first appeared in Reason.