Why does this rise? Because of government subsidies, tariffs and other manipulations of the market. If we subsidize using food to propel our cars instead of eating it, yeah, food prices will rise.

Nevermind the health care market, which is the mother of all government distortions.

And even though oil might be scarce, once it gets dearer, prices will rise, and we can switch to other fuels then.

“what happens when critical resources–such as oil, timber, or wheat–are in short supply? Who gets to continue growing, and who has to stop–or, worse, fall further behind?”

Isn’t it wonderful that prices are the signal we follow here? No central planner. When demand increases, prices will rise. People will try harder to supply. Prices provide the incentive. Timber and wheat are renewable, and rising oil prices in the far future will provide an incentive to switch oil or dig for harder to find deposits. Or use nuclear energy. Beautiful.

I would argue that sociologists are more connected to reality than current economists. Sociologists see the person in terms of the physical person, see human behavior as evolved from the other life around us. And they do debate nature or nuture, with genetics or the environment determines human nature.

Economists exist in their own world with their own rules. When demand requires more goods, labor appears to transform resources which appear to meet demand. When demand decreases, labor disappears .

What messes things up are those pesky externalities.

Lester Brown described the problem as

“Economists see the environment as a subset of the economy. Ecologists, on the other hand, see the economy as a subset of the environment.”

drawing the analogy to Copernicus

“Recognizing that the earth was not the center of the solar system set the stage for many advances. So, too, will recognizing that the economy is not the center of our world.”

See http://www.theglobalist.com/DBWeb/StoryId.aspx?StoryId=2234

Malthus did see the answer in Darwin’s survival of the fittest, but he assumed that those like him were the fittest and most adaptable, just as today’s economists seem to do, while the poor, sick, and old are the weak that don’t.

From observation, the law seems to recognize the constraints of nature, if only by calling the things that defy the law, acts of god.

Or more precisely, the law has evolved from the spiritual explanation of the events that reward or harm people into rules that embody some form of reciprocity expressed in religion into the secular common law. Common law is the result of taking real world experience and trying to “do what’s right” and over time developing a set of rules that handle most of reality.

For example, common law must have some case law for dealing with a glacier sliding off Greenland into the ocean and flooding private land from the sea level rise which secures a mortgage. Does the borrower need to repay the loan, and what does it mean to foreclose to recover the money secured by the property.

For the economist, at least the economists who are the most vocal, such events are not allowed. Or it is a case of the borrower failing to take responsibility for himself. Or the government caused the problem by interferring in the market. Or that the government shouldn’t interfere and create a moral hazard….

To the economist, land is a fixed resource. I suspect the lawyer has much case law that deals with land that disappears. For example, what is the case law for half of Florida being flooded? Certainly many lawsuits would be filed if such an event occurred, and I’m sure that at least some lawyers today can start citing case law.

For economists, that can’t happen. It violate one of the most basic axioms.