The price of commodities "in the ground" have boomed while resources that can be grown have trended downwards
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Vital ingredients
IN HIS 1968 book “The Population Bomb”, Paul Ehrlich, a biologist, argued that rising populations would inevitably exhaust natural resources, sending prices soaring and condemning people to hunger. In a new paper David Jacks, an economist at Simon Fraser University, assembles figures on inflation-adjusted prices for 30 commodities over 160 years. It turns out Mr Ehrlich was not entirely off the mark. Over the very long run commodity prices display a marked upward trend, having risen by 192% since 1950, and by 252% since 1900. But that upward trend has clearly not translated into global famine, and not all commodities are alike. Long-run rises have been most pronounced for commodities that are “in the ground”, like minerals and natural gas. Energy commodities especially have boomed, soaring by roughly 300% since 1950. In contrast, prices for resources that can be grown have fallen. The inflation-adjusted prices of rice, corn and wheat are lower now than they were in 1950. Although the global population is 2.8 times above its 1950 level, world grain production is 3.6 times higher. See full article.
Daily chart: Vital ingredients | The Economist
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