Scarcity and frontiers how economies have developed through natural resource exploitation
Scarcity and Frontiers
Throughout much of history, a critical driving force behind global economic development has been the response of society to the scarcity of key natural resources. Increasing scarcity raises the cost of exploiting existing natural resources and creates incentives in all economies to innovate and conserve them. However, economies have also responded to increasing scarcity by obtaining and developing more of these resources. Since the Agricultural Transition over 12,000 years ago, this exploitation of new “frontiers” has often proved to be a pivotal human response to natural resource scarcity. This book provides a fascinating account of the contribution that natural resource exploitation has made to economic development in key eras of world history. This not only i lls an important gap in the literature on economic history but also shows how we can draw lessons from these past epochs for attaining sustainable economic development in the world today. Edward B. Barbier is the John S. Bugas Professor of Economics in the Department of Economics and Finance, University of Wyoming. He has over twenty-ive years’ experience as an environmental and resource economist, working mainly on the economics of environment and development issues. He is the author of many books on environmental policy, including Natural Resources and Economic Development (Cambridge University Press, 2005) and, with David Pearce, Blueprint for a Sustainable Economy (2000).
Downloaded from Cambridge Books Online by IP 184.108.40.206 on Wed Dec 26 04:51:35 WET 2012.
exploitation / Edward B. Barbier. p. cm. Includes bibliographical references and index. ISBN 978-0-521-87773-2 – ISBN 978-0-521-70165-5 (pbk.) 1. Agriculture–Economic aspects–History. 2. Natural resources. 3. Scarcity. 4. Economic development. I. Title. HD1411.B247 2011 333.7–dc22 2010035574 ISBN 978-0-521-87773-2 Hardback ISBN 978-0-521-70165-5 Paperback Cambridge University Press has no responsibility for the persistence or accuracy of URLs for external or third-party internet websites referred to in this publication, and does not guarantee that any content on such websites is, or will remain, accurate or appropriate.
“That men do not learn very much from the lessons of history is the most important of all the lessons of history.” Aldous Huxley “The history of almost every civilization furnishes examples of geographical expansion coinciding with deterioration in quality.” Arnold Toynbee “Where there is an open mind, there will always be a frontier.” Charles Kettering
The classic pattern of frontier expansion page 10 Key historical epochs of resource-based development 25 The origins and expansion of early agricultural systems 48 The Fertile Crescent in Southwest Asia 53 The Mesopotamian-Indus Valley trade routes, 3000–1500 BC 114 The major silk trade routes, 200 BC to 400 AD 117 The emerging world economy, ca. 1200–1300 163 Phases of frontier expansion in North and South America, 1500–1914 253 Phases of frontier expansion in Asia and the Paciic, 1500–1914 261 Phases of frontier expansion in Africa, 1500–1914 266 The Atlantic economy triangular trade, 1500–1860 307 Global energy consumption, 1800–1910 374 Energy consumption by fuel type in the United States, 1800–1910 375 Change in land use, 1700–1950 473 Global energy consumption, 1900–1950 482 Global energy production, 1900–1950 483 Long-run material use trends in the US economy, 1900–2000 497 GDP per capita and population, 1960–2006 561 Long-run global land use change, 1700–1990 572 Global agricultural and forest land use change, 1961–2005 575 Global energy use, 1965–2006 580 Resource dependency in exports, 1960–2006 584 The rural poor and population on fragile lands in developing economies 592 Fragile land population and GDP per capita in developing economies 593 Reversing the vicious cycle of “unsustainable” development 684
1.1 Magnitudes of global environmental change, 1890s–1990s 2.1 Rates of spread of early farming 3.1 Estimates of world and regional population, 3000 BC to 1000 AD (millions of people) 3.2 Distribution of major world cities, 3000 BC to 1000 AD 3.3 Civilizations and environmental degradation, 3000 BC to 1000 AD 4.1 Estimates of world and regional population, 1000–1500 (millions of people) 4.2 Estimates of major world cities, 1000–1500 5.1 Estimates of regional population and growth, 1500–1913 5.2 Estimates of regional economic indicators, 1500–1913 5.3 Ocean empires and natural resource trade, 17th and 18th centuries 5.4 European immigration to the United States, 1630–1914 6.1 Pattern of trans-Atlantic slave trade, 1501–1867 6.2 Staple regions and exports from British America, 1764–1775 6.3 Atlantic economy commerce, 1501–1850 6.4 Destination of British and European exports, 1663–1860 6.5 Estimated populations of major North American regional societies, ca. 1750 7.1 Estimates of regional demographic and economic indicators, 1870–1913 7.2 Global transport cost changes, 1870–1914 7.3 Length of railway line in service, 1870–1913 7.4 Land use trends for selected regions, 1700–1910 7.5 Cropland expansion in frontier regions, 1870–1910 7.6 Destination of international capital lows, 1900–1914
7.7 Agricultural land share of national wealth for selected countries (%), 1688–1913 7.8 Percentage share of world manufacturing output by country, 1750–1913 7.9 Pre-1913 turning points from extensive to intensive growth 7.10 Regional shares (%) of world mineral production and reserves, 1913 8.1 Estimates of regional demographic and economic indicators, 1913–1950 8.2 Land use trends for selected regions, 1910–1950 8.3 Cropland expansion in frontier regions, 1910–1950 8.4 Regional shares (%) of world mineral production, 1910–1950 8.5 Agricultural land share of national wealth for selected countries (%), 1913–1955 9.1 Regional shares (%) of world energy production, 1950–2007 9.2 Regional shares (%) of world mineral production, 1950–2006 9.3 Trends in global forest area (106 km 2), 1990–2005 9.4 Trends in cultivated land to 2050 in developing regions 9.5 Water withdrawal by volume and by share of total renewable supplies 9.6 Developing countries and regions with relatively scarce water supplies 9.7 Global greenhouse gas emissions (million tonnes of CO2 equivalent), 1990–2005 9.8 Global greenhouse gas intensity of economies (tonnes of CO2 equivalent per million 2000 international US$), 1990–2005 9.9 Adjusted net savings as a share of gross national income 9.10 Distribution of world’s population and rural poor on fragile land 9.11 Low- and middle-income economies and patterns of resource use 10.1 2008–2009 global stimulus packages and green investments (as of July 1, 2009)
2.1 Timeline for the Agricultural Transition page 50 3.1 Climate change, environmental degradation and the collapse of successive Mesopotamian civilizations, 3500–1000 BC 93 4.1 The economic consequences of the Black Death 176 5.1 Overseas migration and the era of Global Frontiers 226 7.1 “Moving frontier” models of economic development in the tropical periphery 417 9.1 Resource dependency and economic performance 586 9.2 Frontier expansion and economic performance: empirical evidence 597 10.1 Institutions and ecological scarcity 686 10.2 Induced technological change and public policy for reducing carbon dependency 692 10.3 The 2030 blueprint for a clean energy economy 706
The genesis of this book began with another volume, Natural Resources and Economic Development, which was published in 2005 by Cambridge University Press.1 The purpose of the latter book was to explore a key paradox in the contemporary world economy: why is natural resource exploitation not yielding greater beneits to the poor economies of Africa, Asia and Latin America? To better understand this paradox, I thought that it might be important to contrast the less successful resource-based development of present times with past epochs of economic development in which the exploitation of natural resources clearly played an important, and more successful, role. Thus, in my 2005 book, I included a chapter entitled “Natural resource-based economic development in history.” I published subsequently an article based on this chapter in World Economics. 2 However, it soon became apparent that a chapter or journal article was not suficient to explore the contribution of natural resource exploitation in inluencing processes of economic development in key eras of world history. Nor would it be possible through any short historical review to shed light on the many parallels between these past epochs and the current era of global economic development and patterns of resource use. But what i nally convinced me to write this book was the realization that the role of natural resources in shaping economic development has been somewhat of a neglected topic in the study of history. This omission seems surprising, given that the exploitation of land and other natural resources has clearly been an important feature of economic development for most of global history. A study focusing on how economies have developed through exploiting natural resources might therefore be a useful contribution to the existing literature. I also felt that such a contribution might be warranted, given two important developments in the study of history. First, environmental history – the study of humans and nature and their past interrelationships – has become an important subdiscipline within history. Thanks
to this growing subject area, there are now more studies of how past environmental conditions and events have inluenced human history and, as a result, a strong interest in understanding this linkage further from an economic perspective.3 Second, economic history – the study of how economic phenomena evolved from a historical perspective – has experienced a renaissance in recent years. One reason, as cited by the economic historian Nathan Nunn, is the emergence of an exciting new literature that is examining whether historic events and epochs are important determinants of economic development today.4 Perhaps it was time to show how the lessons from successful resource-based development in the past might inform our current efforts to grapple with environmental problems and their inluence on present-day economies. The focus of this book on how economies have developed through natural resource exploitation, especially by exploiting new frontiers of land and natural resources, has received even less attention in contemporary economics. The economists Ron Findlay and Mats Lundahl assert that the analysis of frontier-based development “has been used extensively by historians and geographers for a wide variety of times and places, but has been neglected by economists.”5 As explained in Chapter 1, the book’s title, Scarcity and Frontiers, was chosen to emphasize the economic importance of such a pattern of development. Throughout much of history, a critical driving force behind global economic development has been the response of society to key natural resources. Increasing scarcity raises the cost of exploiting existing natural resources, and will induce incentives in all economies to innovate and conserve more of these resources. However, human society has also responded to natural resource scarcity not just through conserving scarce resources but also by obtaining and developing more of them. Since the Agricultural Transition over 12,000 years ago, exploiting new sources, or “frontiers,” of natural resources has often proved to be a pivotal human response to natural resource scarcity. This long process of history in which i nding and exploiting new sources of land and natural resources has been fundamental to economic development may hold some lessons for the environmental and resource challenges facing the world economy currently. Thus, a key aim of this book is to demonstrate that examining how economies have developed historically through natural resource exploitation may help us understand better the role of scarcity and frontiers in today’s economies. If the following book succeeds in this aim,
then perhaps the study of how natural resource use inluences economic development, both past and present, will not be such an overlooked topic. Notes 1 Barbier (2005a). 2 Barbier (2005b). 3 For example, some of the broad surveys in environmental history that have inluenced this book include Chew (2001); Diamond (1997, 2005); Marks (2007); McNeill (2000); McNeill and McNeill (2003); Ponting (1991); and Richards (2003). 4 Nunn (2009). As we shall see in this book, some of this “exciting new literature” identiied by Nunn, such as Engerman and Sokoloff (1997, 2002) and Acemoglu et al. (2001, 2002), has raised important issues concerning the historical relationship between natural resource use and economic development. 5 Findlay and Lundahl (1994, p. 70).
References Acemoglu, Daron, Simon Johnson and James A. Robinson. 2001. “The Colonial Origins of Comparative Development: An Empirical Investigation.” American Economic Review 91(5): 1369 –1401. 2002 . “Reversal of Fortune: Geography and Institutions in the Making of the Modern World Income Distribution.” Quarterly Journal of Economics 117(4): 1231–1294. Barbier, Edward B. 2005a. Natural Resources and Economic Development, especially ch. 2. “Natural Resource-Based Development in History.” Cambridge University Press. 2005b. “Natural Resource-Based Economic Development in History.” World Economics 6(3): 103 –152. Chew, Sing C. 2001. World Ecological Degradation: Accumulation, Urbanization, and Deforestation 3000 BC–AD 2000. New York: Altamira Press. Diamond, Jared. 1997. Guns, Germs, and Steel: The Fates of Human Societies. New York: W. W. Norton & Co. 2005. Collapse: How Societies Choose to Fail or Succeed. London: Allen Lane. Engerman, Stanley L. and Kenneth L. Sokoloff. 1997. “Factor Endowments, Institutions, and Differential Paths of Growth among New World Economies.” In Stephen Haber (ed.) How Latin America Fell Behind: Essays on the Economic Histories of Brazil and Mexico. Stanford University Press, pp. 260–304.
2002 . “Factor Endowments, Inequality, and Paths of Development among New World Economies,” Economia 3(1): 41–109. Findlay, Ronald and Mats Lundahl. 1994. “Natural Resources, ‘Vent-forSurplus,’ and the Staples Theory.” In G. Meier (ed.) From Classical Economics to Development Economics: Essays in Honor of Hla Myint. New York: St. Martin’s Press, pp. 68–93. Marks, Robert B. 2007. The Origins of the Modern World: A Global and Ecological Narrative from the Fifteenth to the Twenty-irst Century (2nd edn.). Lanham, MD: Rowman & Littleield. McNeill, John R. 2000. Something New Under the Sun: An Environmental History of the 20th-century World. New York: W. W. Norton & Co. McNeill, John R. and William H. McNeill. 2003. The Human Web: A Bird’s Eye View of Human History. New York: W. W. Norton & Co. Nunn, Nathan. 2009. “The Importance of History for Economic Development.” Annual Review of Economics, September 2009, vol. 1, pp. 65 –92. Ponting, Clive. 1991. A Green History of the World. London: Penguin Books. Richards, John F. 2003. The Unending Frontier: An Environmental History of the Early Modern World. Berkeley, CA: University of California Press. Sokoloff, Kenneth L. and Stanley L. Engerman. 2000. “Institutions, Factor Endowments, and Paths of Development in the New World.” Journal of Economic Perspectives 14(3): 217–232.
I am grateful to a long list of people who have helped in so many ways to make this book possible. First, and foremost, I would like to thank Chris Harrison of Cambridge University Press for enthusiastically supporting this project from the outset, commissioning this book and providing useful suggestions and criticisms of earlier drafts of the chapters. I also appreciate the encouragement and advice of Eric Jones, who not only invited me to spend the day with him to discuss my ideas for this book but also agreed to review the entire draft manuscript. His evaluation and suggestions were extremely helpful in preparing the i nal draft. Special thanks go to Joanne Burgess, who read over early drafts of the manuscript and provided detailed comments, suggestions and edits. Her careful attention to the i rst and i nal chapters of this book was immensely helpful and sorely needed. In this task, she was ably assisted by her three “insistents,” Becky, James and Charlotte. They provided the necessary and welcome diversions from this book, whether it was appreciated at the time or not. A number of individuals provided helpful advice, encouragement and useful exchanges that helped me in producing the book. Lara Barbier enthusiastically engaged me in a number of conversations about the ideas in this book, and offered a unique and fresh outlook on the appeal of history from the perspective of an undergraduate majoring in the subject. When I was just formulating my ideas for this book, I had several useful conversations, exchanges and visits with Ron Findlay and Gavin Wright. Stanley Engerman, Nick Hanley, Brooks Kaiser, Kevin O’Rourke, Fiona Watson and Jeffrey Williamson also provided useful advice and exchanges. I am indebted to Margie Reis for helping me with preparing the manuscript for publication and, above all, for her tireless dedication to tracking down obscure references from interlibrary loan and electronic sources.
Thanks also to Brooks Kaiser for inviting me to present an overview of the main “scarcity and frontier” theme at the Environmental Economics History Session, 32nd Annual Meeting of the Social Science History Association, Chicago, Illinois, November 18, 2007. The research undertaken for this book was facilitated by my sabbatical leave from the University of Wyoming over 2006–2007. My sabbatical research was assisted through the Flittie Award from the Faculty Development Committee, University of Wyoming and a research fellowship from the American Heritage Center, University of Wyoming. I am grateful to Nick Hanley and the Department of Economics, University of Stirling, Scotland for hosting me on two visits in Fall 2006 to conduct research for this book.
Resource development is a neglected topic in economic history. To be sure, no economist would be surprised to learn that resource abundance is a function of extraction and transportation cost as well as of physical availability, and the role of substitution in mitigating resource scarcity is widely appreciated … But natural resources still are viewed as the last of the exogenous factors, governed by the principle of diminishing returns in an economic growth process whose other constituents have come to be treated both as endogenous and subject to increasing returns. (David and Wright 1997, p. 204)
Introduction For an early Spring day in Washington, DC in 1913, the weather was overcast but mild. The large crowd milling about the Capitol were jubilant and expectant. After all, their presidential candidate, Woodrow Wilson, had swept to victory the previous November, ousting the incumbent William Taft and soundly beating the third party candidate Theodore Roosevelt. To the average American, Woodrow Wilson embodied the spirit and success of his times. His life and career spanned the US Civil War of the 1860s, the hard post-war years of reconstruction and reconciliation, and, from 1870 onwards, the rapid expansion of the US economy across the North American continent. Woodrow Wilson also typiied the American Dream. The son of a southern Presbyterian minister, Wilson grew up in the South but eventually became a professor at Princeton University and then its President. He entered politics and was Governor of New Jersey from 1911 to 1913. He ran for President for the i rst time and won. Just like the United States itself, there seemed to be no limits to what this mild-mannered, devout and hard-working American could accomplish. 1
The crowd waiting for Wilson’s i rst inaugural address on March 4, 1913 therefore anticipated a rousing afirmation of all that was good and great about the United States. But when he i nally gave his speech, it was different to what his audience had expected. At i rst, Wilson told the crowd what they wanted to hear. He outlined briely the remarkable achievements of rapid US industrialization over recent decades. Soon, though, he launched into his main message: the need for economic and social reform. The human and environmental costs of recent US economic growth had been too high. In particular, Wilson asserted, “We have squandered a great part of what we might have used, and have not stopped to conserve the exceeding bounty of nature, without which our genius for enterprise would have been worthless and impotent.”1 The inaugural audience was stunned by this sober pronouncement. Hadn’t the United States, through exploiting its bounteous land and natural resources, become the leading industrial power of the world, overtaking even the mighty British Empire? Didn’t the United States still have plenty of land and natural resources left to keep its economy growing? Why was the new President so concerned that US economic development may have “squandered” its “exceeding bounty of nature”? Woodrow Wilson’s remarks turned out to be prescient, however. The period from 1870 to 1914 had been unique in world economic history, which scholars now refer to as the “Golden Age” of ResourceBased Development.2 The transport revolution and trade booms of the era were primarily responsible for unprecedented land conversion and natural resource exploitation across many resource-rich regions of the world. The result was a long period of global economic growth, in which many countries and regions beneited from this pattern of resource use and development. The United States was the prime example of such success; in only a few decades the US had exploited its vast natural wealth to transform its economy into an industrial powerhouse. But with the advent of World War I, followed by the Depression years and World War II, the Golden Age came to an end. Although the United States continued to rely on its abundant natural resources to spur industrial expansion, by the 1950s the US economy had also become dependent on foreign sources of raw materials, fossil fuels, minerals and ores to support this expansion. In the post-war world, possessing an abundant endowment of natural resources no
longer guaranteed successful economic development. Over the past ifty years, increased trade and globalization has resulted in declining trade barriers and transport costs, fostered global integration of commodity markets, and severed the direct link between natural resource wealth and the development of domestic industrial capacity. Or, as the economic historian Gavin Wright maintains, in today’s world economy, “there is no iron law associating natural resource abundance with national industrial strength.”3 Nearly a hundred years after President Wilson’s 1913 inaugural address, public reaction during another democratic election illustrates how contemporary perceptions of natural resources and economic development are very different. This time the location was France, and the election was the June 2009 vote for seats in the European Parliament, the legislature of the European Union. A year before the election, the French Government of President Nicolas Sarkozy released its strategic plan for the French Armed Forces over the next several years. The plan’s main recommendation was that “the current structure of the armed forces will undergo a controlled reduction, combining on the one hand the effects of concentration of military bases in France and the rationalization of administrative and support functions and, on the other, the redefinition of operational contracts. A similar reduction will be made in the size of prepositional forces and forces stations overseas.”4 The result of this recommendation would be a reduction in total French armed forces from 271,000 civilian and military personnel in 2008 to 225,000 in 2014–2015. By late 2008, the French legislature had approved the reductions. One of the obvious targets for overseas troop reductions were the small garrisons stationed in the tiny overseas French possession, les Íles Eparses (the Scattered Islands). 5 These territories consist of four small coral islands and one atoll, dotted around Madagascar in the southern Indian Ocean. Although les Íles Eparses are unpopulated and are designated nature reserves, France maintains a military garrison of around ifteen troops on all but one of the territories. The garrisons establish French sovereignty against rival territorial claims by Madagascar and Mauritius and may deter the spread of piracy in the Indian Ocean. But the principal function of the garrisons has been to monitor and police the reserves, which are highly valued by the international scientiic community as biodiversity sanctuaries and for studying the effects of global warming. With the planned
reductions in French forces stationed overseas, it seemed that eliminating these expensive outposts in les Íles Eparses was an obvious policy decision. However, the June 2009 European elections in France caused a remarkable reversal in the political fortunes of les Íles Eparses. The French Greens received a signiicant share of votes in the elections, by campaigning for better policies to halt ecological degradation, biodiversity loss and global warming. French scientists, including ornithologists, meteorologists, archaeologists, coral reef experts and geologists, capitalized on the public concern over the environment. They argued that the pristine les Íles Eparses were of unique scientiic and ecological value, which was well worth the costs of maintaining small garrisons on the islands to protect them from poachers and other unwelcome visitors. The French public was persuaded by the scientists, and the fate of les Íles Eparses became an electoral issue. The Sarkozy Government had no choice but to abandon any plans of eliminating the troop garrisons in les Íles Eparses. Despite the exorbitant budgetary costs of maintaining troops thousands of miles away on remote islands, preserving nature reserves of scarce biodiversity and ecological value was warranted. By October 5, 2009 the French Government was hosting a symposium on “Scattered Islands: Land of the Future,” to plan the long-term management of the reserves and regional cooperation of the isheries in the exclusive economic zone of 640,000 km 2 encompassed by les Íles Eparses. The difference in public attitudes between the American crowd listening to President Wilson in 1913 and the French electorate in 2009 illustrates that much has changed over the past hundred years in how we view the role of natural resources in economic development. In Wilson’s day, associating “natural resource abundance with national industrial strength” was the norm. Today, we no longer believe that this association holds. Instead, we see our economies and societies potentially threatened by a wide variety of constraints caused by natural resource scarcity. Such problems range from concerns over the cost and availability of key natural resources, including fossil fuel supplies, isheries, arable land and water, to the environmental consequences of increasing global resource use, degradation of key ecosystems, such as coral reefs, tropical forests, freshwater systems, mangroves and marine environments, and the rising carbon dependency of the world economy. Contemporary unease over natural resource scarcity, energy insecurity, global warming and other
Table 1.1. Magnitudes of global environmental change, 1890s–1990s Indicator
Coeficient of increase, 1890s to 1990s
Drivers Human population Urban proportion of human population Total urban population World economy Industrial output Energy use Coal production Freshwater use Irrigated area Cropland area Pasture area Pig population Goat population Cattle population Marine ish catch Impacts Forest area Bird and mammal species Fin whale population Air pollution Carbon dioxide (CO2) emissions Sulfur dioxide (SO2) emissions Lead emissions
Source: Adapted from McNeill (2000, pp. 360–361) and McNeill (2005, Tables 1 and 2).
environmental consequences is to be expected, given the rapid rate of environmental change caused by the global economy and human populations over the twentieth century (see Table 1.1). At the beginning of the twenty-i rst century, therefore, we are more accustomed to viewing “the exceeding bounty of nature” to be running out, rather than providing unlimited supplies for “our genius for enterprise.” Rather than enjoying a new “Golden Age” of Resource-
Based Development, we seem to be entering a different era, the “Age of Ecological Scarcity.” However, as the quote at the beginning of this chapter indicates, the contemporary concern with natural resource and ecological scarcity also shapes our view of how natural resources inluence economic development. We regard natural resources as “i xed endowments.” These endowments comprise the sources of raw materials, energy and land that are provided in varying amounts freely by nature and geology, and that are distributed randomly across regions and countries. Although natural resources serve as valuable inputs into our economies, as the economic historians Paul David and Gavin Wright note, because they are largely i nite in supply relative to demand, we treat these endowments as “exogenous factors” that are subject to “diminishing returns.” This view appears to be reinforced by current patterns of resource use and exploitation in today’s economy. As we continue to encroach on and pollute i xed natural environments and habitats, the earth’s natural capacity to sustain a stable climate, absorb emissions, support ecosystems and maintain wild species has declined (see Table 1.1). In today’s world, we are more concerned about the impact of economic development on natural resources and global environmental change than how the abundance, or scarcity, of natural resources have shaped economic development. Our preoccupation with present-day environmental and natural resource problems tends to be myopic, however. There is mounting scientiic evidence that ecological scarcity, global warming and energy insecurity are serious issues that do require immediate attention by the international community. But our concern with these contemporary issues must be balanced with learning from the past. We tend to dismiss past uses of natural resources in previous eras, such as the Golden Age, as artifacts of history and thus irrelevant to our current environmental concerns. The result, as emphasized by David and Wright, is that “resource development is a neglected topic in economic history.” The purpose of this book is to correct this omission and, in doing so, show why the relationship between natural resources and economic development has been fundamental as economies have evolved over the past 10,000 years or so. There are two principal reasons motivating this task: i rst, to show that resource development should not be a neglected topic in economic history; and second, to demonstrate that the lessons learned from natural resource use and economic
development in past eras are relevant in the present Age of Ecological Scarcity.
Scarcity and frontiers This book’s title, Scarcity and Frontiers, conveys an important overall theme. Throughout much of history, a critical driving force behind global economic development has been the response of society to the scarcity of key natural resources. Increasing scarcity raises the cost of exploiting existing natural resources, and will induce incentives in all economies to innovate and conserve more of these resources. However, human society has also responded to natural resource scarcity not just through conserving scarce resources but also by obtaining and developing more of them. Since the Agricultural Transition over 12,000 years ago, exploiting new sources, or “frontiers,” of natural resources has often proved to be a pivotal human response to natural resource scarcity. The concept of natural resource frontiers is therefore signiicant to this book. The term frontier, as employed here, refers to an area or source of unusually abundant natural resources and land relative to labor and capital. Note that it is the relative scarcity, or abundance, of natural resources that matters to economic development, not their absolute physical availability. The process of frontier expansion, or frontier-based development, thus means exploiting or converting new sources of relatively abundant resources for production purposes. Years ago, the economist Joseph Schumpeter suggested that this process often contributes fundamentally to economic development, which he dei ned as “the carrying out of new combinations of the means of production,” one of which is “the conquest of a new source of supply of raw materials … irrespective of whether this source already exists or whether it has i rst to be created.”6 As we shall see in this book, such resource-based development has proved to be highly successful in the past for some economies and regions, but less successful for others. In sum, the process of economic development has not just been about allocating scarce resources but also about obtaining and developing new frontiers of natural resources. This is particularly the case if, as noted by the economists Ron Findlay and Mats Lundahl, the concept of a “frontier” extends “vertically downwards” to include mineral resources and extractive activities as well as “horizontally