"Iron is an infinite resource"
No, it really depends. Its all about the cost to harvest* it in correlation to the gain. (*whats the correct term again in English?)

Its an interesting discussion EH, I will react to topic later.

The #1 biggest issue here is dependent on how resource-dependent nations utilize the income from resources they gain.

The whole concept Hez refers to is a long-known economic condition called "dutch disease."  The problem isn't inherently with natural resources.  Rather, the problem occurs when nations come under the false impression that a nonrenewable resource is a stable income.

If a nation's leadership believes its nonrenewable resources are stable incomes, it more often utilizes their budgets as such.  Money is used for all forms of government services just like any tax.  Economic development isn't seen as necessary under this interpretation as the nation will always have their natural resource (Iran under Ahmadinejad is a pretty good example of this, as he even dipped into the nation's emergency savings fund to pay for social services).

However, it's inherently flawed.  As Hez points out, some natural resources (oil is a perfect example) aren't renewable, and thus their economies aren't stable.  These nations will inevitably see hard economic times as their single resource dwindles (Once again, refer to Iran.  When oil prices hit $60.00 last November, the economy went to hell in a handbasket, it was discovered that there was no reserve savings, and a solid opposition to Ahmadinejad was able to build up in response to his use of oil money).

Rather, natural resource nations should be viewed as temporary blessings.  An oil nation can have decades without needing to tax its population.  This creates the perfect opportunity for the government to invest in other economic sectors, such as manufacturing, service industries, etc.  Economic globalization has allowed most countries to be able to develop the infrastructure for a stable economy even without natural resources, provided they somehow obtain a way to access that infrastructure.  Natural resources provide nations with this windfall.

It's surprising... with nearly 0 personal taxes and the huge oil windfall, most of the Middle East should be a flourishing center of industrial growth, as they have the resources to develop the infrastructure and develop the demography enough to become industrialized nations.  However, most nations tend to squander their opportunity.

It's funny, really.  The US is addicted to oil, and the middle east is addicted to US dollars.  Yet, one of these has inherent worth and the other doesn't.

lol Xeno, i have never heard it put that way...

> Little Paul wrote:

> "Iron is an infinite resource"
No, it really depends. Its all about the cost to harvest* it in correlation to the gain. (*whats the correct term again in English?)

i dont know, but i think he wasnt referring to the size of the iron deposits in the earth, but that you dont consume iron, so you dont run out of it, so its infinite...

@everyone

This discussion, as of the original post, isn't talking about what consumer nations will do when their resources run out.  The question at hand was from the other perspective: When nations which rely on particular natural resources for their economies later run out of their resources, how will they cope?

The issue of consumer dependence on resources, though interesting, isn't part of the topic at hand.  Can we please focus on this one issue?  (Frankly, I think this particular angle in the resource question isn't looked at enough, so we should at least take some time on this)

Or the nose...

Saw a guy play his nose like a trumpet once: played God Save the Queen with it.  An absolutely brilliant brit, he was.

you know its not a matter of "lasting" but of ROEI. You made lots of posts about it once if I remember well.

> Mace wrote:

> Norway has built up a $400bn fund off of its gas and oil, Abu Dhabi around $800bn (a lot for 1 million people). Russia has about $150bn (though this amounts to little for 140 million people). These economies are diversifying. Norway has a very strong economy, Russia doesn't ... yet. But Medvedeev and Putin are aware of the dangers of relying upon oil and gas.

Iran's fund, meanwhile, is dead empty.  (It used to have a sizable amount, actually, except that Ahmadinejad withdrew much of the funds during high oil price seasons to pay for social programs).

Wales didn't run out of coal, it simply became no longer viable to produce it as other nations were cheaper.

nevertheless the entire welsh economy was centred around this coal, little other development had been funded in other areas of the economy so inevitably the collapse of the coal industry in the 1920s created massive economic problems.

They will not come automatically. You need a lot of energy and resources to create this "renewable" energy. When resources run out, econ goes down, and no one will be able to invest in these things which will be very costly to produce.

There is, unless we discover something new, no cheap replacement for oil energy. Which means we will all be poorer, and also means we might have to colonize again to secure our food supply.