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).

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Scarcity and Frontiers
How Economies Have Developed Through
Natural Resource Exploitation

E dwa r d B. Ba r bi e r

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ca mbridge universit y press
Cambridge, New York, Melbourne, Madrid, Cape Town, Singapore,
São Paulo, Delhi, Dubai, Tokyo, Mexico City
Cambridge University Press
The Edinburgh Building, Cambridge CB2 8RU, UK
Published in the United States of America by Cambridge University Press,
New York
www.cambridge.org
Information on this title: www.cambridge.org/9780521701655
© Edward B. Barbier 2011
This publication is in copyright. Subject to statutory exception
and to the provisions of relevant collective licensing agreements,
no reproduction of any part may take place without the written
permission of Cambridge University Press.
First published 2011
Printed in the United Kingdom at the University Press, Cambridge
A catalogue record for this publication is available from the British Library
Library of Congress Cataloguing in Publication data
Barbier, Edward, 1957–
Scarcity and frontiers : how economies have developed through natural resource
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.

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“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

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Contents

List of igures

page viii

List of tables

ix

List of boxes

xii

Preface

xiii

Acknowledgements

xvii

1 Introduction: scarcity and frontiers

1

2 The Agricultural Transition (from 10,000 BC
to 3000 BC)

47

3 The Rise of Cities (from 3000 BC to 1000 AD)

84

4 The Emergence of the World Economy (from
1000 to 1500)

157

5 Global Frontiers and the Rise of Western Europe
(from 1500 to 1914)

225

6 The Atlantic Economy Triangular Trade
(from 1500 to 1860)

306

7 The Golden Age of Resource-Based Development
(from 1870 to 1914)

368

8 The Age of Dislocation (from 1914 to 1950)

463

9 The Contemporary Era (from 1950 to the present)

552

10 Epilogue: the Age of Ecological Scarcity?

663

Index

730

vii

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Figures

1.1
1.2
2.1
2.2
3.1
3.2
4.1
5.1
5.2

5.3
6.1
7.1
7.2
8.1
8.2
8.3
8.4
9.1
9.2
9.3
9.4
9.5
9.6
9.7
10.1

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

viii

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Tables

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

page 5

63
86
104
109
158
160
230
232
239
251
311
315
319
320
345
370
376
378
380
382
387
ix

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x

List of tables

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)

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390
391
393
399
468
474
475
485
486
565
567
574
576
577
578

581

583
589
590
594
668


List of tables

10.2 Global greenhouse gas emissions (million tonnes of CO2
equivalent), 2005–2030
10.3 The emerging environmental tax base in selected
European economies

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xi

672
700


Boxes

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

xii

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Preface

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

xiii

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Preface

xiv

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,

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Preface

xv

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.

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xvi

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.

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Acknowledgements

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.

xvii

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xviii

Acknowledgements

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.

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1

Introduction: scarcity and frontiers

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

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2

Introduction: scarcity and frontiers

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

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Introduction

3

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

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4

Introduction: scarcity and frontiers

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

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Introduction

5

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

4
3
14
14
40
13–14
7
9
5
2
1.8
9
5
4

35
0.8 (20% decrease)
0.99 (1% decrease)
0.03 (97% decrease)
2–10
17
13
8

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-

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6

Introduction: scarcity and frontiers

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

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Scarcity and frontiers

7

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

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