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Monday, April 16, 2012

Apples and fences


It's funny how our economy works.
We trade resources, if you happen to own valuable resources there are good chances you are on the main road that brings to richness, whatever that may mean.

Say you own a land with apple trees and people think your apples are a valuable resource as they like to eat them.
Then you can sell your resource in exchange for currency that can be used to trade other resources you may need.
Overall it's quite simple, it even seems quite fair or at least it is accepted as such.
You worked you land, maybe planted the trees, you took care of them, collected the products and your effort is compensated.

That's already a bit different when we talk about "natural resources", those things you normally "simply" dig up from your land.
You did not plant them, they just happen to be there and since they are within the borders of your land, you "own" them.
That's already quite a stretch to me, but for now let's just say that individuals, companies or nations can own parts of this planet.

A typical one is mineral oil, we keep fighting wars for it (but we like to call it "democracy").
Oil is considered a valuable resource because it is "scarce" and by that we mean that we would need more than the quantity available.
On top of that the natural process that creates oil takes ages, so we define it a "non renewable" resource, which is augmenting its value.
There are rich countries whose economy is entirely sustained by their oil.

Let's for a moment assume we really need to use all that oil and let's forget at the same time that it's availability is going down each year.
The main usage of oil is to produce some kind of energy through combustion, this happens in our cars, in our heating systems, in big electrical plants etc.
So, if you have oil, can you do the magic of combustion?
Not quite, a combustion needs two different resources that are mixed together : a "fuel" and an "oxidant".
So why when you are at the gas station you just buy fuel?
That's because you are stealing the oxidant!
Your car gets oxygen from the atmosphere, your engine would stop if you try to drive underwater because it would ne be able to reach the oxidant it badly needs.  

I hear you saying that the oxygen is "free for all", so you cannot actually steal something which is free.
Is it really free? Why?
We just said it is a resource which is needed as much as oil in the combustion, so why it does not have a value?
The answer, with the logic of our economy, is : because it is an "non scarce" resource, on the opposite of oil.
The real reason, obviously it a different one (as oxygen IS actually scarce, I will explain why next time) : because you cannot pack the oxygen produced by trees in barrels and sell it, like we do with oil.

Back to our apples, it's like having a tree protected by a fence, where you cannot reach the apples, and another tree, also owned by someone, where you can easily reach the apples.
If you simply get those apples without paying for them, wouldn't it be stealing in both situations?

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