Honorable mention goes to Chris Mayer for “The Yellowstone Syndrome” :But once a society has plucked all the low-hanging fruit of "no-brainer" productivity improvements, what then can its members do to improve productivity? The only thing left to do would be to adopt improvements in productivity that involve more roundabout methods of production.
... However, since making bows and arrows takes more time [than making pointed sticks], and perhaps more resources, the hunters and their investment must be sustained by an adequate stock of food and other materials; even though the bows and arrows will yield a greater bounty, they will only do so after a longer period of time. Thus, savings are an indispensable prerequisite for increases in productivity that involve lengthening the structure of production.
As Ludwig von Mises explained: “This postponement of consumption [saving] makes it possible to direct action toward temporally remoter ends. It is now feasible to aim at goals which could not be thought of before on account of the length of the period of production required. ... The sine qua non of any lengthening of the process of production adopted is saving, i.e., an excess of current production over current consumption. Saving is the first step on the way toward improvement of material well-being and toward every further progress on this way.” ...
“Every single performance in this ceaseless pursuit of wealth production is based upon the saving and the preparatory work of earlier generations. ... We favorite children of the age of electricity still derive advantage from the original saving of the primitive fishermen who, in producing the first nets and canoes, devoted a part of their working time to provision for a remoter future. If the sons of these legendary fishermen had worn out these intermediary products — nets and canoes — without replacing them by new ones, they would have consumed capital and the process of saving and capital accumulation would have had to start afresh.” ...
“An increment in capital goods available makes it possible to attain temporally remoter ends without being forced to restrict consumption. A loss in capital goods, on the other hand, makes it necessary either to abstain from striving after certain goals which one could aim at before or to restrict consumption. ...
“The start which the peoples of the West have gained over the other peoples consists in the fact that they have long since created the political and institutional conditions required for a smooth and by-and-large uninterrupted progress of the process of larger-scale saving, capital accumulation, and investment.”
In the late 1800s, Yellowstone’s game population – its elk, bison, antelope and deer – began to disappear. So in 1886, the US Cavalry took over management of the park. And its first order of business was to help bring back the game population.
After a few years of protection and special feeding, the game population started to come back strong. But what the government didn’t understand was that it was dealing with a complex ecosystem. You can’t just change one thing and think that it won’t also lead to cascading changes elsewhere.
The surging elk and deer populations ate a lot more. This caused the plant life to diminish. Aspen trees, for instance, started to disappear, eaten by the numerous elks. This hurt the beaver population, which depended on the aspen tree. The beavers built fewer dams. The beaver dams were important in helping prevent soil erosion by slowing the flow of water from the spring melt. Now the trout population took a hit, because it didn’t spawn in the increasingly silted water. And so on and so on...
The entire ecosystem started to break down because of man’s desire to boost the elk population. It got worse. In the winter of 1919-1920, more than half of the elk population died – with most of them starving to death. But the National Park Service chalked it up to predators. So it began killing wolves, mountain lions and coyotes – all of which only made the problems worse.
... By the mid-1900s, the Park Service managed to kill off nearly all of the predators. In 1926, it shot the last wolf.
This experience in Yellowstone sounds a lot like what’s happening in our economy today. Congress and the Federal Reserve are so busy “rescuing” specific pieces of the economy that they fail to realize how these efforts are threatening other pieces of the economy.
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That’s why so many so-called experts are so often dead wrong. They think they know what’s causing what. But they don’t.
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