Economics

How Do Natural Resources Affect The Economy?

The way we use, process, buy, sell, destroy, and recycle resources we find in nature plays a significant part in how the economy looks. So, let us discuss first what the economy is and how are natural resources shaping the markets.

Economy and natural resources are two intertwined notions that affect and determine each other continuously. The way we use, process, buy, sell, destroy, and recycle resources we find in nature plays a significant part in how the economy looks. So, let us discuss first what the economy is and how are natural resources shaping the markets.

Resource Managing Economies

There are several stances we could take on what the economy is. Still, possibly everyone would agree that the economy, in the broadest sense, is the way people manage resources. That includes everything: determining what resources are more exploitable than others, how rare are some of them, and which type of resources are the one that has the biggest impact on our everyday life. 

For example, money is a must-have resource if you want to go buy something. If you lack that resource, you are probably failing at some factors that allow you to maneuver through the economic system successfully. However, the story is vastly more complicated than that. At least if we want to discuss the functionality of an economic system. There is an enormous number of factors that determine how the economy looks, and nothing is more prone to fluctuations, and changes like economic activity are. 

A large part of this change is based on the fact that natural resources can, in fact, be depleted. Or, the demand for one type of product can be so high that it can not make everyone inside the system happy.

Nature: A Depletable System

The way we handle the resources we find in nature has become, and it has probably been for longer than you imagine, one of the most critical questions that the economic systems have to bear in mind. The problems that we cause in the environment because of the methods we use to find, spend, and waste resources are also one that affects the economy. 

It would be only fair to admit, how the idea of economic growth that, for example, depends on the price of oil is an example of a risky way to lead a business. Business, in this context, is one of the most important elements that change the way people approach attaching prices to their products and what people can or can not buy. 

It would be only fair to admit, how the idea of economic growth that, for example, depends on the price of oil is an example of a risky way to lead a business.
It would be only fair to admit, how the idea of economic growth that, for example, depends on the price of oil is an example of a risky way to lead a business.

The way the economy in the world changes, at moments, can even seem erratic. Have you witnessed how many people went absolutely insane about buying toilet paper once it was evident the world was facing a pandemic of the coronavirus? In this case, we can see how the rationale changes, depending on the situation.

However, it is far too simple to explain the toilet-paper demand by directly attaching it to the frenzied behavior of people in panic. But, no matter how you try to put it, basing the economy on natural resources that will be gone sooner or later is a practice that does not seem sustainable. 

What we today determine as economic growth is mostly depending on the way we handle natural resources. However, they are dispersed within a system where a number of different factors: political, social, and moral movements, and everyone have their say as to why and where specific natural resources should be allocated.

About the Author

Antonia is a sociologist and an anglicist by education, but a writer and a behavior enthusiast by inclination. If she's not writing, editing or reading, you can usually find her snuggling with her huge dog or being obsessed with a new true-crime podcast. She also has a (questionably) healthy appreciation for avocados and Seinfeld.

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