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Volume 12  Number 3  •  Winter 2008
All Issues:  

Resource Exhaustibility
A Myth Refuted by Entrepreneurial Capital Maintenance
By John Brätland
This article appeared in the Winter 2008 issue of The Independent Review

Claims that oil deposits and other extractive resources are “exhaustible” often conflate physical exhaustion (total depletion of the physical stock of a resource) with economic exhaustion (loss of the expected profitability required to induce resource owners to continue extracting and marketing the resource). Yet that distinction is crucial, because when private-property rights are unencumbered, entrepreneurs usually have several strategies available for maintaining the economic value of their firms while they continue to operate them.

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