Land, wildlife and water

Agriculture and pastoralism may be viewed as ways of exploiting the natural environment. Human labour and man-made capital are employed in harvesting some of nature's bounty. As was mentioned earlier, man actually modifies his natural environment and its flora and fauna. The application of science and technology allows him to do so to an increasing extent. None the less the availability of natural resources still limits what can be harvested from a given area using a given technology.

In so far as natural resources may be destroyed by over-exploitation or misuse, choices arise between current and future consumption. Resources which are conserved for the future might otherwise have been used to increase consumption now. The analysis of such choices really comes into the realm of capital theory discussed in Chapter 7.

For present purposes it is convenient to assume that users aim to sustain productive capacity over time; or in other words to maintain a steady state. This means that the stock of natural resources is not allowed to deteriorate over time. Naturally, yield may vary from season to season as a result of chance climatic and other variation, but a steady state implies no long-term downward (or upward) trend in the resource stock.