The Ultimate Resource is a 1981 book written by Julian Lincoln Simon challenging the notion that humanity was running out of natural resources. It was revised in 1996 as The Ultimate Resource 2. Overview The overarching thesis on why there is no resource crisis is that as a particular resource becomes more scarce, its price rises. This price rise creates an incentive for people to discover more of the resource, ration and recycle it, and eventually, develop substitutes. The "ultimate resource" is not any particular physical object but the capacity for humans to invent and adapt. Scarcity The work opens with an explanation of scarcity, noting its relation to price; high prices denote relative scarcity and low prices indicate abundance. Simon usually measures prices in wage-adjusted terms, since this is a measure of how much labor is required to purchase a fixed amount of a particular resource. Since prices for most raw materials (e.g., copper) have fallen between 1800 and 1990 (adjusting for wages and adjusting for inflation), Simon argues that this indicates that those materials have become less scarce. Forecasting Simon makes a distinction between "engineering” and "economic" forecasting. Engineering forecasting consists of estimating the amount of known physical amount of resources, extrapolates the rate of use from current use and subtracts one from the other. Simon argues that these simple analyses are often wrong. While focusing only on proven resources is helpful in a business context, it is not appropriate for economy-wide forecasting. There exist undiscovered sources, sources not yet economically feasible to extract, sources not yet technologically feasible to extract, and ignored resources that could prove useful but are not yet worth trying to discover. To counter the problems of engineering forecasting, Simon proposes economic forecasting, which proceeds in three steps in order to capture, in part, the unknowns the engineering method leaves out (p 27): Infinite resources Perhaps the most controversial claim in the book is that natural resources are infinite. Simon argues not that there is an infinite physical amount of, say, copper, but for human purposes that amount should be treated as infinite because it is not bounded or limited in any economic sense, because: known reserves are of uncertain quantity new reserves may become available, either through discovery or via the development of new extraction techniques recycling more efficient utilization of existing reserves (e.g., "It takes much less copper now to pass a