Why Economists should know Chemistry in an Age of Accelerating Material Substitution

Intermaterial substitution is driven by the consumer's desire to minimize his user cost. Since material choice is made by looking for maximum efficiency in terms of several performance characteristics per unit user cost or price coordinates, the economist needs very close ties with several technologies and sciences for policy making. The dominant science turns out to be chemistry. Its logic and insights are here shown to determine whicb depletable or replenishable raw materials and what energy sources will produce chemical building blocks to perform the function desired by the consumer. Since basic raw materials are shown to cost generally less than 1% of the price of the ultimate object, and the intermediate chemicals around 10%, the classic economics textbook raw material scarcify effects are of very minor importance in today's intermaterial substitution economics. Today the least cost performance at the consumer's end is decisive. The policy oriented economist must therefore get advice from chemists and from members of several additional discipline for even the most elementary understanding of intermaterial substitution processes

Consumption (sociology · Economics · Environmental economics · Epistemology · Function (biology · Linguistics · Microeconomics · Raw material · Sociology · Substitution (logic · Substitution effect · Unit (ring theory · Chemistry · Chemistry and Chemical Engineering · Computer Science · Mathematics · Philosophy · Organic Chemistry

• Consumer demand

  Kelvin Lancaster•Consumer demand•1971

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• Technology and American Economic Growth

  Margaret Walsh, Nathan Rosenberg•Economica•1973

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