Should We Ban this Common Product?

“I can imagine that in 50 years' time our children will be saying: 'I can't believe they used such a precious material to fill balloons.’”

An article in the British newspaper The Guardian last week has forced me to answer some concerns about something I’ve never written about – and probably never will again.

Titled, “Should we ban helium balloons?” – the article describes how helium is a scarce resource, so scarce that we shouldn’t waste it in something as trivial as decorative balloons…

I’m not very interested in helium as a commodity – mostly because it’s not very easy to invest in it. I’ve never heard of someone getting rich from helium either.

But this helium story is a great example of how the mainstream media can turn any piece of news into a sensationalist hatchet job.

First off, I want to point out the main crux of the story – which is the idea that helium is scarce.

Without this point of fact (and it is a fact) then we don’t have a story at all.

Unfortunately, the idea that something is scarce isn’t so much a revelation as an economic fact. Scarcity is the basis of economics. All resources are scarce.

Some are scarcer than others. But when you live in a finite world and you have a finite time in that world, then you have to understand that scarcity is the rule when it comes to resources.

You’re probably thinking to yourself that as westerners, we live in a world of plenty. But that’s only of relative plenty. Even in our world of plenty, it would be a practical impossibility for all members of even a medium-sized city to simultaneously own, say, two loaves of bread each.

That’s because at any given moment, there are far more people in a city like Philadelphia than there are loaves of bread. Moreover, the resources necessary to get all of that bread to all of those people would make it almost logistically impossible to ensure that kind of simultaneous ownership.

Resources are scarce. That’s the basis for capitalism. Capitalism emerged as simply the best system for resource distribution. People with the skills and means to best distribute the most resources in the shortest time are rewarded. People who squander resources or allocate them inefficiently are not rewarded.

It seems cruel – but remember that if it weren’t for this system, it would be nearly impossible to cultivate any resources for distribution.

So whenever we hear that resources are scarce, I’m skeptical. Of course helium is scarce. But what do you think will happen to helium resources available in the market if one major helium good is banned?

Will helium all of a sudden become more available if there’s a balloon ban? I have no idea, but my instinct is that it would become scarcer and more expensive.

Ask yourself: If motorcycles were banned, would there be more oil left over for diesel trucks  – or would refiners simply require less oil overall?

Maybe with fewer motorcycles on the road, more people would drive pickup trucks, which would have the effect of decreasing average gas mileage, and raise the price of gasoline.

We can’t know what a balloon ban would do for helium supply. What we do know is that it will change the distribution of a scarce resource – possibly for the worst. If helium balloons are a high margin product, then it might be that balloon helium is making other helium cheaper for more “important” functions.

So I’m always skeptical when people talk about banning something. They usually have an ulterior motive that has nothing to do with saving the resource or making things better. And usually, their efforts have the opposite of the desired effect.