William Watson: Canada's surprising comparative advantage—selling sand to the Sahara
Well, not exactly the Sahara. More like the Arabian Desert. But the alliteration sounded better than selling sand to Dubai. "Coals to Newcastle" doesn't have alliteration, strictly, but it has two hard Cs and is memorable, and it's true, we Canadians have been selling sand to people who live in or at least just beside the Arabian Desert.
I learned this from the current issue of The New Yorker magazine in an article ("The World is Running out of Sand") by one of my favourite writers, David Owen. Owen has what to scribblers of a certain age seems the perfect career; he is both a staff writer at the New Yorker, which is top of the pops in magazine journalism, and a contributing editor at Golf Digest, where he often goes on golfing trips that he then writes about in a perfectly charming way.
Owen's story is not about his enviable life, however, but about the emerging shortage of sand. Sand, it turns out, is used for many purposes, including making both silicon chips and cement. Emerging countries, some of which are emerging very quickly, are doing lots of building and as a result using up lots of sand. By 2030 China intends to have a road network in place larger than the U.S. interstate highway system. The competition for sand has reached such a pitch in India that there's a sand mafia.
The United States is also using up sand in vast amounts, in particular to help shore up its eroding eastern coastline, which has been hit hard in recent years by hurricanes including the aptly named (for Owen's story) Hurricane Sandy. You might think the lesson of such devastating experiences would be to stay away from the water's edge but, thanks to extensive underwriting by Congress, Americans are going back to the shore like lemmings—there to suffer the inevitable repetition of Sandy-like disasters. What was it Einstein said about insanity? One geologist Owen spoke to said that when people tell him folks are crazy to rebuild he replies "No, they're making a perfectly rational economic decision. We're the crazy ones, because we're paying for it."
And that's a geologist saying that, not an economist.
But the parts of the story that really caught my eye were Owen's passages about Hutcheson Sand & Mixes of Huntsville, Ontario. It's the company that, about 10 years ago, exported custom-processed sand to Dubai to be used in the sand traps on a new Greg Norman course. They've got a lot of sand in Dubai, of course, and it turns out sand is generally helpful when building golf courses—it can be pushed around and moulded fairly easily. But desert sand is no good for sand traps. Down at the particulate level, it's too smooth. The hot desert winds have, as it were, sandblasted it too much. All the little bits are round and slide together too easily so golf balls sink into the traps too readily, which is not something golfers enjoy. Ontario sand, among other sands, is more angular and receives balls better. Who knew?
Exactly. Who knew? Knowledge is the key to Hutcheson's sand advantage, as it is to more and more things in the economic world. Since the 1996 Olympics in Atlanta, where Canadian volleyballers had trouble with the sand, Hutcheson has provided specialty sands to different major sporting events, as well as helping the international volleyball federation first devise and then enforce its sand standards. Because sand is heavy, in most cases sand for special events is sourced from closer than Huntsville, though the people from Hutcheson still have to figure out what local sands are suitable. In the political and social world, expertise is under attack. In the economic world, it still rules.
I'm in Vancouver this weekend for the second leg of the Fraser Institute's Economics for Journalists seminars for 2017. We start off with some examples of how markets respond to consumer needs in intricate, effective and also sometimes mysterious ways. We mention Adam Smith's discussion of the great cooperative-but-unplanned effort that went into providing an 18th century English worker with his plain cloth coat. We cite Leonard Reed's 1958 classic, I, Pencil, about all the many steps involved in making a pencil. (For younger readers, a pencil was a primitive writing implement pre-dating cell phones.)
I think today I'm going to add a word or two about David Owen's stories on how Canada exports sand to the Sahara.
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