Questionable Talking Point

From the (assuming Business) Professor Donald Mackay, chairman of Scottish Mortgage Investment Trust.

The accompanying graph shows that the real price of oil, even after its latest increases, is less than half the level reached in 1979. And oil is much less important in the world economy, accounting for only just over 2 per cent of world GDP. According to the latest estimates, if the higher oil price is now maintained, it will knock only some 0.6 per cent off the rate of growth of US GDP.

Oil may be only 2%, but as Smalley points out, the dependences on oil get complicated -- fast. Perhaps akin to saying, I can get by with a limited amount of Vitamin C; after all it is less than 1% of my total food intake. An even better analogy is fresh water; this is obviously only a fraction of the GDP, but can you imagine a restriction on the supply, and the complications that would ensue?