TEXT OF COMMENTARY

Scott Jagow: What’s important in the new economy? Things like mobile phones, computer chips, Internet companies? No, no, no, says commentator David Frum. It’s things like cows, grain and water.

David Frum: Just one word: potash.

Potash is a mineral used in fertilizer. The Canadian province of Saskatchewan has the largest deposit on Earth and the Potash Corporation of Saskatchewan mines it exclusively.

The five-year stock graph for the Potash Corporation looks like some Internet startup from the 1990s. In 2002, Potash Corporation stock traded around $8 a share. This year, it crossed $85 a share.

World potash prices are soaring. The company’s profits and stock price have reached an all-time record, and the company expects the next five years to be the most exciting in its history.

No wonder. As Chinese and Indian consumers get richer, they want to eat more pork, chicken and beef. Pigs, chickens and cattle live on grain. Grain producers need fertilizer.

It’s not only potash prices that are up. Like most agricultural commodities, the bulky mineral moves by rail. And so, Canadian Pacific Railway shares have quadrupled since 2002.

When you hear about the worldwide commodities boom, don’t just think oil. Think fertilizer, wood, cocoa — the ingredients for the basic necessities and little luxuries that people start buying when their incomes rise above subsistence.

Asia today is looking like Europe and America in 1900 — and the commodity price charts of 2007 look a lot like those of a century ago.

Back in the 1990s, we heard a lot about a “new economy.” This new economy dealt in things conceptual, abstract, weightless. A decade later, the economy is again heavy and bulky. Everything old is new again it seems — in investing as in fashion.

David Frum is a resident scholar at the American Enterprise Institute. Share your thoughts with us at Marketplace.org. In Los Angeles, I’m Scott Jagow. Thanks for tuning in and enjoy your day.