The Simon-Ehrlich wager 25 years on
As the famous environmentalist bet showed, Malthusians are always wrong.
In 1980, economist Julian L Simon challenged Paul R Ehrlich, the biologist and author of the best-selling Population Bomb, to put his money where his catastrophist mouth was by staking $10,000 on his belief that ‘the cost of non-government-controlled raw materials… will not rise in the long run’, with the minimum period of time over which the bet could take place being one year (1). If, as Ehrlich believed, the store of valuable resources was absolutely finite and subject to ever-increasing demand, the resources’ price would rise. Simon, however, argued that in a market economy characterised by freely determined prices and secured property rights, a rise in the price of a valuable resource could only be temporary as it would provide incentives for people to look for more of it, to produce and use it more efficiently, and to develop substitutes. In the long run, even non-renewable resources would become ever-less scarce as they are ultimately created by the always renewable and ever-expanding human intellect.
Ehrlich, along with his regular collaborators John P Holdren and John Harte, accepted ‘Simon’s astonishing offer before other greedy people’ jumped in and offered ‘to pay him on September 29, 1990, the 1990 equivalent of 10,000 1980 dollars (corrected by the consumer price index) for the quantity that $2,000 would buy of each of the following five metals on September 29, 1980: chromium, copper, nickel, tin and tungsten’ (2).
Between Ehrlich’s chosen dates, the world’s population grew by more than 800million individuals while standards of living rose. In spite of this, the prices of all these commodities fell – from a 3.5 per cent fall for copper to a 72 per cent fall for tin – as, just as Simon had predicted, new deposits were brought into production and new substitutes created. Ehrlich honoured his financial engagement by mailing Simon a check to the amount of $576.07, but never acknowledged the superiority of his intellectual opponent’s outlook.
Since the conclusion of the bet, several analysts have observed that Simon got lucky as the initial date coincided with historically high commodity prices (although he obviously didn’t know this at the time) and that different timeframes, say a different decade, would have put Ehrlich on the winning side on more than one occasion. While this is true, these comments detract from Simon’s larger point and more sophisticated arguments, for he was well aware of the volatility of the commodity markets and ultimately betted on the knowledge that the odds were in his favour, though by no means absolutely certain.
Looking back, his ‘astonishing offer’ was arguably the clever ploy of a serious poker player with a background in marketing and statistical analysis who sought to draw attention to a perspective then shunned by most environmentally minded academics, activists and public intellectuals. Indeed, prominent critics of overpopulation rhetoric were then mostly limited to old-fashioned Marxists who, following (mostly) Engels’ writings, believed that scientific advances would overcome natural limits (3); the Vatican, whose doctrine opposed population control on (mostly) theological grounds; and a few free-market economists and think-tank analysts who also believed in scientific advances, but believed that these would be guided by the price system rather than central planning.
Although much less prominent these days, the old population-control and resource-depletion rhetoric is still alive and well in some of its traditional strongholds, be they some institutions dominated by the British upper classes (see, among others, recent remarks by, Jane Goodall, David Attenborough and John Sulston) or international-development bureaucracies.
For instance, when asked why Indians shouldn’t aspire to the same standard of living as the Westerners, the former chair of the Intergovernmental Panel on Climate Change, Rajendra K Pachauri, answered, ‘Gandhi was asked if he wanted India to reach the same level of prosperity as the United Kingdom. He replied: “It took Britain half the resources of the planet to reach its level of prosperity. How many planets would India require?”‘ Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCC) Christiana Figueres once said, ‘We should make every effort to reduce the world’s population in an effort to fight climate change’, that ‘obviously fewer people would exert less pressure on the natural resources’, and that humanity is ‘already exceeding the planet’s planetary carrying capacity, today’. She added that population control wasn’t enough and that fundamental changes needed to be made to our current economic system. Professor Hans Joachim Schellnhuber, director of the Potsdam Institute for Climate Impact Research and an influential contributor to the recent encyclical letter Laudato si, is similarly on record estimating the carrying capacity of the planet at ‘below one billion people’.
Of course, the fear that a growing population is rapidly depleting its finite store of natural resources while mercilessly wrecking its environment is probably as old as civilisation. Some scholars thus interpret the oldest surviving written story, The Epic of Gilgamesh, as a warning against the rapid deforestation of Mesopotamia nearly 5,000 years ago. Two millennia later, Confucius (551 – 479 BC) and some of his followers reportedly argued that excessive population growth may reduce output per worker, lower standards of living and create strife.
After having determined that the ideal number of citizens per city-state was 5,040, Plato suggested fiscal and other incentives to increase the number if need be, or else birth control and emigration if warranted. He further warned that ‘exceed[ing] the limit of necessity’ and the ‘unlimited accumulation of wealth’ would result in expansionary wars. One problem was the populace’s fondness for meat, which would result in struggles over pastureland. Plato’s solution was a vegetarian diet consisting mainly of cereals (wheat and barley), fruits (grapes in the form of wine, olives, figs and myrtle berries), pulses (peas and beans), dairy products (mostly cheese), flavouring ingredients (relish-salt, roots and herbs) and a few other wild foods (mostly acorn). Echoing his Mesopotamian predecessors, he further lamented that Athens’ back country, whose hills had once been ‘covered with soil’, the plains ‘full of rich earth’, and the mountains displaying an ‘abundance of wood’, had been turned after years of abuse into a landscape that could ‘only afford sustenance to bees’ because all the ‘richer and softer parts of the soil [had] fallen away, and the mere skeleton of the land [was] being left’.
Shortly afterward, Aristotle cautioned that populations could outstrip their resource base and end up mired in poverty and social unrest. These risks justified drastic population-control measures such as abortion and exposing children to the elements. Writing half a millennia later, the Carthaginian Christian theologian Tertullian observed matter-of-factly that:
‘[What] most frequently meets our view (and occasions complaint), is our teeming population: our numbers are burdensome to the world, which can hardly supply us from its natural elements; our wants grow more and more keen, and our complaints more bitter in all mouths, while Nature fails in affording us her usual sustenance. In very deed, pestilence, and famine, and wars, and earthquakes have to be regarded as a remedy for nations, as the means of pruning the luxuriance of the human race…’
The first full-fledged population catastrophist among modern writers is generally acknowledged to be the Italian Jesuit Giovanni Botero (1544-1617) who, more than two centuries before the better known Thomas Robert Malthus (1766-1834), argued that human population would increase to the maximum extent permitted by human fertility, that the means of subsistence wouldn’t keep up, and that the unavoidable result would be poverty, starvation, war, diseases and population crashes.
In time, the ‘Malthusian trap’ came to describe the belief that population growth is absolutely limited by finite resources; that because there is only so much to share, a smaller population will be inherently better off; that technological or social innovations can at best delay the unsustainable character of population growth; and that because of projected future ills a range of – sometimes drastic – preventive policy interventions are justified in the present. This jeremiad was repeatedly brought to the fore over the past two centuries under the feather, pen, typewriter or keyboard of some (often highly credentialed) concerned individuals. And almost invariably, each time scores of public intellectuals, activists, bureaucrats, politicians, academic journal editors, private foundation and granting agency officials echoed, promoted, funded or implemented restrictive policies in the name of preventing the children of careless lemmings from jumping over the societal cliff.
Along the way, however, dissenting voices questioned the severity of the ‘population problem’ and made the case that free individuals were not only mouths to feed, but also arms to work and brains to develop new and better ways of doing things. The more people around, they argued, the more likely something good was going to happen. As the physicist Robert Zubrin asks, who, between Louis Pasteur or Thomas Edison, should not have been born in order to improve the lot of mankind? (4) Besides, because new ideas are born out of the combination of existing ideas, processes and things, the supply of new beneficial technologies will not only never run out, but will expand exponentially.
Of course, optimistic analysts conceded, humanity is always confronted by various challenges, but in the long run technological progress has a pretty good record of creating lesser problems than those that existed before. As a result, we now live in a world where every indicator of human wellbeing, from life expectancy, income per capita, hunger, and infant mortality to child labour and education, has improved dramatically over the past two centuries. And, even more amazingly, despite the fact that there now over seven times more (and much wealthier) people than two centuries ago, we live on a planet that is increasingly green and clean; where in many if not most places, wildlife is much more abundant than in the recent and even more distant past (5).
Population catastrophists, however, constantly remind us of Hegel’s alleged observation that ‘If theory and facts disagree, so much the worse for the facts’. This is especially true in current discussions of humanity’s increased consumption of coal, petroleum and natural gas over the past two centuries, where alleged problems always trump real benefits. After all, nobody would argue that this consumption made possible the development of large-scale, reliable and affordable long-distance transportation, which in turn paved the way to better and more affordable nutrition by concentrating food production in the most suitable locations. Or that kerosene, heavy oil and natural gas displaced poor quality biomass fuels such as firewood and dung, which filled houses with soot, particles, carbon monoxide and toxic chemicals. Or that cars, trucks and tractors removed the need for work animals (and their attending food consumption), while helping address the diseases associated with their excrement and carcasses. Or that refined petroleum products further reduced harvesting pressures on wild resources such as whales (whale oil, perfume base), trees (lumber and firewood), birds (feathers) and other wildlife (ivory, furs, skin), thus helping preserve biodiversity.
One overall result of these developments – plus the fact that plants benefit from increased carbon-dioxide emissions – is that nature, in the form of growing forests and increased wildlife, has made a significant comeback in advanced economies (6). And yet, pretty much the only thing one hears today from activists who take these beneficial advances for granted is something along the lines of: ‘ever-increasing production and use of fossil fuels will, over time, kill billions of us and irreversibly change all life on the planet’. Of course, the fact that there were barely one billion human beings around when fossil-fuel use took off and the very notion that ‘billions’ of us might die is entirely contingent on their widespread use is completely lost on eco-warriors.
Yet, even granting the seemingly more reasonable premise that hydrocarbons are incorrectly priced because of all the negative (or unaccounted for) climate externalities they generate is problematic. After all, reducing our consumption of fossil fuels will not make bad weather and extreme natural events go away. In the end, the greater wealth generated by fossil fuels (eg, better infrastructure, advanced-warning systems, long-distance transportation) remains our best insurance policy against whatever nature may throw our way.
The fact that past natural climatic events or trends were once blamed on anthropogenic causes such as insufficient offerings to the gods, witchcraft, deforestation, the invention of the lightning rod and wireless telegraphy, cannon shots in the First World War, atomic tests, supersonic flights, nuclear testing and air pollution should also perhaps temper some of the most extreme rhetoric (7). Or else consider that, not too long ago, countless writers suggested, as the geographer William Dando did in his 1980 book The Geography of Famine, that most climatologists and even a ‘declassified Central Intelligence Agency’ report agreed that because of air pollution, the Earth was ‘entering a period of climatic change’ that had already resulted in ‘North African droughts, the lack of penetration of monsoonal rains in India and seasonal delay in the onset of spring rains in the Soviet Virgin Lands wheat area’. Global cooling, Dando told his readers, was ‘the greatest single challenge humans will face in coming years’ because it would soon trigger ‘mass migration and all-encompassing international famines’ (8).
That the perspective put forward by the likes of Julian Simon or the social and environmental benefits of fossil fuels remain mind-boggling to a general audience is to be expected. That so many well-meaning academics and public intellectuals remain enthralled by scenarios of doom after two centuries of debates in which the depletionists’ projections were repeatedly crushed by human creativity is more puzzling. In the end, though, one suspects that Paul Ehrlich, David Attenborough, Jane Goodall and other prominent messengers of gloom who have lived long and productive lives must, deep down, be grateful for living in Julian Simon’s world.
Pierre Desrochers is associate professor of geography at the University of Toronto.
Picture by: Getty Images.
(1) ‘Environmental Disruption or Environmental Improvement?’, by JL Simon in Social Science Quarterly, 62 (1), 1981, p39
(2) ‘An Economist in Wonderland’, by PR Ehrlich, Social Science Quarterly, 62 (1), 1981, p46
(3) Among other classic statements on Malthusianism, Friedrich Engels observed that ‘[t]he extent of land is limited. All right! The labour-power to be employed on this land-surface increases with population. Even if we assume that the increase in yield due to increase in labour does not always rise in proportion to the labour, there still remains a third element which, admittedly, never means anything to the economist – science – whose progress is as unlimited and at least as rapid as that of population’, that the ‘productive power at mankind’s disposal is immeasurable’ and that the ‘productivity of the soil can be increased ad infinitum by the application of capital, labour and science’. See Outlines of a Critique of Political Economy, F Engels, 1844
(4) Merchants of Despair. Radical Environmentalists, Criminal Pseudo-Scientists and the Fatal Cult of Antihumanism, by R Zubrin, New Atlantis Books, 2012, p24
(5) See, among others, ‘The Return of Nature. How Technology Liberates the Environment’, by H Ausubel, The Breakthrough Journal (Spring), 2015, and the website www.humanprogress.org.
(6) See, among others, The Pontifical Academies’ Broken Moral Compass, by IM Goklany, Global Warming Policy Foundation Briefing 19, 2015; Humanity Unbound: How Fossil Fuels Saved Humanity from Nature and Nature from Humanity, by IM Goklany, Cato Institute Policy Analysis No 715, 2012; The Locavore’s Dilemma. In Praise of the 10,000-mile Diet, by P Desrochers, and H Shimizu, PublicAffairs, 2012; ‘Petrol Power: An Eco-Revolution’, P Desrochers, spiked, 20 July, 2015
(7) ‘Anthropogenic Climate Change: A Reason for Concern since the 18th Century and Earlier’, by H Von Storch and N Stehr, Physical Geography 88 (2), pp107-113, 2006
(8) The Geography of Famine, by W Dando, VH Winston and Sons, 1980, p104