Betting Against Apocalyptic Thinking

The Simon-Ehrlich Wager

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In 1990, Julian Simon (above left) placed a bet with Paul Ehrlich (above right) about the price of five commodities. Ehrlich thought resource pressures would inexorably drive up their prices, while Simon believed that abundance resulting from economic forces would result in lower prices. The real battle was not simply between ideas on scarcity and abundance, but rather two competing views of the world. In many respects the politics and tone of the Ehrlich-Simon debate has relocated itself into the debate over climate change. With apocalyptic visions, Panglossian optimism, and plenty of vitriol to go around, the heirs to the Ehlich and Simon debate have carried on where they left off, without pause for rethinking either the debate or how it is conducted. In some respects, the current debate over climate is really just an extension of the population-resource debates of the 1970s and 1980s, amplified by many voices yet dispersed by today’s multi-channel media.

August 28, 2013 | Roger Pielke Jr

$576.07. That is how much money Julian Simon won from Paul Ehrlich, John Harte and John Holdren in 1990 in a bet about commodities prices. The wager was actually a proxy for competing ideological views about the role of humans on the Earth. The story of the bet between Simon and Ehrlich is told in a wonderful new book by Yale historian Paul Sabin, titled The Bet: Paul Ehrlich, Julian Simon, and the Gamble over Earth’s Future.

Simon, who died in 1998 at age 65, was a self-described “cornucopian” who believed that there were few environmental or resource constraints on humanity.  Ehrlich and his fellow travelers were by contrast self-described “neo-Malthusians” who warned of a looming global collapse due to resource constraints caused by the pressures of global over-population.

Sabin describes how Ehrlich came to fame largely as a result of his appearances on the Johnny Carson Show beginning in 1970, at a time when limited media meant a limited focus of attention. Everybody watched Johnny Carson. Several years earlier Ehrlich had written The Population Bomb, in which he called humans a “cancer” upon the Earth.

The Population Bomb had been commissioned by The Sierra Club in an effort to influence the national political scene during a time when famine and population had been at the center of public debates. The book quickly became a runaway best seller.  Later, Ehrlich was influential with the Carter administration, despite never falling fully in line with President Carter’s political agenda.

Simon’s rise to public intellectual status came later, during the presidency of Ronald Reagan. Sabin artfully weaves the emerging intellectual battle between Ehrlich and Simon into the politics of the period, contrasting Carter’s emphasis on limits and constraints with Reagan’s sunny optimism of a brighter future. Like Ehrlich, Simon never fully embraced the politics of his political champions, much preferring a libertarian political outlook to Reagan’s conservatism.

Simon, who will also be remembered for the adoption of his proposal that airlines pay travelers who are bumped from their seats, was a strong critic of neo-Malthusians during the 1970s from his perch as a faculty member at the University of Illinois. It was not until Simon directly engaged Ehrlich with a high profile article in Science in 1980 accompanied by a Washington Post op-ed that his visibility increased. A flurry of letters and follow-up exchanges between the two followed and the bet emerged soon thereafter.

The bet was over the price of five commodities over a decade – chromium, copper, nickel, tin and tungsten. Ehrlich thought that resources pressures would inexorably drive up their prices, while Simon believed that greater abundance resulting from economic forces would result in lower prices. Both sides believed that the bet was not really about commodities, but rather, about two competing views of the world and our role in it – they were betting on scarcity versus abundance.

Simon famously won the bet but Sabin explains he “had also been lucky.” Sabin cites research that shows that “for every ten-year period between 1900 and 2008 … Ehrlich would have won the bet 63 percent of the time” but this was due largely to the post-World War I collapse in commodity prices. At the same time Sabine argues that “Ehrlich and his colleagues only tenuously understood economics and commodity markets.” It turns out that the five commodities prices over a decade were not a particularly good proxy for betting on scarcity versus abundance.

Looking back at the bet and its consequences it seems clear that Simon’s optimism resoundingly defeated Ehrlich’s pessimism in terms of public opinion and political commitments. No one seriously questions economic growth and over-population concerns have all but disappeared from public debate. Yet, it would be a mistake to declare the end of Malthusian thinking. As Herman Daly once quipped, “Malthus has been buried many times … anyone who has been buried so often cannot be entirely dead.”

We continue to see vestiges of Malthus in current debates over climate, energy, food, immigration, and other issues. Rarely explicit, it does emerge on occasion, such as when former NASA scientist James Hansen said with respect to global energy access “if you let these other countries come up to the level of the developed world then the planet is done for.” As Morgan Bazilian and I documented in a recent paper, assessments of future global energy consumption skirt this issue by defining “energy access” in pitifully small amounts for vast swaths of global population. Optimism may have won, but Malthus has not gone away.

Upon the bet’s resolution in 1990, it was characterized by John Tierney in a lengthy New York Times magazine article which portrayed Simon as the hero and Ehrlich as the villain. Yet despite coming out on the losing end of the bet, Ehrlich has remained a celebrated figure in environmental and academic circles. Sabin provides a long list of prestigious prizes that Ehrlich (and his wife and collaborator Anne) won in the 1990s, accompanied by more than a million dollars in prize money. Meantime, Sabin notes that Julian Simon’s “below average” academic salary actually shrank after inflation from 1988 to 1997.

Sabin quotes Simon railing against what he saw as a fundamental injustice: “After 25 years of the doomsayers being proven entirely wrong, their credibility and influence waxes even greater.” Simon even wore devil’s horns when he gave lectures to drive home the point. The bitterness was shared, in 1995 Ehrlich told the Wall Street Journal, “If Simon disappeared from the face of the Earth, that would be great for humanity.”

Sabin observes that intellectual debate has the potential to make arguments “sharper and better.” But in the case of Ehrlich and Simon “the opposite happened … [both] got carried away in their battle. The ready audience for their ideas encouraged them to make dramatic claims. Their unwillingness to concede anything in their often-vitriolic debate exacerbated critical weaknesses in each of their arguments.” Both Ehrlich and Simon will be remembered far more for their roles as public intellectuals where science meets politics, than for their academic research.

In many respects the politics and tone of the Ehrlich-Simon debate has relocated itself in the debate over climate change. With apocalyptic visions, Panglossian optimism and plenty of vitriol to go around, the heirs to the Ehlich and Simon debate have carried on where they left off, without pause for rethinking either the debate or how it is conducted.  In some respects, the current debate over climate is really just an extension of the population-resource debates of the 1970s and 1980s, amplified by many voices yet dispersed by today’s multi-channel media.

It is here where The Bet falls short. It rushes through events which occurred in the aftermath of Simon’s death in just a few pages, including only a cursory discussion of the rise of Simon's intellectual torch-bearer in Bjorn Lomborg. The final, summary chapter is similarly terse and rushed. But these are small complaints on what is an excellent book, and a fantastic introduction to population-resource debates of the late-twentieth century. It will be the required first reading on this topic in my future courses.


Photo Credit: CEI.org (left); Haaretz.org (right)


Comments

  • A couple of thoughts. First, beyond the famous bet, it would be difficult to find a 20th century scientist who was more wrong about more things than Ehrlich. Predictions of tens of millions of people dying in the streets are not hard to falsify. This review touches on this matter, but not explicitly enough. Second, and less important, I think that Matt Ridley would be a better torch-bearer of the Simon school than Bjorn Lomborg. Lomborg’s focus is far more on applying resources to present day, certain needs than preventing future, potential problems. Ridley is more explicit in his ‘rational optimism’ than Lomborg.

    By MarkB on 2013 08 29

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  • The examination of the Simon vs. Ehrlich bet is interesting, but likely incomplete if it doesn’t at least cursorily look at how Malthus’ prominence was due to an economic agenda. I refer to the Corn Laws; Malthus’ prominence in his time was because of the convenience of his ideology in service towards retaining and even expanding the Napoleonic era Corn Laws that propped up prices for grain in the UK.

    By c1ue on 2013 08 29

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  • “Telling the truth when the government lies is a revolutionary act” Orwell

    Ehrlich, Malthus and the entire “Green” movement prove that lying when the government lies is a lucrative act.

    I also think Lomberg a strange choice as the intellectual heir of Simon. Ray Kurzweil perhaps.

    By Neil Craig on 2013 09 02

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  • John Holdren, one of Ehrlich’s partner’s in the bet, is now director of the White House Office of Science and Technology Policy; a more influential political role than Ehrlich ever achieved.  However, I think few would state the current administration’s policies reflect neo-Malthusian viewpoints.

    By Rob Stern on 2013 09 03

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  • The Ehrlich-Simon bet

    The gambling that occurred between a scientist and an economist was idiotic. Even though the scientist has been proven to be correct in many respects, the scientist lost the bet. Perversions of science such as those by economists have served to distract, mislead and set back the science of human population dynamics and overpopulation for too long. Similarly, a widely shared and consensually validated, preter-natural demographic transition theory (DTT) promulgated by demographers served a common purpose. This theoretical perversion of science ignored, avoided and denied apparently unforeseen and admittedly unwelcome research related to the diminishing prospects for future human wellbeing and environmental health on a planet with the size, composition and ecology of a finite and frangible planet like Earth.

    On our watch many too many people listen to and act upon what the economists and demographers say because their pseudoscience is politically convenient, economically expedient, legally rationalized, socially accepted, religiously tolerated and culturally syntonic. Their fabrications and optical delusions have acquired the imprimatur of science at least in large part because too many people with scientific knowledge refuse to stand up and speak out in affirmation of the best available scientific evidence. Too many scientists will not speak truth, according to the lights and science they possess, to those with the great wealth and power.

    All that is actively and wrongheadedly being done by those who are few in number to massively extirpate global biodiversity, to recklessly dissipate finite resources, to relentlessly degrade the environment and to threaten the future of children everywhere is bad enough. The elective mutism perpetrated by so many knowledgeable people is even worse. The masters of the universe along with their sycophants and minions, all of whom act as if “greed is good” and money rules the world, are but a few; those with ‘feet of clay’ are many. Thank you to everyone here and elsewhere with feet of clay for speaking out as if you are a million voices. By so doing we educate one another to what science discloses to all of us about the placement of the human species within the order of living things on Earth and the way the blessed world we inhabit works. Otherwise, the silence of so many and the greedmongering of so few kill the world.

    By Steven Earl Salmony on 2013 09 14

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  • Mr. Pielke says “Looking back at the bet and its consequences it seems clear that Simon’s optimism resoundingly defeated Ehrlich’s pessimism in terms of public opinion and political commitments. No one seriously questions economic growth and over-population concerns have all but disappeared from public debate.”

    Excuse me, but there are plenty of intelligent scientists and laypeople who absolutely still question economic growth and have concerns about populations, whether it’s too many people or not enough bees. Graduate studies in both mechanical engineering (which is all about energy) and economics have led me to conclude that most economists have physics envy. Unfortunately, they also think they are using math the same way physicists use it. The laws of physics are proved in the lab, and summarized in the language of math, but economists typically think that the math derivation IS the proof. NOT! Their theories posit money as the independent variable, as the primary factor. NOT!

    I read Simon’s book, and I found him to be vastly over-optimistic about the substitutability of goods and services. I read Lomborg’s book, and I found no indicator for changes in standard of living than whether deaths would occur sooner than otherwise. But for ‘a fate worse than death’ to be a cliche means his metric is very incomplete. I know of no substitute for clean air and water. Nor for the solar energy that powers the ecology we absolutely depend on for healthy food.

    I haven’t actually read Ehrlich, but I will read Sabin’s book, which by other accounts than Mr. Pielke’s offers a more balanced view of the debate between them, and concludes that the issue has by no means been decided.

    One useful thing economists could do would be to calculate what the discount rate would be if we really wanted to steward both the earth and our erratic civilization unto the seventh generation.

    By Muriel Strand, P.E. on 2014 01 14

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    • Re: “no substitute for clean air and water.”

      There isn’t substitutes for my personal consumption of clean air and water, but there are substitutes for how much is necessarily consumed by technology.  Remember, if a producer is serious about production, he considers the pollution he creates as input that never becomes sellalbe output and therefore an uncovered cost. 

      I always think of the history of metallic aluminium production and use as a great encapsulation of Simon’s ideas.

      By M.Bob on 2017 10 16

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      • those “uncovered costs” are actually externalities which are real costs foisted onto ordinary people.

        having read simon’s book, i found his notions of infinite substitutability to be erroneous.

        By Muriel Strand, P.E. on 2017 10 16

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