Betting Against Apocalyptic Thinking

The Simon-Ehrlich Wager

$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: (left); (right)