Missing Link in the Resource Equation


The Ultimate Resource, by Julian L. Simon, Princeton, N.J.: Princeton University Press, 1981, 415 pp., $14.50.

The 1970s have been a difficult decade. In the United States, we suffered from the demoralizing aftermath of the Vietnam war and of urban riots, only to be hit by Watergate and the OPEC petroleum embargo of 1973-74. We waited in queues for hours for gasoline, which suddenly doubled in price. Soon thereafter, supermarkets rationed customers to two or three pounds of meat per visit, and fertilizer and soybean prices around the globe soared. At the end of the decade, Three Mile Island and the DC-10 crash at Chicago's O'Hare Airport shook popular confidence in high technology.

Throughout the decade, we were bombarded with a steady stream of doomsday books, such as The Limits to Growth, The Population Bomb, Famine 1975, The End of Affluence, and Losing Ground: Environmental Stress and World Food Prospects, while the media announced almost daily new discoveries about the carcinogenicity of some food substance we had been using for years. In 1980, a commission chartered by President Carter presented its Global 2000 Report to the President, reiterating most of the warnings of this gloomy literature.

Given this succession of bad news, most reasonable lay people, having little or no expertise, time, or resources to investigate these issues for themselves, would come to the conclusion that the future is rather bleak. We seem to be using up the Earth's resources at an ever faster and faster rate, inventing and scattering about more and more pollutants or toxic materials, multiplying faster than rabbits (especially in the less developed countries—LDCs), all the while proliferating more and more potent weapons of mass destruction. Amid all the rhetoric about scarcities of petroleum, food, agricultural land, strategic metals, sites for waste disposal, potable water, or money to carry out socially desirable programs at home and abroad, it seems the commodity we most lack is hope.

Julian L. Simon's new book, The Ultimate Resource, provides a refreshing and well-documented refutation of the gloom-and-doom school. Simon is a professor of economics at the University of Illinois, and the bulk of his book is based on economic evidence and arguments, with a minimum of technical jargon, so the book is readily accessible to the intelligent lay person. This is a book for people who are interested in shaping the future to read, to refer to repeatedly, and to give to friends who have been swayed by the abundance of bad news in the media.

Most of the book's conclusions are sharply at odds with currently accepted conventional wisdom, which is largely based on certain ideological positions totally unsupported by real-world data. Just a few of these conclusions will serve to indicate the thrust of the good news:

• "Food. Contrary to popular impression, the per capita food situation has been improving for the three decades since World War II, the only decades for which we have acceptable data. We also know that famine has progressively diminished for at least the past century."

• "Land. Agricultural land is not a fixed resource.…Rather, the amount of agricultural land has been, and still is, increasing substantially, and it is likely to continue to increase where needed. Paradoxically, in the countries that are best supplied with food, such as the U.S., the quantity of land under cultivation has been decreasing because it is more economical to raise larger yields on less land than to increase the total amount of farmland."

• "Natural resources. Hold your hat—our supplies of natural resources are not finite in any economic sense.…[If] the past is any guide, natural resources will progressively become less scarce, and less costly, and will constitute a smaller proportion of our expenses in future years. And population growth is likely to have a long-run beneficial impact on the natural resource situation."

• "Energy. Grab your hat again—the long-run future of our energy supply is at least as bright as that of other natural resources, though political maneuvering can temporarily boost prices from time to time. Finiteness is no problem here either. And the long-run impact of additional people is likely to speed the development of a cheap energy supply that is almost inexhaustible."

• "Pollution.…population growth is not the villain in the creation and reduction of pollution.…the key trend is that life expectancy, which is the best overall index of the pollution level, has improved markedly as the world's population has grown."

This is good news indeed, and there is more.

But what is the justification for claims so outrageously at odds with the prevailing common wisdom? History provides some clues. Our present standard of living (in terms of life expectancy, material affluence, and political freedom) is the direct result of the Industrial Revolution, which would not have been possible but for the "population explosion " in Europe in the 18th and 19th centuries. More people, in the long run, provide the increased demand that leads to the invention of new technologies that not only meet the demand but satisfy it at lower cost than was previously possible. More people, moreover, provide the additional labor force to permit more efficient division of labor, providing new economies of scale. Had population growth 200 years ago been slower, we would all be poorer today.

The conventional wisdom, on the other hand, is based on a short-term view of the problem. An additional child (especially in the more-developed countries—MDCs—such as the United States) places large new demands on the socioeconomic system until the child joins the productive labor force 20-odd years later. Other things being equal, the same "pie" of resources must be divided more ways, and everyone's standard of living decreases.

But each additional child (again, especially in the MDCs) contributes in his or her lifetime more than he or she consumed in growing up. In contrast to such neo-Malthusian computer models as those used in The Limits to Growth, computer models that include the economic contributions of additional children once they join the labor force show that an LDC with moderate population growth rates will prosper better than the same country with very low (or, worse yet, with negative) population growth rates. It is only necessary to look at a time span long enough (say, 50 years or more) for the additional children to grow up and make their positive contributions.

An additional effect of more children, however, is that other things are not equal. When a family grows larger, the parents have more incentive to become more productive, and all of society benefits. Most of the costs of the additional child are borne by the family, while most of the economic benefits accrue to society as a whole. The family, of course, receives intangible benefits in terms of the experience of another new and unique human being. The issue of population growth versus standard of living is in large part so very thorny because the costs of additional children are incurred long before the benefits.

Historical data consistently show, Simon argues persuasively, that economic forces have always (barring excessive governmental interference) kept the wolf farther and farther away from the door. In anticipation of impending scarcities, people have always developed new ideas capable of reaping profits from the inevitable shifts in the economy, providing the services and products to which society has become accustomed. Not even the most strident opponents of growth have presented systematic evidence (other than isolated anecdotes) that these social and economic forces of progress have ceased or been superseded by economic or technical factors that would prevent further progress.

The conclusion is that we can expect continued economic growth far into the future. This puts the current emphasis on conserving resources into an unusual light: "Because we can expect future generations to be richer than we are, no matter what we do about resources, asking us to refrain from using resources now so that future generations can have them later is like asking the poor to make gifts to the rich."

The bottom line in the debate between the neo-Malthusian school and more optimistic schools of thought is a matter of personal values. Simon describes his personal shift in views on these issues in his introduction:

Ironically, when I began to work on population studies, I assumed that the accepted view was sound. I aimed to help the world contain its "exploding" population.…One spring day about 1969 I visited the [State Department's Agency for International Development] to discuss a project to lower fertility in less-developed countries. I arrived early for my appointment, so I strolled outside in the warm sunshine. Below the building's plaza I noticed a sign that said "Iwo Jima Highway." I remembered reading about a eulogy delivered by a Jewish chaplain over the dead on the battlefield at Iwo Jima, saying something like, "How many who would have been a Mozart or a Michelangelo or an Einstein have we buried here?" And then I thought, Have I gone crazy? What business do I have trying to help arrange it that fewer human beings will be born, each of whom might be a Mozart or a Michelangelo or an Einstein—or simply a joy to his or her family and community, and a person who will enjoy life?

The longer I read the literature about population, the more baffled and distressed I become that one idea is omitted: Enabling a potential human being to come into life and to enjoy life is a good thing, just as enabling a living person's life not to be ended is a good thing. Of course, a death is not the same as an averted life, in part because others feel differently about the two. Yet I find no logic implicit in the thinking of those who are horrified at the starvation of a comparatively few people in a faraway country…but who are positively gleeful with the thought that 1 million or 10 million times that many lives will never be lived that might be lived.

The book concludes on a realistic and positive note: "Is a rosy future guaranteed? Of course not. There will always be temporary shortages and resource problems where there are strife, political blunderings, and natural calamities—that is, wherever there are people.…The main fuel to speed our progress is our stock of knowledge, and the brake is our lack of imagination. The ultimate resource is people—skilled, spirited, and hopeful people who will exert their wills and imaginations for their own benefit, and so, inevitably, for the benefit of us all."

J. Peter Vajk, the author of Doomsday Has Been Cancelled, is a physicist and futurist specializing in the prospects of space industrialization for improving the human condition.