Does Doom Loom?

There's always been an abundance of resources. Is the party over?

Even such doomsayers as Paul Ehrlich and Garrett Hardin now agree that man's history has been one of increasing availability of resources (as measured by falling prices), together with an improving standard of material living (as measured by life expectancy and the quantity of consumer goods). But, they say, this benign trend will not continue in the future. Rather, they make such statements as "the age of cheap energy is over" and "we have entered an age of scarcity following on the age of affluence." They even predict life expectancy to fall.

There is no way to prove with the force of deductive logic that we are not at a turning point in history now; it is indeed possible that, starting in our time, these very long-term trends will indeed reverse. But is it likely that this is so?

The doomsayers' arguments for the turning-point hypothesis are of two kinds, empirical and deductive. The empirical argument—whether the argument was made in 1970, 1975, or now (and probably the same argument was made in 1300, 1600, and many other times)—is that the last few years have shown increasing prices (relative to wages) in some raw materials. But when we look at the long-term trends, we see that frequent temporary price upturns are followed by resumption of the long downward trend. These historical series indicate that reliance on just a few years' data usually leads to disastrously wrong long-run predictions.

The doomsayers' theoretical, or deductive, argument begins with the supposed "finiteness" of all resources, especially energy, and a consequent reduction in the stock of resources as some are used up. In my book The Ultimate Resource (Princeton, 1981), I argue at length that the underlying concept of finitude is fatally flawed as a foundation for scientific reasoning and forecast.

Rejection of the doomsayers' arguments, however, still leaves us in limbo; for although the doomsayers have no solid reason to believe that we are now at a turning point, the historical series of falling prices is not conclusive proof that these benign trends will continue. Nonetheless, experience is a powerful guide to the future, and this has been the main argument of those who have argued that—absent strong theoretical reasons to the contrary—things will continue to get better.

Moreover, historical experience is buttressed by the observation that people respond to newly arisen or soon-expected problems by developing solutions that leave us better off than we began. Still, many long-run trends do reverse—the number of horses in the United States, for example. So it behooves us to seek a deeper understanding.

In my view, we can improve our understanding by going beyond the trends in particular resource prices and quantities per person to examine the larger trend of which these particular trends are a part. And the greatest and most important trend is the world becoming ever more livable for human beings. We see signs of this in increased life expectancies, our improved knowledge of nature, and the subduing of the elements with respect to our own safety and comfort.

But though this larger trend buttresses the particular resource trends, it still provides no causal explanation of the phenomenon we seek to understand. Evolutionary thinking, however, and (more specifically in economics) the sort of analysis suggested by Austrian School economist Friedrich Hayek, offers an explanation of the observed long-term trend. And that explanation in turn provides the basis for a grounded forecast of a continuation of the great long-term trend (of the world becoming ever more livable for people). Hayek suggests that, as there has been an evolutionary selection for survival among those societies that have existed in the past, mankind has evolved rules and patterns of living that are consistent with survival and growth rather than with decline and extinction.

Hayek assumes that these particular rules and living patterns have had something to do with the societies' chances for survival. For example, he reasons that patterns yielding higher fertility and more healthful and productive living have led to groups' natural increase and hence survival—and therefore, where conditions are not too different from those conditions that held in the past, inherited patterns constitute a machinery for continued survival and growth.

This is consistent with a biological view of humankind as having evolved a genetic pattern that (under historical conditions) points toward survival. But Hayek presupposes no such genetic evolution, in part because its time span is so great that we cannot understand it as well as we can understand the evolution of cultural rules. It may be illuminating, however, to view mankind's biological nature as part of the long evolutionary chain dating from the simplest plants and animals, a history of increasing complexity of construction and greater capacity to deal actively with the environment.

Let us apply Hayek's general analysis to natural resources. All sorts of natural resources have been a part of man's history ever since the beginning. If humankind had not developed patterns of behavior and association that increased rather than decreased the amounts of resources available to us, we would not still be here. If, as mankind's numbers increased (or even as they remained nearly stationary), its behavior had led to diminished supplies of plants and animals, less flint for tools, and disappearing wood for fires and construction, I would not be here writing these pages, and you would not be reading them.

What then, are the key patterns of culture that maintained and increased human life? It is interesting and important that we try to learn what they are. Certainly the evolved cultural patterns include voluntary exchange among individuals, and markets that function to provide resources in increasing quantities; institutions that pass on knowledge, such as schools; libraries and legends and storytellers, all of which store knowledge; and monasteries and laboratories and research-and-development departments, which produce knowledge. Biological patterns that have evolved to aid survival include the hunger signals we get when we lack food and the attention that we focus on apparent regularities in nature when they appear before us. But ignorance of these cultural and biological patterns is not devastating for us, and such ignorance ought not be surprising, given the complexity of these patterns and the difficulty of any one person seeing much of any pattern.

The belief that our evolved history is, as I suggest, toward humans being creators rather than destroyers may be strengthened by some evidence that such evolution spontaneously occurs within most human groups, independent of one another, as a result of the conditions that humankind faces. For example, people build dwellings that shelter them from sun, rain, and snow. And the exchange mechanism evolves everywhere as a way of handling differences in people's abilities, in order to improve their capacities to construct and create new goods as well as to distribute existing goods. Chiefs of work gangs somehow assume their roles so that constructive tasks can be carried out efficiently. Communities reward creators of works in a variety of ways that they do not reward destroyers of the community works. (Warriors against other groups are not exceptions to this proposition. But perhaps it deserves mention as an exception that songs are written about such destroyers as the James Gang as well as about such creators as John Henry.) Probably everywhere mothers ooh and ah about their children's sand castles. And though I have no evidence—and feel no need to consult anthropologists on the matter—I'd bet that early tribes in dry climates gave greater honor to persons who found water than to those who polluted water sources, and greater honor to those who procured food than to those who showed considerable ability to consume food supplies.

The above illustrations are intended to show that human groups spontaneously evolve patterns of behavior—and of training people for that behavior—that, on the whole, lead people to create rather than destroy. And this supports the view that humans are, on net balance, builders rather than destroyers. The evidence is seen in the historical records and in the state of civilization and economy that our ancestors have bequeathed to us, one that contains more created works than the civilization and economy they were bequeathed.

In short, humankind has evolved into creators and problem-solvers to an extent that people's constructive behavior has outweighed their destructive behavior, as evidenced by our increasing life expectancy and richness of consumption. And in recent centuries and decades, this positive net balance has been increasing rather than decreasing.

This view of man, as (on balance) builder, conflicts with the view of man as destroyer that underlies the thought of many doomsayers. From those holding the latter view come such statements as, "The United States has 5 percent of the (world's) population, and uses 40 percent of (its) resources"—without reference to the creation of resources by the same US population. (Also involved here is the misleading view of resources as physical quantities, rather than as the services that humankind derives from some combination of humankind's knowledge and physical conditions. According to that superficial view, people are not "resourceful" and do not convert physical conditions into resources, but resources somehow are waiting for the plucking, like cherries on a tree. Many writers have commented on the fact that naturally occurring materials, such as copper and oil and land, were not resources until humans discovered their uses, found out how to extract and process them, and thereby made their services available to us. Hence resources are, in the most meaningful sense, created, and when this happens their availability increases and continues to increase as long as our knowledge of how to obtain them increases faster than our use of them, which is the history of all "natural resources.")

If one notices only the destructive activities of humankind, without understanding that in order for us to have survived to this point, constructive behavior must have been the dominant part of our individual-cum-social nature—which is confirmed by the increasing positive net balance in our resources—then it is not surprising that one would arrive at the conclusion that resources will grow scarcer in the future.

Paradoxically, rules and customs that lead to population growth rather than to population stability or decline may be part of our inherited capacity to deal successfully with resource problems in the long run, though the added people may exacerbate the problems in the short run. Such rules and customs probably lead to long-run success of a society in two ways.

First, high fertility leads to increased chances of a group's survival, other things being equal. (This key idea comes from Hayek.) For example, though the Parsis of India have been, as individuals, very economically successful, as a people they seem doomed to the failure of disappearance in the long run, due to their marriage and fertility patterns.

Second, high fertility leads to resource problems, which then lead to solutions to the problems that usually leave humanity better off in the long run than if the problems had never arisen. In a more direct chain of events, rules and customs leading to high fertility yield an increased supply of human ingenuity, which responds productively to the increased demand for goods.

But even if one accepts that up until now humankind has evolved into a creator rather than a destroyer, it is certainly not unreasonable to wonder whether there have been changes in conditions, or "structural changes" in patterns of social behavior, that might point to a change in trend, just as structural changes might have contributed to the fate of the dinosaur and of some extinct human groups.

Changes in natural conditions, such as climate, are suggested by few writers, so we can pass them by. "Internal contradictions" in societies or economies may be more relevant. This concept represents the intuitive notion that, because of our large, fast-growing population and because of the way we produce goods and organize ourselves socially, our civilization is unwieldy and hence must collapse of its own weight—by, for example, nuclear destruction, or the failure of an all-important crop.

Many who are pessimistic about the outcome of the present course of civilization suggest that pollution is an "internal contradiction" that will do us in. Some political organizations and devices have evolved to deal with the matter, and we have both public and private cleanup and collection of various kinds of garbage, as well as laws that regulate pollution behavior. But the possible changes in pollutants and the regency of the onset of regulatory activities certainly leave room to wonder whether we have yet evolved reliable ways of dealing with pollution problems.

Intergenerational relationships with respect to resources are another frequently mentioned possible "internal contradiction"—one generation is feared to be exploiting a resource, leaving too little for the next generation. But the advent of futures markets—both for buying and selling the resources themselves and for buying and selling stock in resource-supplying firms—protects against this potential danger. And we have had enough experience by now to believe that this evolved mechanism is reliable and satisfactory for the purpose.

What I am suggesting, in sum, is that humankind has evolved culturally (and perhaps also genetically) in such a manner that our patterns of behavior—social rules and customs being a crucial part of these patterns—predispose us to deal successfully with resource scarcity. That is, over the centuries, these evolved patterns have given us greater rather than less command over resources.

This view of human history is consistent with both the observed long-term trend toward greater resource availability and the positive, growing net balance between our creative and our exploitative activities. It provides a causal foundation for the observed benign resource trends and thereby buttresses the simple extrapolation of past trends that produces a forecast of increasing rather than decreasing resource availability.

The market system, of course, is part of the evolution of resource-expanding behavior. But it is not the whole of it. The story of Robinson Crusoe (which has been badly twisted by economists, who make it a story of allocation when it is really a story of ingenuity and the use of the knowledge that Crusoe brought to the island with him) also illustrates this point—that is, that we have developed a body of knowledge and a set of cultural patterns that enable us to improve our resource situation rather than make it worse, even as we use resources and even in the absence of an exchange mechanism.

Thus, as time goes on, I think we can with confidence expect to observe greater rather than less availability of resources, whether they be arable land or oil or whatever, just as we observe in this trend in the past. If I am correct, we now have systematic grounds to believe that we are not at a turning point in resource history caused by man's propensity to destroy rather than create. On the contrary, humankind is on balance a creator rather than a destroyer.

Julian Simon's works include The Ultimate Resource (1981) and The Economics of Population Growth (1977). He teaches at the University of Maryland and is a senior fellow in resource economics at the Heritage Foundation.