The Eternal Return of Malthus—The End of Ingenuity Again

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Way back in 1991, when I submitted the proposal for my book, Eco-Scam: The False Prophets of Ecological Apocalypse, my editor looked at me and said, "Ron, we're going to publish this book and we'll both make a bit of money from it, but I just want to tell you that if you'd given me a proposal for a book that said that the end of the world was nigh, I could have made you a rich man." Eco-Scam did earn out its advance and sell over 30,000 copies, but my editor was right, I am not a rich man.

A person is considered wise and taken seriously only when he predicts that the world is about to come to an end due to the hubris of heedless humanity. The careers of Paul Ehrlich, Lester Brown, and most recently Jared Diamond are built on predictions of imminent doom. Whenever something goes wrong–oil prices go up, hurricanes increase, another famine breaks out in Africa–it is a sign that the end has finally arrived. In that sad silly tradition, the New York Times published yesterday a supersized op/ed by Thomas Homer-Dixon, director of the Trudeau Center for Peace and Conflict Studies at the University of Toronto, asserting that human ingenuity has come to an end.

Homer-Dixon notes the famous bet between Julian Simon and Paul Ehrlich in which Simon bet that mineral prices would decline between 1980 and 1990–they did drop by 57 percent. But Homer-Dixon argues that it's different this time. True, commodity mineral and oil prices are up, but I wouldn't bet that they are going to stay up–in other words, I'd be happy to make another 10 year Simon-Ehrlich wager on commodity minerals. As for oil prices, the International Energy Agency believes that they will be in the range of $34 to $96 per barrel by 2030. Right now I would be real happy to take part of the bet between the New York Times reporter John Tierney and peak oiler Matthew Simmons. Simmons bet that oil would be $200 per barrel or more in inflation-adjusted dollars by 2010.

There's nothing original about Homer-Dixon's doom-laden op/ed, but this one paragraph is particularly irritating when he baldly asserts:

Without a doubt, mankind can find ways to push back these constraints on global growth with market-driven innovation on energy supply, efficient use of energy and pollution cleanup. But we probably can't push them back indefinitely, because our species' capacity to innovate, and to deliver the fruits of that innovation when and where they're needed, isn't infinite.

I fully realize that fueling the future is an enormous challenge, but Homer-Dixon asserts, without evidence, that humanity's capacity to innovate is finite. In fact, the opposite is the case. A point made by New Growth Theory economists like Stanford University's Paul Romer. I explained Romer's insights about economc growth in my article "The Law of Increasing Returns." It usually takes more explanation to refute simpleminded errors like those being propounded by Homer-Dixon, so at the risk of trying the patience of Hit & Run readers I quote my article at some length:

We make ourselves better off, then, not by increasing the amount of resources on planet earth–that is, of course, fixed–but by rearranging resources we already have available so that they provide us with more of what we want. This process of improvement has been going on ever since the first members of our species walked the earth. We have moved from heavy earthenware pots to ultrathin plastics and lightweight aluminum cans. To cook our food we have shifted from wood-intensive campfires to clean, efficient natural gas. By using constantly improving recipes, humanity has avoided the Malthusian trap while at the same time making the world safer and more comfortable for an ever larger portion of the world's population.

In fact, increasing, rather than diminishing, returns characterize many economic activities. For example, it may cost $150 million to develop the first vial of a new vaccine to prevent Lyme disease. Yet every vial after that is essentially free. The same is true for computer programs: it may cost Microsoft $500 million for the first copy of Windows 98, but each subsequent copy is merely the cost of the disk on which it is stored. Or in the case of telecommunications, laying a fiber optic network may cost billions of dollars, but once operational it can transmit millions of messages at virtually no added cost. And the low costs of each of these inventions make it possible for the people who buy them to be even more productive in their own activities–by avoiding illness, expediting word processing, and drastically increasing the tempo of information exchanges.

What modern Malthusians who fret about the depletion of resources miss is that it is not oil that people want; they want to cool and heat their homes. It is not copper telephone lines that people want; they want to communicate quickly and easily with friends, family and businesses. They do not want paper; they want a convenient and cheap way to store written information. In short, what is important is not the physical resource but the function to be performed; and for that, ideas are the crucial input. Robert Kates notes that technological discoveries have "transformed the meaning of resources and increased the carrying capacity of the Earth"; economist Gale Johnson concludes that history has clearly confirmed that "no exhaustible resource is essential or irreplaceable"; and economist Dwight Lee asserts that "the relevant resource base is defined by knowledge, rather than by physical deposits of existing resources." …

We cannot deplete the supply of ideas, designs and recipes. They are immaterial and limitless, and therefore not bound in any meaningful sense by the second law of thermodynamics. Surely no one believes that humanity has already devised all of the methods to conserve, locate and exploit new sources of energy, or that the flow of ideas to improve houses, transportation, communications, medicine and farming has suddenly dried up. Though far too many of our fellow human beings are caught in local versions of the Malthusian trap, we must not mistake the situation of that segment as representing the future of all of humanity and the earth itself; it is, instead, a dwindling remnant of an unhappy past. Misery is not the inevitable lot of humanity, nor is the ruin of the natural world a foregone conclusion.

But it is still the case that affirming humanity's capacity to solve problems will not make me a rich man. Maybe I should arrange for some bets with neo-Malthusians?

NEXT: My God, He Didn't Even Kiss The Ring!

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  1. All I have to do is write a book about how ancient Atlantian mystics predicted the end of the world on August 14, 2026. The 3 mm rise in ocean levels over the past century proves it! Problem is, how can I spin it out for 175 pages?

  2. THE SKY IS FALLING! THE SKY IS FALLING!

    If you will just dispense with your rights, I’l put it back up for you.

  3. Make that “I’ll put it back up for you.”

  4. When betting mineral prices, consider that zinc always covers the spread on its home turf.

  5. It always amazes me how the purveyors of doom and gloom are given respectibility, a free pass on any facts and much fame and fortune.
    But those that say things are pretty good don’t even make page 28 of the NY Post.

  6. With a title like director of the Trudeau Center for Peace and Conflict Studies at the University of Toronto, can idiocy like asserting that human ingenuity has come to an end be far behind?

  7. “What modern Malthusians who fret about the depletion of resources miss is that it is not oil that people want; they want to cool and heat their homes.”

    Exactly; I have made this point, at various times, in my own feeble way.

    I am not addicted to oil: I am, however, “addicted” to not having to walk up and down this great big hill I live on, and I am “addicted” to not having ice in my moustache when I get up in the morning, and to having electricity all day, every day, and indoor plumbing, and all the mod cons. I really couldn’t care less if my electricity is generated with coal or geothermal energy or the fecal runoff from pig farms or ten billion gerbils on treadmills. I don’t care if my car runs on gasoline, as long as it can move under its own power (preferably with wheelspin on demand).

    As for the depletion of ideas, that sounds like a personal problem.

  8. Running out of ideas is unlikely. A more frightening scenario — one that has occured many times in the history of mankind — is a collapse of the dominant culture followed by a quick slide into a dark age. A recent glimpse of this on a tiny scale was the Taliban’s reign of terror in Afghanistan. Think Muslim fundamentalism on a global scale, and be afraid.

    Or have a beer and watch a football game.

  9. You know, there is an easy way to find people who will take bets on commodities prices. Places with names like Chicago Mercantile Exchange, New York Stock Exchange, American Stock Exchange. It’s a game that’s caught on with quite a few people – you don’t even have to find a neo-Malthusian author. Find an oil contract expiring in 2010 and take the short position. I’m doing something of the sort myself.

  10. I can agree with Homer-Dixon if his focus is on the ability of Governmental institutions to innovate…the best a government can do is to “allow” it’s citizens to innovate…every other action is about stifling experiments, squashing deviations, or homogenizing solutions to whatever ails us…

  11. Ron,

    Whatever you do, don’t write “Solving the Energy Crisis Using the Power of the Pyramids,” because that’s MY new best seller.

  12. Ron, like Ehrlich, you have to be willing to be wrong, but but in your case, you would also have to be willing to be intellectually dishonest. Much more difficult, if not impossible, for you.

  13. No Joe, don’t say a thing.

  14. Didn’t “Eco-scams” argue the James Inhofe line, that Global Warming isn’t happening, and is a conspiracy being foisted on the public?

    Perhaps not the best person to be critiquing other people’s books about environmental problems.

  15. P Brooks,

    Was that an oblique reference to the Jam?
    If so, you rock! If not, good point anyway.
    Wellllaaaaaaahhhhhh!!!!!

    I’m not a nut, I swear.

  16. Oh look, everybody! joe has dragged his equine cadaver back with him! Whip it, joe! Whip it good!

  17. Didn’t “Eco-scams” argue the James Inhofe line, that Global Warming isn’t happening, and is a conspiracy being foisted on the public?

    Didn’t the Stern Report, commissioned by the government of the United Kingdom, come out just last month with highly publicized conclusions based on ridiculous discounting mechanisms that are being roundly criticized by the experts in global warming economics?

  18. MikeP,
    how does the Cato Institute qualify as experts Global Warming Economics…is there a college course or somesuch?

    I haven’t read the Stern report summary yet (planning on it). But I gather that it assumes the basics of the IPCC report, which also does not predict for any hidden civilization threatening catastophies. and as such the change will be gradual…if one can call it that. Global scale disasters, while not so presumed, should not be disregarded from overall consideration. The slower we can make the change, the less likely we will soon experinece such outside catastrophies, and the more likely our global civilization wiil be able to survive.

  19. Is it really necessary to throw Diamond under the bus? I read Collapse and I don’t recall anything in it predicting doom and gloom. More he was making the rather obvious point that men can damage their environments to such degree that they end up harming themselves, only he was showing how that lesson has been borne out by history. Seeing as how he repeats many instances of human history where that actually did happen, and attempts to create a template which would allow for us to be alert to the process now, it seems more than prudent to take his lessons to heart.

  20. how does the Cato Institute qualify as experts Global Warming Economics…

    You were supposed to follow the links to the PDFs.

    As is noted in those papers, as well as in the Cato blog summary, the “new” contribution of the Stern Report is neither a greater understanding of science nor of future economic impact. Rather, the reason the Stern Report draws such wildly frightening conclusions is solely due to a social discount rate and utility function that, taken together, are not economically defensible.

    Yet these are the numbers that get paraded in the papers. And this is the report that is going to serve as the foundation of the new Congress’s efforts to regulate carbon emissions. The refutations will never be heard in public or government circles…

  21. All righty, CEI is being dared:
    http://www.treehugger.com/files/2006/11/european_commis.php
    “The upshot seems to be that some European Union-based emitters will have just enough, and others not enough, credits to cover actual emissions in the future: hence real action can be expected soon. We can’t wait for the WSJ Editorial Page and CEI takes on this story. No doubt the sky will be seen to be falling.”
    Bsically, Europe is tightening the CO2 belt.

  22. Seeing as how he repeats many instances of human history where that actually did happen, and attempts to create a template which would allow for us to be alert to the process now, it seems more than prudent to take his lessons to heart.

    I assume you speak of, for example, Easter Island. Since I’ve already referred to Cato’s blog, there is another posting by Jerry Taylor relevant to this thread: Diamond’s take on the collapse of Easter Island’s ecology is bunk.

    I especially like Taylor’s last paragraph:

    There’s a reason people like me are deeply suspicious of virtually everything environmentalists have to say. After you run across this and similar vignettes hundreds of times over, you get to the point where you don’t believe a word these people say. They might be right here and there, but you’ll never know for sure unless you check it out for yourself.

  23. There’s a reason people like me are deeply suspicious of virtually everything environmentalists have to say. After you run across this and similar vignettes hundreds of times over, you get to the point where you don’t believe a word these people say. They might be right here and there, but you’ll never know for sure unless you check it out for yourself.

    Lucky for us, we don’t have that problem here, all we need to do is ask joe what the truth is.

  24. Jimmy,
    Zinc is that dark metal – right?

  25. Ron, you keep forgetting that:

    (1) the reason why those pesky enviros are wrong on many issues is that where there are effective property rights, markets continually provide opoortunities and incentives for technological change and economizing,

    (2) the enviros are quite right to be worried about open-access resources for which there are no effective owners, and that we are either racing to consume willy-nilly or continue to pollute without any market feedback mechanism, and

    (3) and the enviros have legitimate complaints about corporate statism and rent-seeking with respect to government-mismanaged “public” resources and to the misuse of laws and regulations for special interests – in which case the enviros simply become another rent-seeker in the pork fray.

    Why can’t libertarians use their principles to explain to enviros where they’re wrong, and acknowledge frankly when enviros are right and start talking about solutions? There are many enviros who are very frustrated with government and understand that at their core environmental problems are either property rights problems or rent-seeking problems.

  26. Why can’t libertarians use their principles to explain to enviros where they’re wrong

    You think we don’t try? For too many enviros, it is a matter of faith, not reason.

    There are many enviros who are very frustrated with government and understand that at their core environmental problems are either property rights problems or rent-seeking problems.

    They sure keep a low profile.

  27. “They sure keep a low profile.”

    Trying not to. And I don’t think they are hiding.

    FWIW, the Environmental Defense Fund sends me a newsletter, one of which stated their goals, here’s a few of them (their bold not mine):

    “3. Continue our bipartisan focus on market-based solutions that are proven to be the most effective and politically viable approach.

    4. Emphasize the fact that solutions to global warming also help our nation achieve other critical goals, such as strengthening our national security, bolstering our economy, improving our health and creating good jobs.

    6. Expand our outreach to non-traditional allies of the environmental movement, such as hunters, farmers, the faith-based community and business leaders.”

  28. MikeP (November 30, 2006, 2:33pm) wrote:

    “I assume you speak of, for example, Easter Island. Since I’ve already referred to Cato’s blog, there is another posting by Jerry Taylor relevant to this thread: Diamond’s take on the collapse of Easter Island’s ecology is bunk.”

    Unlike you, and, apparently, Jerry Taylor, I have actually read Diamond’s account of the collapse of the civilization on Easter Island. Contrary to the claims, Diamond does not say that the population collapsed just due to deforestation, nor does he put the blame for their plight entirely on the islanders themselves. Deforestation was a contributing factor due to the fact that, without trees, they could no longer build seaworthy canoes for fishing and hunting dolphins, thus depriving them of one of their major food sources. He also identifies many factors relating to climate, geography, and geology which made the island unusually susceptible to collapse.

    As has been pointed out previously, Diamond does not predict “imminent doom”, as Bailey would know if he had bothered to read the book before pontificating about it.

    “I especially like Taylor’s last paragraph:
    There’s a reason people like me are deeply suspicious of virtually everything environmentalists have to say. After you run across this and similar vignettes hundreds of times over, you get to the point where you don’t believe a word these people say. They might be right here and there, but you’ll never know for sure unless you check it out for yourself.”

    Change “environmentalists” to “libertarians” or “conservatives” and I’ve said exactly the same thing myself many, many times. When are they going to learn that they are the ones spouting “bunk”?

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