The Bet: Paul Ehrlich, Julian Simon, and Our Gamble Over Earth's Future, by Paul Sabin, Yale University Press, 304 pp., $28.50.
In 1980, four men placed a bet on the future prices of five commodity metals. That seemingly small event still resonates powerfully in the ongoing fight between doomsters and optimists. Gambling that prices would spiral ever upward as a growing population used up the world's resources was Population Bomb author Paul Ehrlich and two of his acolytes, John Holdren and John Hart. Holdren is now President Barack Obama's chief science advisor, and Harte has become a professor in the College of Natural Resources at Berkeley. On the other side of the bet stood the University of Maryland economist Julian Simon. Simon believed that human ingenuity would increase the availability of natural resources and lower their prices.
In his intriguing new book The Bet: Paul Ehrlich, Julian Simon, and Our Gamble over Earth's Future, the Yale environmental historian Paul Sabin uses this famous wager to frame 40 years of rancorous debate over humanity's impact on the planet and the prospects for human flourishing. Sabin also argues that understanding the genesis of these controversies can help illuminate the choices that confront us as we try to navigate further economic and ecological challenges.
So what was the famous bet? In October 1980, Ehrlich and Simon drew up a futures contract obligating Simon to sell Ehrlich the same quantities that could be purchased for $1,000 of five metals (copper, chromium, nickel, tin, and tungsten) 10 years later at 1980 prices. If the combined prices rose above $1,000, Simon would pay the difference. If they fell below $1,000, Ehrlich would pay Simon the difference. In October 1990, Ehrlich mailed Simon a check for $576.07. There was no note in the letter. The price of the basket of metals chosen by Ehrlich and his cohorts had fallen by more than 50 percent.
Sabin points out that had the bettors chosen different starting and end dates, Simon could have actually lost, since commodity metal prices have fluctuated considerably over the past century. In fact, had the same bet been made between 2002 and 2012, Simon would have lost badly. Researchers have identified "supercycles" in which commodity prices rise and then fall, but they generally report that the overall trend has, nevertheless, been for most commodities to become cheaper over time. It is true that there has been a recent run-up in commodity prices, but a 2002 International Monetary Fund study found that "there has been a downward trend in real commodity prices of about 1 percent per year over the last 140 years."
As Sabin builds up to the bet, he traces the development of the epic scientific and intellectual fights between doomsters like Ehrlich and doomslayers like Simon. Ehrlich became publicly prominent with the 1968 publication of The Population Bomb, which declared that the "battle to feed humanity is over. In the 1970s, the world will undergo famines. Hundreds of millions of people are going to starve to death in spite of any crash programs embarked upon now." Apocalypse was in the air. Sabin also recounts the dire computer model predictions of imminent resource depletion made in the Club of Rome's Limits to Growth report published in 1972. Even if global resource consumption rates didn't increase at all, the modelers calculated 41 years ago that known world copper reserves would be entirely depleted in 36 years, lead in 26 years, mercury in 13 years, natural gas in 38 years, petroleum in 31 years, silver in 16 years, tin in 17 years, tungsten in 40 years, and zinc in 23 years.
In other words, at then current rates of consumption, the known reserves of these nonrenewable resources were expected to be used up before the end of the 20th century. These doleful prognostications of impending scarcity were largely endorsed by The Global 2000 Report to the President, commissioned in 1980 by President Jimmy Carter. Carter himself declared that the world's entire proven reserves of oil could be gone by 1990.
While Ehrlich and other doomsters were achieving fame, Simon was largely ignored. Simon had initially agreed with Ehrlich that population was a significant problem. In 1969, he calculated that a poor country gained $114 per avoided birth, concluding that contraceptive distribution programs costing $5 per avoided birth were a "fantastic economic bargain."
Simon changed his views on population growth when he delved deeper into the economic research that found no strong correlation between economic development and lower fertility. He concluded that economist Simon Kuznets had been right when he observed, "More population means more creators and producers." When people encounter scarcity, they use their brains to figure out a way to innovate around it, if they are left free to do so. In his 1977 book The Economics of Population Growth, Simon wrote: "Commonsense notices our use of resources but fails to see how our needs lead to our creation of resources—planting forests, exploration of new oil fields and invention of ways to obtain oil from rocks, discovery of substitute sources of energy and nutrients, invention of new tools of all kinds. Clearly we now have available to us vastly more resources of almost every kind than did people in any preceding age." The world's problem, Simon concluded, "is not too many people, but lack of political and economic freedom."
The intellectual sparring between the two men came to its end when Simon died of a heart attack in 1998. Ehrlich, now age 81, continues to prophesy imminent doom. Earlier this year, Ehrlich co-authored articles predicting civilizational collapse in two prestigious journals, Science and The Proceedings of the Royal Society B. In February 2013, over at Project Syndicate, he and his wife Anne asked, "Can humanity avoid a starvation-driven collapse?" Their answer: "Yes, we can—though we currently put the odds at just 10%." (Back in 1990, Ehrlich told me that the population collapse would occur in the decade between 2000 and 2010.)
In a 1981 article, Simon asked, "How often does a prophet have to be wrong before we no longer believe that he or she is a true prophet?" That's an even more salient question after 30 more years of failed predictions. The mountains of evidence that the last four decades have given us should persuade any reasonable person that Ehrlich is a false prophet.
Sabin does a pretty good job of even-handedly outlining each man's intellectual strengths and flaws. The author goes wrong, though, when he tries to give Ehrlich and Simon equal blame for contributing to the often bitterly polarized state of contemporary debates over environmental and economic policy. Sabin is quite right when he points out that both men were unfortunately prone to overstatement in the heat of argument, but he underplays the two big differences between them. First, Simon's predictions were mostly right and Ehrlich's predictions mostly wrong. And second, Ehrlich harbored the totalitarian desire to tell people how they should live, whereas Simon wanted people to be free to choose for themselves how they would like to live.
By the end, even Sabin acknowledges that "history over the past forty years has not conformed to Paul Ehrlich's predictions. By the most basic measure, human populations have continued to grow and no population collapse or broad-scale famine-caused by population outstripping food supply-has occurred." In other words, Simon was right and Ehrlich was wrong.
In his conclusion, Sabin argues that the fierceness of the debate between environmental doomsters and free-market techno-optimists is getting in the way of solving real environmental problems. Specifically, he is concerned about the political polarization over the "strong consensus that greenhouse gas emissions are warming the planet." In an interview, I reminded Sabin that there were once strong scientific consensuses that world was running out resources, overpopulation was a problem, and exposure to trace amounts of synthetic chemicals would cause cancer epidemics. Yet none of them turned out to be right. Given that track record, is it any wonder that a significant portion of the public is doubtful about a consensus that humanity faces imminent climate doom?
Sabin responded that we should exercise "a measure of humility" when dealing with environmental claims and "make our best efforts based on our current level of knowledge." He added, "At the same time it seems important to make prudent decisions based on our best knowledge of what works." Well, yes. But it would seem to me that those who continue to predict imminent ecological catastrophe are especially in need of "a measure of humility."
I asked Sabin who ultimately came out ahead, Simon or Ehrlich. "I am optimistic that humans can adapt and flourish," he replied. "Of course, we must recognize the real environmental problems that we face, climate change in particular, and then apply our creative forces to solve them. I'm hopeful."
I pressed him further: Do you believe that Ehrlich is right in his predictions about the impending collapse of human civilization? Sabin paused, "No, I don't."
Julian Simon was right: Betting against human ingenuity in free societies will always be a losing proposition.