28 August 2013

The Bet: Paul Ehrlich vs. Julian Simon

Over at The Breakthrough Institute I have a review up of The Bet: Paul Ehrlich, Julian Simon, and the Gamble over Earth’s Future by Yale University historian Paul Sabin. It is an excellent book. Here is an excerpt from my review:
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.”
The Bet would be an excellent introduction to more comprehensive and challenging works such as Matthew Connelley's Fatal Misconception, Nick Cullather's The Hungry World and Björn-Ola Linnér's The Return of Malthus. One day I hope to teach a seminar on this topic and these four books would be the core readings.

My review can be found here. The Bet can be found here. Comments welcomed.