The shrieking and rending of garments set off by the announcement that the United States would withdraw from the Paris climate accord take one back to the good old days of real apocalyptic catastrophism – and of the David who most memorably debunked it.
It’s a genuinely great story, and it’s lucidly told in one of my all-time favorite books on any subject, Paul Sabin’s short and eminently readable The Bet: Paul Ehrlich, Julian Simon and Our Gamble Over Earth’s Future.
Goliath, in this true fable, was Paul Ehrlich, a twentieth century Malthusian on steroids. His 1968 book The Population Bomb – which forecast that a hundred to two hundred million people would be starving to death annually by the 1970s – was reprinted 22 times in its first three years alone; the author was lionized by the media/intelligentsia complex to the point where he was Johnny Carson’s guest on The Tonight Show at least 20 times.
Toiling in obscurity at the University of Illinois, the economist Julian Simon begged to differ. In the face of the runaway inflation of the Somber Seventies, Simon maintained that a combination of rising resource prices and illimitable human ingenuity must call forth a superabundance of new supply – not just in food but in oil and every other “scarce” natural resource. The stage was set for a famous wager.
In 1980, Simon very publicly invited Ehrlich to choose any five commodities, which the two men would then put up $1,000 each to purchase. If by 1990 the prices had gone up, Simon would pay Ehrlich the difference; if they went down, Ehrlich would only have to pay Simon the difference between 1980 and 1990 prices. You will not have failed to note that Ehrlich’s risk was limited, while Simon’s was not.
On the tenth anniversary of the bet, the prices of all five commodities Ehrlich had chosen – chromium, copper, nickel, tin and tungsten – were down more than 50%, despite a world population increase of over 800 million during the term of the wager. Moreover, they had fallen for exactly the reasons Simon projected – a combination of technical innovation, conservation, and new supply in response to high prices. (As veterans of the commodity pits have noted since time immemorial: the cure for high prices is high prices.)
Graceless to the end, Ehrlich sent Simon a check for $576.07. Author Sabin notes with asperity that the envelope contained no note. The Bet is both an object lesson in long-term optimism and a crackling good read.
© 2017 Nick Murray. All rights reserved. Reprinted by permission. Nick reviews important current books, articles and research findings monthly in his newsletter, Nick Murray Interactive.