In 1981, the same year that Bill Gates and Paul Allen founded Microsoft, an economist and an ecologist made a simple but epic bet. The outcome of this wager still reverberates – and haunts – more than 30 years later.
Business professor Julian Simon bet biology professor Paul Ehrlich and two colleagues $1,000 that the prices of five metals of the Ehrlich team’s choice – chromium, copper, nickel, tin and tungsten – would decline over the coming decade. Ehrlich et al. wagered that the prices would increase.
In Simon’s optimistic view, natural resources were becoming less scarce and more abundant over time as a result of ever-advancing technology. The inventive human mind was “the ultimate resource” that could out-smart any shortage. In Ehrlich’s pessimistic view, natural resources were inexorably being depleted and becoming scarcer, which would tend to drive up their prices.
As Microsoft co-founder Bill Gates puts it:
Ehrlich and Simon saw the price of metals as a proxy for whether the world was hurtling toward apocalyptic scarcity (Ehrlich’s position) or was on the verge of creating greater abundance (Simon’s).
As co-chair of the Bill and Melinda Gates Foundation, Bill Gates takes a keen interest in population, resource and environmental matters. His foundation invests billions of dollars promoting family planning and reproductive health policies and programs in the developing world.
So who won the bet? Simon did, hands down, though it turns out that if it had been made a decade later (the 1990s) or in the last decade (the 2000s) he would have lost just as decisively. The prices of all raw materials are inherently volatile and skyrocket or plummet at the whim of world markets. Even a decade is not long enough to accurately gauge whether the long-term trend is toward scarcity or abundance.
But the real elephant in the room is whether the market price of any raw material is an appropriate proxy for the sustainability of the human enterprise on this finite planet. The late Simon thought so; Ehrlich thinks not, and regrets that he ever made the bet in the first place.
So do many of us. I can personally attest that its outcome dogs us even today. It is still trotted out as bogus “proof” that everything is actually just hunky-dory here on Earth, in spite of all the braying by doomsayers.
In the 1990s, Simon refused an Ehrlich counter-proposal for another bet based on 15 environmental indicators. When I asked Simon why, he told me that the market was a better guide of what really mattered to people than, for example, the increase of carbon dioxide in the atmosphere, or some other indicator of a non-human phenomenon.
Bill Gates has written a thoughtful review of Paul Sabin’s new book about the Simon-Ehrlich wager, The Bet: Paul Ehrlich, Julian Simon, and Our Gamble over Earth’s Future.
In his review, “‘The Wager of the Decade’ and its Unfortunate Legacy,” Gates justifiably decries the hyperbole and rancor that both Ehrlich and Simon epitomized. But Gates criticizes Ehrlich more than Simon:
…Ehrlich’s brand of science made it easy for conservative critics to caricature environmentalists as doom merchants and fear mongers who peddle dubious science as a means of advancing their big-government agenda.
The worst Gates can say about Simon is that:
He went so far as to claim that population growth should ‘thrill rather than frighten us.’
In fact, Simon went much further than that, claiming in a 1996 article that:
We now have in our hands – really, in our libraries – the technology to feed, clothe, and supply energy to an ever-growing population for the next seven billion years.
The late physicist Al Bartlett did some back-of-the-envelope calculations that for a population growing at just 1% annually (less than the current global growth rate) the number of humans would equal the number of atoms in the known universe in just 17,000 years, which is only 0.00024% of Simon’s seven billion years.
Thus, while Mr. Gates’ review is quite reasonable and even-handed, it is flawed nonetheless. He writes:
I wish there more people who took the middle ground and who were as prominent as Simon or Ehrlich.
The notion that the truth must always lie somewhere in the middle may be agreeable, but it is mistaken.