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Page added on January 3, 2014
A Bet, Five Metals, And The Future Of The Planet
This famous bet — between a biologist and an economist — was over population growth. It started three decades ago, but it helped set the tone for environmental debates that are still happening today.
The biologist at the heart of this bet was Paul Ehrlich at Stanford. He wrote a best-selling book in 1968 called The Population Bomb. It was so popular he appeared on The Tonight Show with Johnny Carson.
He told Carson, “There are 3.6 billion people in the world today, and we are adding about 70 million a year. And that’s too many. The very delicate life support systems of the planet, the things that supply us with all of our food, with ultimately with all of our oxygen, all of our waste disposal are now severely threatened.”
Despite Ehrlich’s sobering message, Carson had him on 20 times.
The guy on the other side of the bet, the economist Julian Simon, didn’t buy Ehrlich’s argument. Simon didn’t see the growing population as a catastrophic problem. He explained that we are not like any other species. We have an economy and markets. So, according to Simon, if the world demands more oil, the price of oil will go up, and there will be an incentive to find more, or find an alternative.
Both Ehrlich and Simon enjoyed being provocative. Ehrlich started a movement called “Zero Population Growth.” He got a vasectomy to set an example. And he proposed a tax on diapers to keep population in check.
Simon took to wearing devil horns on his head when giving talks.
Paul Sabin, a historian at Yale, told the story of this famous bet in his new book The Bet. And Sabin says Simon’s side never really got as much notice as Ehrlich’s — and that, it seems, is why he proposed the bet.
Simon proposed that they bet on what would happen to the price of five metals — copper, chromium, nickel, tin and tungsten — over a decade.
And the logic was that these metals were essential for all kinds of stuff — electronics, cars, buildings. So, if Ehrlich was right, more people on the planet would mean we would start running out of stuff, and the price of these things should go up.
But, if Simon was right, the markets and human ingenuity would sort things out, and the prices would stay the same or even go down.
And before we get to how the bet turned out, it’s worth remembering the context for all this.
The 1970s felt like a time of shortages. TV news showed famines in Africa. And here at home in 1974, there were long lines at gas stations because of conflict in the Middle East.
President Richard Nixon went on television. He asked people to drive more slowly to conserve fuel. And to kill outdoor Christmas lights.
Those next 10 years, from 1980 to 1990, crept by. The world population grew by 800 million people. Then it was 1990. And they tallied it up. Simon, the economist, decisively won. Prices for the five metals went down by an average of 50 percent.
One of the reasons the prices dropped was just what Simon said. The catastrophe Ehrlich was predicting just did not happen. People invented substitutes, like companies switching from aluminum to plastic for packaging.
But Paul Sabin at Yale says, personally, he worries a lot about the environment. And he wonders if the bet actually poisoned the waters, helping to set the stage for a world where environmental debates are framed by the extremes — one side warning of certain catastrophe, and the other saying everything is going to be great.
In October 1990, the economist Julian Simon was going through the mail at his house. And he found a small envelope from California. Inside was a check from Paul Ehrlich for $576.07. There was no note.
11 Comments on "A Bet, Five Metals, And The Future Of The Planet"
robertinget on Fri, 3rd Jan 2014 2:21 pm
During the decade between 1980 and 1990
how many times did you hear the term
“Global Warming”? Renamed by a conservative wordsmith, more accurately
as it turns out, to “Climate Change”.
Like early internet company investors who inflated values far out of proportion to their money earning potentials in the late 1990’s were in fact premature. Today, 2014, we
can see enormous changes brought about by this medium.
So it is with ‘predictions’. We forget the ones that did not pan out in abbreviated spans of human awareness.
Lifelong investors always looking for the ‘next big trend’ will unhappily
tell you how they ‘got in too early’
or too late on a trend.
Timing of course, is everything.
Ehrlich committed a major scientific boo boo when he failed to consider human resourcefulness.Ehrlich was not wrong in 1980, he just ‘got on board’ 35 years too early.
Speaking of commodities prices, don’t
expect current ones to predict anything
more than a few hours or minutes out.
Stay warm.
yellowcanoe on Fri, 3rd Jan 2014 2:41 pm
Yes, timing is everything. I think a lot of us peak oilers made the same mistake in 2008, expecting oil production to go into decline very soon. What happened instead is that high oil prices drove new production so oil production is slightly higher than it was in 2008. However, that has come at a tremendous cost in both financial and environmental terms. Over the next five years it will be even more challenging for the oil companies to bring enough new production online to offset depletion. My bet would be that it cannot be done and we will reach the point that current production cannot be maintained.
Jerry McManus on Fri, 3rd Jan 2014 5:03 pm
Trying to predict prices is a fool’s bet, always will be.
There are simply far too many social and political factors that play into it. Besides, it ignores the larger question, what use are low priced goods if no one has any money to buy them at any price?
It would have been far wiser of Ehrlich to bet on the quantifiable mega-trends like population, pollution, food per capita, industrial output per capita, etc.
If the Limits to Growth study were taken as a guide, Ehrlich would be the “standard run” scenario while Simon would probably take the “Comprehensive Technology” scenario.
Ironically, both of those scenarios result in collapse in the middle half of this century.
Even better, we won’t know for sure what scenario has actually come to pass until at least 2050 or so, a full half century after the famous “bet”, but so far the “Standard Run” scenario appears to be the front runner.
More info here:
http://damnthematrix.wordpress.com/2012/10/16/are-we-on-the-cusp-of-global-collapse/
Jerry McManus on Fri, 3rd Jan 2014 5:25 pm
If half a century is too long to wait for settling a bet, then Ehrlich would still have done well to bet on something more tangible, such as ore quality.
There are clear short-term trends (on the decade time scale) showing that technology is not actually making resources like metals more abundant, per se, but just enabling us to expend greater amounts of energy and other resources chasing after lower and lower grades of ore.
This is otherwise known as the “resource pyramid”:
http://scitizen.com/future-energies/energy-the-achilles-heel-of-the-resource-pyramid_a-14-2760.html
DC on Fri, 3rd Jan 2014 5:43 pm
I am not sure what point this writer is trying to make here. His only messages seems to be, ‘someone’ lost a bet somewhere.
Copper. Now that is interesting metal. Not too long ago in my province, indeed, all over the country. Cooper was being literally stolen from anyplace it wasnt nailed down, and a lot of times even from the places it was. Cooper was being stolen from ‘secured’ construction sites, old buildings, new ones, street fixtures, you name it. People were even going down manholes to mine copper from under city streets! The price was so high taking it from anyplace you could was fairly lucrative.
Nothing like that happened to the other four metals, yet, but the huge upsurge in outright theft of copper gave us a kind of preview on what a raw material scarcity society would look like. And this surge in copper theft wasnt a gradual, measured thing, it literally exploded in very short time frames. Im not sure if people still steal copper, the media doesnt report on it anymore. One thing I can say for sure, I dont seem to see any copper waste lying around like I used to….
J-Gav on Fri, 3rd Jan 2014 8:14 pm
Sorry if my snoring is bothering you …
Harquebus on Fri, 3rd Jan 2014 10:21 pm
Let’s see the market find us another planet Earth or a substitute. A one way trip to Mars may be on the cards.
stevefromvirginia on Sat, 4th Jan 2014 12:39 am
A problem w/ Peak Oil is the emphasis on gross output (or, production). This is this same problem Ehrlich encountered w/ his bet; how it was framed. Had he used another measure outside of a ‘market’ such as arable land/person or topsoil fertility or fuel supply/person he would have easily won his bet; all of these indicate depletion.
… Simon would not have taken the bet.
Today, there is more gross hydrocarbon output which suggests that Peak Oil is not an issue for the present. However, output/person has declined, so have discovered proven reserves. This is even as the price-per-barrel has rocketed. The industry has managed to eke out small increases in gross output since 2005, the energy content/barrel has declined as lower-quality fuels such as bitumen from tar sands become part of the fuel stream. Also, the rate of extraction or its productivity has sharply declined.
Simon posited that resource depletion was simply a matter of money-cost … out of all other context. However, the reason for lower costs was unrelated to scarcity, in fact due to the short-term success of prior rounds of extraction efforts and temporarily expanded inventories. Longer term, it is clear that resources have becoming more scarce, even those historically considered to be plentiful such as iron ore and fresh water; certainly for gold, uranium, potash, phosphorus and waste-carrying capacity. Simon = cherry picking.
Measured by price, Peak Oil occurred in 1998; we have been on the back-side of it ever since (no wonder our economies are faltering).
Makati1 on Sat, 4th Jan 2014 1:16 am
For instance:
Copper prices today = $ 3.50/lb.
Copper prices in 2004 = $ 1.20/lb. in 2014 $.
Why? Lower quality ores and higher oil (energy) prices.
The ‘oil peak’ will be when the average consumer can no longer afford to consume it or products taking a lot of it. When? Soon!
Arthur on Sat, 4th Jan 2014 4:56 pm
In Holland and the rest of Europe there is the same problems with copper thieves:
http://nos.nl/op3/artikel/248563-koperdiefstal-is-een-europees-probleem.html
They go so far as stealing complete train catenary.
Kenz300 on Sat, 4th Jan 2014 4:59 pm
Too many people and too few resources……..
Endless population growth is not sustainable….