Back in 1980 Paul Ehrlich made a famous bet with Julian L. Simon. They bet $1,000 that five resources (of Ehrlich’s choosing) would be more expensive in 10 years. Ehrlich lost: 10 years later every one of the resources had declined in price by an average of 40 percent.
The wager reached legendary proportions among conservative economists and pundits. Stephen Moore of the Cato Institute gloated that "Julian Simon’s views on population and natural resources are so triumphant that they are almost mainstream. No one can rationally look at the evidence today and still claim, for example, that we are running out of food or energy."
But now it appears that Ehrlich was not wrong, only two decades too early. Since 2000, the price of energy and metal resources have been soaring. Prices for copper, iron ore, lead, crude oil, and uranium have more than doubled in five years. Others have shown significant gains as well. The markets are signalling that we are reaching the limits of growth.
|Iron Ore, |
|Crude Oil |
|% incr |
|% incr |
As Stephen Moore notes,
Among the many prominent converts to the Julian Simon world view on population and environmental issues were Ronald Reagan and Pope John Paul II. Despite howls of protest from the international population control lobby, in 1984 the Reagan administration adopted Simon’s position—that the world is not overpopulated and that people are resource creators, not resource destroyers—at the United Nations Population Conference in Mexico City. The Reaganites called it "supply-side demographics." Meanwhile, in the late 1980s, Simon traveled by invitation to the Vatican to explain his theories on population growth. A year later Pope John Paul II’s encyclical letter urged nations to treat their people "as productive assets."
While I would contend that it is not so much population growth that is driving the problem as it is consumption, and therefore very much a western problem, the almost unbelievable naivety of the "supply side demographics model is going to come back to haunt us soon.