{"id":30253,"date":"2015-02-17T04:00:24","date_gmt":"2015-02-17T09:00:24","guid":{"rendered":"http:\/\/quotulatiousness.ca\/blog\/?p=30253"},"modified":"2015-02-15T10:14:36","modified_gmt":"2015-02-15T15:14:36","slug":"the-bet-between-julian-simon-and-paul-r-erlich","status":"publish","type":"post","link":"https:\/\/quotulatiousness.ca\/blog\/2015\/02\/17\/the-bet-between-julian-simon-and-paul-r-erlich\/","title":{"rendered":"The bet between Julian Simon and Paul R. Erlich"},"content":{"rendered":"

Aaron Tao<\/a> remembers one of the more amusing stories from the career of economist Julian Simon:<\/p>\n

February 12 marks the birthday of the late economist Julian Simon<\/a> (1932\u20131998). On this special occasion, I wish to bring attention to this thinker whose work I feel has not been fully appreciated. The implications of his controversial but time-tested ideas certainly deserve greater attention in academia and society at large.<\/p>\n

Simon is perhaps best known for his famous wager against ecologist Paul R. Ehrlich<\/a>, author of the notorious best-seller The Population Bomb<\/em>.<\/p>\n

In line with classical Malthusian theory<\/a>, Ehrlich predicted that human population growth would result in overconsumption, resource shortages, and global famine \u2014 in short, an apocalyptic scenario for humanity. Simon optimistically countered Ehrlich\u2019s claim and argued that the human condition and our overall welfare would flourish thanks to efficient markets, technological innovation, and people\u2019s collective ingenuity. Both men agreed to put their money where their mouth is.<\/p>\n

They agreed that rising prices of raw materials would indicate that these commodities were becoming more scarce, and this became the premise of The Bet<\/a>. The metals chromium, copper, nickel, tin, and tungsten were chosen as measures of resource scarcity by Ehrlich\u2019s team. Ehrlich and his Malthusian colleagues invested a total of $1,000 (in 1980 prices) on the five metals ($200 each). The terms of the wager were simple: If by the end of the period from September 29, 1980, to September 29, 1990, the inflation-adjusted prices of the metals rose, then Simon would pay Ehrlich the combined difference, and vice versa if the prices fell.<\/p>\n

Here\u2019s the final outcome as summarized<\/a> by Wired<\/em>:<\/p>\n