Archive for September 6th, 2013

September 6, 2013

Simon–Ehrlich Wager

Paul Ehrlich

Julian L. Simon and Paul Ehrlich entered in a famous scientific wager in 1980, betting on a mutually agreed-upon measure of resource scarcity over the decade leading up to 1990. Simon had Ehrlich choose five commodity metals. Copper, chromium, nickel, tin, and tungsten were chosen and Simon bet that their prices would decrease, while Ehrlich bet they would increase. Ehrlich lost the bet, as all five commodities that were bet on declined in price from 1980 through 1990, the wager period.

In 1968, Ehrlich published ‘The Population Bomb,’ which argued that mankind was facing a demographic catastrophe with the rate of population growth quickly outstripping growth in the supply of food and resources. Simon was highly skeptical of such claims, so proposed a wager, telling Ehrlich to select any raw material he wanted and select ‘any date more than a year away,’ and Simon would bet that the commodity’s price on that date would be lower than what it was at the time of the wager.

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September 6, 2013

The Ultimate Resource

Simon–Ehrlich wager

The Ultimate Resource‘ is a 1981 book written by Julian Lincoln Simon challenging the notion that humanity was running out of natural resources. It was revised in 1996 as ‘The Ultimate Resource 2.’ 

The overarching thesis is that there is no resource crisis because as a particular resource becomes more scarce, its price rises, creating an incentive for people to discover more of the resource, ration and recycle it and, eventually, develop substitutes. The ‘ultimate resource’ is not any particular physical object but the capacity for humans to invent and adapt.

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