‘It is one thing to wish to have truth on our side, and another thing to wish sincerely to be on the side of truth’. (Richard Whately)
In The Ultimate Resource, originally written in 1981, Julian Simon challenges the notion that humanity is running out of natural resources - click for a short summary, from where the below excerpt stems:
Based on preliminary research for The Ultimate Resource, Julian L.
Simon and Paul Ehrlich entered in a famous wager in 1980, betting on a
mutually agreed upon measure of resource scarcity over the decade
leading up to 1990.
Ehrlich was the author of a popular book, 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.
Simon had Ehrlich choose five of several commodity metals. Ehrlich
chose 5 metals: copper, chromium, nickel, tin, and tungsten. Simon bet
that their prices would go down. Ehrlich bet they would go up.
The basket of goods, costing $1,000 in 1980, fell in price by over
57% over the following decade. As a result, in October 1990, Paul
Ehrlich mailed Julian Simon a check for $576.07 to settle the wager in
Simon's favor.
Friedrich Hayek sent his first and presumably only "fan letter to a professional colleague" to Julian Simon (see The Amazing Julian Simon (1937-1998) - (3/3) ).
Another Nobel prize winner, Milton Friedman, commends Simon:
I think he probably should have
been considered for a Nobel Prize. He took a very independent position
with little backing, dug deep and provided very good evidence for his
predictions and expectations.
[...]
The basic point I believe in
your natural resource discussion is that the economic product in
question is not coal or oil or natural gas but energy. The question is, what is the
supply curve of energy? The use of coal or oil is a simply a means of
producing energy. The stock of coal, of oil, etc., is certainly in some
sense finite, but that doesn’t mean that the potential amount of energy
capable of being produced by whatever source is to be considered finite.
Energy will be produced in
whatever way is cheapest at the time and as new means of producing
energy are discovered the particular mode of producing energy will
change from coal to oil to natural gas to atomic sources.
And on peak oil, as the current phrase goes, he notes:
... oil is not as an economic matter an
exhaustible resource. That result follows from the Hotelling
demonstration that an exhaustible resource will have a price that is
rising over time.
[...]
... a resource that is finite will
exhibit increasing relative prices over time. In fact, oil has not done
so; its price has been falling. Hence, the Hotelling analysis implies
that oil is not from an economic point of view a finite resource, that
it is a producible commodity like most others which has an elastic
supply curve, more elastic in the long run than in the short run.
The very readable source.
See also
The Amazing Julian Simon (1937-1998) - (1/3)
The Amazing Julian Simon (1937-1998) - (2/3)
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