I have heard it claimed that Julian Simon got a bit lucky in his bet with Paul Ehrlich, and that if a different basket of metals or other commodities had been chosen, he might have lost. Is that true? What do we make of that?
Julian Simon was lucky because human population has been lucky for the last 150 years. And taking a long perspective is what is necessary if you really want to discover the underlying trend versus short-run market fluctuations. (You can always find a 10-year period to show prices going up or down.)
To understand what’s happening, we looked that the time prices of the Simon-Ehrlich five metal basket bet (copper, chromium, nickel, tin, and tungsten) from 1900 to 2018. For blue-collar workers the average time price fell by 89.2 percent. This means that for the time required to earn the money to buy one unit in 1900, you would get 9.28 units in 2018. These non-renewable metals have become 828 percent abundant. (Page 190)
During this same period, U.S. population increased by 330.3 percent. Every one percent increase in population corresponded to a 3.22 percent increase in personal resource abundance. Measured at the population level, these five metals became 3,884 percent more abundant. (Page 229)
Take a look at any basic commodity and there is a good chance that over the last 40-50 years it has become much more abundant. The only exceptions seem to be those products that are influenced by government regulations and subsidies like health care and education.
We are grateful that Julian Simon had the courage to enter into this bet. He could have lost big time. But he had done his research and had a theory to explain the evidence. More people make life much more abundant. Simon won $576.07, but humanity has enjoyed trillions in new value over the last 150 years created by people that have the freedom to innovate.
I have heard it claimed that Julian Simon got a bit lucky in his bet with Paul Ehrlich, and that if a different basket of metals or other commodities had been chosen, he might have lost. Is that true? What do we make of that?
Julian Simon was lucky because human population has been lucky for the last 150 years. And taking a long perspective is what is necessary if you really want to discover the underlying trend versus short-run market fluctuations. (You can always find a 10-year period to show prices going up or down.)
To understand what’s happening, we looked that the time prices of the Simon-Ehrlich five metal basket bet (copper, chromium, nickel, tin, and tungsten) from 1900 to 2018. For blue-collar workers the average time price fell by 89.2 percent. This means that for the time required to earn the money to buy one unit in 1900, you would get 9.28 units in 2018. These non-renewable metals have become 828 percent abundant. (Page 190)
During this same period, U.S. population increased by 330.3 percent. Every one percent increase in population corresponded to a 3.22 percent increase in personal resource abundance. Measured at the population level, these five metals became 3,884 percent more abundant. (Page 229)
Take a look at any basic commodity and there is a good chance that over the last 40-50 years it has become much more abundant. The only exceptions seem to be those products that are influenced by government regulations and subsidies like health care and education.
We are grateful that Julian Simon had the courage to enter into this bet. He could have lost big time. But he had done his research and had a theory to explain the evidence. More people make life much more abundant. Simon won $576.07, but humanity has enjoyed trillions in new value over the last 150 years created by people that have the freedom to innovate.