FreedomTalks

Are we running out of natural resources? Listening to the chatter of the media, it can certainly seem that way. But next time somebody frets about a loss of resources, remember Julian Simon’s example:

The essence of Simon’s position in the bet was that, despite the population growth that was sure to occur during the 1980s, the effective supply of natural resources would increase during this decade because human beings would figure out how to find, extract and use such resources more efficiently.

And the surest measure of this increased supply would be lower inflation-adjusted prices of resources.

Convinced that higher population is a curse, Ehrlich accepted the $1,000 bet. He chose (for Simon gave Ehrlich the choice of which resources to bet on) a bundle of copper, chromium, nickel, tin and tungsten and bet Simon that the real price of this bundle of resources would be higher in 1990 than in 1980.

In 1990 the prices in September of that year were compared to the prices of these resources in September 1980. Simon won convincingly. The real price of each of these five resources had fallen over the course of that decade, indicating that their supplies had grown even though human population had also grown by more than 800 million during that same time.

Don Boudreaux’s entire column on Simon is well worth your time.

This entry was posted on Thursday, February 14th, 2008 at 4:13 pm and is filed under Energy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.