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Sustainable Society:  A society that balances the environment, other life forms, and human interactions over an indefinite time period.







Simon Knew What he was Doing!

Dell Erickson*
March, 1999


Re.: The late Julian Simon’s two bets with Paul Ehrlich.

Wager #1

Although uncomfortable —and said so at the time— because of the lack of connections with a sustainable economy, he agreed to a wager that prices would increase for a small group of commodities. Paul Ehrlich knew that the commodities Simon wanted to bet on (copper, chrome, nickel, tin and tungsten) were not critical indicators and said so.

On the other hand, Julian Simon, an economist and professor of business administration at the University of Maryland was fully aware that unsustainable inflationary forces had driven prices to unheard of levels —$800 gold!

Simon understood that prices had no where to go but down. If interests rates and prices had continued escalating for much longer, we would only today be recovering! Unparalleled inflation was the reason Simon said the wager should continue for not less than a year. He realized —unlike Ehrlich— that inflation's back had recently been broken and falling interest and commodity rates for several years were all but assured.

In other words, Simon took advantage of transient inflation to support his otherwise weak point (and used less relevant commodities as well).

Simon not only was informed but cunning —evidently ethically impaired.

Note, by the way, that Simon's favorite and most important commodity used in the wager, copper, was 10% higher after adjusting for inflation at the end of the bet than at the beginning.

In 1990 Simon received a check from Ehrlich for $576.07, the amount the basket of prices had fallen in the 10-year period.

Wager #2

The claim that Ehrlich declined Simon's second proposed wager is accepted only by the misinformed. To be certain, Ehrlich declined the bet as offered because it continued the previous pattern: the proposed wager did not address important life issues.

Understanding that Simon wanted to bet again, Paul Ehrlich and climatologist Stephen Schneider counter-offered challenging Simon to bet on 15 current trends, betting $1000 that each will get worse (as in the previous wager) over a ten year future period.

Among the trends they bet would continue to worsen were:

·        Rising global temperature.

·        Shrinking amount of cropland per person.

·        Decline in amount of wheat and rice grown per person.

·        Shrinking area of tropical moist forests.

·        Decreasing oceanic fish harvest per person.

·        Increasing number of people dying of AIDS.

·        Declining human sperm count.

·        Growing gap between rich and poor.

Julian Simon was no fool! Realizing that biological systems are at peril (and the wager more substantial!), Simon wisely declined.

The second proposed bet was significantly more important because it applied to long-term human needs and environmental factors. Although far more significant, the second proposed bet was unlikely to become as famous (and considerably less abused in the media) than the first because it fails to support those who believe life and resources are infinite.

Optimists follow him like lemmings over a cliff: he says what they like to hear, reaffirming the status quo and allowing them to forsake responsibility for the future. Thus, the term "Cornucopian" to identify those who in their imagination believe the world is capable of infinite abundance when even a common sense look around proves otherwise.

For example, take species extinction. In Indonesia (certainly fully qualifying in Simon's growth is good bias) there were five "big cats." In the last twenty years three have become extinct, another is found only in zoos, and the last is struggling, the Sumatra Tiger.

However, in his words, "We now have in our hands the technology to feed, clothe and supply energy to an ever growing population for the next 7 billion years." Hyperbole aside (although he was serious), the planet doesn't have the wherewithal to provide for the current population (6 billion) growing for even the next 100 years. Stopping that growth is a tough act because it requires about fifty years to stop population growth once no family had more than two children.

Meanwhile, Dr. Simon also acknowledged that economic growth was not dependent on population growth.

In their proposed wager to Simon, Ehrlich and Schneider acknowledged that, "we are not arguing that there are only unfavorable human or environmental trends, rather that too many of the most important are very unfavorable."

And to demonstrate their good will they said, "since humanity is gambling with its life-support systems, we hope to lose all parts of the bet."

MFS: Click here to return to Paul Ehrlich, Sustainability Author or use the back-key.
* Used with permission of Dell Erickson


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