Julian Simon and the Bountiful Environment
This Sunday 8th February marks the seventeenth anniversary of the passing of one the twentieth century’s most important environmental economists - American Julian Simon. That his work is not more widely known is a scandal. Our world would be a more prosperous and rational place, were his thinking on the environment heeded in the power corridors of Canberra, Washington, Ottawa and London.
Julian Simon was by trade, an academic, mainly in the field of Business Economics. His last post was as Professor of Business Administration University of Maryland College Park before his passing in 1998.
He wrote on a wide variety of subjects, including depression (of which he suffered throughout his life) business administration and marketing. He was also the brain child of the voluntary incentive system where Airlines would pay people to give up their seats on overbooked flights. Before then Airlines would bump people off flights.
However it was in the field of population and the environment economics where Julian Simon made a lasting contribution to society.
Scratch the surface of any environmentalist - a Tim Flannery and Bob Brown in Australia, Doctor David Suzuki in Canada, an Al Gore in the United States or Lord Stern in Britain and one finds a Malthusian. This eponymous refers to the English scholar Thomas Robert Malthus. In his 1798 Essay on ‘Principle of Population,’ Malthus wrote that unchecked population growth and the waste produced is exponential, while resources needed to maintain it remain finite. Only two options are possible for humanity in this scenario. Either the population, or its actions are controlled at sustainable levels. Or the population growth will ultimately exceed a tipping point known as a Malthusian Catastrophe and the population crashes back to a sustainable level. This catastrophe might be a war, a famine, or environmental degradation through unchecked pollutants.
Malthusian thinking is deeply ingrained in the psyche of the modern world. Politicians continually pay lip service to its basic creed. All nature documentaries continually use the Malthusian concept in their conclusion to warn us of the fragile nature of the environment. Movies such as Elysium and Avatar use its worldview as the basis for their plots. Celebrities preach its pieties.
It comes as shock, therefore, to realise that Malthusian thinking is utter nonsense. Julian Simon, who was drawn to environmental economics and demographics by his love of the natural environment (he was an avid bird watcher all his life) and his original belief over-population was one of the major problems facing mankind, would do much to destroy this concept.
From the early 1970s to his untimely death in 1998, he demolished one environmental scare after another. Some of these included: the vanishing farmland through urban sprawl and soil erosion. In the early nineties this was a major issue generating front page headlines in leading American newspapers including the Washington Post. Through detailed and exhaustive research, Simon showed that it was, in fact, the reverse. Farmland along with prime wilderness areas were in fact increasing. Soil Erosion? This was decreasing and had been for a very long time. What about Urban Sprawl? Simon managed to calculate all land used for urban areas in the United States equated to less than 3% of the total land mass and was not likely to increase even with significant population rises. Air quality in major cities? Improving.
Species loss? This was a significant issue in the 1990s. It was first brought to prominence by Edward O Wilson, Harvard Biologist and the Father of biodiversity, who stated in 1985 that 100,000 species a year were being lost due to human actions. Simon checked Wilson’s sources and found that the figure was not based on observable data but on a theory ‘Island Biogeography’, which equated species loss with tropical forest destruction. The theory was not just flawed but wrong. There was no statistical evidence to prove any correlation between supposed species loss and the depletion of habitat. Simon put the maximum species loss, after review of all primary data, at a maximum of one per year. But even this, he intimated, was probably too pessimistic as no one knew for certain how many species there were, let alone how many were being lost.
What about air quality? Improving. Water quality? The same. Think of any other environmental issue, Simon found the trend to always be the same. In ‘Scarcity or Abundance’ he stated his central proposition as: ‘every trend that affect(ing) human welfare points in a positive direction as long as we consider a reasonably long period of time.’
Most environmentalists reacted with disbelief when Julian Simon published his seven hundred page opus magnum ‘The State of Humanity’ which charted the growing prosperity of humanity based on official records. Many environmentalists believed Julian Simon was only reporting on one side of the ledger. But Simon, who loved primary data, stated that his was the only data, as it all came from official sources.
But even if what Julian Simon says is true, don’t environmentalists perform a civic duty by exaggerating real problems? Forcing us to consider the world around us instead of concentrating solely on material wealth.
Simon’s biggest issue with environmentalists and why he fought hard against all their scares, was that they diverted precious human resources towards non-problems, usually at the expense of the wider community, for the benefit of one or two interest groups. The disappearing farmland scare was a case in point. Those pushing this scare Simon stated were home owners who had bought in a semi-rural area and didn’t want to lose the rustic ambience of their surroundings. Their victory was at the expense of young first home buyers trying to buy into the housing market. Behind every scare, he intimated, lurked self-interest.
Julian Simon’s greatest victory over the environmentalists was through his famous bet with Paul Ehrlich, an entomologist and early prototype of the modern environmentalist celebrity. In 1968 Paul Ehrlich published the runaway best seller the ‘Population Bomb.’ The first two sentences stating: ‘The battle to feed humanity is over. In the 1970s and 1980s hundreds of millions of people will starve.’ What follows is a standard Malthusian script - over population, followed by resource depletion and environmental degradation, leading to a tipping point. In Paul Ehrlich’s scenario - mass starvation.
The book received fawning press. The basic premise remaining unchallenged. By the 1980s Julian Simon had enough of his scare mongering. In the game changing article: ‘Resources, Population, Environment: An Oversupply of False Bad News,’ published in the June 27 edition of the Science magazine, he took Ehrlich’s claims apart one by one. It was classic Julian Simon. Using primary data as his main weapon, not one of Paul Ehrlich assertions remain standing by the end of the article. An angry Paul Ehrlich foolishly responded to the shakedown. What resulted was the wager of the century. Julian Simon bet that the value of any given resource selected by Paul Ehrlich would fall over time. Julian Simon believed the price of the item was the only true value of its scarcity. Paul Ehrlich selected five: copper, tin, tungsten, chromium and nickel. By early 1990 Paul Ehrlich conceded defeat with prices for all five metals falling and mailed Julian Simon his winnings.
The bet brought to international prominence the heart of Julian Simon’s thinking on population and resources. Based on all the primary evidence evaluated, he surmised all resources are finite only in the short term. In the longer term, however this was not the case. He calculated that over any given stretch of time the value of a resource would fall. To illustrate his argument he used the example of copper, which he calculated was a 1,000 times cheaper today than in the 18th Century BC Babylonian empire of Hammurabi. The idea, therefore, of the human race reaching peak oil or peak food was as absurd as announcing peak steel had been reached during the height of the middle ages, or peak clay during Ancient Babylonian time.
The key to growing availability was the only resource Simon considered scarce, and whose value he measured to be increasing over time - Humans. Simon often complained that there were never enough of us to go round. He reasoned that ten thousand years ago only four million people could be kept alive, but by the 1990’s over 5 billion people were living longer and healthier lives. The key to this success was population increase. People, to Simon, were never more mouths to feed or a strain on the environment. People were creative, productive, innovative and a problem solving resource, who gave more than they received. When faced with feeding more human through exponential population growth they found a way to do so, either by increasing the amount of food produced, improving crop yields, inventing smarter ways to use existing resources, or finding new resources. Human ingenuity made Malthusian diminishing return irrelevant. As Simon explained when horse powered transportation became a problem, the railroad and motor car were developed. When OPEC placed an embargo on oil, people adapted their behaviour. Simon was a great believer ‘that people create more resources of all kinds’ and societies that rewarded innovation and resource creation, demographic growth would pose less of a problem in the short run, and bring many more benefits in the long term, than under central planning or where no population expansion occurred.
Many people on encountering Julian Simon arguments for the first time react with disbelief. It can’t be right? But Simon is right, all the evidence supports his theory, even if it is still not psychologically accepted by the vast majority of people.
Many environmentalist also counter that we cannot go on expanding for ever and that all resources no matter how abundant must eventually run out. To pose this point is to fail to grasp the implications of Simon’s theory and by implications the evidence.
At its heart, the Malthusians sees the natural world as small and finite: humans having a dominant but sinful role. Human actions, strongly and adversely affecting environmental outcomes. One immediately equates Malthusian’s thinking with humans as bacteria in a petri dish.
In the cornucopian universe described by Julian Simon, the world is infinite with resources whose supply is only limited by the imagination and ingenuity of the human population. Humans have a positive role within this world.
However like the Copernicus revolution 450 years previously, which demoted the earth from the centre of the solar system to a mere rock rotating around the sun, we are no longer central to the earth’s biosphere. If anything our presence which constitutes less than one percent of the earth’s surface suggest that we live in a world which is far larger than we realise and our influence is far less than we imagine. We are, but a tiny spec on a big blue planet.
For those interested exploring his ideas more, go to https://www.juliansimon.com/. This sets out all his major writing. Unfortunately much of the raw data Julian Simon loved, have fallen out of the articles.