Julian Simon vs. President Obama's Science Man
Data are from Global Financial Data.In 1980 Paul Ehrlich, a Stanford scientist and environmental Cassandra who predicted calamitous food shortages by 1990, accepted a bet with economist Julian Simon. When Ehrlich predicted the imminent exhaustion of many nonrenewable natural resources, Simon challenged him: Pick a "basket" of any five such commodities, and I will wager that in a decade the price of the basket will decline, indicating decreased scarcity. Ehrlich picked five metals -- chrome, copper, nickel, tin and tungsten -- that he predicted would become more expensive. Not only did the price of the basket decline, the price of all five declined (see chart above, all prices are in 2000 dollars, data from Global Financial Data).
An expert Ehrlich consulted in picking the five was John Holdren, who today is President Obama's science adviser.
~George Will's column today
MP: Julian Simon wanted to enter into a second wager with Ehrlich, based on either the same commodities, or a different group of commodities, but the terms of a proposed second wager were never agreed upon. Simon died in February 1998.
Q: What if the original bet had been extended for another ten-year period, from 1990-2000? Simon would have won again (see chart above), since all of the metals declined in real price except for tungsten (which increased by 51.97%), and the average price decline of the 5-commodity group was -21.56%.