The late Julian Simon led a vigorous challenge to conventional beliefs about scarcity of energy and natural resources, the effects of immigration, and the 'perils of overpopulation'.
"With a full understanding
of the opposition and smears he would encounter, Julian Simon nevertheless
wrote 'The Economics of Population Growth', 'Population Matters', and his
best-known book, 'The Ultimate Resource'. The him, the ultimate resource
was human intelligence. We should also add, in his honor, the courage to
use that intelligence."
- Thomas Sowell
The full text of this work is available online at JulianSimon.com
# THE BOOK
"A professor giving
a lecture on energy declares that the world will perish in seven billion
because the sun will then burn out. One of the audience becomes very agitated, and asks the professor to repeat what he said, and then, completely reassured, heaves a sigh of relief, 'Phew! I thought he said
seven million years!'"
- Sauvy 1976
"My economic anaylses
rest on... some principles which are uncommon, and which may seen too refined
and subtle for such vulgar subjects. If false, let them be rejected. But
no one ought to enter a prejudice
against them, merely because they are out of the common road."
- David Hume, Essays, 1777.
# POPULAR IMPRESSIONS
"Nothing is more responsible for the good old days than a bad memory."
Land : Agricultural land is not a fixed resource. The amount of agricultural land has been increasing substansially. Paradoxically, in the countries that are best supplied with food, such as the United States, the quantity of land under cultivation has been decreasing because it is more economical to raise larger yields on less land. For this reason, among others, the amount of land used for forests, recreation, and wildlife has been increasing rapidly in the US.
Natural Resources : Our supplies of natural resources are not finite in any economic sense. Nor does past experience give reason to expect natural resources to become more scarce. If history is any guide, natural resources will progressively become less costly, hence less scarce, and will constitute a smaller proportion of our expenses in future years. The costs of raw materials have fallen sharply over the period of recorded history, no matter which reasonable measure of cost one chooses to use.
Pollution : The key trend is that life expectancy, which is the best overall index of the pollution level, has improved markedly as the world's population has grown. This reflects the enormous decline in recent centuries in the most important pollutions - diseases borne by air and water.
Population : In 1989,
the US Census Bureau forecast that US population would peak at 302 million
in 2038 and then decline. Just three years later, the Census Bureau forecast
383 million in 2056 with no peaking in sight. The science of demographic
forecasting clearly has not yet reached perfection.
Present trends suggest that even though total population for the world is increasing, the density of population on most of the world's surface will decrease. This is already happening in the developed world.
Immigration : The migration of people from poor to rich countries is as close to an everybody-wins government policy as can be. Countries im North America and Western Europe thereby advance just about all their national goals - higher productivity, a higher standard of living, and an easing of the heavy social burdens caused by a growing population of aged dependents. Immigration does not even increase native unemployment measurably, even among low-income groups.
# THE BEAUTIFUL RESOURCE-RICH FUTURE
"Summing it all up, for nearly all the nonrenewable resources, the known or confidently expected world stores are thousands of times as great as the annual world consumption. For the few which like petroleum are available in relatively small quantities, substitutes are known or potential sources of alternative supply are at hand in quantities adequate to meet our current needs for many thousands of years. There is no prospect of the imminent exhaustion of any of the truly essential raw materials, as far as the world as a whole is concerned. Mother Earth's storehouse is far more richly stocked with goods than is ordinarily inferred."
- Kirtley Mather
"Reserves are but a small part of the resources of any given commodity. Reserves and resources are part of a dynamic system and they cannot be inventoried like cans of tomatoes on a grocer's shelf. New scientific discoveries, new technology, and new commercial demands or restrictions are constantly affecting amounts of reserves and resources. Reserves and resources do not exist until commercial demand puts a value on a material in the market."
- Donald Brobst
A vivid illustration of the changing role of natural resources is a floppy computer disk: with a standard word processing program on it, it sells for $450. It embodies only a cent's worth of petroleum and sand.
If mineral resources
such as copper will be more scarce in the future - that is, if the real
price (netting out inflation) will rise - you can make money by buying
the minerals now and selling them later at higher prices. As soon as information
about an impending scarcity becomes known and accepted, people begin buying
the commodity; they bid up the present market price until it reflects the
expected future scarcity. Current market prices thus reflect the best guesses
of professionals who spend their lives studying commodities, and who stake
their wealth and incomes on being right about the future.
The Japanese, and above all Japanese officialdom were seized by hysteria in 1974 when raw materials shortages were cropping up everywhere (due to the OPEC oil embargo). They bought and bought. Now they are frantically trying to get out of commitments to take delivery, and have slashed raw materials imports nearly in half.
Japan began paying heavily for this blunder. The program of stockpiling strategic materials is one more testament to the human propensity not to trust the workings of markets and to only feel comfortable when one has control of resources - especially when someone else is paying the bill. The result of this propensity is that the public pays a pretty penny for the folly.
False scares are not costless and benign; far from it. Starting in the early 1970s, Mexico and Venezuela borrowed heavily to finance the development of oil. But the price index of Latin American exports sank sharply from 1974 to the late 1980s, vastly exacerbating the debt crisis of the 1980s. Mexico and Venezuela could not sell oil at the high prices they had anticipated.
# THE ULTIMATE RESOURCE
"Of what use is research? Of what use is a baby?"
The common morally charged statement that the average American uses (say) 90 times as much X as does the average Asian or African (where X is some natural resource) can be seen as irrelevent. The average American also creates a great deal more of 'natural' resource X than does the average African or Asian - on average, by the same or greater proportion as the resource is used by Americans compared with Asians and Africans.
Our whole evolution
up to this point shows that human groups spontaneously evolve patterns
of behaviour, as well as patterns of training people for that behaviour,
which tend on balance to lead people to create rather than destroy. Humans
are, on net balance, builders rather than destroyers. The evidence is clear:
the civilization which our ancestors have bequeathed to us contains more
created works than the civilization they were bequeathed.
In short, humankind has evolved into creators and problem solvers. Our constructive behaviour has counted for more than our using-up and destructive behaviour, as seen in our increasing length of life and richness of consumption.
Such statements as 'The US has 5% of the population, and uses 40% of resources,' without reference to the creation of resources by the same US population. Many writers have commented on the fact that natural phenomena such as copper and oil and land were not resources until humans discovered their uses and found out how to extract and process them, and thereby made their services available to use. Hence resources are, in the most meaningful sense, created.
# THE WEALTH OF NATIONS
"As for the Arts of Delight and Ornament, they are best promoted by the greatest number of emulators. And it is more likely that one ingenious curious man may rather be found among 4 million than among 400 persons."
Bangladesh and Holland are both very low to the sea, though Bangladesh has a much better climate for agriculture. If the Dutch were in Bangladesh for a quarter of a century and applied their skills in farming and in keeping the sea at bay, or if Bangladesh had the same institutions and educational level as the Dutch, Bangladesh would soon be rich, as Holland is.
The extraordinary improvement in the cleanliness of the environment may be discenred from the types of pollutants that Americans now worry about - substances of so little harm that it is not even known whether they are harmful or not. Alar was a notorious false alarm, as was DDT. There is equipment today that allows you to dinf a whole lot of nasty things in the food we eat. This does not imply that these substances hurt us.
As wealth increases,
one of the goods that people are prepared to buy is a cleaner environment.
The demand for a cleaner environment may be expressed through political
activity, as was observed centuries ago in Great Britian; citizens clamour
for businesses to be held responsible for their noxious emissions, which
is entirely consistent with free-market principles.
The most horrifying stories of air pollution in recent decads come from Easten Europe. The revelations in the 1980s of the terrible air and water pollutions in Eastern Europe have provided powerful evidence of the role of government structure in such matters.
Saudi Arabia no more 'supports' the Netherlands by exporting oil than the Netherlands 'supports' Saudi Arabia by exporting electronic goods. If you are a white-collar workers, you support a farmer with what you produce just as much as the famer supports you. To divide the exchange in half and call one direction 'supportive' and the other 'exploitive' can only be misleading. Any attempt to make each of us self-sufficient pushes us back toward the short, sickly, hungry, impoverished life of subsistence agriculture.
# CONSERVATION TRADE-OFFs
the arrival of civilization to the Yonomami Indians of Brazil. But the
anthropologists also seek the health and cultural benefits of civilization
on behalf of the group. Whichever way it goes they will feel regrets, and
both cannot be the case. It is natural to want things both ways. When an
economist uses quintessential economic thinking to point out that we must
accept the necessity for a trade-off and that we cannot usually have our
cake and eat it, the argument is met with denial of any such necessity.
The economist does try to focus on matters other than motivations. Economists care more about results than intentions. If we can succeed in focusing others' attention on results rather than intentions, too, we will achieve results that people will like better than they will otherwise obtain.
Should you conserve energy by turning off lights that are burning needlessly in your house? Of course you should - just as long as the money that you save by doing so is worth the effort of shutting off the light. Recycling does not 'save' trees. It may keep some particular trees from being cut down. But those trees never would have lived if there were no demand for new paper - no one would have bothered to plant them.
An increase in the
population of chicken hawks leads to fewer chickens, but an increase in
the population of humans leads to more chickens. Consider elephants. If
people can personally benefit from protecting elephants, and then selling
their ivory and the opportunity to hunt them, the elephant population will
grow in that place - as is the case now in Zimbabwe and Botswana where
ownership belongs to some regional tribal councils.
But where no one has a stake in the welfare of elephants because they are owned only by the 'public' at large, a ban on the sale of ivory will not prevent the elephant herds from being slaughtered.
Some say that the human
population should be stabilized or reduced because we threaten some species
of animals. This raises interesting questions. If we assume there is a
trade-off between more people and more of species X, then which species
should we favour? Buffalo or golden eagles over Homo Sapiens? If yes, does
the same logic hold for rats and cockroaches? And how many people do we
trade for more buffalo? Should the whole Midwest be made a buffalo preserve,
or do we want only to maintain the species this side of extinction? If
the latter, why not just put them in a few big zoos? And do we want to
protect malaria-carrying mosquitos from extinction?
We ought to consider the species of animals whose numbers are increases when the human population increases - chickens, goats, cattle, minks, dogs, cats, laboratory white mice, and canaries. Is this a justification for increasing the human population? Here lies a problem for those who are against kiling animals for food or clothing. Without humans to consume these products there would be fewer chickens and minks to be killed. Which way does one prefer to have it from the viewpoint of animal welfare?
Where costs do not settle the issue, the decision about what is conserved, and how much, is a matter of tastes and values.
Of those who praise a reduction of population in the name of making the world more beautiful, I ask these questions: (1) Have you not seen much beauty on this Earth that comes from the hands of humans - gardens, statues, skyscrapers, graceful bridges? (2) The population of Athens was only 6000 persons in 1823. Do you suppose Athens was more beautiful in 1823, or two millennia earlier when it was more crowded? (3) If the world's population now were only a hundredth of what it actually is, would there be a transportation system to get you to Yosemite, the Grand Canyon, the Antartic, Kenya's wildlife preserves, or Lake Victoria?
Enabling a potential human being to come to life and to enjoy life is a good thing, just as protecting a living person's life from being ended is a good thing. Of course a death is not the same as an averted life, in large part because others feel differently about the two. Yet I find no logic implicit in the thinking of those who are horrified at the starvation of a comparitively few people in a farawar country (and apparently more horrified than at the deaths by political murder in that same faraway country, or at the deaths by accidents in their own country) but who are positively gleeful with the thought that a million or ten million times that many lives will never be lived that might be lived.
I do not say that society should never trade off human life for animals or even for nonliving things. Indeed, society explicitly makes exactly this tradeoff when a firefighter's life is lost protecting a building or a forest or a zoo, and neither I nor hardly anyone else says it should not be so.
# BEYOND THE DATA
"I know that it is a hopeless undertaking to debate about fundamental value judgments. For instance, if someone approves, as a goal, the extirpation of the human race from the earth, one cannot refute such a viewpoint on rational grounds."
- PJ O'Rourke, "All The Trouble In The World"
You may wonder why the tone of this book is so overwhlemingly positive whereas that of most popular writings is no negative. The most important explanation, I think, is the nature of the comparisons that are made. The comparisons in this book mostly compare now with earlier times. The comparisons others make often show one group versus another, or constrast how we are versus how we think we should be or would like to be - situations that guarantee a steady flow of depressing news.
The doomsters say that there are too many of us; on the other hand, they warn that we are in danger of most of us being wiped out. Usually, a larger number of members of a species is greater protection against being wiped out. The doomsters reply that because there are more of us, we are eroding the basis of existence, and rendering more likely a 'crash' due to population 'overshoot'; that is, they say that our present or greater numbers are not sustainable. But the signs of incipient catastrophe are absent. Length of life and health are increasing, supplies of food and other natural resources are becoming ever more abundant, and pollutants in our environment are decreasing.
The world's problem is not too many people, but lack of political and economic freedom. Powerful evidence comes from pairs of countries that had the same culture and history and much the same standard of living when they split apart after WW2 - East and West Germany, North and South Korea, Taiwan and China. In each case the centrally planned Communist country began with less population 'pressure', as measured by density per square kilometer, than did the market-oriented economy. And the Communist and non-Communist countries also started with much the same birthrates. But the market-directed economies performed much better economically than the centrally planned econmies. This powerful demonstration cuts the ground from under population growth as a likely explanation of poor economic performance.
If Indians and Americans exchanged countries, in a few decades the United States would look like India now, and India like the United States.
The most important
benefit of population size and growth is the increase it brings to the
stock of useful knowledge. Minds matter economically as much as, or more
than, hands or mouths. In the long run the basic forced influencing the
state of humanity and its progress are the number of peopl who are alive
to consume, but also to produce goods and knowledge; and the level of wealth.
Wealth is far more than assets such as houses and cars. The essence of wealth is the capacity to control the forces of nature, and the extent of wealth depends upon the level of technology and the ability to create new knowledge. A wealthy world can find remedies for a new disease more quickly than can a poor world, because the wealthy world possesses stocks of knowledge and skilled persons. That's why wealthy groups live longer, with better health and fewer accidental deaths.
It is a proof of our extraordinary success in healing the Earth that the horros of the past which were transmitted by filthy air and water are no longer even thought of as pollutants. Now that we have largely overcome humanity's historic enemies - wild animals, hunger, epidemic disease, heat and cold - we worry about a large new class of phenomena in the environment and society. This saying expresses this idea : No food, one problem; plenty of food, many problems.
Some say 'If we have more children, when they grow up there will be more adults who can push the nuclear button and kill civilization'. True. More generally, as one writer reduced the matter to an absurdity: 'All human problems can be solved by doing away with human beings'. But to have more children grow up is also to have more people who can find ways to avert catastrophe.
"Multitudes of people, necessity, and liberety have begotten commerce in Holland."
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