Julian Lincoln Simon
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This article is about the economist Julian Simon. For the Spanish motorcycle racer, see Julián Simón.
Julian Lincoln Simon (February 12, 1932–February 8, 1998) was a professor of business administration at the University of Maryland and a Senior Fellow at the Cato Institute. He wrote many books and articles, mostly on economic subjects. He is best known for his work on population, natural resources, and immigration. He was the primary proponent of the cornucopian belief in endless resources and unlimited population growth empowered by technological progress. His works are often cited by libertarians in support of their arguments.
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[edit] Thought
His 1981 book The Ultimate Resource is a criticism of the conventional wisdom on population growth, raw-material scarcity and resource consumption. Simon argues that our notions of increasing resource-scarcity ignore the long-term declines in wage-adjusted raw material prices. Viewed economically, he argues, increasing wealth and technology make more resources available; although supplies may be limited physically they may be viewed as economically indefinite as old resources are recycled and new alternatives are developed by the market. Simon challenged the notion of a pending Malthusian catastrophe—that an increase in population has negative economic consequences; that population is a drain on natural resources; and that we stand at risk of running out of resources through over-consumption. Simon argues that population is the solution to resource scarcities and environmental problems, since people and markets innovate. His critique was praised by Nobel Laureate economists Friedrich Hayek & Milton Friedman, the latter in a 1998 foreword to The Ultimate Resource II, but has also attracted many critics, such as Paul R. Ehrlich and Albert Bartlett .
His 1984 book The Resourceful Earth (co-edited by Herman Kahn), is a similar criticism of the conventional wisdom on population growth and resource consumption and a direct response to the Global 2000 report.
Simon was skeptical, in 1994, of claims that human activity caused global environmental damage, notably in relation to CFCs, ozone depletion and climate change, the latter primarily because of the rapid switch from fears of global cooling and a new ice age (in the mid 1970s) to the later fears of global warming.[1] Simon also listed numerous claims about environmental damage and health dangers from pollution as "definitely disproved". These included claims about lead pollution & IQ, DDT, PCBs, malathion, Agent Orange, asbestos, and the chemical contamination at Love Canal (The Ultimate Resource 2, pp260-265).
[edit] Vision of the Future
Julian Simon believed in the long term-sustainability of humanity and claimed in a 1995 policy report for the Cato Institute
We have in our hands now—actually in our libraries—the technology to feed, clothe, and supply energy to an ever-growing population for the next 7 billion years. Most amazing is that most of this specific body of knowledge was developed within just the past two centuries or so, though it rests, of course, on basic knowledge that had accumulated for millennia. Indeed, the last necessary additions to this body of technology—nuclear fission and space travel—occurred decades ago.[2]
Julian Simon concluded his Cato Institute report:
Progress toward a more abundant material life does not come like manna from heaven, however. My message certainly is not one of complacency. The ultimate resource is people—especially skilled, spirited, and hopeful young people endowed with liberty—who will exert their wills and imaginations for their own benefit and inevitably benefit the rest of us as well.
[edit] Influence
Simon was one of the founders of free-market environmentalism. An article The Doomslayer profiling Julian Simon in Wired magazine inspired Bjørn Lomborg to write the book The Skeptical Environmentalist.
Simon was also the first to suggest that airlines should provide rewards for travelers to give up their seats on overbooked flights, rather than arbitrarily taking random passengers off the plane (a practice known as "bumping"). Although the airline industry initially laughed at him, his plan was later implemented with resounding success, as recounted by Milton Friedman in the foreword to The Ultimate Resource II.
Although Simon's arguments about the beneficial nature of population growth were not generally accepted, they contributed to a shift in opinion in the literature on demographic economics from a strongly Malthusian negative view of population growth to a more neutral view. More recent theoretical developments, based on the ideas of the demographic dividend and demographic window have largely superseded the older debate in which Simon was a protagonist.
Simon wrote a memoir, A Life Against the Grain, which was published by his wife after his death.
[edit] Wagers with rivals
[edit] Paul R. Ehrlich - 1st wager
A wager between Julian Simon and Paul Ehrlich was made in 1980 over the price of metals a decade later; Simon had been challenging environmental scientists to the bet for some time. Ehrlich, John Harte and John Holdren selected a basket of five metals that they thought would rise in price with increasing scarcity and depletion.
Simon won the bet, with all five metals dropping in price. Supporters of Ehrlich's position suggest that much of this price drop came because of an oil spike driving prices up in 1980 and a recession driving prices down in 1990, pointing out that the price of the basket of metals actually rose from 1950 to 1975. They also suggest that Ehrlich did not consider the prices of these metals to be critical indicators, and that Ehrlich took the bet with great reluctance. On the other hand, Ehrlich selected the metals to be used himself, and at the time of the bet called it an "astonishing offer" that he was accepting "before other greedy people jump in," hardly suggesting reluctance.
Simon's critics claim that none of the actual supplies of these metals increased during this time, but that prices declined during the period of the wager for a variety of reasons:
- The price of tin went down because of an increased use of aluminium, a much more abundant, useful and inexpensive material.
- Better mining technologies allowed for the discovery of vast nickel lodes, which ended the near monopoly that was enjoyed on the market.
- Tungsten fell due to the rise of the use of ceramics in cookware.
- The price of chrome fell due to better smelting techniques.
- The price of copper began to fall due to the invention of fiber optic cable (which is derived from sand), which serves a number of the functions once reserved only for copper wire.
However, in all of these cases, better technology allowed for either more efficient use of existing resources, or replacement of those resources with something more abundant and less expensive, which is the point of Simon's theories.
[edit] Paul R. Ehrlich - proposed 2nd wager
In 1995, Simon issued a challenge for a second bet. Ehrlich declined, and proposed instead that they bet on a metric for human welfare. Ehrlich offered Simon a set of 15 metrics over 10 years, victor to be determined by scientists chosen by the president of the National Academy of Sciences in 2005. There was no meeting of minds, because Simon felt that too many of the metrics measured attributes of the world not directly related to human welfare, e.g. the amount of nitrous oxide in the atmosphere. [3] For such indirect, supposedly bad indicators to be considered "bad", they would ultimately have to have some measurable detrimental effect on actual human welfare. Ehrlich refused to leave out measures considered by Simon to be trival.
Simon summarized the bet with the following analogy:
"Let me characterize their [Ehrlich and Schneider's] offer as follows. I predict, and this is for real, that the average performances in the next Olympics will be better than those in the last Olympics. On average, the performances have gotten better, Olympics to Olympics, for a variety of reasons. What Ehrlich and others says is that they don't want to bet on athletic performances, they want to bet on the conditions of the track, or the weather, or the officials, or any other such indirect measure." [4]
[edit] David South
The same year as his second challenge to Ehrlich, Simon also began a wager with David South, professor of the Auburn University School of Forestry. The Simon / South wager [5] concerned timber prices. Consistent with his cornucopian analysis of this issue in The Ultimate Resource, Simon wagered that at the end of a five-year term the consumer price of pine timber would have decreased; South wagered that it would increase. Before five years had elapsed, Simon saw that market and extra-market forces were driving up the price of timber, and he paid Professor South $1,000. Simon died before the agreed-upon date of the end of the bet, by which time timber prices had risen further.
Simon's reasoning for his early exit out of the bet was due to "the far-reaching quantity and price effects of logging restrictions in the Pacific-northwest."[6] He believed this counted as interference from the Canadian government, which rendered the bet worthless from the standpoint of his economic principles. Simon's bet only considered the possibility of prices being driven up by South Carolina's government; he did not believe anything worthwhile was shown when Canadian import restrictions drove the prices up.
[edit] Criticism
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Simon's ideas have come under criticism from authors such as Garrett Hardin in his book The Ostrich Factor: Our Population Myopia, physicist Albert Bartlett in his paper, The New Flat Earth Society and Jared Diamond in his book Collapse. They point to Simon's assertion, in the context of space colonization and nuclear technology, that "We now have in our hands—really, in our libraries—the technology to feed, clothe, and supply energy to an ever-growing population for the next seven billion years." Diamond and others[7] also interpret statements by Simon in The Ultimate Resource (page 47), as suggesting that in the future it would be possible to produce "copper" by transmutation from other elements:
There is an abundance of errors of the latter sort: e.g., [....] the prediction of the economist Julian Simon that we could feed the world's population as it continues to grow for the next 7 billion years; and Simon's prediction "Copper can be made from other elements" and thus there is no risk of a copper shortage. As regards the first of Simon's two predictions, continuation of our current population growth rate would yield 10 people per square foot of land in 774 years, a mass of people equal to the earth's mass in under 2,000 years, and a mass of people equal to the universe's mass in 6,000 years, long before Simon's forecast of 7 billion years without such problems. As regards his second prediction, we learn in our first course of chemistry that copper is an element, which means that by definition it cannot be made from other elements. Jared Diamond, Collapse, 2005 (paperback) pp509-10
Conversely, Diamond is scientifically wrong concerning the transmutation of elements. While chemical reactions do not allow atoms to change, nuclear reactions do. The sun, for example, releases energy by turning hydrogen into helium.
Regarding the attributed population predictions Simon did not specify that he was assuming a fixed growth rate as Diamond, Bartlett and Hardin have all assumed. Nor did Simon ever say, as Diamond quotes, that "Copper can be made from other elements"; after a discussion about the definition of "finite" Simon had actually said:
Simarily, the quantity of copper that will ever be available to us is not finite, because there is no method (even in principle) of making an appropriate count of it, given the problem of the economic definition of "copper," the possibility of creating copper and its economic equivalent from other materials, and thus the lack of boundaries to the sources from which copper might be drawn.Julian Simon, The Ultimate Resource, 1981 pp 47
Regarding the term "economic equivalent", Simon later clarified this with the additional response "It takes much less copper now to pass a given message than a hundred years ago." (The Ultimate Resource 2, 1996, footnote, page 62)." and rewrote the original text as:
The quantity of services we obtain from copper that will ever be available to us should not be considered finite because there is no method (even in principle) of making an appropriate count of it, given the problem of the economic definition of "copper," the possibility of using copper more efficiently, the possibility of creating copper and its economic equivalent from other materials, the possibility of recycling copper, or even obtaining copper from beyond planet Earth, and thus the lack of boundaries to the sources from which "copper" might be drawn. That is, one cannot construct a working definition of the total services that we now obtain from copper and that can eventually be obtained by human beings. (The Ultimate Resource 2, 1996, page 63).
[edit] Education
- BA, Harvard University, experimental psychology, 1953
- Approximately four graduate courses in experimental psychology, Harvard, 1953
- MBA, University of Chicago, 1959
- PhD, University of Chicago, business economics, 1961
[edit] Books
- The Ultimate Resource (1981), ISBN 0-85520-563-6
- The Ultimate Resource II (1996), ISBN 0-691-00381-5
- The Resourceful Earth: A Response to "Global 2000" (1984), ISBN 0-631-13467-0, Julian Simon & Herman Kahn, eds
- The Economic Consequences of Immigration into the United States
- Effort, Opportunity, and Wealth: Some Economics of the Human Spirit
- Good Mood: The New Psychology of Overcoming Depression ISBN 0-8126-9098-2 (Forewords by Albert Ellis and Kenneth Colby)
- The Hoodwinking of a Nation ISBN 1-56000-434-7 (hard), ISBN 1-4128-0593-7 (soft)
- A Life Against the Grain: The Autobiography of an Unconventional Economist ISBN 0-7658-0532-4
- Scarcity or Abundance? A Debate on the Environment (1994), (with Norman Myers), ISBN 0-393-03590-5
- The Philosophy and Practice of Resampling Statistics
- Basic research methods in social sciences: The art of empirical investigation, ISBN 0-394-32049-2
- Resampling: A Better Way to Teach (and Do) Statistics (with Peter C. Bruce)
- The Science and Art of Thinking Well in Science, Business, the Arts, and Love
- Economics of Population: Key Modern Writings, ISBN 1-85278-765-1
- The State of Humanity, ISBN 1-55786-585-X
- It's Getting Better All the Time : 100 Greatest Trends of the Last 100 Years by Stephen Moore, Julian Lincoln Simon ISBN 1-882577-97-3 manuscript finished posthumously by Stephen Moore
[edit] References
.
- Kenneth N. Gilpin. "Julian Simon, 65, Optimistic Economist, Dies." The New York Times. February 12, 1998. B11.
- Julian L. Simon & Herman Kahn eds(1984) "The Resourceful Earth - A Response to Global 2000" Blackwell ISBN 0-631-13467-0
- Albert A. Bartlett. Reflections on Sustainability, Population Growth, and the Environment (revised version).
[edit] Books critical of Julian Simon
- Ehrlich, Paul R. Betrayal of Science and Reason: How Anti-Environmental Rhetoric Threatens Our Future, 1996. (ISBN 1-55963-483-9)
- Grant, Lindsey. Elephants in the Volkswagen, 1992. (ISBN 0-7167-2268-2)
- Hardin, Garrett. The Ostrich Factor: Our Population Myopia, 1998. (ISBN 0-19-512274-7)
[edit] External links
- Writings by Julian L. Simon Available on WWW
- Liberty Institute First Annual Julian L. Simon Memorial Lecture
- The Simon Market in Science Claims
- Julian Simon's Bet With Paul Ehrlich
- Julian Simon's bet with David South
- Julian Simon Remembered It's A Wonderful Life
- FMN and Heartland: Remembering Julian Simon
- Reason Magazine: David Foreman vs. the Cornucopians
- MIT Technology Review: Environmental Heresies
- The Julian L. Simon Memorial Award
- MercatorNet: Population
