The Price of Everything - Eduardo Porter [106]
Unfortunately, some studies suggest this strategy could trigger catastrophic drought in parts of the world. Still, it has the advantage that if it works, it would work fast. Moreover, it is cheap: a few billion at the most. This approach would fit what we have done, at least since Malthus’s day. Every time we have faced physical constraints, we have deployed technology to squeeze more out of the finite resources of the planet.
Only forty years ago, as concern over population growth and environmental degradation was shaping into an environmental movement, the economist Julian Simon decided to challenge the prevailing concern about the state of the earth and dared the Stanford ecologist Paul R. Ehrlich, a noted prophet of doom, to a bet.
Ehrlich had built his reputation dusting off Malthus’s expectation of impending environmental collapse. “In the 1970s the world will undergo famines—hundreds of millions of people are going to starve to death,” he wrote in The Population Bomb in 1968. In The End of Affluence, published in 1974, he forecast “a genuine age of scarcity” by 1985. Simon would have none of it. In 1980 he challenged Ehrlich to choose any natural resource he wanted—from coal to copper to corn. If these commodities were to become scarce as the world’s population grew, their price would naturally rise. Simon bet that the price of whatever Ehrlich chose would, instead, decline over the next decade.
Ehrlich bet $1,000 on a basket of five metals—chromium, copper, nickel, tin, and tungsten. He scoffed that explaining to an economist the inevitability of rising commodity prices was like “attempting to explain odd-day-even-day gas distribution to a cranberry.” But Simon won. The world’s population grew by 800 million people over the decade. But phone companies abandoned copper wire for fiber optics. Tin cans were displaced by aluminum. And the price of every one of the metals in Ehrlich’s chosen basket fell, after accounting for inflation. Tin and tungsten plummeted 71 percent.
Ehrlich sent Simon his winnings: a check for $576.07—which amounted to the extent of the fall in the basket’s price. Ever since, the wager has provided a victorious narrative for the school of thought that we can ride global warming out without enormous sacrifices. Opponents of efforts to reduce emissions of carbon into the atmosphere wield Simon’s wager as a weapon. After his death in 1998, the Competitive Enterprise Institute in Washington, which spends much of its time and resources in denying climate change, created the Julian L. Simon Memorial Award to bestow upon fellow skeptics.
IT SEEMS RISKY to trust our ingenuity at this stage. Around the world, the planet is showing signs of stress to sustain 7 billion humans living on it.
It was barely over two years ago, in the spring and summer of 2008, just before banks across the rich world started buckling under the weight of bad mortgages, that the price of corn, wheat, and soybeans shot to unprecedented heights on the board of the Chicago Mercantile Exchange. There were food riots in Egypt and Bangladesh. In Haiti’s sprawling slum of Cité Soleil, mud cookies—a mixture of dirt, salt, and vegetable shortening—became the food of choice as the price of rice soared out of most Haitians’ reach. Prices of iron and steel jumped too. On July 3, Brent crude oil from the North Sea peaked at $143.95 a barrel—94 percent higher than its price just twelve months before.
We were momentarily saved from this catastrophe by a global recession of which we had not seen the like since the 1930s. But as soon as the world