Summary: Previous posts about the future of economic growth in America have examined the drivers of growth. Today we look at the most commonly cited barrier to growth: a future scarcity of natural resources.
Contents
- Doom by the year 2000
- Predictions of resource scarcity
- Reality of ample supplies
- Why have we not run out?
- For More Information
(1) Doom by the year 2000
A typical doomster prediction, more precise and famous than most (quite unlike those in Limits to Growth):
“If current trends continue by the year 2000 the United Kingdom will simply be a small group of impoverished islands, inhabited by some 70 million hungry people, of little or no concern to the other 5-7 billion inhabitants of a sick world. … If I were a gambler, I would take even money that England will not exist in the year 2000.”
— Paul R. Ehrlich speaking in London at the Institute of Biology in Autumn 1969. From “In Praise of Prophets” by Bernard Dixon in the New Scientist, 16 September 1971.
Ehrlich also predicted worldwide plague, thermonuclear war, death of all sea-food, “rocketing” death rates, and ecological catastrophe. Dixon reported that “the audience loved it and gasped for more”.
(2) Predictions of resource scarcity
Excerpt from “The Doomslayer“.
By Ed Regis in Wired, February 1997.
“The environment is going to hell, and human life is doomed to only get worse, right? Wrong. Conventional wisdom, meet Julian Simon, the Doomslayer.”
“This is the litany: Our resources are running out. The air is bad, the water worse. The planet’s species are dying off – more exactly, we’re killing them at the staggering rate of 100,000 per year, a figure that works out to almost 2,000 species per week, 300 per day, 10 per hour, another dead species every 6 minutes. We’re trashing the planet, washing away the topsoil, paving over our farmlands, systematically deforesting our wildernesses, decimating the biota, and ultimately killing ourselves.
“The world is getting progressively poorer, and it’s all because of population, or more precisely, overpopulation. There’s a finite store of resources on our pale blue dot, spaceship Earth, our small and fragile tiny planet, and we’re fast approaching its ultimate carrying capacity. The limits to growth are finally upon us, and we’re living on borrowed time. The laws of population growth are inexorable. Unless we act decisively, the final result is written in stone: mass poverty, famine, starvation, and death.
“Time is short, and we have to act now. That’s the standard and canonical litany. It’s been drilled into our heads so far and so forcefully that to hear it yet once more is … well, it’s almost reassuring. It’s comforting, oddly consoling – at least we’re face to face with the enemies: consumption, population, mindless growth. And we know the solution: cut back, contract, make do with less. “Live simply so that others may simply live.”
“There’s just one problem with The Litany, just one slight little wee imperfection: every item in that dim and dreary recitation, each and every last claim, is false. Incorrect. At variance with the truth.
“…Thus saith The Doomslayer, one Julian L. Simon, a neither shy nor retiring nor particularly mild-mannered professor of business administration at a middling eastern-seaboard state university. Simon paints a somewhat different picture of the human condition circa 1997. {supporting evidence follows}
…Ehrlich, a Stanford University entomologist who as a youth had seen his best butterfly hunting grounds churned under the real estate developer’s plow, wrote the runaway best-seller The Population Bomb
“The battle to feed all of humanity is over. In the 1970s and 1980s hundreds of millions of people will starve to death in spite of any crash programs embarked upon now. At this late date nothing can prevent a substantial increase in the world death rate, although many lives could be saved through dramatic programs to ‘stretch’ the carrying capacity of the earth by increasing food production and providing for more equitable distribution of whatever food is available. But these programs will only provide a stay of execution unless they are accompanied by determined and successful efforts at population control.”
“This late-breaking Malthusian out-burst, strangely enough, did set the world on fire. The book sold 3 million copies, became the best-selling environmental tract of all time, and got the author on The Tonight Show.
…The next year, 1969, Ehrlich published an article called “Eco-Catastrophe!” in Ramparts. “Most of the people who are going to die in the greatest cataclysm in the history of man have already been born … By that time [1975] some experts feel that food shortages will have escalated the present level of world hunger and starvation into famines of unbelievable proportions.”
“Then, in 1974, Ehrlich and his wife, Anne Ehrlich, also a Stanford biologist, published a new book, The End of Affluence, in which they warned of a “nutritional disaster that seems likely to overtake humanity in the 1970s (or, at the latest, the 1980s). Due to a combination of ignorance, greed, and callousness, a situation has been created that could lead to a billion or more people starving to death. … Before 1985 mankind will enter a genuine age of scarcity” in which “the accessible supplies of many key minerals will be nearing depletion.”
…In 1990, for his having promoted “greater public understanding of environmental problems,” Ehrlich received a MacArthur Foundation “genius” award. …Lester Brown, for example, founder and president of the Worldwatch Institute, who in 1981 wrote:
“The period of global food security is over. As the demand for food continues to press against the supply, inevitably real food prices will rise. The question no longer seems to be whether they will rise but how much.”
“All during the 1980s, however, wheat and rice prices declined; in mid-century, in fact, they reached all-time lows. But this made no difference, and in 1986, for his work on the “global economy and the natural resources and the systems that support it,”
“Lester Brown, too, received a MacArthur Foundation “genius” award. Julian Simon {who was consistently right where Ehrlich and Brown were wrong} never received a MacArthur award.”
(3) The reality of ample supplies, at a price
Excerpt from “Betting on the Wealth of Nature: The Simon-Ehrlich Wager“
By David McClintick (journalist) and Ross B. Emmett (Professor of Politics, MI State U)
PERC Report of the Property and Environment Research Center, Fall 2005.
“{I}n October 1980 Ehrlich and his colleagues picked 5 different metals (chrome, copper, nickel, tin, and tungsten), spending $200 on each metal. The total investment was worth $1,000 in 1980 prices. If in October 1990 the value of the five metals at their original 1980 quantities, adjusted for inflation, turned out to be greater than $1,000, then Ehrlich would win the bet. If the value were less, Simon would win the bet.
“…In October 1990, the price of the basket of metals had fallen substantially below its 1980 level. All the metals had experienced a drop in value. Moreover, the drop was so substantial that Simon would have won even if the values hadn’t been adjusted for inflation.
“…Simon’s response to the wager was more humble than that of many of his supporters. Responding to a question from the audience during a debate, for example, he said that he would win “not in every single place, not in every single time span, but on the average”. Prices in any short-run period, he recognized, are subject to fluctuations, and he might have lost the bet. Simon’s claim was that the human propensity to take advantage of new opportunities and innovate meant that commodities are likely to become less scarce. The general trend of natural resource prices should be downward sloping, even though individual decades might run counter to that trend.
“Simon’s claims can now be put to the test for the entire twentieth century. The U.S. Geological Survey has standardized the price data for all basic metals during the past century, using 1998 as the base year. We examined those data to determine the answers to three questions.
“First, would the outcome of the Simon-Ehrlich wager be the same if the bet had been extended to the entire twentieth century? The figure provides the 20th C price history of a composite of chrome, copper, nickel, tin, and tungsten. Despite ups and downs over the course of the past century, a wager in 1900 would have been won in 1999 by the person who predicted a decrease in natural resource prices. If someone invested $200 at 1900 metals’ prices in each of these five metals the inflation adjusted value of the same bundle of metals in 1999 would have been 53% lower. The person who took Simon’s position would have won over the entire century.
“Second, would Simon have won or lost in other decades? Was he just lucky to have picked the 1980s? The figure shows that the 1980s experienced the second largest drop in prices of the century, so to some extent Simon was lucky. He had said simply that he was more likely to win than to lose in any given decade, and indeed he would have won in only 5 decades (the 1900s, 1910s, 1940s, 1980s and 1990s). He would have lost by a few dollars in the 1950s, and by more significant amounts in the other 4 decades. This outcome confirms Simon’s suspicion that prices over short spans of time are as likely to rise as to decline, but the overall trend will be downward.”
(4) Why have we not run out of resources
Opening of
Recovering lost knowledge about exhaustion of the Earth’s resources (such as Peak Oil).
“The short version, the key fact about mineral resources: there is an inverse relationship between quantity and quality of reserves. Low quality deposits are more common than high quality. That’s why peak oil means acceleration of the capital expenditure required to extract the marginal barrel of oil. From sticking a straw into the ground in Saudi Arabia to deep onshore well to deeps offshore to unconventional sources (e.g., heavy oil, bitumen/oil sands, pre-salt deposits under fantastic depths of water and rock), to vaguely oil (e.g., kerogen/oil shale, coal-to-oil).
“Once we have explored the world for a given resources, rising prices drives this evolution. New technology for extraction and efficiency can mitigate but not prevent these price increases. This is lost knowledge for the general public, as seen in articles like Tom Keene’s at BusinessWeek, with a likely winner for dumbest thing written about energy in 2011: “There is oil wherever people are putting holes in the ground.” {In this post} we recover some of this knowledge. …”
(5) For More Information
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