Ehrlich’s Easy Honor: “Say what we want to hear”

Paul Ehrlich is the guy who lost a $10,000 bet in 1990 to the economist Julian Simon that prices would rise on the five core commodities (copper, nickel, chrome, tin, and tungsten) in the next ten years (1980-1990). Although world population increased by 800 million in the 80s, every single one of Ehrlich’s metals went down in price. But who won the MacArthur Foundation Genius Award that year for promoting “greater public understanding of environmental problems”? Yeah, the false prophet, of course. That is because he was saying the right thing. Destruction. Catastrophe.

What did Simon know? He knew about the substitution effect: If a resource becomes too scarce and expensive, this gives incentive to find an abundant replacement, bringing demand away from the scarce resource and toward the new abundant resource.

Share Button

RSS feed for comments on this post. TrackBack URI

Leave a Reply