If the famous Ehrlich-Simon wager — the one that ran from 1980 to 1990 — had been done again from 1990 to 2000, Julian Simon would have won that bet, too. My former research assistant at GMU, Prof. Mark Perry, has the story over at his excellent blog Carpe Diem.
If Simon's Bet Had Been Repeated…..
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…what about the comment on the original blog that, extending the prices out to 2008 dollars, simon would lose (due to increased demand)?
what about the comment on the original blog that, extending the prices out to 2008 dollars, simon would lose (due to increased demand)?
It is a general principle and will not work for every time period and every comidity but give it a while!
Why is Ehrlich still revered by the left, when he's been proven, time and again, to be wrong?
Extending to 2008 in real terms certain commodities are still lower in inflation adjusted dollars:
Oil for example:
http://www.inflationdata.com/inflation/images/charts/Oil/Inflation_Adj_Oil_Prices_Chart.htm
Prices are probably not the proper bet anyway. The question is will we run out or will people adjust so that life goes on? If oil gets too expensive then the world will adjust. You might see mass telecommuting. Imagine a 5000 person financial services company all working and collaborating from home over the net. No more driving to work. Factory workers might have to drive, but many types of employees do not. I fly to sales meetings all the time, but could just as easily conduct the meeting over the web.
If gold gets too expensive then people will no longer buy gold jewelry, but maybe use cheaper metals or not wear jewelry. I just bought a wedding band, but I did not buy gold or platinum, which run around $800-$1200 respectively for something nice. I bought a Titanium ring for $50, and looked at some used estate jewelry too which is metal already mined.
Sorry, my chart link above was truncated, and I hope this works (broke the link into 2 lines so you must cut and paste):
http://www.inflationdata.com/inflation/images/
charts/Oil/Inflation_Adj_Oil_Prices_Chart.htm
bob…skip on over to the 'carpe diem' site (linked above), and see an example of "the end will come, you Simonites, and your folly shall be shown!!!" gloom-and-doomism.
Shawn,
Thanks. Dave Gardner is an Ehrlich wanna be. The exchanges were almost funny. How can one think there will be no changes in productivity? Or no changes in anything. Gloom and doom personified.
..the conversation gets more and more interesting over there.
I think yours truly's doing a pretty good job of explaining the merits of prices…."yeah me!"
Two comments…
1.There are two measurement problems in making a commodity based bet. One is inflation in the currency used, and the other is that the commodities are international and the currency is national so exchange rates must come into the calculation.
2. The second comment is basic ecocomics. The doom and gloomers do not understand that people are factor of production…more people means possible production. They also do nor understand that natural resources are a function of existing technology. There was oil for thousands of years, but it is a natural resource for only the last 100+ years.