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Category — Ultimate Resource (ingenuity)

Julian Simon’s ‘The Ultimate Resource’ (1981) Speaks to Us Today

[Ed. note: Julian Simon, born February 12, 1932, died four days before his 66th birthday. He would have been 82 years old today. MasterResource takes its name from Simon’s term for energy, and we publish on his oeuvre from time to time.]

Thirty-three years after its publication by Princeton University Press, The Ultimate Resource remains insightful and timely—if not timeless. Simon’s Ultimate Resource 2, published in 1996, greatly expanded upon the original, but the major themes were not changed due to the solid worldview that Simon had developed in the 1970s.]

Energy: The Master Resource

“Energy is the master resource, because energy enables us to convert one material into another. As natural scientists continue to learn more about the transformation of materials from one form to another with the aid of energy, energy will be even more important.”

- Julian Simon, The Ultimate Resource (Princeton: Princeton University Press, 1981), p. 91.

Energy Optimism

“Technological forecasts of resource exhaustion are often unsound and misleading [in part because] … the physical quantity of a resource in the earth, not matter how closely defined, is not known at any time, because resources are only sought and found as they are needed.” (p. 40) [Read more →]

February 12, 2014   1 Comment

“Nothing is more fungible than a good idea” (U.S. as global high-tech oil/gas leader)

In 2008, Candidate Obama campaigned against Republican-era high gasoline prices. Now that pump prices are high with a presidential election looming, President Obama disclaims responsibility. “We cannot drill our way to lower gas prices,” he says.

Crude oil is a fungible commodity, the argument goes. So why should we Drill, Baby, Drill when any domestic supply we might add is a relative drop in the bucket? Nice argument, except that it could be used against having any new production. (And U.S. CO2 emissions at the margin are a drop in the bucket, right Mr. President? ) And as the economic revolution of the 1870s taught, economic value and thus prices are set at the margin.

Marginal Economics

The United States is the world’s #3 oil producer. Domestic policy decisions in the U.S. can impact the global supply/demand picture, which in reality is quite narrowly balanced.

Every barrel of domestic production clearly benefits energy security, but lately the debate has shifted to whether U.S. drilling can impact the globally set price.

But whether or not our incremental production can move the market, the U.S. is the world leader in petroleum technology. We have incubated and nurtured new and innovative drilling and production methods that are used worldwide. We are one big petroleum laboratory: new ideas often get their first test in our oil fields. Our technology advances unlock reserves worldwide. [Read more →]

June 19, 2012   3 Comments

Here Comes Ingenuity! Offshore Drilling Will Be Better, Cleaner, Safer in the New Era (Julian Simon speaks to us today)

“Material insufficiency and environmental problems have their benefits, over and beyond the improvement which they invoke. They focus the attention of individuals and communities, and constitute a set of challenges which can bring out the best in people” (emphasis added).

- Julian Simon, The Ultimate Resource 2 (1996), p. 587.

“We need our problems, though this does not imply that we should purposely create additional problems for ourselves.”

- Julian Simon, The Ultimate Resource 2 (1996), p. 588.

If he were alive, Julian Simon (1932–1998) would apply his view that our problems can make us better to the worst-case scenario that BP uniquely brought to life in the Gulf of Mexico this year.

Simon argued that there was a third driving force or condition for human improvement beyond the the institutional  framework for progress (private property, voluntary exchange, the rule of law) and the insightful reasons given for capitalistic progress (motivation, effective use of knowledge, trial and error feedback, etc.).

The third element is the very fact of problems and setbacks, which create challenges that human ingenuity would not need to confront and solve as much as in an incremental improvement process.

The recent Gulf oil spill was certainly not anticipated by anyone in government or in private industry. Yet it happened. And BOOM, the whole offshore industry had to lock heads to try to find the best way to contain the spill and to eventually stop the same. After 87 days, the runaway well was capped. After about 110 days, the cement held, and the well was entombed.

And now will come a new generation of offshore technology to ensure that such an accident does not happen again (see below). Whatever the combination of new regulation, insurance requirements, or just best practices for cost minimization, there must be sound, failsafe, redundant technology for safe, spillage-free deepwater exploration. The reprinted article before is one early recognition of this fact.

APPENDIX: OFFSHORE DRILLING: Disaster Will Lead to Leaps in Engineering Innovation, Greenwire, July 20, 2010.

Disaster begets innovation more often than success does. The modern feats of technology often stemmed from some inevitable mistakes, say historians of engineering.

“It’s a great source of knowledge — and humbling, too — sometimes that’s necessary,” said Henry Petroski, a historian of engineering at Duke University and author of the book, “Success Through Failure.” “Nobody wants failures. But you also don’t want to let a good crisis go to waste.”

The Deepwater Horizon incident, experts say, will provide rich fodder to spur innovation into developing safe and complex techniques to drill into ever-deeper waters. Among lessons learned from this incident are ones about the importance of blowout preventers — the switches on top of wells that cut off the oil supply and are often the last line of defense. The devices were not working in the Gulf of Mexico oil spill.

Environmentalists learned a different lesson about the need to move away from offshore drilling and reduce the amount of greenhouse gas emissions into the atmosphere.

But the history of engineering suggests that though devices may become unfavorable, whole ideas do not become obsolete. Following the Hindenburg disaster where a hydrogen-filled blimp exploded, engineers simply built airships with inert helium gas. Other disasters including the sinking of the Titanic, the Chernobyl nuclear reactor meltdown and the collapse of the World Trade Center all taught engineers to come to terms with flaws and evolve.

Engineers think that the present disaster will help wells become safer as designers search for solutions to reduce risk. The profession itself is inherently problem-solving and would not concern itself with the politics or ethics of reducing dependence on oil, say historians.

Forensic engineers say that analyzing the Deepwater Horizon disaster will take time, and investigations will be necessary to refine the art of drilling. One of the biggest lessons so far: to build blowout preventers with more than one blind shear ram. These blades slice right through the pipe to cut off flow, and two of these plates would be better than one.

“It’s like our personal lives,” said David Fowler, a professor at the University of Texas, Austin, who teaches a course on forensic engineering. “Failure can force us to make hard decisions” (William Broad, New York Times, July 20). –GV

August 11, 2010   4 Comments

Population, Consumption, Carbon Emissions, and Human Well-Being in the Age of Industrialization (Part IV – There Are No PAT Answers, or Why Neo-Malthusians Get It Wrong)

Editor’s note. This is the conclusion of a four part series by Indur M. Goklany, in which the Neo-Malthusian view of the adverse effects of industrialization, economic growth and technological change is contrasted with empirical data on the substantial progress in human well-being during the age of industrialization. Having established this, he appropriately warns about predicting the future. For ease of reference, links to the previous three parts are included at the end.

Neo-Malthusians believe that humanity is doomed unless it reins in population, affluence and technological change, and the associated consumption of materials, energy and chemicals. But, as shown in the previous posts and elsewhere, empirical data on virtually every objective indicator of human well-being indicates that the state of humanity has never been better, despite unprecedented levels of population, economic development, and new technologies. In fact, human beings have never been longer lived, healthier, wealthier, more educated, freer, and more equal than they are today.

Why does the Neo-Malthusian worldview fail the reality check?

The fundamental reasons why their projections fail are because they assume that population, affluence and technology — the three terms on the right hand side of the IPAT equation — are independent of each other. Equally importantly, they have misunderstood the nature of each of these terms, and the nature of the misunderstanding is essentially the same, namely, that contrary to their claims, each of these factors instead of making matters progressively worse is, in the long run, necessary for solving whatever problems plague humanity. [Read more →]

April 26, 2010   4 Comments

Julian Simon on the Ultimate Resource (Forget Peak Oil, Worry About Peak Government)

Best of MasterResource 2009: This post originally appeared on September 5th.

Julian Simon (1932–98) is an inspiration to those of us here at MasterResource and, indeed, the whole capitalist movement. Indeed, it was he who characterized energy as the master resource and human ingenuity as the ultimate resource.

In honor of Simon, I have reproduced some quotations from his works and invite readers to add their favorite in the comment section.

“The world’s problem is not too many people, but a lack of political and economic freedom.”

- Julian Simon, The Ultimate Resource 2 (Princeton, N.Y.: Princeton University Press, 1996), p. 11.

“There is only one important resource which has shown a trend of increasing scarcity rather than increasing abundance. That resource is the most important of all—human beings. . . . [An] increase in the price of peoples’ services is a clear indication that people are becoming more scarce even though there are more of us.”

- Julian Simon, The Ultimate Resource 2 (Princeton, N.Y.: Princeton University Press, 1996), p. 581.

“Human beings create more than they destroy.”

- Julian Simon, The Ultimate Resource 2 (Princeton, N.Y.: Princeton University Press, 1996), p. 580.

“Progress toward a more abundant material life does not come like manna from heaven. . . . My message certainly is not one of complacency. In this I agree with the doomsayers: our world needs the best efforts of all humanity to improve our lot.”

- Julian Simon, “Introduction,” in Simon, ed., The State of Humanity (Cambridge, MA: Blackwell, 1995), p. 27. [Read more →]

January 1, 2010   2 Comments

Julian Simon on the Ultimate Resource (forget about 'peak energy'–worry about peak government)

Julian Simon (1932–98) is an inspiration to those of us here at MasterResource and, indeed, the whole capitalist movement. Indeed, it was he who characterized energy as the master resource and human ingenuity as the ultimate resource.

In honor of Simon, I have reproduced some quotations from his works and invite readers to add their favorite in the comment section.

“The world’s problem is not too many people, but a lack of political and economic freedom.”

- Julian Simon, The Ultimate Resource 2 (Princeton, N.Y.: Princeton University Press, 1996), p. 11.

“There is only one important resource which has shown a trend of increasing scarcity rather than increasing abundance. That resource is the most important of all—human beings. . . . [An] increase in the price of peoples’ services is a clear indication that people are becoming more scarce even though there are more of us.”

- Julian Simon, The Ultimate Resource 2 (Princeton, N.Y.: Princeton University Press, 1996), p. 581.

“Human beings create more than they destroy.”

- Julian Simon, The Ultimate Resource 2 (Princeton, N.Y.: Princeton University Press, 1996), p. 580.

 “Progress toward a more abundant material life does not come like manna from heaven. . . . My message certainly is not one of complacency. In this I agree with the doomsayers: our world needs the best efforts of all humanity to improve our lot.”

- Julian Simon, “Introduction,” in Simon, ed., The State of Humanity (Cambridge, MA: Blackwell, 1995), p. 27.

“Adding more people causes problems. But people are also the means to solve these problems. The main fuel to speed the world’s progress is our stock of knowledge; the brakes are our lack of imagination and unsound social regulations of these activities. 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 benefits, and so inevitably they will benefit the rest of us as well.”

- Julian Simon, “Introduction,” in Simon, ed., The State of Humanity (Cambridge, MA: Blackwell, 1995), p. 27.

And here is one Simon-like quotation from outside of the Simon tradition to think about!

“The worst of all forms of pollution is wasted lives.”

 - Al Gore, Earth in the Balance: Ecology and the Human Spirit (New York: Plume/Penguin, 1992, 1993), p. 162.

September 5, 2009   9 Comments