Julian Simon, Vindicated Again

By Jane Shaw Stroup -- October 27, 2023

Ed. Note: Jane Shaw Stroup blogs at two websites: Jane Takes On History and Liberty and Ecology Blog. The post below can be accessed here.

Each year, the Competitive Enterprise Institute (CEI) has a dinner in Washington, D.C., honoring the economist Julian Simon, who died in 1998. Simon was a rare optimist in the fields of population and natural resources. He disagreed with most environmentalists of his day (especially in the 1980s through 1990s). They feared passionately that growing population would overwhelm agriculture and industry and that the world would run out of natural resources such as oil and minerals.

Instead, Simon thought that more births are a good thing and was sure that resources would not disappear. His upbeat views were widely disparaged.

Ecologist Garrett Hardin called him “Dr. Pangloss,” compared him to a “fast change artist at a county fair,” and said he persuaded people with “sleight of hand.” [1] Paul Ehrlich, author of The Population Bomb, and a leading alarmist wrote (along with his wife, Anne) that Simon was “the leader of a space-age age cargo cult” of economists and a “fringe character.” [2] They also called his qualifications those of a “specialist in mail-order marketing.”[3]

Today Simon’s views are beginning to be appreciated. The CEI dinner honored two authors working in the tradition of Simon, Marian L. Tupy and Gale L. Pooley for their book Superabundance. It reveals in a distinctive way how prosperous the world has become.

I’ll tell you a little about this framework below. So, if you already know about Julian Simon, you might want to skip this part.

But wait! 

Did you know that the Ehrlichs were right when he said that Simon was a specialist in mail-order marketing? Simon started out as an assistant professor of advertising and marketing at the University of Illinois. His most successful book (it went through five editions) was an early one on mail-order marketing.

Another fact: One of Simon’s ideas explains why you are not rejected from an airplane when it is overbooked. Simon proposed the “auction” that occurs when there are more people than seats. You have probably been there when it happened, but may not have noticed it.

The airline offers a reward to anyone who is willing to take a later flight; if there are no takers, the offer goes up. Under this system, the airplane continues boarding and no one is forced to give up a seat. It usually happens quietly, often with just one announcement.

This way of dealing with overbooking became federal policy around 1980 after  Simon proposed it in 1979 to Alfred Kahn. As head of the Civi Aeronautics Board, Kahn was trying to deregulate the airline industry, and he did.

So Simon was pretty remarkable. But because he opposed the “neo-Malthusian” views of the day, he was treated dismissively for years.

Rehabilitation

One event began the “rehabilitation” of Simon in the public mind. It was an article in the New York Times by John Tierney, “Betting on the Planet.” [4]

Because so few people accepted Simon’s views that the world was not running out of resources, Simon offered a bet. Tierney described the bet:

“Simon offered to let anyone pick any natural resource—grain, oil, coal, timber, metals—and any future date. If the resource really were to become scarcer as the world’s population grew, then its price should rise. Simon wanted to bet that the price would instead decline by the appointed date.”

Ehrlich and two other environmental experts took on the challenge in 1980. They chose five metals, in quantities worth at the time $200 each. Tierney explained:

“If the 1990 combined prices turned out to be higher than $1,000, Simon would pay them the difference in cash. If prices fell, they would pay him.”

Ten years later, the metals had declined in price (adjusted for inflation, as the bet required, but the prices would have declined slightly even if inflation were ignored, Tierney points out). Ehrlich wrote a check to Simon for $576.07.

More Validation

Now at last, the half-century of disdain is over. One sign is a recent (September  2023) New York Times article. The opinion piece by Dean Spears reports that world population is expected to peak in the 2080s. [5]

And according to Spears, that’s a bad thing. We will suffer—not from overpopulation but from depopulation.

“Sustained below-replacement fertility will mean tens of billions of lives not lived over the next few centuries—many lives that could have been wonderful for the people who would have lived them . . . .”

That sounds like Julian Simon! However, I’m sure he would also say that people can learn to cope with declining population. (More time would be spent on education, for example.) And  just as people were wrong in depicting runaway population growth, they may be wrong about its decline.

What a Turnaround

Now, let me refer briefly to Superabundance, the book featured at the recent CEI dinner. It is hefty (547 pages) and it covers the history of how the world has achieved “superabundance.” Tupy and Pooley define superabundance as a time “when the abundance of resources grows at a faster rate than population increase.” [6] We’re in that time.

The “Simon Superabundance Framework” begins by measuring the cost of goods and services in terms of the amount of work a consumer must do to earn enough money to afford them. This “time price” has been used before [7] but not as Tupy and Pooley use it. For them it is the  foundation-stone for creating a panoply of ways to measure the increasing availability of those goods and services.

Just to give you a taste of their work, consider that, globally, the time price of 50 commodities declined by 71 percent from 1980 to 2018. In Tupy-Pooley lingo, that means that the abundance of those commodities increased by 252 percent from 1980 to 2018. [8]

They can go back farther and parse more finely: For blue-collar workers  in the U.S, the price of beef declined by 75.5 percent between 1900 and 2018. The price of sugar declined by 98 percent. [9]There is much more—measurements of abundance for specific commodities, within  nations, and for the world as a whole.

Julian Simon’s optimism has proven to be correct.

Image of children is by Larm Rmah on Unsplash.

Notes

[1] Garrett Hardin, “Dr. Pangloss Meets Cassandra,” New Republic, Oct 28, 1980, 31–34, at 31, 33, 34.

[2] Quoted in John Tierney, “Betting on the Planet,” New York Times, Dec. 1, 1990,  https://www.nytimes.com/1990/12/02/magazine/betting-on-the-planet.html.

[3] Paul Ehrlich and Anne Ehrlich, Healing The Planet: Strategies For Solving The Environmental Crisis. (Da Capo Press, 1991), 228.

[4], Tierney, “Betting on the Planet.”

[5] Dean Spears, “The World’s Population May Peak in Your Lifetime. What Happens Next?” New York Times, Sept. 2023.  https://www.nytimes.com/interactive/2023/09/18/opinion/human-population-global-growth.html.

[6] Marian L. Tupy and Gale L. Pooley, Superabundance (Washington, D.C.: Cato Institute, 2022), 2.

[7] For example, see Herman Freudenberger and Gaylord Cummins, “Wealth, Work, and Leisure before the Industrial Revolution,” Explorations in Economic History 13 (1976), 1-12. The authors used time worked at the going rate of pay to determine whether families were able to pay for a basic basket of agricultural goods.

[8] Tupy and Pooley,  137.

[9] Tupy and Pooley, 151.

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Jane Shaw Stroup specializes in environmental, economic, and educational topics and has written for such publications as the Wall Street Journal, the Washington Times, and USA Today, as well for as academic venues such as Public Choice and the Cato Journal. 

She is co-author with Michael Sanera of Facts, Not Fear: A Parents’ Guide to Teaching Children About the Environment (Regnery Publishing: 1996) and coedited (with Ronald D. Utt) A Guide to Smart Growth (Heritage and PERC: 2000).

She received her B.A. degree from Wellesley College and holds a master’s degree in history from North Carolina State University. For other bibliographical information, see here.