Julian+Simon

 ** Julian Simon:  **

** The Optimist **
= =

Background:
Julian Simon is an American economist, who is optimistic about the exponential growth of population. Originally, Julian Simon supported the theories of Malthus but in the 1960s argued that the evidence didn't support this. Simon then published several books, his most complete being //The Ultimate Resource II//, published in 1996. During his life, he was a professor of business administration at the University of Maryland while conducting research in population economics, managerial economics and statistics. His theories encouraged other economists, most notably Bjorn Lomborg, to pursue further research and oppose those given by the Club of Rome, Thomas Malthus, and Paul Elrich. Simon died on February 8th, 1998 in Chevy Chase, Maryland of a heart attack.

Theory:
Simon argued that the true measure of scarcity is the price of the item. If an item is becoming more abundant the price will fall, and if the item is becoming more scarce, then the price will rise. He argues that increasing wealth and technology makes resources more available even when there is a finite amount. He claims that resources can be viewed as economically indefinite because it recycles old resources and incorporates new alternatives developed by the market. Simon's view truly contradicts that of Malthus as he sees that the increase in population and markets will provide more innovation, pushing the development of technology and research. This is evident today as we are looking into alternative energy sources including solar, hydroelectric, tidal, and wind power due to our increasing population. His theory was also praised by Nobel Laureate economists Friedrich Hayek and Milton Friedman, the latter wrote the preface to the 1998 edition of //The Ultimate Resource II//.

When he published his theory, Simon observed gas tanks in cars in the United States. He noticed that cars improved their efficiency from 13.1 miles per gallon in 1973 to 17.9 miles per gallon in 1985 cutting gas consumption by 20 billion per year.

The following quote is from his work //The Ultimate Resource II//, and displays his views in a clear and succinct manner;

//"The more people, the more minds there are to discover new deposits and increase productivity, with raw materials as with other goods."//

Putting the theory to the test:
Simon bet Paul Elrich, John Harte, and John Holden (environmental scientists) in 1980 about the prices of five metals (tin, nickel, tungsten, chromium, and copper) a decade later. Simon told Elrich to chose the five elements to be used in the bet, all increasing in scarcity and depletion. Simon won the bet with all five metals decreasing in price, ranging from 5% (chromium) to 74% (tin), specifically due to rapid developments in technology, allowing a more efficient use of resources or the use of cheaper alternatives.

Simon's predictions:
Before his death in 1998, Simon described his views about the future world population's situation:

//"This is my long-run forecast in brief:

The material conditions of life will continue to get better for most people, in most countries, most of the time, indefinitely. Within a century or two, all nations and most of humanity will be at or above today's Western living standards.

I also speculate that many people will continue to **think and say** that the conditions of life are getting **worse**."//

Criticism:
Julian Simon was criticized for being too optimistic. Example: Simon created another wager with David South, a professor at Auburn University School of Forestry. This bet dealt with timber prices, Simon wagered that in accordance with his theory stated in //The Ultimate Resource//, timber consumer prices would decrease at the end of a five year period. The idea was that :

//"The costs of raw materials have fallen sharply over the period of recorded history, no matter which reasonable measure of cost and price one chooses to use.... historical trends are the best basis for predicting the trends of future costs, too." The Ultimate Resource (p. 20)//

Before the time period was completed (in 1996 one year after the bet was made), timber prices rose with inclination that they would continue to rise.

Simon noted this and wrote to South:

//"I must tell you that I think you have a very good chance of winning over a five-year period - close to 50-50. Of all the topics that might fall into the categories I specify, I think yours is the most challenging for me. And if I did not feel bound to accept the bet by my general statement - I would feel that I was welshing if I didn't accept it - I would have demurred. This is one of those situations in which we are moving from a hunting-and-gathering situation to cultivation, and during that period prices certainly can go the other way for five years."//

Simon did not live to see the conclusion of the wager as he died in 1998. The bet was to conclude in 2000, and in 2000 the consumer price of timber was still above the consumer price at the beginning of the wager.

Bernards, Neal. __Population: Detecting Bias__. San Diego, California: Greenhaven Press, Inc., 1992. Codrington, Stephen. __Planet Geography__. 4th. Hong Kong: Solid Star Press, 2007. "Julian Lincoln Simon." __Wikipedia__. 2008. 13 Oct 2008 . Lomborg, Bjorn. "Running on empty?." __Guardian Unlimited__ 16 Aug 2001 14 Oct 2008 . "The Simon- South Bet On Pine Saw Timber." __Auburn University__. Auburn University. 14 Oct 2008 .