Oracles and Prophets

Economists v. Ecologists - TierneyLab - Science - New York Times Blog

when it comes to getting the big picture right, when it comes to preparing for environmental catastrophes, economists have a better track record than the scientists who specialize in analyzing environmental trends.

The classic example is the “population crisis” of the 1960s and 1970s, when biologists like Paul Ehrlich were convinced humanity was about to suffer massive famines and devastating shortages of energy and other resources because the growing population would exceed the planet’s “carrying capacity.” This concept seemed obvious to biologists who study ecosystems, but economists realized there’s a big difference between animals and humans: Humans are remarkably adaptable and creative. When confronted with shortages and environmental problems, they have a long history of coming up with solutions — new methods of farming, new and cheaper sources of energy, cleaner technologies — that leave them better off in an environment that’s less polluted. .

When the economist Julian Simon pointed this out and predicted that humanity wouldn’t run out of food or energy or other resources in an article in the journal Science, the journal was widely criticized by ecologists and other scientists for publishing the work of an ignorant outsider. Paul Ehrlich and his wife, Anne, said that economists like Dr. Simon were members of a “space-age cargo cult.” Trying to explain to these economists that commodities must inevitably become more scarce and expensive, the Ehrlichs wrote, “would be like attempting to explain odd-day-even-day gas distribution to a cranberry.”

So Dr. Simon challenged the supposed experts to pick any resource that was going to become scarce, and offered to bet them it would instead be cheaper in the future. Dr. Ehrlich and two specialists in energy and natural-resource issues, John Harte and John Holdren, picked five metals and bet $1,000 in 1980. Ten years the supposed experts in natural resources had to pay up, because all five metals were cheaper, just as Dr. Simon had predicted.

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