What Nobel Minds Get Wrong – OpEd |
Each year after the Nobel Prize announcements, laureates, who are among the greatest minds of their generation, gather and shape a broader intellectual conversation. At this year’s gathering, a Nobel laureate in physics posed a question to the economic laureates: “Can we grow without limit? What about finite resources?” He added, “At some point, must we also modify this growth system—which wants to consume more and more of the Earth’s resources?”
To answer this question, we need to go back to a bet made about humanity’s fate in 1980. Economist Julian Simon and biologist Paul Ehrlich made a wager about the future of humanity. At the heart of the bet was a simple question: Would population growth lead to resource scarcity and human decline, or to greater prosperity and innovation?
The terms of the bet were straightforward: Ehrlich would select a $1,000 basket of raw materials that he expected to become scarcer—and therefore more expensive—over time. He chose copper, chromium, nickel, tin, and tungsten. If the price of the goods rose above (an inflation-adjusted) $1,000, Simon was to pay Ehrlich the difference; if they fell, Ehrlich was to pay. The contract was signed on October 6, 1980, for a ten-year period. The outcome was decisive: by 1990, the real price of the basket had fallen by 36%, and Simon received a check from Ehrlich........