Simon-Ehrlich Wager: A Clash of Resource Theories

In the late 20th century, a profound intellectual conflict emerged between two opposing views of humanity's future: one that saw a world spiraling toward collapse due to overpopulation, and another that believed human ingenuity would always overcome scarcity. This clash culminated in a famous scientific bet between economist Julian Simon and biologist Paul R. Ehrlich.

The dispute began in earnest during the summer of 1980. Simon had published rebuttals in Science and The Washington Post, debunking claims by the United Nations and Newsweek regarding death tolls from a West African drought (1968–1973). Simon used these rebuttals to challenge "environmental doomers," specifically targeting the theories presented in Ehrlich's book, The Population Bomb, and the concepts popularized by The Limits of Growth. Simon argued that the belief that humanity was reaching its ecological limit was an exaggeration driven by the fact that "bad news sells books, newspapers, and magazines."

Simon's core thesis was that technological advancements—the discovery of new mineral lodes, the invention of better production methods, and the creation of substitutes—would naturally alleviate scarcity.

The Ideological Divide

Paul R. Ehrlich, along with colleagues Anne Ehrlich, John Holdren, and John Harte, countered Simon's optimism in Science. They argued that technology could not replace essential ecological systems and that the scarcity of minerals and energy posed a genuine danger. They dismissed Simon's economic perspective as a "tired old argument" and claimed he lacked knowledge of geology. Other experts, such as biologist Wayne Davis, argued that Simon's prediction that oil prices would decrease defied logic.

Ehrlich had become a celebrity scientist, appearing on The Tonight Show Starring Johnny Carson at least 20 times and delivering hundreds of lectures and radio appearances in 1970 alone. He famously predicted that without global population control, the world would face nuclear war, disease, or dire resource scarcity. In 1969, he even suggested that if he were a gambler, he would bet that England would not exist by the year 2000.

The Scientific Wager

To resolve the dispute with empirical evidence, Simon challenged Ehrlich to a wager based on the future prices of raw materials. The logic was simple: if population growth led to scarcity, the prices of metals would rise due to increased demand. If technological innovation reduced scarcity, prices would fall.

Ehrlich accepted the challenge. Working with Harte and Holdren, he selected a basket of five metals that they believed would increase in price due to depletion and scarcity: chromium, copper, nickel, tin, and tungsten.

The Outcome and Technological Drivers

Ultimately, Julian Simon won the bet. All five metals decreased in price over the period. The decline was driven by the very factors Simon had predicted: better technology and the discovery of substitutes.

• Tin: Prices dropped as aluminium, a more abundant and inexpensive material, became more widely used.
• Nickel: Better mining technologies led to the discovery of vast new lodes, ending a market monopoly.
• Tungsten: The rise of ceramics in cookware reduced the demand for tungsten.
• Chromium: Improved smelting techniques lowered costs.
• Copper: The invention of fiber-optic cable (made from sand) replaced many functions previously served by copper wire.

Metal	Predicted Trend	Actual Result	Primary Reason for Price Drop
Chromium	Increase	Decrease	Better smelting techniques
Copper	Increase	Decrease	Substitution with fiber-optic cable
Nickel	Increase	Decrease	Discovery of new lodes via better mining
Tin	Increase	Decrease	Substitution with aluminium
Tungsten	Increase	Decrease	Substitution with ceramics

The Proposed Second Wager

In 1995, Simon attempted to initiate a second bet. Ehrlich declined a direct repeat and instead proposed betting on 15 different metrics of human welfare over a 10-year period, with the winner to be decided by scientists appointed by the National Academy of Sciences in 2005.

The two could not reach an agreement. Simon argued that many of Ehrlich's metrics—such as the amount of nitrous oxide in the atmosphere—were indirect indicators. He believed that an indicator should only be considered "bad" if it had a measurable detrimental effect on actual human welfare. Simon compared Ehrlich's approach to someone who, instead of betting on whether Olympic athletes would perform better, insisted on betting on the weather or the condition of the track.

Key Facts

• The Bet: A wager between Julian Simon and Paul R. Ehrlich on whether the prices of five specific metals would rise or fall.
• The Metals: Chromium, copper, nickel, tin, and tungsten.
• The Result: Julian Simon won; all five metals decreased in price.
• The Driver: Technological innovation and resource substitution (e.g., fiber-optics replacing copper) drove prices down.
• The Conflict: A fundamental disagreement between "environmental doomerism" (scarcity) and the belief in human ingenuity (abundance).

Frequently Asked Questions

What was the primary goal of the Simon-Ehrlich wager?

The goal was to test whether population growth would lead to resource scarcity (increasing prices) or if technological advancements would lead to resource abundance (decreasing prices).

Why did the price of copper decrease despite population growth?

The price fell largely due to the invention of fiber-optic cables, which are derived from sand and could perform many of the functions previously reserved for copper wiring.

Which metals were included in the wager?

The five metals chosen by Ehrlich, Harte, and Holdren were chromium, copper, nickel, tin, and tungsten.

Why did the second proposed wager in 1995 fail?

The two parties could not agree on the metrics. Simon rejected metrics like atmospheric nitrous oxide levels, arguing they were indirect measures that did not necessarily prove a decline in human welfare.

What did Paul R. Ehrlich predict about England?

In 1969, Ehrlich stated that if he were a gambler, he would take even money that England would not exist in the year 2000 due to the consequences of overpopulation.