X-Message-Number: 5517
From: Peter Merel <>
Subject: Simon Says ...
Date: Tue, 2 Jan 1996 00:35:28 +1100 (EST)

Perry Metzger writes,

>This stuff comes up every few years -- everyone from Malthus to now
>predicts that disaster is just around the corner. According to the
>famous Club of Rome study we should all be experiencing food riots now
>as I recall.

Yes, that study was indeed bullshit. And as I mentioned, I have no idea
whether Drexler or Hanson is closer to predicting  what we're dealing
with.  However I can see that massive global ecological damage is
occurring, and I can see that the global human population is presently
exploding. I haven't heard anything to suggest that these trends are
likely to result in a soft landing. The fact that the club of rome and
Erlich were too pessimistic doesn't seem to allow me to deduce anything
to alleviate these worries.

>The problem is, of course, that these analyses are all purely static
>-- never considering advances in technology, changes in prices brought
>on by market prices, or increases in production caused by increasing
>population. Frankly, I'm not even remotely worried. 

I'm not concerned with human abilities to increase industrial production
to meet increasing needs, nor with limits on energy or mineral
commodities - I'm quite happy to think that there are ways and means to
keep these things ticking along. I'm only concerned that ecological
degradation seems to be occurring at a rate that parallels human
population increase, and that a crunch might (not will, but might) occur
before we achieve the engineering capabilities required to correct it.
If such a crunch occurs, it might (not will, but might) even halt
research into the technologies that could otherwise repair it.

I'm suggesting then that this possibility be used as a stick to drive
environmentally aware dollars into accelerating engineering (esp.
nanotech) R&D *now*. This seems appropriate unless someone can demonstrate
that the trends are illusory, or easily remedied by other means.

>Julian Simon bet Paul Erlich a considerable sum that a large number of
>commodities would go down in price with time in constant dollars. He
>won, of course. Catastrophism is generally speaking wrong.

Non-sequitur. But also, it seems that there is good reason to doubt the
validity of Simon's arguments. There is quite a thorough refutation
available on the web at

http://csf.colorado.edu/hypermail/ecol-econ/oct95/0169.html

>Have you tried looking at world food prices instead? They are a much
>simpler indicator, being a pure supply/demand based metric.

If you can find a way to extrapolate present day food prices into 2050 or
2100 food prices, then I can see the value of this metric. However I rather
doubt your ability to devise such a method.

>They also contradict your premise, by the way.

Oh, I see, this is weatherman's logic - it did not rain today, therefore
it will not rain tomorrow ...

--

Rodney Perkins writes,

>        In response to Pete Merel's posting, I've written a review of
>theThe Ultimate Resource by Julian Simon. Its very long so if you would
>like a copy, drop me a note and I will send it to you.  This should be of
>interest to anyone concerned about the possible state of the world in the
>near and distant  future. Thanks.

I obtained a copy of Rodney's summary from him, and since it doesn't
seem to be all that long I hope he won't be offended if I post it, and
my reply to it, here. My reply refers to the much longer critique of
Simon that you can find at the URL quoted above.

[from Rodney's summary:]

>                In his 1981 book, The Ultimate Resource, Julian Simon
>argues that the economic and environmental conditions of the world is
>increasingly improving, despite the well-publicized claims of
>environmentalists and population control advocates. He examines areas such
>as natural resources (energy), food supply, agriculture, and population
>growth. Using the best available data at the time, he shows that each of
>these areas shows a continuing improvement. While the book is dated, its
>core arguments are very relevant. It also has great historical relevance:
>its shows how wrong many of the environmentalists of the time were.

Indeed, Simon's bet with Erlich has given the lie to a whole generation of 
doomsters. The simple fact is that these folks were turning an excellent buck 
on their prognostications, and that coloured what they had to say.

However, this neither confirms or denies longer term trends. While I have
every confidence that we're not going to run out of mineral commodities
any time soon, just about all the ecological indicators I've been able
to turn up on the web are extremely unfavourable. Species extinctions 
at 10,000 times the natural rate are not a joke. The loss of 30% of the
world's arable land in just the last 40 years is not a joke. Global
human population hitting 10 billion by 2050 is not a joke.

I think these trends do not neccessarily spell disaster, if we can cope
with them via technological means - but that is only a possibility, not
a probability. Since it is plain that the policies being advocated by
today's ecologists are fanciful (conservatism and zpg ...) to say the
least, I think that a concerted campaign to turn environmentalists
towards accelerating engineering R&D is worth pursuing.

>        Simon's general tone can be gleaned from the following quote from
>the books introduction:
>
>Are we now "entering an age of scarcity"? You can see anything you like in
>a crystal ball. But almost without exception, the best data - the long-run
>economic indicators - suggest precisely the opposite. The relevant measures
>of scarcity - the costs of natural resources in human labor, and their
>prices relative to wages and to other goods - all suggest that natural
>resources have been becoming less scarce over the long run, right up to the
>present (p. 3)

But these indicators are worthless because they rely on human expectations.
Most humans have only the most rudimentary idea about resource limits, and
so these indicators are not informed by any empirical measure. Relying
on these indicators is like measuring the distance between the lemmings
and the cliff by judging how fast they are running.

I should also say that many of these costs are distorted by the vagaries of
human political processes - the famines in Africa, for example, are caused
by politics rather than by resource prices. Many commentators seem to feel that
the wealth experienced in North America has a similar cause (cf. Chomsky, 
etc.). 

>Since the issue at hand is available resources (I would assume food and
>natural resources) and population growth, I will summarize some of Simon's
>ideas in these two areas.
>        Simon uses an economist's perspective (or more accurately, his
>economic perspective) to analyze the issues surrounding resources and
>population growth. Part one of the book presents attempts to debunk
>scarcity arguments regarding natural resources. One of his core ideas is
>that the best measure of the "scarcity" of a natural resource at any given
>moment is an increase in its market price in concert with other indicators
>such as cost and share of income (p. 17).

I think my arguments above apply here too. Markets fluctuate chaotically; 
did the availability of natural resources really change during, say, the
stock market plunge of 1929? 

>He claims that the economic
>perspective is better than the engineering method for forecasting scarcity
>and costs of natural resources because it extrapolates prices of resources
>from past costs (if the trends can be reconciled with theory). 

He'd make a hell of a weatherman ...

>The
>engineering method, on the other hand, has numerous foibles which make it
>inferior as method as a means of projecting resources. (see pages 20-21 for
>a full explanation of this). Simon claims that scarcity leads to
>technological advances or substitutions of "dwindling" resources for
>others. Take this hypothetical example (my own): If the oil supply really
>dwindled to the point where it was scarce in the physical sense (which
>according to Simon, it probably won't), the market would force companies to
>develop new energy sources (solar energy, or perhaps when it matures,
>superconductivity energy storage systems). In this regard, he says that
>natural resources are not finite in the economic sense; increased consumer
>demand leads to increased efforts ways to fulfill the demand.

This is fine, so long as an acceptable substitute can be found.
Unfortunately, barring nanotech and/or the philosopher's stone, there
seem to be no end of resources for which no such substitute is available
- I think that critique I mailed you mentioned some obvious cases, but
the one that strikes me is the global decimation of amphibians that
seems to be proceeding right now - just what technology would Simon
propose to take their place?

>        Part two of the book analyzes population growth and its effects on
>areas such as standard of living and pollution. Simon argues that a long
>run view of demographic history (shown over the entire development of the
>human species) shows that Malthusian exponential growth does not
>characterize the human population. He believes that major improvements  of
>economic and health conditions contributes to sudden increases in
>population, which moderate as major productive advances and health
>improvements take effect (p. 163). After this initial surge, the rate of
>grown slows down until the next surge. He also argues that as income
>increases in a country, its fertility rate subsides as well. 

This is a *gross* oversimplification of the case. Cultural factors are a
better indicator of a nation's fertility - if a culture prohibits birth
control, then its population zooms no matter what its prosperity.

>This is
>contrary to the Malthusian idea that population increases faster than the
>means of sustenance and continues to do so until the living standard has
>fallen to its lowest level. 

I agree that this notion is also mistaken - you have only to observe the
population density in Japan, Taiwan, Indonesia and Hong Kong to see the
lie. Many minds, educated minds, make light work.

However these are places that can, and must, import natural resources.
The issue I'm worried about is global population - and it is not
apparent that the Malthusians are not on the money when no external
sources of natural resource (biological resource esp.) are available.
The example that Hanson draws on is Easter Island, where ecological
catastrophe destroyed the entire human population due to overpopulation
and bad biological management.

>The cause of this decrease in fertility is
>better nutrition, better sanitation and health care (p. 184). Contrary to
>views of uneducated poor reproducing out of ignorance, it can be shown that
>people in poor countries (just as in "rich" countries) adjust the number of
>children they have based on available resources. Often times, large
>families maybe beneficial (put the kids to work, increase your income and
>leisure time).

Yes, this is one of the prime causes of Indian overpopulation - and again, 
this is a cultural influence not preempted by India's prosperity.

>        He argues that increased population actually has a positive effect
>on economies, education, and scientific discoveries. He says that larger
>population contributes to increased demand for resources, which in turn,
>leads to increased demand for new discoveries (p. 216). 

Time and again we have seen that just throwing money and people at an
engineering project does not hasten that project - so increased demand
is highly unlikely to increase the rate of engineering progress under
catastrophic conditions. Engineering progress takes its own sweet time.
The best we can do is to try to accelerate progress now, while we are not
so pressed for time.

>Modern
>transportation and communication systems are examples of technologies that
>would not be possible without increased population density (p. 190-193).

Simon is a little dated. Modern transport and communcations systems
are working towards decentralisation, not centralisation. And in fact,
historically speaking, it has been the technology (automobiles especially)
that has driven urbanisation, not the other way around. Technology is 
more often the cause of social change than the result of it.

>On the issue of famine, he claims that greater population density may
>lead to less chance of famine for the reasons cited above (better
>transportation) (p. 63). He says scientific discoveries of the time (meat
>substitutes, new cultivation techniques) combined with free-market
>incentives for farming should contribute to increased food output (p. 68).

Heh. Tell it to the Africans. Centralisation of population makes disasters
like the recent Rwandan business much *more* likely, because you have more
of your eggs in the one basket. As to free-markets, again they're dominated
by political forces. If you're on the side of the angels, the free market will
get you all the resources you need, but if you're not ... you go hungry.

>        The third section looks into the motivations of organizations
>promoting population control. This section is weaker than the others
>because it makes a veiled attempt to question the ethics of these groups.
>>From the overall tone of the book, you can figure out where Simon stands on
>these issues.

As I mentioned before, I think naive conservatism is bunk, and I extend
this opinion to those Canutes who campaign for population control. Not
because they're unethical, but because they're pissing in the wind.

>        Some of Simon's ideas are incredibly optimistic. However, I do no
>fault him for this. His data seems to confirm many of his ideas and his
>approach is a welcome change from other less rigorous and jaundiced
>perspectives.  As mentioned earlier, some of the arguments can only be
>taken for their historical value; the book's analysis only covers up to
>1980. Ultimate Resource II is apparently in the works and we will be able
>to see if Simon's theories have held up. I would argue that some of the
>basic concepts are valuable regardless. His refutations of environmentalist
>hysteria at the time are quite convincing.

I look forward to hearing how he responded to the critique at the URL above.

>        As an interesting side note, Simon has recently done work on
>immigration policy for the Cato Institute. A complete summation of his
>study is available at http://www.cato.org.

I stumbled over the Cato web site just the other day - seemed long on opinion 
and short on facts in general, but I didn't look at their immigration
policy - shall do.

>How does nanotechnology fit into this picture?
>
>Simon has presented a view of world of increasing prosperity and resources
>on the basis of historical economic trends. While he considers technology
>and innovation to be essential factors in progress, he does not go too far
>in predicting possible technologies that will aid in energy production and
>food output. His most extreme technological vision is that of fusion
>energy. Could his point of view hold up without the occurence of something
>as radical as nanotechnology? I think his view could be sustained by
>something as "mundane" as superconducting energy storage systems, a
>technology that could easily find widespread, commercial use early in the
>next century.

There are lots of promising energy technologies - it's one area where
substitution is abundantly feasible I think. I have no qualms there - 
it's only the imminence of ecological catastrophe that has me rattled.

Peter Merel.


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