In August 2005, The New York Times Magazine published an article titled “The Breaking Point” in which Council on Foreign Relations member Matthew Simmons predicted that oil, then about $65 a barrel, would more than triple in price by 2010. New York Times journalist John Tierney read the article, called Simmons up, and eventually bet Simmons $5,000 that the average price of oil over the course of 2010 would be at least $200 a barrel in 2005 dollars. As of January 1st, Tierney will have won. Yesterday, he explained why he made the bet:
I took him up on it, not because I knew much about Saudi oil production or the other “peak oil” arguments that global production was headed downward. I was just following a rule learned from a mentor and a friend, the economist Julian L. Simon.
As the leader of the Cornucopians, the optimists who believed there would always be abundant supplies of energy and other resources, Julian figured that betting was the best way to make his argument. Optimism, he found, didn’t make for cover stories and front-page headlines.
No matter how many cheery long-term statistics he produced, he couldn’t get as much attention as the gloomy Malthusians like Paul Ehrlich, the best-selling ecologist. Their forecasts of energy crises and resource shortages seemed not only newsier but also more intuitively correct. In a finite world with a growing population, wasn’t it logical to expect resources to become scarcer and more expensive?
As an alternative to arguing, Julian offered to bet that the price of any natural resource chosen by a Malthusian wouldn’t rise in the future. Dr. Ehrlich accepted and formed a consortium with two colleagues at Berkeley, John P. Holdren and John Harte, who were supposed to be experts in natural resources. In 1980, they picked five metals and bet that the prices would rise during the next 10 years.
By 1990, the prices were lower, and the Malthusians paid up, although they didn’t seem to suffer any professional consequences. Dr. Ehrlich and Dr. Holdren both won MacArthur “genius awards” (Julian never did). Dr. Holdren went on to lead the American Association for the Advancement of Science, and today he serves as President Obama’s science adviser.
Julian, who died in 1998, never managed to persuade Dr. Ehrlich or Dr. Holdren or other prominent doomsayers to take his bets again.
Holdren’s position as President Obama’s top science adviser is completely consistent with this administration’s energy policies. Cap and Trade, Renewable Electricity Standards, and EPA global warming regulations all are founded on Malthusian beliefs that government must raise energy prices in order to stop global warming, which Holdren believes will kill 1 billion people by 2020. This came after Holdren wrote a book in 1977, Ecoscience: Population, Resources, and Environment, predicting a global cooling.
Cooling, warming, whatever; for Malthusians the policy answers are all the same: more government control.