Lessons From a Famous Bet

Julian Simon, frustrated by the huge attention that Paul Ehrlich was receiving for his apocalyptic warnings about overpopulation, offered Mr. Ehrlich a bet in 1980. If a selected basket of commodities became more expensive over the coming decade  â€" which would signal scarcity caused by a crowded planet â€" Mr. Ehrlich, an ecologist, would win the bet. If the commodities fell in price â€" signaling a triumph of human ingenuity â€" Mr. Simon, an economist, would win.

Nina Subin Paul Sabin, author of “The Bet.”

The basics of the Simon-Ehrlich bet are fairly well known. But the full story is not. In his new book, “The Bet,” Paul Sabin has managed to write a work of serious historical scholarship about a vexing political issue â€" and make it read like a character-driven novel. I picked it up a couple of weeks ago and finished it in a matter of days.

Mr. Simon won the bet, with room to spare, and it’s easy to forget today how serious the overpopulation fears once were. Mr. Sabin catalogs them â€" from the United Nations, major publications and even a United States president â€" in entertaining fashion. But “The Bet” also makes clear that some of Mr. Ehrlich’s worries had an undercurrent of reason.

I had an e-mail conversation with Mr. Sabin, an associate professor of history at Yale, about these issues in recent days, and a lightly edited transcript follows.

Q.

The predictions of scarcity that environmentalists made in the 1960s and 1970s ended up being spectacularly wrong, as you document so well. It’s easy to see a potential parallel between these failed predictions and today’s warnings about global warming: both are based in part on the idea that human ingenuity will not triumph over nature. Yet you think this parallel is dangerously misguided â€" that climate change is a far more serious threat than population growth. Why?

A.

I think climate change differs from population growth in two main ways.  First, climate change is a pollution problem with direct consequences.  Continuing to increase atmospheric greenhouse gases will cause very specific environmental changes, such as raising sea levels and likely causing more extreme weather events. Growing populations, by contrast, simply create diffuse additional pressure on the planet that has no specific consequence.

Second, the powerful economic forces that unleash human ingenuity cannot be brought to bear on greenhouse gas emissions unless they are somehow brought within the marketplace â€" with carbon prices, cap-and-trade or other regulatory schemes.  By contrast, resource pressures associated with population growth over the past several decades manifested themselves in the form of practical economic demands for food, water and energy. The marketplace responded by increasing production, inventing new things, and by reallocating resources.

There is good news here. Because climate change is a pollution problem, we have regulatory and scientific tools at our disposal to address it, as the E.P.A. showed recently with its proposed new emissions regulations. We can reduce the carbon intensity of modern civilization â€" if we choose to.

Q.

So population growth contained the seeds of its own solution in a way that carbon pollution does not. With population, market signals gave huge incentives for change; with climate change, the signals aren’t so helpful.

But there does seem to be one main common thread: the potential for innovation. Even allowing for the idea that market signals won’t be as helpful with the climate, what does history tell us about the promising ways and areas to look for innovation?

James J. Johnson/Yale University Press, via Getty Images

A.

One of the most effective strategies is to shape the market so that prices encourage innovation.  This is why so many economists, including conservatives like N. Gregory Mankiw, favor carbon taxes that would prompt everyone to take the cost of carbon emissions into account in everyday decision-making.  Putting a price on carbon would unleash the market forces that I discuss in the book, triggering investment, efficiency and substitution.  Energy prices are inherently political, so a carbon tax would not distort a “free market” but rather readjust a market already structured by politics and law.

History is full of surprises about the sources of innovation and the results.  Since it is hard to pick what will work, funding basic research may pay off most.  But targeted investment sometimes has played an indispensable role. Successes like the Internet and the agricultural advances of the Green Revolution remind us that this kind of investment can yield world-changing results.

Both pessimists and optimists can find support for their views in recent history. Ironically, anxiety and fear about the future, even if ultimately disproved, have been critical spurs to innovation.

Q.

Do you think Paul Ehrlich and Anne Ehrlich, his wife and close collaborator, played a significant role in the spread of environmentalism, such as recycling programs and 1970s anti-pollution laws? Or were they more effect than cause?

A.

How do we determine cause and effect in assessing public intellectuals and their impact?  The country was ready for Ehrlich’s message when he published “The Population Bomb” in 1968, but his tremendous success in turn left a profound mark on public thinking about environmental problems. Ehrlich was one of a handful of environmental leaders who became household names. “The Population Bomb” sold some two million copies and was one of several books that helped persuade Americans that the planet faced an environmental crisis and that Americans needed to take aggressive action â€" at the personal level, in terms of family size and personal consumption, and also in politics.

Yet the environmental movement soon became dominated by lawyers, amid the fierce battle over regulation during the 1970s.  The Clean Air Act, Clean Water Act, Endangered Species Act and other laws did not depend on the Ehrlichs. The fierce rivalry between President Richard Nixon and Democratic senators like Edmund Muskie and Henry Jackson was far more important, as were dramatic incidents like the 1969 Santa Barbara oil spill.

Sweeping apocalyptic pronouncements by people like Ehrlich could even obstruct pragmatic policy making. The economist Robert Solow, for instance, complained of the 1972 book “The Limits to Growth,” which made arguments similar to “The Population Bomb”: “Who could pay attention to a humdrum affair like legislation to tax sulfur emissions when the date of the Apocalypse has just been announced by a computer?” Dire rhetoric from Ehrlich and others created unrealistic expectations for social transformation among his followers, and, I think, also could help inflame, and even justify, opposition to environmental policies.

Q.

You consider yourself an environmentalist, writing in your preface, “I believe that we define ourselves in part through our stewardship of the planet.” Most climate scientists believe that global warming does indeed pose dire risks â€" and there is no science-based opposition today along the lines of Simon’s 1970s allies, with a substantial number of top economists or other researchers among its ranks. Yet the history of dire warnings  argues for some skepticism about how persuasive they will be. What lessons do you think the Ehrlich-Simon story hold for environmentalists?

A.

I would start with humility and self-awareness.  The biggest problem with both Ehrlich and Simon’s approaches to this debate â€" and, I’d argue, with American political dialogue generally right now â€" is that they did not listen well to the other side, or acknowledge the uncertainties and limitations inherent in their own arguments.  My book is called “The Bet” both because of Simon and Ehrlich’s iconic wager and because we are all engaged in a massive gamble on the future.  Anyone who says they are absolutely sure how it will turn out â€" both optimists and pessimists â€" probably shouldn’t be trusted.

For example, there is significant uncertainty about the ultimate scope and timing of climate change, the cascading effects on society and our capacity for adaptation.  There also is great uncertainty about our ability to free modern economies from their dependence on oil, gas and coal, which have fueled the industrial revolution.

For environmentalists, in particular, the Ehrlich-Simon story should instill great caution about predictions of imminent scarcity and soaring resource prices.  In the 1970s and again more recently, expectations that energy prices would climb and remain high led to unrealistic investment plans and, in many cases, corporate bankruptcy.  I think there is a bright future for alternative energy, and we should invest heavily in its development, but as the current natural gas boom shows, there is not a straight line from abundance to scarcity.

More broadly, environmentalists are right to sound the alarm over global warming, but Ehrlich-style warnings that civilization is about to collapse in a paroxysm of warfare, disease and starvation just aren’t that persuasive or helpful.  I think that environmentalists would find a more solid foundation to advocate action if they made their case based on social values, rather than apocalyptic fear.  What kind of world do we want to live in?  Humans might survive, and even prosper economically, in a warmer and more populated world.  But are the risks associated with climate change worth taking? (The answer, I think, is clearly “no.”)  Do we want to live on a more biologically impoverished, albeit economically productive, planet?  These are profound social questions that, I might point out (as a historian), cannot be answered by economics or biology alone but rather depend on the humanities and can only be resolved through politics.