The Wager

In chapter 1 of Genesis and Genes, I wrote about a famous wager between Paul Ehrlich and Julian Simon. Ehrlich is a world-famous ecologist and environmentalist, and Simon is a distinguished economist. I discussed their wager in the context of becoming an informed consumer of science. One element in becoming informed in matters of science is the ability to distinguish between scientific claims about limited phenomena and claims about issues that are diffuse. As I explain in the book,

[limited] refers to the fact that the phenomenon under study is to some extent isolated; it is more-or-less modular, and so can be studied independently, without having to take account of numerous interactions. Studying the process of crystallisation is an example. In contrast, studying the climate would not fit into this category because the climate is influenced by a huge number of factors ranging from the local density of trees to the cyclic appearance of sunspots.

This does not mean that there is something wrong with studying climatology; it just means that as an informed consumer of science, you should apply greater scepticism to results about climate studies than you would to studies about crystallisation, say.

A kind reader has sent me links to two fascinating articles. The first article was written in late 1990, when the wager between Ehrlich and Simon was settled, and was published in The New York Times.[1] The second article appeared in The Spectator in December 2012.[2] I recommend both articles. They cover lots of terrain which, although fascinating, is beyond the scope of Genesis and Genes. In this post I will summarise the articles, and we will focus on the point mentioned above – how informed consumers of science must differentiate between limited scientific claims and claims about wide-ranging phenomena.

***

Doomsday predictions about humanity’s profligate ways have been made many times in the past few centuries (and they have been responsible for a healthy number of best-sellers). In Genesis and Genes, for example, I quoted the distinguished physicist Sir William Crookes (1832-1919), the inventor of the Crookes Tube, a forerunner of the cathode ray tube that would later become ubiquitous in televisions sets and computer monitors. In the autumn of 1898, in Bristol, he spoke to the cream of British science. As the incoming president of the British Academy of Sciences, he was delivering his inaugural address. “England and all civilized nations stand in deadly peril,” he said. If nothing dramatic was accomplished, he explained, great numbers of people would starve. “As mouths multiply, food sources dwindle.” Here is a digest of similar claims from a broad spectrum of sources and historical periods:

• Population, when unchecked, increases in a geometrical ratio. Subsistence increases only in an arithmetical ratio. Thomas Robert Malthus, 1798.
• “Population Outgrows Food, Scientists Warn the World.” Front-page headline in The New York Times, Sept. 15, 1948, over an article about the “dark outlook for the human race” due to “overpopulation and the dwindling of natural resources.”
• “No Room in the Lifeboats.” Headline in The New York Times Magazine, April 16, 1978, over an article warning that “the cost of natural resources is going up” as increasing population ushers in the “Age of Scarcity”.
• In 1926 the Federal Oil Conservation Board announced that the United States had a seven-year supply of petroleum left.

Ehrlich and Simon lead two intellectual schools, sometimes known as the doomsters and the boomsters. They use the latest in computer-generated graphs and foundation-generated funds to debate whether the world is getting better or going to the dogs. In 1980 Ehrlich and Simon chose a refreshingly unacademic way to resolve their differences. Simon offered to let anyone pick any natural resource – grain, oil, coal, timber, metals – and any future date. If the resource really were to become scarcer as the world’s population grew, then its price should rise. Simon wanted to bet that the price would instead decline by the appointed date. Ehrlich derisively announced that he would “accept Simon’s astonishing offer before other greedy people jump in.” They bet $1,000. They promised to abide by the results exactly 10 years later – in October 1990 – and to pay up out of their own pockets.

In October 1980 Ehrlich bet $1,000 on five metals – chrome, copper, nickel, tin and tungsten – in quantities that each cost $200 in the current market. A futures contract was drawn up obligating Simon to sell Ehrlich these same quantities of the metals 10 years later, but at 1980 prices. If the 1990 combined prices turned out to be higher than $1,000, Simon would pay the difference in cash to Ehrlich. If prices fell, Ehrlich would pay Simon. In the 1980s the world’s population grew by more than 800 million, the greatest increase in history, and the store of metals buried in the earth’s crust did not get any larger. Who would win the bet?

Over the years, Ehrlich has made dramatic predictions, many of them together with John Holdren. His best-seller, The Population Bomb, began: “The battle to feed all of humanity is over. In the 1970s the world will undergo famines – hundreds of millions of people are going to starve to death.” Here are two more of his predictions:

• “65 million Americans” will die of starvation between 1980 and 1989, and by 1999 the U.S. population would have declined to “22.6 million”. [1968]
• “I would take even money that England will not exist in the year 2000.” [1969]

In a book he wrote with his wife, The End of Affluence, Ehrlich raised the death toll. He claimed that through a combination of ignorance, greed and callousness, a situation has been created that could lead to a billion or more people starving to death.

But Ehrlich has always ignored the historical lessons that indicate that human beings are resourceful and intelligent and adapt quickly to adversity. Temporary scarcity often leads to a much better substitute. The Greeks’ great transition from the Bronze Age to the Iron Age 3,000 years ago, according to some scientists, was inspired by a disruption of trade due to wars in the eastern Mediterranean. The disruption produced a shortage of the tin needed to make bronze, and the Greeks responded to the bronze crisis by starting to use iron. Similarly, timber shortages in 16th-century Britain ushered in the age of coal; the scarcity of whale oil around 1850 led to the first oil well in 1859.

Let’s cut to the chase. The bet between Ehrlich and Simon was settled without ceremony. Ehrlich did not even bother to write a letter. He simply mailed Simon a sheet of calculations about metal prices – along with a check for $576.07. Each of the five metals chosen by Ehrlich, when adjusted for inflation since 1980, had declined in price. The drop was so sharp, in fact, that Simon would have come out slightly ahead overall even without the inflation adjustment called for in the bet. Prices fell for the same reasons they had fallen in previous decades – entrepreneurship and continuing technological improvements. Prospectors found new lodes, such as the nickel mines around the world that ended a Canadian company’s near monopoly of the market. Thanks to computers, new machines and new chemical processes, there were more efficient ways to extract and refine the ores for chrome and the other metals. Often, the metals were replaced by cheaper materials. Telephone calls went through satellites and fibre-optic lines instead of copper wires. Ceramics replaced tungsten in cutting tools. Cans were made of aluminium instead of tin.

Is there a lesson here for the future?

“Absolutely not,” said Ehrlich in an interview. Nevertheless, he has no plans to take up Simon’s new offer: “The bet doesn’t mean anything.” Simon was not surprised to hear about Ehrlich’s reaction. “Paul Ehrlich has never been able to learn from past experience,” he said.

This is where the article in The Spectator comes in. It argues that the world has never been as well off as it is now. Here are a few indicators. In 1990, the UN announced Millennium Development Goals, the first of which was to halve the number of people living in extreme poverty by 2015; the target was met in 2008. The rich world’s economies grew by 6 per cent over the last seven years, but fossil fuel consumption in those countries fell by 4 per cent. The average life expectancy in Africa reached 55 in 2012; ten years ago, it was 50. The number of people dying from AIDS has been in decline for the last eight years. Deaths from malaria have fallen by a fifth in half a decade. Hundreds of millions of people in China and India have been pulled from the ranks of the wretched into something approaching middle class.

What are the lessons for us? The predictions made by Ehrlich and colleagues like John Holdren have been about as accurate as the Mayan Apocalypse nonsense. And these are top-notch scientists, not fringe characters. Ehrlich is one of the world’s most-celebrated scientists. He has won a MacArthur “genius” fellowship and the Crafoord Prize, ecology’s equivalent of the Nobel. He has been awarded the Volvo Environmental Prize and the Eminent Ecologist Award of the Ecological Society of America. He is a Fellow of the Royal Society and a Professor at Stanford. Holdren was appointed by President Barack Obama in 2009 as Director of the White House Office of Science and Technology Policy, Assistant to the President for Science and Technology, and Co-Chair of the President’s Council of Advisors on Science and Technology. And yet, they and many of their colleagues were dead wrong.

Being an informed consumer of science means knowing how to assign appropriate levels of credibility to various scientific claims. At any given time, we do not know the future, so we cannot tell with certainty whether a given scientific viewpoint will be vindicated. But we do know, from abundant historical experience, that certain types of scientific explanation tend to be reliable, while other types tend to end up on the ash-heap of history, even when they are initially backed up by impressive charts and statistical analyses.

References:

[1] http://www.nytimes.com/1990/12/02/magazine/betting-on-the-planet.html?pagewanted=all&src=pm
[2] http://www.spectator.co.uk/the-week/leading-article/8789981/glad-tidings/

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One Response to “The Wager”

  1. Blowing Hot and Cold | Torah Explorer Says:

    […] Genesis and Genes is not about climate change. But I did devote substantial space to discussing how informed consumers of science should approach scientific research which is diffuse (i.e. the opposite of limited), and climate research is a paradigmatic example of such research. [Also of interest is my post The Wager, at https://torahexplorer.com/2013/01/22/the-wager/.%5D […]

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