CHAPTER 1
Julian L. Simon: Eco-Sage and Natural Resources Optimist
Why is there so much false bad news about the subjects of the environment, resources, and population?⌠An even tougher question is this one: Why do we believe so much false bad news about the environment, resources, and population?
âJulian Simon, Hoodwinking the Nation, 19991
AFTER A CAREER AS AN ECONOMICS and business professor, Julian Simon passed away prematurely at sixty-five years old in 1998 in Chevy Chase, Maryland. At the end of his life, Simon held a position as a senior fellow at the Cato Institute in Washington, D.C., his last job after a longtime career at the University of Illinois Urbana-Champaign, followed by an academic position at the University of Maryland. Born in 1932 in Newark, New Jersey, and educated at Harvard University, Simon received his Ph.D. in business economics from the University of Chicago in 1961. Among âGreen Energyâ true believers, Simon has become infamous for taking a contrarian position on energy resources, arguing that our perception of scarcity is a psychological fear, one not validated by the current or historical factual record of energy abundance.
In the 1999 foreword to Simonâs first book to be published posthumously, Hoodwinking the Nation, author Ben Joseph Wattenberg, then a senior fellow at the American Enterprise Institute in Washington, D.C., commented that Simon often felt angry that he was being ignored or ridiculed by opponents who belonged to a vast Malthusian population-environment-resources conspiracy of crisis. Today, Malthusians have captured the politically correct mainstream media, rejecting Simonâs contention that supplies of natural resources, including energy, are not finite and exhaustible. Simon saw the human intellect as the ultimate, infinitely renewable resource, and its potential as unlimited. He argued we would never run out of energy resources, including oil, coal, and natural gas, provided our energy resources are âmixedâŚwith intellect.â2
What distinguishes Simon from the Malthusians was that Simon saw human beings as the solution, not the problem. In direct contrast, Malthusians see human beings as a menace that threatens the very survival of the planet itself. Wattenberg understood this precisely, noting the attacks on Simon were often intensely personal. Simonâs detractors demeaned him by stating his doctorate was âmerely in business economicsâ and that he taught business-oriented subjects like advertising and marketing. Simon was ridiculed for starting a mail-order business and daring to write a book on how to run a successful and profitable one. âNever mind that he studied population economics for a quarter of a century and the mail-order book is still in print and in its fifth edition,â Wattenberg commented.3 Simon was perplexed that the environmental movement did not appreciate his extensive research and many publications about natural resources. What drove the âenvirosâ crazy, Wattenberg explained, was the following:
Wattenberg calculated correctly that Simonâs knowledge of the business world gave him an edge over the Malthusians in the intellectual wars. Suppose Simon is correct that the ultimate human resource was the human intellect. In that case, Wattenberg argued, it could also be right that our supply of natural resources would grow over time, outpacing demand, pushing prices down. Wattenberg correctly understood that Simonâs vision is a severe threat to the supposed crisis in natural resources that the Malthusians desperately want us to believe is inevitable. Simonâs argument is simple: scientifically proven facts contradict the Malthusian doom-and-gloom narrative we see pervasive today in popular culture.
Appropriately, Simon titled his autobiography, published posthumously, A Life Against the Grain: The Autobiography of an Unconventional Economist.5 Contrary to everything Simon argued in his numerous published writings, todayâs politically correct popular culture demands universal acquiesce to the proposition that human beings have created the conditions of our demise as a species. About energy resources, the politically correct popular culture requires an agreement that our wanton burning of hydrocarbon fuels has tossed so much toxic carbon dioxide into the atmosphere that we have created a greenhouse effect that will result in catastrophic climate change.
In characteristic prose, Simon began Hoodwinking the Nation with an essay summarizing the human history of utilizing natural resources, including energy as follows:
Today, the politically correct mainstream media would brand anyone daring to publish an argument favoring continued global use of hydrocarbon fuels as an âenvironmental lunaticâ or possibly even an âecological criminal.â At the end of his life, Simon realized his optimism regarding the human capacity to utilize natural resources for our betterment as a species would brand him as a fringe nut case. âI was not cut out to be a Mafia boss,â Simon wrote in the preface to his autobiography. âI am more like a competent and hard-working plumber or building contractor or burlesque-show baggy pants comedian, though I have more kooky ideas than most of them.â7 Yet, throughout his life, Simon insisted the results of his studies and his writings would turn out to be correct.
Over the years, I managed to acquire a student-used copy of Simonâs 1981 book, The Ultimate Resource.8 On the title page of the book, the student handwrote her assessment of Simonâs work: â[The author is] a rich white male who has never left his officeâworld of graphs, equations, and charts that he bases all his theories on. Graphs, e.g., charts that are not comprehensive and only tell if population is up, if aggregate output is up, if fertility, mortality is upâŚbut none of the other factorsâenvironmental consequences, inequalities, humans are a resourceâno limits to their abilities and innovations. Exploit the Earth and other planets if necessary to serve humans, income upâŚno intrinsic value in natureâonly there to serve man.â The polemical tone of these comments clarified that already by the 1980s, these arguments on the left were entering the realm of ideology.
Reading those comments today, I am not surprised that in this age of the neo-Marxist critical race theory, the student began her analysis of Simonâs work with an ad hominem attack, pointing out that he was a white man and an academic? The student dismissed the research Simon documented in the book by insisting todayâs natural resource policies have produced no adverse environmental consequences and economic inequality. So, what system would the student have preferred? Would using fewer resources to preserve a more pristine environment be better, even at the cost of shortening life expectancies? Would that have been fairer to all races, all sexes, all cultures, and all religions? Today university courses rarely teach Simonâs economics. Why? Because he refused to accept the orthodox conviction that we humans apply our limited intellects only to exploit, for our selfish good, the precious and scarce natural resources of our mother, Earth.
The Malthusian view has convinced millions that Earth has entered a new and final hypothesized era of geological time, the Anthropocene era. Malthusians insist that anthropogenic carbon dioxide will cause such catastrophic global warming and subsequent climate change that human activity is responsible for bringing about a coming sixth extinction. Malthusians argue that the sixth extinction will dwarf the previous âBig Fiveâ extinctions in which nearly all life on Earth disappeared, rivaling even the giant meteorite that caused the extinction of the dinosaurs in the Late Cretaceous Period, some sixty-six million years ago. Malthusians warn us that the sixth extinction will be the last this time, and we will have no one to blame but ourselves.
Simon took a lot of abuse during his life for running against the politically correct popular culture by not adhering to Malthusian views. However, in his final analysis, Simon understood it was more important to be right about natural resources than to have a mass audience applaud his genius. That was especially true when we appreciate that the need to âdecarbonizeâ and move to a âzero emissionsâ world if we are to âSave the Planetâ are all views Julian Simon found hopelessly uninformed.
Why We Will Never Run Out of Oil
In his revised 1996 book, The Ultimate Resource 2, Julian Simon devoted chapter 11 to the question: âWhen Will We Run Out of Oil?â In the chapter title, Simon gave a one-word answer to his question: âNever!â Simon argued that energy is the master resource because âenergy allows us to convert one material to another.â9 He argued that the low energy costs afforded by hydrocarbon fuels enable modern technological society to thrive. âOn the other hand, if there were to be an absolute shortage of energyâthat is, if there were no oil in the tanks, no natural gas in the pipelines, no coal to load onto the railroad carsâthen the entire economy would come to a halt,â he wrote. âOr, if energy were available, but at a very high price, we would produce much smaller amounts of most consumer goods and services.â10 Simon proceeded to elaborate: âThe history of energy economics shows that, in spite of troubling fears in each era of running out of whatever source of energy was important at that time, energy has grown progressively less scarce, as shown by long-run falling energy prices.â11
Simon traced fears of energy resource exhaustion back to an 1865 book published in London by W. Stanley Jevons, one of the nineteenth centuryâs most outstanding social scientists, entitled The Coal Question: An Inquiry Concerning the Progress of the Nation and the Probable Exhaustion of our Coal-mines.12 Jevons argued Great Britainâs industrial progress would halt because industry would soon use all available coal. Jevons filled his book with detailed analyses of coal mines showing mine by mine the estimated amount of coal remaining, the annual consumption of that coal (depletion ratio), and the duration of the supply. He anticipated with uncanny precision the bell-shaped curve that in the next section of this chapter we will see was typical of M. King Hubbertâs 1950s peak oil graphs. In his despair that the U.K. would soon run out of energy, Jevons further concluded (obviously incorrectly) that there was no chance oil would be an alternative resource able to solve the running-out-of-coal problem.
âWhat happened to Great Britain in 1865?â Simon asked. âBecause of the perceived future need for coal and because of the potential profit in meeting that need, prospectors searched out new deposits of coal, investors discovered better ways to...