Back in 1980, the great libertarian economist, Julian Simon, and the prepetually wrong Malthusian biologist, Paul Ehrlich, entered into a little wager regarding population growth and resource scarcity. They decided on using the inflation-adjusted prices of five metals to decide the bet. Simon allowed Erlich to pick the five metals. If the 1990 prices were higher, Erlich would win. If they were lower, Simon would win. With the help of a fellow perpetually wrong Malthusian, John P. Holdren, Ehrlich selected chromium (Cr), copper (Cu), Nickel (Ni), tin (Sn) and tungsten (W). Julian Simon won the bet. However, a couple of years ago, economist Paul Kedroski suggested that had the time period of the bet extended to 2010, Ehrlich would have been the winner every year since 1991…
Given its 30th anniversary, and with commodities in the news – especially oil – I thought it was an apropos time (and TED an appropriate venue) to revisit the bet’s context, outcome, controversies and implications.
Without getting into it too deeply, here are some things worth knowing. Given the above graph of the five commodities’ prices in inflation-adjusted terms, it will surprise no-one that the bet’s payoff was highly dependent on its start date. Simon famously offered to bet comers on any timeline longer than a year, and on any commodity, but the bet itself was over a decade, from 1980-1990. If you started the bet any year during the 1980s Simon won eight of the ten decadal start years. During the 1990s things changed, however, with Simon the decadal winners in four start years and Ehrlich winning six – 60% of the time. And if we extend the bet into the current decade, taking Simon at his word that he was happy to bet on any period from a year on up (we don’t have enough data to do a full 21st century decade), then Ehrlich won every start-year bet in the 2000s. He looks like he’ll be a perfect Simon/Ehrlich ten-for-ten.
In light of the fact that the world population clock recently crossed the 7 billion mark, I thought I’d see if there was a more accurate measure of the increasing scarcity (or lack thereof) of these metals over time.
Rather than “cherry-picking” particular decades, I took a look at the full historical price record (available from the USGS). The inflation adjusted prices of Chromium (Cr), Copper (Cu), Nickel (Ni), Tin (Sn) and Tungsten (W) exhibit no statistically meaningful inflation-adjusted price trend over the last 110 years…
Cu, Ni and W have slightly negative slopes; while Cr and Sn have slightly positive slopes… Only chromium’s (R^2 = 0.3187) and copper’s (R^2 = 0.1719) trend lines approach statistical significance.
While the inflation adjusted price of these metals is a good measure of affordability, it is not a complete measure. The price is only relevant if it is measured against the financial resources available. Relative to world real per capita GDP all five metals have become more affordable since 1969…
The GDP slope is positive and highly statistically significant (R^2 = 0.98). The GDP slope (81.354) is almost three times larger than the largest positive metal slope (Ni, 32.506).
More importantly, from a scarcity perspective, the production output of all five metals has been rising over time. Four are rising exponentially …
While the ratio of price to output has been declining exponentially…
If these metals were becoming more scarce, the price would be rising faster than the supply.
The USGS estimates that the current prover reserves of all five metals are sufficient to meet demand for the next 20 to 59 years. For “fun” I estimated the crustal mass of all five metals and estimated how long it would take to literally run out at the current production rate…
Debunking the Population Bomb Dud
The human popupation hit the seven billion mark last fall…
Published online 19 October 2011 | Nature 478, 300 (2011) | doi:10.1038/478300a
News
Seven billion and counting
A look behind this month’s global population landmark reveals a world in transition.
Jeff Tollefson
What’s in a number? This month, the world’s attention turns to a big one: 7 billion, the latest milestone in humanity’s remarkable and worrying rise in population.
[…]
On one level, a figure of 7 billion is incredible for the sheer momentum it represents: a full doubling of the planet’s population since 1967, with current growth adding 200,000 people each day, and a nation larger than the size of France each year. But although the 6-billion mark was reached about 13 years ago according to revised figures, it will take nearly 14 years to hit 8 billion (see ‘Snapshots of growth’). The comparison shows that population growth is decelerating; it is likely to level off at about 10 billion before the end of the century.
Between now and then, the fastest growth will be in Africa, where fertility levels remain higher than anywhere else in the world. Population levels among industrialized countries, by contrast, will remain relatively constant. Although Asia will remain the most populous continent, decreasing fertility rates there will add to the overall ‘greying’ of the planet.
The Nature article included the following graphic, indicating that the word population will most likely level off at ~10 billion ca. 2070…
Is that a problem? I don’t think so. The human race handled the rise from 3.5 to 7 billion rather well. The global per capita food supply has steadily increased since 1960…
Per capita real GDP has risen at the same rate as the population…
Per capita food supply has also risen with the population…
And… Amazingly… Per capita food supply and per capita GDP are highly correlated…
The percentage of the world’s population suffering from undernourishment has steadily declined over the last 40 years, despite a rising population…
Very few nations have failed to reach the MDG 1 target of reducing the percentage of their population suffering from undernourishment by 50%…
The world isn’t running out of water either. The UN FAO Aquastat data base showed that in the year 2000, the world’s total renewable water resource was 53,730 x 10^9 m3/yr. The total withdrawal was estimated to be 2,871 x 10^9 m3/yr. That’s a 5% utilization rate.
The far from perect human condition doesn’t negate the fact that clear progress has been made over the last half-century to reduce hunger, despite a growing population.
Almost all of the population growth over the next 60 years will be in Africa and Asia – the two largest land masses on Earth.
Assuming that the populations of Asia and Africa reach 5 billion and 3.6 billion respectively, their population densities will be 114 and 119 people per km^2. The population densities of the rest of the world will remain about the same or decline. Asia’s density is currently 95 per km^2. The greatest stress will be on Africa, which is currently underutilizing its resources more than any other continent.
Africa has plenty of potentially arable land, plenty of water and plenty of resources. Africa just lacks the economic and political infrastructure to realize its own potential.
Current and potential arable land use in Africa. Out of the total land area in Africa, only a fraction is used for arable land. Using soil, land cover and climatic characteristics a FAO study has estimated the potential land area for rainfed crops, excluding built up areas and forests – neither of which would be available for agriculture. According to the study, the potential – if realised – would mean an increase ranging from 150 – 700% percent per region, with a total potential for the whole of Africa in 300 million hectares. Note that the actual arable land in 2003 is higher than the potential in a few countries, like Egypt, due to irrigation…
The “world” isn’t running out of anything. Global proven oil reserves have doubled since 1980.
Most other commercial mineral resources have seen its proven reserves grow at least as fast as consumption has grown.
The world has plenty of food, water, space, mineral resources and the Earth’s environment is generally cleaner now than it was 35 years ago. Crop yields have continued to maintain an increasing upward trend for 40 years… And there is every reason to believe that crop yields will continue to improve (unless we really are on the verge of returning to Little Ice Age climate conditions).
But it will get worse in the future!!!
The “bear” is always just out of sight in the woods. For centuries, Malthusians have trotted out one invisible bogeyman after another (Malthusians pre-date Malthus by at least a few thousand years). The disaster is just over the horizon, just around the corner or lurking in the woods.
The Earth is finite; but humans have barely tapped its resources… We will still barely be tapping the Earth’s resources when we hit the 10 billion mark about 90 years down the road… And the Malthusians will still be warning us about the bear in the woods.
The only thing the world has a genuine shortage of is honest and competent people in gov’t. Almost all of our problems are due to political interference with market forces.
SteveSadlov says:
January 25, 2012 at 7:10 pm
“I have a dark view. I suspect such decline and stagnation will be our destiny. We will never reach the stars, let alone colonize our own star system. We will perish, a fallen, barbaric shadow of what we once were, in a slowly dying world.”
__________________________________
Not necessarily, Steve.
History tells us that human advancement has always come and gone in great waves that span centuries.
The most recent down beat was the Black Death plagues which in Europe’s case reduced the population by a third.
When the recovery came, mankind took another great leap into the Industrial Revolution and the resulting technological age we are currently still enjoying.
Mankind may well stagnate for a couple of centuries as the population slowly declines and as he adapts and changes to the reality of a small, by our standards, global population.
But perhaps more slowly that at present, technology will continue to advance. And there will new generations in the future that will be looking sometime in the future for new horizons to conquer and the only horizons left with sufficient challenges will be the Oceans and Space.
And Space with it’s immense challenges and it’s unbounded challenges is where our destiny may lay for the end generations of the 22’nd century.
The moon landing of the 20th July 1969 will be regarded with total awe as to how our generation achieved that with such primitive technology.
[ I made my 6 and 7 year olds watch those landings over their protests but they are now starting to think of that with awe. They saw it, the first time in human history where mankind had left his womb, the planet Earth. ]
.
Interstellar Bill
January 25, 2012 9:28 pm
The only way our civilization can decline and stagnate
is because of ubiquitously stifling Big Government that so afflicts us now.
On its own, consitutional capitalism will progress without limit.
Just read von Mises.
Statists, interventionists, rent-seekers, regulationists, the Left in general:
there is 100% of the Cause of our Decline.
David
January 26, 2012 1:29 am
MarkW says:
January 25, 2012 at 5:55 am
a reader says:
January 25, 2012 at 5:35 am
—
And that was using 1975 agricultural technology. Using modern technology you could probably double or triple that number.
==========================
Then run the plant food up to about 750 PPM, and who knows??? But the truth is, just make energy very inexpensive so third world nations can become first world nations, and presto, the population growth stops, there is money and resources for developing ever cleaner energy, whatever the source.
D. Patterson
January 26, 2012 1:30 am
SteveSadlov says:
January 25, 2012 at 7:10 pm
[….]
I have a dark view. I suspect such decline and stagnation will be our destiny. We will never reach the stars, let alone colonize our own star system. We will perish, a fallen, barbaric shadow of what we once were, in a slowly dying world.
The first tentative steps towards the colonization of our solar System have already been accomplished in the form of the temporary scientific stations inhabited for years at a time in Low Earth Orbit (LEO). The next few early steps are well within current capabilities, with the establishment of special purpose habitats on the Moon and in the asteroids. Once human habitation of the asteroids reaches a critical mass and self-sufficiency, the human habitation of the asteroids would rapidly overtake the human population of the Earth and go on to surpass it many times over, regardless of events on the Earth.
Once humans have mastered the permanent habitation of asteroids, slow travel to the stars could at the very least be accomplished over millenial time periods by asteroidal habitats used as transports. At best, interstellar transportaion may be accomplished by utilizing concepts of physics yet to be discovered. In any event, unaddressed is the vst potential for human colonization of the dark planets and planetoids between the stars.
The future of the human race is largely a matter of human choice/s and will to survive beyond the cradle of human origins on the Earth. As always, some humans will choose to adapt, survive, and prosper on the frontiers of human experience; while other humans will choose to shun such challenges and sacrifices to squabble over and despoil whatever others have struggled and sacrificed to create. The choices for human prosperity versus human extinction begin with adopting or rejecting the opposing visions for the future.
Hugh Pepper says:
January 25, 2012 at 3:10 pm
Since you seem intent on slandering Professor Ehrlich, you could at least spell his name correctly.
Wow! Mr. Pepper (or is it Dr. Pepper?) got something right!
I misspelled Ehrlich. If convenient, could one of the moderators please correct that error?
Where did I slander Dr. Ehrlich? No Malthusian prediction has ever turned out to be correct. They have been “perpetually wrong” about everything.
Starting a post describing this highly acclaimed scientist as “perpetually wrong” is over the ethical line.
Then, perhaps, you could cite an example of Dr. Ehrlich having been right about something, apart from butterflies. The “perpetually wrong” phrase was regarding the subject of “population growth and resource scarcity” and Malthusianism in general.
Steven Kopits
January 26, 2012 7:03 am
All of these commodities are driven by fast-growing Chinese demand. This demand is able to grow faster than supply, with some commodities–like copper–looking quite peaky.
On the oil supply front, see my Jan. 2011 article, “The Tierney Simmonsw Bet”: http://www.energybulletin.net/stories/2011-01-10/commentary-tierney-simmons-bet
To update the article, a couple of comments:
– Shale (tight) oils are doing well in the US. Various analysts see their production up by 2 mbpd in 2020 (CERA) to 2030 (BP). At that scale, they would certainly be helpful, but wouldn’t dramatically re-write the oil supply situation. I would note, however, that we could see upside surprises on the shale oil front, at least based on the last decade’s history with shale gas production. But shale oil is the only real bright spot on the horizon. Canada’s oil sands continue to do well, but add only 150,000 barrels/day per year. That’s not very much on 89 million barrels of production. Venezuela has plans for 2 million barrels per day of upgrader capacity (to make syncrude from tars), but with Chavez in power, there is a good possibility that none of these will be built within the next five years. So right now, all eyes are on shales/tight oils as our savior on the crude oil supply side.
– As regards consumption, US and European consumption is indeed failling, by about 1.5% per year (and with it our carbon footprint). As a nation, we are unable to maintain oil consumption at current prices, consistent with our outlook in the article mentioned above.
JPeden
January 26, 2012 7:06 am
jrwakefield says:
January 25, 2012 at 12:35 pm
Everyone is ignoring the basic problem with resource extraction. The rate of extraction….
….Going forward the rate of demand will grow faster than the capable rate of extraction for crucial resources like oil, copper, chromium.
We are like a bacterium in a test-tube that has a resource consumption double period of one week….
A-ha, truisms as true as they were in the days of the Horse and Buggy, and well back before the invention of the Wheel. Behold ye, even the holy GCM’s themselves forecast the fact that unless we immediately retreat to the Equality of the Watermelon’s Bacterium’s Stone Age Utopia, thus ~”restoring American Values”, we’re doooomed, I tell you, doooomed…by the ineluctable Rules of the hallowed Petri Dish to Ecological Overshoot’s dire consequences! Repent and “Unite”, ye B. Septics, before it’s too late! “B. Obama wants you!”
Brian H
January 26, 2012 7:08 am
David says:
January 26, 2012 at 1:29 am
…
Then run the plant food up to about 750 PPM, and who knows??? But the truth is, just make energy very inexpensive so third world nations can become first world nations, and presto, the population growth stops, there is money and resources for developing ever cleaner energy, whatever the source.
Indeed. Don’t have the link, but just saw reference to a study of food production across all eras and tech levels, and you get as much energy out of food as went into cultivating it. So tractors and fertilizer get much more energy transformed into edible calories than horses and wooden plows. Etc.
As for the cheaper energy, here’s a slightly OT link to an article about the effect shale gas is having on power pricing and plant construction: http://www.vancouversun.com/news/Natural+glut+puts+electricity+market+into+tailspin/6009113/story.html
Steven Kopits says:
January 26, 2012 at 7:03 am
[…]
Canada’s oil sands continue to do well, but add only 150,000 barrels/day per year. That’s not very much on 89 million barrels of production.
[…]
Alberta oil sand production is currently more than 1 million BOPD and they expect to top 3 million BOPD by 2018… Gov’t of Alberta, Energy
If the US would get serious about our closest equivalent, the Green River Shale, we could be producing another 15 million BOPD by the end of this century.
David Middleton,
Your post is well done. You extend Simon’s legacy; thanks.
I find your post consistent with the book by Indur Goklany titled “The Improving State of the World: Why We’re Living Longer, Healthier, More Comfortable Lives on a Cleaner Planet”.
John
if you are using US CPI as the inflation measure for this study, then this whole exercise is futile. the BLS changed the CPI calculation in 1992. readings across that data are not comparable. the new, post-boskin report CPI reads several % points lower than the old one. what shows as 3% today would have read more like 7-8% pre 1992.
many (myself included) feel this massively understates inflation. it was a deliberate manipulation to get social security COLA costs down. it’s data tampering that would make even the GISS blush.
regardless this change in the CPI data is the reason the winner of the bet changed, not an actual change in the behavior of the metals.
that makes this whole analysis meaningless.
John Whitman says:
January 26, 2012 at 9:01 am
David Middleton,
Your post is well done. You extend Simon’s legacy; thanks.
I find your post consistent with the book by Indur Goklany titled “The Improving State of the World: Why We’re Living Longer, Healthier, More Comfortable Lives on a Cleaner Planet”.
John
Dr. Goklany’s books are on my “to read” list… Unfortunately it’s a long list.
I have read Bjørn Lomborg’s The Skeptical Environmentalist. I keep it on my desk with my other reference books.
morganovich says:
January 26, 2012 at 9:19 am
if you are using US CPI as the inflation measure for this study, then this whole exercise is futile. the BLS changed the CPI calculation in 1992. readings across that data are not comparable. the new, post-boskin report CPI reads several % points lower than the old one. what shows as 3% today would have read more like 7-8% pre 1992.
many (myself included) feel this massively understates inflation. it was a deliberate manipulation to get social security COLA costs down. it’s data tampering that would make even the GISS blush.
regardless this change in the CPI data is the reason the winner of the bet changed, not an actual change in the behavior of the metals.
that makes this whole analysis meaningless.
The data are fine. The inflation-adjusted numbers for minerals from the USGS and GDP from the USDA were calculated using the post-1992 method. They are consistent over time.
If I had taken the time to recalculate the inflation-adjusted numbers using the old method, Ehrlich would become even more wrong.
SteveSadlov
January 26, 2012 11:46 am
RE: “The first tentative steps towards the colonization of our solar System have already been accomplished in the form of the temporary scientific stations inhabited for years at a time in Low Earth Orbit (LEO). ”
The coming beat down of the triple dip “Great Recession,” cold period on par with the Age of Migrations (or worse) and great war, will snuff all this out in a heartbeat. Although I will grant that orbital warfare may happen. That will be the only use of space technology if at all.
E.M.Smith
Editor
January 27, 2012 12:44 am
We can’t run out of metals or water as they never leave the planet.
At most, they can take more craft and / or energy to extract again (from a more dilute ‘deposit’).
There is NO shortage of “stuff” as it doesn’t leave the planet.
There is NO shortage of “energy” as it is available in massive quantities. (ONE example, out of dozens: Enough Uranium washes into the ocean each year to power the planet several times over. We have proven established methods to extract said Uranium that have costs which would be very profitable for energy production. We don’t do it only because land mining uranium is cheaper. The crust has about 3 x that much Thorium that is also usable ….)
The whole “running out scare” is a created fantasy ( vis. “The Limits To Growth” by Meadows et. al.) designed for the purpose of scaring folks into submission to greater government and promulgated by the same folks who have now brought you the Global Warming Scare for the same purpose. http://chiefio.wordpress.com/2009/03/20/there-is-no-energy-shortage/ http://chiefio.wordpress.com/2009/03/20/there-is-no-energy-shortage/
E.M.Smith
Editor
January 27, 2012 12:46 am
Oh, and metals prices are mostly driven by the business cycle (that is often about 10 years long) so it’s a silly wager to use with a 10 year period. It rises over most of that interval, then crashes at the end. (See the inflation adjusted price graph above and note the lead in ramp then the more steep drops.)
It would really be more meaningful to take a 40 year trend line…
Chris B
January 27, 2012 7:04 am
David Middleton says:
January 25, 2012 at 8:24 am
Chris B says:
January 25, 2012 at 7:01 am
“Almost all of our problems are due to political interference with market forces.”
Not that i’m in favour of more government, but hasn’t the increase in government closely followed, or led (causal/correlation issues notwithstanding), the growth in GDP, kcals per capita, volume of metals and oil extracted, etc.?
The author hasn’t shown his political statement to be true. Moreover, he contradicts himself with this statement: “Africa just lacks the economic and political infrastructure to realize its own potential.”
The increase in “rule of law” governance helps to enable growth. Western capitalist democracies are all “rule of law” governments (even the Obama administration is somewhat restrained by “rule of law”).
Most undeveloped and developing nations tend to have governments that are less restrained by “rule of law.”
_____________________________________
So, I hear you saying that anti-trust laws, for example, are not a good thing, because they are “political interference with market forces” even though they are a part of the “Rule of Law”.
And African nations following “Sharia Law” with no “political interference with market forces” are destined to prosper.
Sorry, but I think the explanation for western prosperity lies more in the theories of Max Weber than the effect of “Rule of Law”.
Chris B
January 27, 2012 7:08 am
SteveSadlov says:
January 25, 2012 at 7:10 pm
RE: “As the global population stabilises an entire new economic system much different to our present economic system will have to be created otherwise mankind and his civilisation will just fall into a long term period of economic decline and stagnation with all that entails for the future advancement of the race.”
I have a dark view. I suspect such decline and stagnation will be our destiny. We will never reach the stars, let alone colonize our own star system. We will perish, a fallen, barbaric shadow of what we once were, in a slowly dying world.
____________________________
Take some Vitamin D, get some religion,…………. and turn on American Idol if you want to reach the stars.
John Brookes
January 27, 2012 7:22 am
Malthusians are like the bears in the middle of a bull market. They are (of course) correct, and it will all end in tears. But at the time they are roundly ridiculed for not understanding why “this time it is different”. The timing is of course the key. Is it 7 billion, or maybe 8? It really doesn’t matter, but there is a number which is too much. And we will reach it. And it won’t be pretty.
Maybe we’ll get lucky and the population will stop growing before we reach the crunch. I hope so.
Chris B
January 27, 2012 8:17 am
MarkW says:
January 25, 2012 at 9:22 am
Chris B says:
January 25, 2012 at 7:01 am
—
Multiple studies have shown that size of growth and size of govt are inversely proportional.
The US’s economy was growing much, much faster, decades ago, when govt was much, much smaller.
___________________________________—-
So, having no government leads to infinite growth?
I think you’re talking about a very narrow range of circumstances.
David Middleton says:
January 25, 2012 at 8:24 am
Chris B says:
January 25, 2012 at 7:01 am
“Almost all of our problems are due to political interference with market forces.”
Chris B says:
Not that i’m in favour of more government, but hasn’t the increase in government closely followed, or led (causal/correlation issues notwithstanding), the growth in GDP, kcals per capita, volume of metals and oil extracted, etc.?
The author hasn’t shown his political statement to be true. Moreover, he contradicts himself with this statement: “Africa just lacks the economic and political infrastructure to realize its own potential.”
David Middleton says:
The increase in “rule of law” governance helps to enable growth. Western capitalist democracies are all “rule of law” governments (even the Obama administration is somewhat restrained by “rule of law”).
Most undeveloped and developing nations tend to have governments that are less restrained by “rule of law.”
_____________________________________
Chris B says:
So, I hear you saying that anti-trust laws, for example, are not a good thing, because they are “political interference with market forces” even though they are a part of the “Rule of Law”.
And African nations following “Sharia Law” with no “political interference with market forces” are destined to prosper.
Sorry, but I think the explanation for western prosperity lies more in the theories of Max Weber than the effect of “Rule of Law”.
1. The government and its officials and agents are accountable under the law.
2. The laws are clear, publicized, stable, and fair, and protect fundamental rights, including the security of persons and property.
3. The process by which the laws are enacted, administered, and enforced is accessible, fair, and efficient.
4. Access to justice is provided by competent, independent, and ethical adjudicators, attorneys or representatives, and judicial officers who are of sufficient number, have adequate resources, and reflect the makeup of the communities they serve.
The Obama administration’s “dynamic regulatory environment” and unlawful permitorium clearly run afoul of #2 and possibly #1 and #3.
Despite the serial malfeasance of the current occupiers of the Executive Branch, the United States clearly has a “rule of law” government. However, the enforcement of antitrust laws has often deviated from rule of law. Antitrust laws are anything but “clear, publicized, stable, and fair”…
Antitrust as Anti-Free Market Antitrust laws allow the federal government to regulate and curtail basic business activities, including pricing, production, product lines, and mergers, usually in the name of preventing monopolies and fostering competition. The irony is that the laws in fact impose arbitrary government limitations on competition, keep prices for consumers high, and weaken American industries. Massachusetts Institute of Technology economist Lester Thurow wrote in his 1980 book The Zero-Sum Society that “the time has come to recognize that the antitrust approach has been a failure. The costs it imposes far exceed any benefits it brings.”
[…]
Antitrust laws are always enforced arbitrarily and sometimes capriciously, violating the due process of law and relying on ex post facto rulings.
A fundamental principle of Anglo-American law is that crimes must be clearly defined. But with antitrust the definitions are vague and constantly changing, depending on the whims of regulators and policymakers. Businesses rarely know in advance which practices may constitute price discrimination or “predatory” pricing or may “substantially lessen competition” in the eyes of the antitrust enforcers. As Alan Greenspan once observed, antitrust
is a world in which competition is lauded as the basic axiom and guiding principle, yet “too much” competition is condemned as “cutthroat.” . . . It is a world in which the law is so vague that businessmen have no way of knowing whether specific actions will be declared illegal until they hear the judge’s verdict–after the fact.
Consequently, businesses do not compete and serve consumers as vigorously as they otherwise would, for fear of running afoul of new and creative interpretations of what constitutes an illegal business practice. There can never be a precise definition of “competition,” for competition, as a dynamic process, constantly leads to the discovery of new techniques for competing. The criteria the government has used in the past to try to define competition–size of firms, prices that are “too high” or “too low,” closeness of substitute products, and the like–are all meaningless and arbitrary.
[…] Cato
Brian H
January 27, 2012 10:08 pm
As for anti-trust laws,
“If one rejects laissez faire on account of man’s fallibility and moral weakness, one must for the same reason also reject every kind of government action.”
“Manufacturing and commercial monopolies owe their origin not to a tendency imminent in a capitalist economy but to governmental interventionist policy directed against free trade and laissez faire.”
Ludwig von Mises – Austrian Economist 1881 – 1973
Spector
January 28, 2012 6:09 am
Here is a compelling (72 min) presentation by Dr. Chris Martenson, “a former American biochemical scientist and Vice President of Pfizer.[1] Currently he is an author and trend forecaster interested in macro trends regarding the economy, energy composition and environment.” (Wikipedia) made at the Gold and Silver conference at Madrid, Spain last year under the auspices of the Gold Money Foundation. His basic proposition is that exponential growth has been required for the world of which we have become accustomed, and that is now reaching a natural limit that will force a new paradigm in the future. It appears he is warning, by implication, that traditional investments can not be expected to return their expected rewards.
When questioned about the errors of Malthus, about 50 minutes into the talk, he says “He didn’t have Google…” Chris Martenson al Gold & Silver di Madrid 16.11.2011.mp4
Chris B
January 28, 2012 6:44 am
David Middleton says:
January 27, 2012 at 1:36 pm
Chris B says:
January 27, 2012 at 7:04 am
David Middleton says:
January 25, 2012 at 8:24 am
Chris B says:
January 25, 2012 at 7:01 am
“Almost all of our problems are due to political interference with market forces.”
…………….
With respect to your definition of “Rule of Law”, while it’s a good definition, it is still subjective. The practitioners of Sharia Law would firmly believe their Law fits your definition, as would lawyers of the so-called “Dark Ages”, or any other Age. Lawyers are as well-intended now as any other Times, or Geography.
There are loopholes in the “Rule of LAW” such as who gets to be defined as a person.For example, In our system pre-born humans are not persons under the Law.
With respect to Anti-Trust Law, I suppose an argument can be made for, or against, whether this is good, or bad, political intervention by government, depending on what part of an economy the monopoly is in operation. For example, natural resources are usually thought of as best not controlled by a monopoly because the price of the commodity would tend to be lower than if controlled by a monopoly. Standard Oil is an example.
To be less ambiguous I should have said, “So, I hear you saying that slavery and child labor laws, for example, are not a good thing, because they are “political interference with market forces” even though they are a part of the “Rule of Law”.”
SteveSadlov says:
January 25, 2012 at 7:10 pm
“I have a dark view. I suspect such decline and stagnation will be our destiny. We will never reach the stars, let alone colonize our own star system. We will perish, a fallen, barbaric shadow of what we once were, in a slowly dying world.”
__________________________________
Not necessarily, Steve.
History tells us that human advancement has always come and gone in great waves that span centuries.
The most recent down beat was the Black Death plagues which in Europe’s case reduced the population by a third.
When the recovery came, mankind took another great leap into the Industrial Revolution and the resulting technological age we are currently still enjoying.
Mankind may well stagnate for a couple of centuries as the population slowly declines and as he adapts and changes to the reality of a small, by our standards, global population.
But perhaps more slowly that at present, technology will continue to advance. And there will new generations in the future that will be looking sometime in the future for new horizons to conquer and the only horizons left with sufficient challenges will be the Oceans and Space.
And Space with it’s immense challenges and it’s unbounded challenges is where our destiny may lay for the end generations of the 22’nd century.
The moon landing of the 20th July 1969 will be regarded with total awe as to how our generation achieved that with such primitive technology.
[ I made my 6 and 7 year olds watch those landings over their protests but they are now starting to think of that with awe. They saw it, the first time in human history where mankind had left his womb, the planet Earth. ]
.
The only way our civilization can decline and stagnate
is because of ubiquitously stifling Big Government that so afflicts us now.
On its own, consitutional capitalism will progress without limit.
Just read von Mises.
Statists, interventionists, rent-seekers, regulationists, the Left in general:
there is 100% of the Cause of our Decline.
MarkW says:
January 25, 2012 at 5:55 am
a reader says:
January 25, 2012 at 5:35 am
—
And that was using 1975 agricultural technology. Using modern technology you could probably double or triple that number.
==========================
Then run the plant food up to about 750 PPM, and who knows??? But the truth is, just make energy very inexpensive so third world nations can become first world nations, and presto, the population growth stops, there is money and resources for developing ever cleaner energy, whatever the source.
The first tentative steps towards the colonization of our solar System have already been accomplished in the form of the temporary scientific stations inhabited for years at a time in Low Earth Orbit (LEO). The next few early steps are well within current capabilities, with the establishment of special purpose habitats on the Moon and in the asteroids. Once human habitation of the asteroids reaches a critical mass and self-sufficiency, the human habitation of the asteroids would rapidly overtake the human population of the Earth and go on to surpass it many times over, regardless of events on the Earth.
Once humans have mastered the permanent habitation of asteroids, slow travel to the stars could at the very least be accomplished over millenial time periods by asteroidal habitats used as transports. At best, interstellar transportaion may be accomplished by utilizing concepts of physics yet to be discovered. In any event, unaddressed is the vst potential for human colonization of the dark planets and planetoids between the stars.
The future of the human race is largely a matter of human choice/s and will to survive beyond the cradle of human origins on the Earth. As always, some humans will choose to adapt, survive, and prosper on the frontiers of human experience; while other humans will choose to shun such challenges and sacrifices to squabble over and despoil whatever others have struggled and sacrificed to create. The choices for human prosperity versus human extinction begin with adopting or rejecting the opposing visions for the future.
D. Patterson said @ur momisugly January 26, 2012 at 1:30 am
There ya go! The Git thought it was all down to whoever wrote the screenplay (having just begun watching series 3 of Battlestar Galactica) 🙂
Wow! Mr. Pepper (or is it Dr. Pepper?) got something right!
I misspelled Ehrlich. If convenient, could one of the moderators please correct that error?
Where did I slander Dr. Ehrlich? No Malthusian prediction has ever turned out to be correct. They have been “perpetually wrong” about everything.
Then, perhaps, you could cite an example of Dr. Ehrlich having been right about something, apart from butterflies. The “perpetually wrong” phrase was regarding the subject of “population growth and resource scarcity” and Malthusianism in general.
All of these commodities are driven by fast-growing Chinese demand. This demand is able to grow faster than supply, with some commodities–like copper–looking quite peaky.
On the oil supply front, see my Jan. 2011 article, “The Tierney Simmonsw Bet”: http://www.energybulletin.net/stories/2011-01-10/commentary-tierney-simmons-bet
To update the article, a couple of comments:
– Shale (tight) oils are doing well in the US. Various analysts see their production up by 2 mbpd in 2020 (CERA) to 2030 (BP). At that scale, they would certainly be helpful, but wouldn’t dramatically re-write the oil supply situation. I would note, however, that we could see upside surprises on the shale oil front, at least based on the last decade’s history with shale gas production. But shale oil is the only real bright spot on the horizon. Canada’s oil sands continue to do well, but add only 150,000 barrels/day per year. That’s not very much on 89 million barrels of production. Venezuela has plans for 2 million barrels per day of upgrader capacity (to make syncrude from tars), but with Chavez in power, there is a good possibility that none of these will be built within the next five years. So right now, all eyes are on shales/tight oils as our savior on the crude oil supply side.
– As regards consumption, US and European consumption is indeed failling, by about 1.5% per year (and with it our carbon footprint). As a nation, we are unable to maintain oil consumption at current prices, consistent with our outlook in the article mentioned above.
jrwakefield says:
January 25, 2012 at 12:35 pm
Everyone is ignoring the basic problem with resource extraction. The rate of extraction….
….Going forward the rate of demand will grow faster than the capable rate of extraction for crucial resources like oil, copper, chromium.
We are like a bacterium in a test-tube that has a resource consumption double period of one week….
A-ha, truisms as true as they were in the days of the Horse and Buggy, and well back before the invention of the Wheel. Behold ye, even the holy GCM’s themselves forecast the fact that unless we immediately retreat to the Equality of the
Watermelon’sBacterium’s Stone Age Utopia, thus ~”restoring American Values”, we’re doooomed, I tell you, doooomed…by the ineluctable Rules of the hallowed Petri Dish to Ecological Overshoot’s dire consequences! Repent and “Unite”, ye B. Septics, before it’s too late! “B. Obama wants you!”Indeed. Don’t have the link, but just saw reference to a study of food production across all eras and tech levels, and you get as much energy out of food as went into cultivating it. So tractors and fertilizer get much more energy transformed into edible calories than horses and wooden plows. Etc.
As for the cheaper energy, here’s a slightly OT link to an article about the effect shale gas is having on power pricing and plant construction:
http://www.vancouversun.com/news/Natural+glut+puts+electricity+market+into+tailspin/6009113/story.html
Alberta oil sand production is currently more than 1 million BOPD and they expect to top 3 million BOPD by 2018… Gov’t of Alberta, Energy
If the US would get serious about our closest equivalent, the Green River Shale, we could be producing another 15 million BOPD by the end of this century.
David Middleton,
Your post is well done. You extend Simon’s legacy; thanks.
I find your post consistent with the book by Indur Goklany titled “The Improving State of the World: Why We’re Living Longer, Healthier, More Comfortable Lives on a Cleaner Planet”.
John
if you are using US CPI as the inflation measure for this study, then this whole exercise is futile. the BLS changed the CPI calculation in 1992. readings across that data are not comparable. the new, post-boskin report CPI reads several % points lower than the old one. what shows as 3% today would have read more like 7-8% pre 1992.
many (myself included) feel this massively understates inflation. it was a deliberate manipulation to get social security COLA costs down. it’s data tampering that would make even the GISS blush.
regardless this change in the CPI data is the reason the winner of the bet changed, not an actual change in the behavior of the metals.
that makes this whole analysis meaningless.
Dr. Goklany’s books are on my “to read” list… Unfortunately it’s a long list.
I have read Bjørn Lomborg’s The Skeptical Environmentalist. I keep it on my desk with my other reference books.
The data are fine. The inflation-adjusted numbers for minerals from the USGS and GDP from the USDA were calculated using the post-1992 method. They are consistent over time.
If I had taken the time to recalculate the inflation-adjusted numbers using the old method, Ehrlich would become even more wrong.
RE: “The first tentative steps towards the colonization of our solar System have already been accomplished in the form of the temporary scientific stations inhabited for years at a time in Low Earth Orbit (LEO). ”
The coming beat down of the triple dip “Great Recession,” cold period on par with the Age of Migrations (or worse) and great war, will snuff all this out in a heartbeat. Although I will grant that orbital warfare may happen. That will be the only use of space technology if at all.
We can’t run out of metals or water as they never leave the planet.
At most, they can take more craft and / or energy to extract again (from a more dilute ‘deposit’).
There is NO shortage of “stuff” as it doesn’t leave the planet.
There is NO shortage of “energy” as it is available in massive quantities. (ONE example, out of dozens: Enough Uranium washes into the ocean each year to power the planet several times over. We have proven established methods to extract said Uranium that have costs which would be very profitable for energy production. We don’t do it only because land mining uranium is cheaper. The crust has about 3 x that much Thorium that is also usable ….)
The whole “running out scare” is a created fantasy ( vis. “The Limits To Growth” by Meadows et. al.) designed for the purpose of scaring folks into submission to greater government and promulgated by the same folks who have now brought you the Global Warming Scare for the same purpose.
http://chiefio.wordpress.com/2009/03/20/there-is-no-energy-shortage/
http://chiefio.wordpress.com/2009/03/20/there-is-no-energy-shortage/
Oh, and metals prices are mostly driven by the business cycle (that is often about 10 years long) so it’s a silly wager to use with a 10 year period. It rises over most of that interval, then crashes at the end. (See the inflation adjusted price graph above and note the lead in ramp then the more steep drops.)
It would really be more meaningful to take a 40 year trend line…
David Middleton says:
January 25, 2012 at 8:24 am
Chris B says:
January 25, 2012 at 7:01 am
“Almost all of our problems are due to political interference with market forces.”
Not that i’m in favour of more government, but hasn’t the increase in government closely followed, or led (causal/correlation issues notwithstanding), the growth in GDP, kcals per capita, volume of metals and oil extracted, etc.?
The author hasn’t shown his political statement to be true. Moreover, he contradicts himself with this statement: “Africa just lacks the economic and political infrastructure to realize its own potential.”
The increase in “rule of law” governance helps to enable growth. Western capitalist democracies are all “rule of law” governments (even the Obama administration is somewhat restrained by “rule of law”).
Most undeveloped and developing nations tend to have governments that are less restrained by “rule of law.”
_____________________________________
So, I hear you saying that anti-trust laws, for example, are not a good thing, because they are “political interference with market forces” even though they are a part of the “Rule of Law”.
And African nations following “Sharia Law” with no “political interference with market forces” are destined to prosper.
Sorry, but I think the explanation for western prosperity lies more in the theories of Max Weber than the effect of “Rule of Law”.
SteveSadlov says:
January 25, 2012 at 7:10 pm
RE: “As the global population stabilises an entire new economic system much different to our present economic system will have to be created otherwise mankind and his civilisation will just fall into a long term period of economic decline and stagnation with all that entails for the future advancement of the race.”
I have a dark view. I suspect such decline and stagnation will be our destiny. We will never reach the stars, let alone colonize our own star system. We will perish, a fallen, barbaric shadow of what we once were, in a slowly dying world.
____________________________
Take some Vitamin D, get some religion,…………. and turn on American Idol if you want to reach the stars.
Malthusians are like the bears in the middle of a bull market. They are (of course) correct, and it will all end in tears. But at the time they are roundly ridiculed for not understanding why “this time it is different”. The timing is of course the key. Is it 7 billion, or maybe 8? It really doesn’t matter, but there is a number which is too much. And we will reach it. And it won’t be pretty.
Maybe we’ll get lucky and the population will stop growing before we reach the crunch. I hope so.
MarkW says:
January 25, 2012 at 9:22 am
Chris B says:
January 25, 2012 at 7:01 am
—
Multiple studies have shown that size of growth and size of govt are inversely proportional.
The US’s economy was growing much, much faster, decades ago, when govt was much, much smaller.
___________________________________—-
So, having no government leads to infinite growth?
I think you’re talking about a very narrow range of circumstances.
Rule of law…
The Obama administration’s “dynamic regulatory environment” and unlawful permitorium clearly run afoul of #2 and possibly #1 and #3.
Despite the serial malfeasance of the current occupiers of the Executive Branch, the United States clearly has a “rule of law” government. However, the enforcement of antitrust laws has often deviated from rule of law. Antitrust laws are anything but “clear, publicized, stable, and fair”…
As for anti-trust laws,
Here is a compelling (72 min) presentation by Dr. Chris Martenson, “a former American biochemical scientist and Vice President of Pfizer.[1] Currently he is an author and trend forecaster interested in macro trends regarding the economy, energy composition and environment.” (Wikipedia) made at the Gold and Silver conference at Madrid, Spain last year under the auspices of the Gold Money Foundation. His basic proposition is that exponential growth has been required for the world of which we have become accustomed, and that is now reaching a natural limit that will force a new paradigm in the future. It appears he is warning, by implication, that traditional investments can not be expected to return their expected rewards.
When questioned about the errors of Malthus, about 50 minutes into the talk, he says “He didn’t have Google…”
Chris Martenson al Gold & Silver di Madrid 16.11.2011.mp4
David Middleton says:
January 27, 2012 at 1:36 pm
Chris B says:
January 27, 2012 at 7:04 am
David Middleton says:
January 25, 2012 at 8:24 am
Chris B says:
January 25, 2012 at 7:01 am
“Almost all of our problems are due to political interference with market forces.”
…………….
With respect to your definition of “Rule of Law”, while it’s a good definition, it is still subjective. The practitioners of Sharia Law would firmly believe their Law fits your definition, as would lawyers of the so-called “Dark Ages”, or any other Age. Lawyers are as well-intended now as any other Times, or Geography.
There are loopholes in the “Rule of LAW” such as who gets to be defined as a person.For example, In our system pre-born humans are not persons under the Law.
With respect to Anti-Trust Law, I suppose an argument can be made for, or against, whether this is good, or bad, political intervention by government, depending on what part of an economy the monopoly is in operation. For example, natural resources are usually thought of as best not controlled by a monopoly because the price of the commodity would tend to be lower than if controlled by a monopoly. Standard Oil is an example.
To be less ambiguous I should have said, “So, I hear you saying that slavery and child labor laws, for example, are not a good thing, because they are “political interference with market forces” even though they are a part of the “Rule of Law”.”