UK: New book about the Man Who Is Never Right
So in 1980 Simon made Mr. Ehrlich a bet. If Mr. Ehrlich’s predictions about overpopulation and the depletion of resources were correct, Simon said, then over the next decade the prices of commodities would rise as they became more scarce. Simon contended that, because markets spur innovation and create efficiencies, commodity prices would fall. He proposed that each party put up $1,000 to purchase a basket of five commodities. If the prices of these went down, Mr. Ehrlich would pay Simon the difference between the 1980 and 1990 prices. If the prices went up, Simon would pay. This meant that Mr. Ehrlich’s exposure was limited while Simon’s was theoretically infinite.
Simon even allowed Mr. Ehrlich to rig the terms of the bet in his favor: Mr. Ehrlich was allowed to select the five commodities that would be the yardstick. Consulting two colleagues, John Holdren and John Harte, Mr. Ehrlich chose chromium, copper, nickel, tin and tungsten, each of which his team supposed was especially likely to become scarce. As they settled on their terms, Mr. Sabin notes, Messrs. Ehrlich, Holdren and Harte “felt confident that they would prevail.”
They didn’t. In October 1990, Mr. Ehrlich mailed a check for $576.07 to Simon. Mr. Sabin diplomatically reports that “there was no note.” Although world population had increased by 800 million during the term of the wager, the prices for the five metals had decreased by more than 50%. And they did so for precisely the reasons Simon predicted—technological innovation and conservation spurred on by the market.
Why does anyone continue to take this man seriously?
The book is The Bet, By Paul Sabin.