The 1980-1990 Ehrlich-Simon Bet
Simon won a famous bet with Paul Ehrlich about how the price of metals would move
in the 1980s. The Stanford University population biologist Paul Ehrlich who tends
to believe that the world is facing increasing scarcity believed that the price
of metals would go up because of this. Simon, paying attention to costs of
production and the magnitude of reserves believed the prices would go down. The
bet concerned the price of 5 minerals. (Ehrlich got to choose which 5 minerals).
Simon sold Ehrlich an option to buy an amount of each mineral worth $200 in 1980.
Inflation was taken into account, so that the payoff would be an amount in 1990
dollars corresponding to whoever's predictions were more accurate. If the price
went up, Simon would pay Ehrlich, and they went down, Ehrlich would pay Simon.
Here's what happened to the minerals, which had been selected by Ehrlich.
Mineral quantity 1980 price 1990 price
copper 196.56 lbs $200 $163
chrome 51.28 lbs $200 $120
nickel 65.32 lbs $200 $193
tin 229.1 lbs $200 $56
tungsten 13.64 lbs $200 $86
All 5 minerals went down in price, taking inflation into account, so Ehrlich sent
Simon a check for $576.07. Just a check, no letter. Simon offered another bet on
a proposition of Ehrlich's choice, but Ehrlich declined.
Now that China is consuming so many minerals, Ehrlich should try the bet again.
Note that we Luddites of the world have not given up. We have gotten the notion
that CO2, without which plants could not breathe and survive, is actually a
pollutant. If you think that we cannot convince the world's population that this
is so, then you underestimate us or you over estimate the intelligence of the
human race.
We have already convinced the congress of the United States together with Archer
Daniels Midland and thousands of maize farmers that growing 'corn' and turning it
into ethanol is a wonderful idea. (To see why we grow so much corn and use it
for sweeteners, etc. read The Omnivore's Dilemma.) Putting food into our gas
tanks has the side benefit of raising the price of corn for food at the same
time. Since 'corn fed beef' is simply a habit, it raises the cost of beef as
well. Now, finally, we Luddites can see the farmers making a decent living and
poor people can starve at the same time. Since there is overpopulation of humans
and cattle anyway, this is a good thing from the perspective of the Luddites.
The efficiency of using maize to provide fuel is, of course, totally bogus unless
you ask a lobbiest for the maize industry. At the very best, only 0.6% of the
sunlight can be captured into energy in the resultant ethanol. This is an
optimistic number and you will note that ethanol will not sell without being
subsidized by the government. In Brazil, the government subsidizes using sugar
cane to make ethanol instead. With the poor efficiency of either process, don't
expect ethanol to ever "pay for itself" in any application other than recycling
organic waste.
Ludbot
Simon won a famous bet with Paul Ehrlich about how the price of metals would move
in the 1980s. The Stanford University population biologist Paul Ehrlich who tends
to believe that the world is facing increasing scarcity believed that the price
of metals would go up because of this. Simon, paying attention to costs of
production and the magnitude of reserves believed the prices would go down. The
bet concerned the price of 5 minerals. (Ehrlich got to choose which 5 minerals).
Simon sold Ehrlich an option to buy an amount of each mineral worth $200 in 1980.
Inflation was taken into account, so that the payoff would be an amount in 1990
dollars corresponding to whoever's predictions were more accurate. If the price
went up, Simon would pay Ehrlich, and they went down, Ehrlich would pay Simon.
Here's what happened to the minerals, which had been selected by Ehrlich.
Mineral quantity 1980 price 1990 price
copper 196.56 lbs $200 $163
chrome 51.28 lbs $200 $120
nickel 65.32 lbs $200 $193
tin 229.1 lbs $200 $56
tungsten 13.64 lbs $200 $86
All 5 minerals went down in price, taking inflation into account, so Ehrlich sent
Simon a check for $576.07. Just a check, no letter. Simon offered another bet on
a proposition of Ehrlich's choice, but Ehrlich declined.
Now that China is consuming so many minerals, Ehrlich should try the bet again.
Note that we Luddites of the world have not given up. We have gotten the notion
that CO2, without which plants could not breathe and survive, is actually a
pollutant. If you think that we cannot convince the world's population that this
is so, then you underestimate us or you over estimate the intelligence of the
human race.
We have already convinced the congress of the United States together with Archer
Daniels Midland and thousands of maize farmers that growing 'corn' and turning it
into ethanol is a wonderful idea. (To see why we grow so much corn and use it
for sweeteners, etc. read The Omnivore's Dilemma.) Putting food into our gas
tanks has the side benefit of raising the price of corn for food at the same
time. Since 'corn fed beef' is simply a habit, it raises the cost of beef as
well. Now, finally, we Luddites can see the farmers making a decent living and
poor people can starve at the same time. Since there is overpopulation of humans
and cattle anyway, this is a good thing from the perspective of the Luddites.
The efficiency of using maize to provide fuel is, of course, totally bogus unless
you ask a lobbiest for the maize industry. At the very best, only 0.6% of the
sunlight can be captured into energy in the resultant ethanol. This is an
optimistic number and you will note that ethanol will not sell without being
subsidized by the government. In Brazil, the government subsidizes using sugar
cane to make ethanol instead. With the poor efficiency of either process, don't
expect ethanol to ever "pay for itself" in any application other than recycling
organic waste.
Ludbot
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Ludbot Robotic Simulation