Cato Policy Report, November/December 1996
Rebutting the Doomsayers
Human ingenuity is the ultimate resource
In his 1981 book The Ultimate Resource, Cato senior fellow Julian Simon challenged Paul Ehrlich and other neo-Malthusians who argued that natural resources were becoming dangerously scarce, population growth was going to cripple standards of living, and environmental disaster was imminent.
The book and its conclusions were widely debated. Peter Bauer stated, "Throughout the book he supports his argument both by analytical reasoning and by a mass of informative detailed evidence. His stance is exceptional also in that he never loses sight that man is the ultimate resource behind economic performance and progress." In contrast, Garrett Hardin declared that "Simon’s conclusions are highly palatable to budget evaders, car salesmen, realtors, advertisers, land speculators, and optimists in general; scientists find them appalling."
Sure to attract similar attention is Simon’s new and thoroughly revised edition of the book, The Ultimate Resource 2. It is being published jointly by the Cato Institute and Princeton University Press.
In The Ultimate Resource 2, Simon brings the data presented in the first edition up to date. He demonstrates that the arguments he made in 1981 have been vindicated and shows why they should remain so for years to come.
In addition, he tackles a number of timely issues that weren’t addressed in The Ultimate Resource. He argues that the supposed rapid rate of species extinction is a figment of many biologists’ imaginations. He reveals that the vanishing farmland "crisis" has been manufactured by the U.S. Department of Agriculture and its environmental supporters. He contends that public recycling programs are inefficient and wasteful. And he examines whether global warming and ozone depletion are really the threats that many would have us believe.
At the core of Simon’s arguments is his belief in human innovation and progress. In the short run, he explains, all resources are limited and therefore greater use of any resource tends to place strains on its supply and increase its price. In the long run, however, people respond to such situations by treating them as opportunities for gain.
When prices for a scarce good increase, incentives for innovation and adaptation arise. When innovations are implemented, the good or a reasonable substitute once again becomes abundant, and the price winds up falling below what it was at the time of the shortage. That scarcity-innovation mechanism has functioned throughout recorded history, Simon argues, and will continue to do so.
Simon reminds us throughout the book that the creation and effective dissemination of new ideas and solutions are dependent on personal and economic freedom. Talented people are the most innovative when they aren’t shackled by regulation. Thus, Simon concludes, the true ultimate resource is the human spirit and human imagination in the presence of liberty.
This article originally appeared in the November/December 1996 edition of Cato Policy Report.