RE: ECON: Simon vs Ehrlich

Laws, David (
Sat, 26 Apr 1997 20:29:18 -0400

I am no geologist. I am no economist. To say we are running out of any
mineral (except oil) just basically seems silly. The earth's crust should
be strewn with every mineral known to man (and then some....wood and air is
a far more known limiter). It may take a little bit more searching and
deeper digging to find them but we have only scratched the resources. Oil
may be an exception, but we may still have vast resources we haven't found.
Oil may also be in it's last gasps. Shale oil is another matter. But
chromium? Copper? Tin? Nickel? The 'mother lodes' of these minerals are
probably just the tip of the iceberg of resources hiding in the crust (the
deepest mine is only a mile or two down, correct? Anyone attempted mining
Greenland?) Prices may rise, because the monopolies can do it, but we
won't run out of these metals.

The popular belief we ARE running out of basic minerals may spawn a new
interest in space travel/space engineering as we can get these from the
moon and/or asteroids, a good thing. ||

-----Original Message-----

You could name your own terms: select any raw material you wanted -
tin, whatever - and select any date in the future, "any date more than a
year away," and Simon would bet that the commodity's price on that date
would be lower than what it was at the time of the wager.

Ehrlich and his colleagues picked five metals that they thought would
undergo big price rises: chromium, copper, nickel, tin, and tungsten.
on paper, they bought $200 worth of each, for a total bet of $1,000, using
the prices on September 29, 1980, as an index. They designated September
1990, 10 years hence, as the payoff date. If the inflation-adjusted prices
of the various metals rose in the interim, Simon would pay Ehrlich the
combined difference; if the prices fell, Ehrlich et alia would pay Simon.


Between 1980 and 1990, the world's population grew by more than 800
the largest increase in one decade in all of history. But by September
without a single exception, the price of each of Ehrlich's selected metals
had fallen, and in some cases had dropped through the floor. Chrome, which
had sold for $3.90 a pound in 1980, was down to $3.70 in 1990. Tin, which
was $8.72 a pound in 1980, was down to $3.88 a decade later.

Which is how it came to pass that in October 1990, Paul Ehrlich mailed
Julian Simon a check for $576.07 . . . .