Remembering Doomslayer Simon
Can an economist be a patron saint? Let's hope so because if the position is open in North Dakota, Julian Simon deserves the job. Economist Simon has offered more insight into North Dakota's oil boom than any other analyst. And that's true even t...
Can an economist be a patron saint?
Let's hope so because if the position is open in North Dakota, Julian Simon deserves the job. Economist Simon has offered more insight into North Dakota's oil boom than any other analyst.
And that's true even though Simon died in 1998 and never mentioned North Dakota in his works.
Simon's economics was anything but a "dismal science." Just the opposite: It was delightful, eye-opening and accurate, by far the most important trait.
Simon's accuracy is all the more surprising given that it grew from his broad optimism about human affairs. The "ultimate resource" in the world is neither oil, uranium nor any other raw material, he often said. The "ultimate resource" is the human mind -- humanity's limitless ability to solve problems.
As an economist, Simon's insight was to realize how ingenuity is unleashed by the unassuming but powerful mechanism of price. The relationship shows up over and over again, in North Dakota and around the world.
Here, the price of oil drove engineers to build new deep-boring and maneuverable drills. Once drillers coupled that technology with the mapping of the Bakken oilfields, it was hello man camps and goodbye Buffalo Commons.
Around the world, Simon is famous -- infamous in some circles -- for his insistence that prices (and their influence on human behavior) render natural resources effectively infinite. ...
Here's recent story Simon would love: A remarkable article appears in the current issue of BioScience, the journal of the American Institute of Biological Sciences. It describes "the environmentalists' paradox," which the article describes this way:
"Although many people expect ecosystem degradation to have a negative impact on human well-being, this measure appears to be increasing even as provision of ecosystem services declines."
"How can that be?" the article asks. For decades, environmentalists have predicted that pollution, resource depletion and other abuses would lead to widespread misery, degradation and want. But that's not happening. Instead, the changes "have been accompanied by steady gains in human well-being at the global scale," the article documents.
Again, how can that be?
The authors offer up a few theories. Food production has risen in recent decades; maybe that outweighs other changes. Maybe "technology and innovation have decoupled human well-being from ecosystem degradation," they speculate.
Or maybe there's simply a time lag, and sooner or later, the ecosystem degradation is going to catch up. ...
Will manmade climate change ultimately prove Simon wrong?
Very possibly. But here's Simon again: "In this I agree with the doomsayers -- that our world needs the best efforts of all humanity to improve our lot. I part company with them in that they expect us to come to a bad end despite the efforts we make, whereas I expect a continuation of humanity's history of successful efforts."
Don't count out a fellow who so often has been proved right.