The Simon–Ehrlich wager was a ten‑year bet made in 1980 between the biologist Paul R. Ehrlich, a proponent of the view that human population growth would outstrip the planet’s resources, and the economist Julian Simon, who argued that human ingenuity would overcome resource scarcity. The wager centered on the future prices of five metals—copper, chromium, nickel, tin, and tungsten—chosen as representative non‑renewable resources.
Terms of the wager
- Duration: Ten years, from January 1, 1980, to December 31, 1989.
- Commodities: The five metals listed above.
- Measurement: The average inflation‑adjusted price per ton of each metal in U.S. dollars, expressed in 1990 dollars.
- Outcome criterion: If the average price of the five metals in 1990 dollars was higher in 1990 than in 1980, Ehrlich would win; if the average price was lower, Simon would win.
Result
At the end of the period, the inflation‑adjusted average price of the five metals had fallen by approximately 50 %, resulting in a victory for Julian Simon. The final settlement was a payment of US $1 million to Simon, which he donated to charity.
Significance and impact
The wager has been cited in debates on environmental economics, population studies, and resource scarcity. Proponents of Simon’s position cite the outcome as evidence that market mechanisms and technological innovation can mitigate resource constraints. Critics argue that the bet’s limited scope—covering only a small set of metals and a single decade—does not address longer‑term ecological limits, the environmental costs of extraction, or the broader context of resource consumption.
Subsequent analysis
Scholars have examined the wager in the context of:
- Price volatility: Commodity markets are subject to short‑term fluctuations driven by economic cycles, geopolitics, and speculative activity.
- Technological change: Advances in extraction techniques, recycling, and substitution contributed to price declines during the 1980s.
- Environmental externalities: The wager did not account for the ecological damage associated with mining, which some analysts consider a hidden cost.
The Simon–Ehrlich wager remains a frequently referenced anecdote illustrating contrasting perspectives on the relationship between population growth and resource availability.