The trends they bet would continue to worsen were:

• The three years 2002–2004 will on average be warmer than 1992-1994.
• There will be more carbon dioxide in the atmosphere in 2004 than in 1994.
• There will be more nitrous oxide in the atmosphere in 2004 than 1994.
• The concentration of ozone in the lower atmosphere (the troposphere) will be greater than in 1994.
• Emissions of the air pollutant sulfur dioxide in Asia will be significantly greater in 2004 than in 1994.
• There will be less fertile cropland per person in 2004 than in 1994.
• There will be less agricultural soil per person in 2004 than 1994.
• There will be on average less rice and wheat grown per person in 2002–2004 than in 1992-1994.
• In developing nations there will be less firewood available per person in 2004 than in 1994.
• The remaining area of virgin tropical moist forests will be significantly smaller in 2004 than in 1994.
• The oceanic fisheries harvest per person will continue its downward trend and thus in 2004 will be smaller than in 1994.
• There will be fewer plant and animal species still extant in 2004 than in 1994.
• More people will die of AIDS in 2004 than in 1994.
• Between 1994 and 2004, sperm cell counts of human males will continue to decline and reproductive disorders will continue to increase.
• The gap in wealth between the richest 10% of humanity and the poorest 10% will be greater in 2004 than in 1994.

Simon declined Ehrlich and Schneider’s offer to bet, and used the following analogy to explain why he did so:

Simon’s thesis is that humanity’s life-style will continue to improve, and several of the points of Ehrlich’s second bet may increase for wholly benign reasons. For instance, the prediction of less agricultural soil per capita is a trend that Simon observed in The Ultimate Resource which Simon attributed to long-term rises in agricultural productivity.

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In 1980, Julian Simon repeatedly challenged environmental scientists to bet against him on trends in prices of commodities, asserting that humanity would never run out of anything… Paul and the other scientists knew that the five metals in the proposed wager were not critical indicators and said so at the time… They emphasized that the depletion of so-called renewable resources — environmental resources such as soils, forests, species diversity, and groundwater — is much more indicative of the deteriorating state of society’s life-support systems… Nonetheless, after consulting with many colleagues, Paul and Berkeley physicists John Harte and John Holdren accepted Simon’s challenge in late 1980…^[1]

It’s not clear if Ehrlich consulted with economists. If he had, the flaw in using commodity prices as the best way to understand biophysical limits might have become obvious. Many economists understand the principle of substitution and the dynamic influence of technology with respect to commodity prices. For example, in the absence of any new technologies, copper prices would indeed be expected to increase as growing economies demanded more copper to meet the needs of expanding communications networks and plumbing infrastructure. Technological changes mitigated much of this expected demand as fiber optics replaced copper wire networks and various plastics replaced the once ubiquitous copper pipes throughout the construction industry.

Julian Simon won because the price of three of the five metals went down in absolute terms and all five of the metals fell in price in inflation-adjusted terms,^[1][2] with both tin and tungsten falling by more than half. So, per the terms of the wager, Ehrlich paid Simon the difference in price between the same quantity of metals in 1980 and 1990 (which was $576.07). The prices of all five metals increased between 1950 and 1975, but Ehrlich believes three of the five went down during the 1980s because of the price of oil doubling in 1979, and because of a worldwide recession in the early 1980s.

Yet, it is significant that, according to an article in Wired:

All of [Ehrlich's] grim predictions had been decisively overturned by events. Ehrlich was wrong about higher natural resource prices, about “famines of unbelievable proportions” occurring by 1975, about “hundreds of millions of people starving to death” in the 1970s and ’80s, about the world “entering a genuine age of scarcity.” In 1990, for his having promoted “greater public understanding of environmental problems,” Ehrlich received a MacArthur Foundation Genius Award.” [Simon] always found it somewhat peculiar that neither the Science piece nor his public wager with Ehrlich nor anything else that he did, said, or wrote seemed to make much of a dent on the world at large. For some reason he could never comprehend, people were inclined to believe the very worst about anything and everything; they were immune to contrary evidence just as if they’d been medically vaccinated against the force of fact. Furthermore, there seemed to be a bizarre reverse-Cassandra effect operating in the universe: whereas the mythical Cassandra spoke the awful truth and was not believed, these days “experts” spoke awful falsehoods, and they were believed. Repeatedly being wrong actually seemed to be an advantage, conferring some sort of puzzling magic glow upon the speaker.^[3]

Exponential population growth cannot continue indefinitely for any species, whether it exists as microbes in a petri dish, wild salmon at sea, caribou in the taiga, or a global human society. However, world population is no longer growing exponentially; it has been decelerating for the last half century or so, and UN projections show that it may actually decline after 2040.^[4][5]

Simon offered to raise the wager to $20,000 and to use any resources at any time that Ehrlich preferred. Ehrlich countered with a challenge to bet that temperatures would increase in the future.^[1] The two were unable to reach an agreement on the terms of a second wager before Simon died.

Inflation-adjusted price movements of the commodities in the wager between Simon and Ehrlich may be seen in the larger 1950–2002 context in the following chart. Prices for these five commodities were generally rising from 1960 up until 1978, and generally falling thereafter.^[6]

References

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In 1968, Ehrlich was the author of a popular book, The Population Bomb, which argued that mankind was facing a demographic catastrophe with the rate of population growth quickly outstripping growth in the supply of food and resources. Simon, a libertarian, was highly skeptical of such claims.

You could name your own terms: select any raw material you wanted — copper, 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. Then, 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 29, 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 al. would pay Simon…

Between 1980 and 1990, the world’s population grew by more than 800 million, the largest increase in one decade in all of history. But by September 1990, 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.^[5]

As a result, in October 1990, Paul Ehrlich mailed Julian Simon a check for $576.07 to settle the wager in Simon’s favor.

Other wagers

In 1996, Simon bet $1000 with David South that the inflation-adjusted price of timber would decrease in the following 5 years. Simon paid out early on the bet in 1997 (before his death in 1998) based on his expectation that prices would remain above 1996 levels (which they did).^[6]

In recent years, there have been many bets and bet challenges related to global warming.^[7][8] For instance, J. Scott Armstrong challenged Al Gore to a climate-related bet in 2007 ^[9] that focused on year-to-year variation in temperatures but not on betting over longer term changes in global average temperatures.^[10]

Notes

1. ^ The face-off occurred in the pages of Social Science Quarterly, where Simon challenged Ehrlich to put his money where his mouth was. In response to Ehrlich’s published claim that “If I were a gambler, I would take even money that England will not exist in the year 2000″ — a proposition Simon regarded as too silly to bother with — Simon countered with “a public offer to stake US$10,000 … on my belief that the cost of non-government-controlled raw materials (including grain and oil) will not rise in the long run.”

References

Links

• Wired Magazine article on Julian Simon as Doomslayer and the wager
• Paul Ehrlich’s webpage on the two Simon bets
• http://www.overpopulation.com/simon_bet.html
• Overpopulation — The Population Explosion “Brownlash” and the wager
• “Julian Simon’s Bet With Paul Ehrlich” by Brian Carnell at Libertarian International website
• Julian Simon’s Perilous Optimism
• Graphs of carbon dioxide and nitrous oxide levels
• Armstrong-Gore climate bet
• Long Bets Organization

Tierney was a life-long friend and protégé of the late Julian Simon (the winner of the Simon-Ehrlich wager), and eagerly embraced the opportunity to follow in his mentor’s footsteps. Tierney is (as was Simon) an avowed Cornucopian, believing in the ingenuity of humankind to adapt and improvise. Meanwhile, Simmons’ “Twilight in the Desert” seemed to Tierney to be cut from the same gloom-and-doom cloth as Paul R. Ehrlich’s The Population Bomb, a book published in 1968 which later became the impetus for the Simon-Ehrlich wager. When that well-renowned wager was settled in 1990, Simon’s boomster victory over Ehrlich’s doomster philosophies was heralded as a triumph for Cornucopian economics.

Tierney made unabashed reference to that infamous wager as he gave his apologetic for embarking upon this redux of it:

I didn’t try to argue with [Simmons] about Saudi Arabia, because I know next to nothing about oil production there or anywhere else. I’m just following the advice of a mentor and friend, the economist Julian Simon: if you find anyone willing to bet that natural resource prices are going up, take him for all you can.

The inclusion of Rita Simon

After the bet was agreed upon (but before it was made public) Tierney immediately called Rita Simon, the widow of Julian Simon. She delightedly joined with Tierney’s effort to carry on with her late husband’s legacy, and even financed one half of Tierney’s obligation to the bet by contributing USD$2,500.00 of her own.

Ongoing updates

The price-per-barrel of crude oil is being heavily scrutinized by oil industry watchers aware of this bet. Many peak oil websites make frequent reference to the Simmons-Tierney bet^[1] and some have already begun daily tabulations and adjusted-for-inflation charts on the latest price-per-barrel. (The price-per-barrel of oil at the time of the bet — August 2005 — was around $65.00. The price as of the initial publishing of this article — May 10, 2008 — was $125.96; the record high of $147 in July 2008 was in large part attributable to a weak U.S. dollar.)

With the dramatic drop in demand and prices for many commodities in the economic crisis of 2008, the average per-barrel price for December 2008 reached a post-spike low of $40.88, then steadily climbed back to an average of $78.33 for the month of January 2010.^[2]

Both Simmons and Tierney (as of this writing) have publicly availed their e-mail addresses with a formal and open invitation to anyone else in the general population who might like to make similar wagers.

References

This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

Simmons and Tierney had never met before. But their association began after Simmons had been interviewed by a journalist colleague of Tierney’s, Peter Maass, for a New York Times Magazine article called “The Breaking Point,” published on August 21, 2005. The article heavily emphasized the doomsday claims of Simmons latest book Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy. That book is his prophecy of imminent global catastrophe which he asserts will be triggered by the allegedly soon-coming “peaking” of Saudi oil output, and the supposed domino effect of destruction that he says will subsequently be wreaked upon the global economy. Tierney’s dubious reaction to the article prompted him to call Simmons, introduce himself, and ask Simmons to back up his claims with cash. The friendly wager was immediately worked out over the phone.

Terms of the bet

Of the many claims that Simmons made in the Times article, his prediction of a tripling in the price-per-barrel of crude struck Tierney as perhaps the most incredible. In the Peter Maass article, Simmons was quoted as saying:

“We’re going to look back at history and say $55 a barrel was cheap,” [Simmons] said, recalling a TV interview in which he predicted that a barrel might hit triple digits. [Simmons] said that the anchor scoffed, in disbelief, “A hundred dollars?” Simmons replied, “I wasn’t talking about low triple digits.”

So Tierney focused upon that one detail and the two men fashioned the bet accordingly. Their final agreement was a commitment to tabulate every closing price-per-barrel of oil for each market day of 2010, then average out those prices for the entire year from January 1 through December 31, (adjusted for inflation to 2005 prices). If the year-end adjusted average comes out to $200.00 or more per barrel, Mr. Simmons wins. If it averages out to less than $200.00, Mr. Tierney wins. The winner takes the entire pot of US$10,000.00, plus interest ($5,000.00 from both parties, currently sitting in escrow).

The bet was made public just two days later in an op-ed piece by Tierney published in the New York Times, August 23, 2005 called “The $10,000.00 Question”.

Links

• http://www.nytimes.com/2005/08/23/opinion/23tierney.html
• http://www.twilightinthedesert.com/
• http://www.theoildrum.com/ – The Oil Drum

References

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Nicholas Carr speaking at the VINT Symposium held in Utrecht, Netherlands on June 17, 2008.

The Carr-Benkler wager is between Yochai Benkler and Nicholas Carr about whether the most influential sites on the Internet will be peer-produced or price-incentivized systems.

History

The wager was proposed by Benkler in July 2006 in a comment to a blog post where Carr criticizes Benkler’s views about volunteer peer-production. Benkler believes that by 2010 the major sites will have content provided by volunteers in what Benkler calls commons-based peer production, as in Wikipedia, reddit, Flickr and YouTube. Carr argues that the trend will favor content provided by paid workers, as in most traditional news outlets.^[1][2][3][4]

References

This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.