Julian Simon’s Breakthrough: 1977, 1981, 1996

Julian Simon’s The Economics of Population Growth (1977) was hailed as a “path-breaking work” that offered “a new paradigm in the Kuhnian sense” (Joseph Spengler, quoted in Simon, 2002: 256).

The overused term “paradigm” must be applied with caution, however, because few new ideas really create paradigms, and paradigms can be wrong. Also, contra Kuhn, there are examples of science cumulatively approaching the truth short of revolution (Weinberg). Still, Simon put together the parts of an alternative worldview that continues to penetrate its way into the scientific orthodoxy, particularly in economics (Bradley, 2000: 19–20).

Simon’s extraordinary science (in Kuhnian terms) reached two major conclusions:

(1) a growing population can improve virtually all environmental welfare indicators; and

(2) scarcity measures of mineral (“depletable”) resources are not qualitatively different from that of other economic goods.

Thus human welfare indicators can be expected to trend positively over time, although problems will develop requiring corrective action and solutions.

Simon’s theory of improvement centered on human ingenuity, or what he called the ultimate resource (Simon, 1981, 1996: book titles). The threat to progress was not people but a lack of free-market institutions providing the necessary incentives. In his words, “The world’s problem is not too many people, but lack of political and economic freedom” (1996: 11). The improvement process also results from the very fact of problems, which lead to improvements that leave people better off than if the problem had never occurred (Simon, 1996: 580, 587–88).

Simon’s conclusions, spelled out in popular form in his 1981 The Ultimate Resource, were presented again 15 years later in The Ultimate Resource 2. But Simon gave more emphasis on the institutional and cultural requirements enabling human ingenuity in the second edition. “One of the main themes of this book, which this edition emphasizes even more than the first edition because there is now a greater weight of evidence behind it,” Simon explained,

is the proper role of government; to set market rules that are as impersonal and as general as possible, allowing individuals to decide for themselves how and what to produce and what to consume, in a manner that infringes as little as possible on the rights of others to do the same, and where each pays the full price to others of the costs to others of one’s own activities. Support for this principle appears in chapter after chapter as we view the history and the statistical data on such issues as food production, supply of natural resources, and the like (1996: 584).

Elsewhere in the latter book he states:

It is not only the human mind and the human spirit that are crucial, but also the framework of society. The political-economic organization of a country has the most influence upon its economic progress (1996: 584).

The greatest asset of the United States and of other economically advanced countries is the political and legal and economic organization (1996: 585).

Still, these revisions are deep in the book and not mentioned in the preface in the revised version. “What’s New in the Second Edition” did not mention the above change, in part because Simon did not dedicate a theoretical section to it. He was data driven more than theory driven, believing that theory would fall out of the facts.

But given the new facts about mineral prices in the early twenty-first century, which would have likely inspired an Ultimate Resource 3, he might well have provided statistics on, for example, the estimated loss in resource availability from political restrictions on access in the United States, as well as estimates of lost production from politically unstable mineral-rich countries around the world. To this end, he would have become more of an institutionalist, while avoiding the excess of this school of thought.

————–

References:

Bradley, Robert. Julian Simon and the Triumph of Energy Sustainability. Washington, DC: American Legislative Exchange Council, 2000.

Simon, Julian. The Economics of Population Growth. Princeton: Princeton University Press, 1977.

Simon, Julian. The Ultimate Resource. Princteon: Princeton University Press, 1981.

Simon, Julian. The Ultimate Resource 2. Princeton: Princeton University Press, 1996.

Simon, Julian. A Life Against the Grain. New Brunswick, NJ: Transaction Publishers, 2002.