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The bet that tested whether humanity is running out of everything

The bet that tested whether humanity is running out of everything

New Capabilities
By Newzino Staff |

A Stanford biologist and a contrarian economist wagered $1,000 on the future of resource scarcity — and settled a question Malthus raised two centuries earlier

February 8th, 1998: Julian Simon dies at age 65

Overview

In 1980, biologist Paul Ehrlich — who had warned that hundreds of millions would starve to death in the 1970s — agreed to put money behind his convictions. Economist Julian Simon challenged him to pick any five commodity metals: if their inflation-adjusted prices rose over the next decade, Ehrlich wins. If they fell, Simon wins. On October 11, 1990, Ehrlich mailed Simon a check for $576.07. Every single metal had gotten cheaper.

Why it matters

This wager still shapes how policymakers weigh population growth against resource limits when designing environmental and economic policy.

Key Indicators

$576.07
Ehrlich's payout to Simon
The inflation-adjusted net loss on a $1,000 basket of five metals over ten years
36%
Real price decline of the five-metal basket
All five metals — copper, chromium, nickel, tin, and tungsten — fell in inflation-adjusted terms between 1980 and 1990
5 of 5
Metals that fell in price
Ehrlich chose the metals, yet every one moved in Simon's predicted direction
~62%
Decline in tin and tungsten prices
The two most dramatic drops in the basket, driven by substitution and new mining technology

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Debate Arena

Two rounds, two personas, one winner. You set the crossfire.

People Involved

Paul R. Ehrlich
Paul R. Ehrlich
Lost the wager; continued advocating for population-control policies
 Julian Lincoln Simon
Julian Lincoln Simon
Won the wager; died February 8, 1998
 John P. Holdren
John P. Holdren
Later served as White House Science Advisor under President Obama (2009–2017)
 John Harte
John Harte
Active in ecological research

Organizations Involved

Club of Rome
Club of Rome
International Think Tank
Provided intellectual backdrop for scarcity arguments

An international organization of academics, business leaders, and policymakers that commissioned the influential 1972 report The Limits to Growth.

Timeline

  1. Julian Simon dies at age 65

    Death

    Simon dies of a heart attack in Chevy Chase, Maryland. He had continued to challenge Ehrlich to a second wager, but the two could never agree on terms.

  2. Ehrlich mails Simon a check for $576.07

    Resolution

    All five metals declined in inflation-adjusted price over the decade. The basket fell 36% in real terms. Ehrlich sends payment without a personal note.

  3. Simon publishes The Ultimate Resource

    Publication

    Simon lays out his argument that human ingenuity is the 'ultimate resource,' and that population growth drives innovation that makes raw materials cheaper over time.

  4. Simon and Ehrlich formalize the commodity wager

    Agreement

    Ehrlich, Holdren, and Harte choose five metals — copper, chromium, nickel, tin, and tungsten — and bet Simon $1,000 that their inflation-adjusted prices will rise over the next decade.

  5. Club of Rome publishes The Limits to Growth

    Publication

    A team of researchers at the Massachusetts Institute of Technology uses computer modeling to project that industrial civilization will exhaust key resources within a century if growth continues unchecked. The report sells 30 million copies.

  6. Paul Ehrlich publishes The Population Bomb

    Publication

    Ehrlich predicts that hundreds of millions will starve in the 1970s due to overpopulation. The book becomes a bestseller and galvanizes the environmental movement.

  7. Malthus publishes An Essay on the Principle of Population

    Publication

    Thomas Malthus argues that population grows geometrically while food production grows only arithmetically, predicting inevitable famine. His framework shapes resource-scarcity debates for the next two centuries.

Scenarios

1

Human ingenuity keeps outpacing scarcity, vindicating Simon's framework

Discussed by: Human Progress, Cato Institute, Marian Tupy and Gale Pooley in their research on 'time prices'

Researchers Tupy and Pooley have extended Simon's analysis using 'time prices' — how long a worker must labor to afford a unit of a commodity. By this measure, the five-metal basket became 87% cheaper between 1900 and 2019, even as world population grew sevenfold. If substitution, recycling, and efficiency gains continue accelerating, commodity prices may keep falling in labor-adjusted terms indefinitely, confirming Simon's thesis that human creativity is functionally inexhaustible.

2

Resource constraints bind in new ways Simon didn't anticipate

Discussed by: Ecological economists, Our World in Data analysis, Jeremy Grantham

Asset manager Jeremy Grantham noted that if the bet had run from 1980 to 2011, Simon would have lost on four of five metals. Broader statistical analyses show Ehrlich would have won a majority of possible ten-year windows across the 20th century. If climate disruption, water scarcity, or critical-mineral bottlenecks for clean-energy technology create sustained supply constraints, the next era may look more like Ehrlich's world than Simon's — not through population-driven famine, but through geopolitical competition for finite inputs.

3

The debate becomes irrelevant as population growth stalls

Discussed by: United Nations Population Division, demographers including Dean Spears and others tracking fertility decline

Global fertility rates have fallen below replacement level in most industrialized nations and are declining rapidly across the developing world. The United Nations projects that world population may peak before 2100 and could begin declining. If population growth — the engine of Ehrlich's fears — simply stops, both sides of the wager lose their animating premise. The scarcity-versus-ingenuity debate gives way to new questions about aging societies, labor shortages, and whether innovation can continue without population-driven demand.

Historical Context

Malthus's Essay on the Principle of Population (1798)

1798

What Happened

Thomas Malthus, an English clergyman and economist, argued that population doubles roughly every 25 years while food production grows only incrementally. He predicted that famine, disease, and war would inevitably check population growth unless people exercised 'moral restraint' by marrying later and having fewer children.

Outcome

Short Term

The essay shaped British social policy, influencing the Poor Laws and debates over welfare. It also profoundly influenced Charles Darwin's theory of natural selection.

Long Term

The agricultural and industrial revolutions shattered Malthus's arithmetic. Global population grew from 800 million to over 8 billion while per-capita food production and incomes rose dramatically. But 'Malthusian' became a permanent label for scarcity-based thinking.

Why It's Relevant Today

Ehrlich was explicitly updating Malthus for the 20th century. Simon was explicitly arguing that Malthus had been wrong for a specific, repeatable reason: human ingenuity responds to scarcity by innovating. The wager was a direct empirical test of the Malthusian framework.

The Limits to Growth report (1972)

1972

What Happened

A team at the Massachusetts Institute of Technology, commissioned by the Club of Rome, used computer modeling to project that unchecked industrial growth would exhaust key resources and trigger societal collapse by the mid-21st century. The report sold 30 million copies and became a foundational text for the environmental movement.

Outcome

Short Term

The report fueled the 1970s environmental policy wave, contributing to the creation of agencies like the United States Environmental Protection Agency and catalyzing international environmental diplomacy.

Long Term

Many of its specific resource-depletion timelines did not materialize, and critics pointed to its failure to account for price-driven substitution and technological change. But its broader framing — that exponential growth on a finite planet has limits — remains central to sustainability discourse.

Why It's Relevant Today

The Limits to Growth created the intellectual climate in which the Simon-Ehrlich wager became meaningful. Ehrlich's side of the bet was essentially the Limits to Growth thesis applied to five specific metals. Simon's side was a direct rebuttal: markets and ingenuity would prevent the projected scarcity.

The Green Revolution (1960s–1970s)

1960s–1970s

What Happened

Agricultural scientist Norman Borlaug and colleagues developed high-yield, disease-resistant wheat and rice varieties. Combined with synthetic fertilizers and irrigation, these innovations dramatically boosted food production in India, Mexico, Pakistan, and other developing nations. Borlaug received the Nobel Peace Prize in 1970.

Outcome

Short Term

India went from famine risk to grain self-sufficiency within a decade — directly contradicting Ehrlich's 1968 prediction that India 'couldn't possibly feed two hundred million more people by 1980.'

Long Term

The Green Revolution is estimated to have saved over a billion lives from starvation, though it also introduced new dependencies on chemical inputs and groundwater. It became the single most powerful piece of evidence that technological innovation can outrun Malthusian constraints.

Why It's Relevant Today

The Green Revolution was happening in real time as Ehrlich published The Population Bomb. It demonstrated exactly the mechanism Simon would later champion: human ingenuity responding to scarcity signals with transformative innovation. It also showed why Ehrlich's most specific predictions failed.

Sources

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Human Progress Wikipedia Our World in Data Foundation for Economic Education Econlib Human Progress Wikipedia Wikipedia Wikipedia Wikipedia