Don't count on Green Revolution 2.0.

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Did Wrong Man Win 'The Population Bomb' Bet?

Noah Smith is a Bloomberg View columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion.
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If you ever read science fiction from 1960s and 1970s, you would have come across a lot of story lines that focused on rampant overpopulation, starvation and resource constraints. That seems outdated today -- a little bit of retro-futurism, like the flying cars that we never ended up getting. But to people in the '70s, the idea of a massive population-driven resource shortage and environmental catastrophe didn’t seem so far-fetched. In the 1960s, the global fertility rate -- the number of children a woman can be expected to have in her lifetime -- still stood at five, which if left unchanged would surely lead to exactly the kind of catastrophe that science-fiction authors were imagining. 

It was against this backdrop that Stanford ecologist Paul Ehrlich wrote his famous book, "The Population Bomb," in 1968, the subject of a recent New York Times retrospective. The book predicted enormous famines and resource shortages. Ehrlich was fond of making dramatic, apocalyptic predictions, such as “If I were a gambler, I would take even money that England will not exist in the year 2000.” 

Obviously, England still exists. Nowadays, the arguments Ehrlich made in "The Population Bomb" are popularly derided as Chicken Little-type doomsaying. Ehrlich is regarded as the modern-day equivalent of Thomas Malthus, the 18th century British economist who predicted that exponentially expanding population would inevitably outstrip food supplies. 

Ehrlich’s reputation took another enormous hit when he lost a famous bet with the economics writer Julian Simon. Simon was a firm believer in the power of technological progress to outrace resource scarcity, ensuring increasing plenty even with increasing population. Ehrlich bet Simon that the prices of five metals would rise between 1980 and 1990. They fell, as resource prices generally crashed in the 1980s, and Simon won the bet. 

Simon’s victory wasn't just a victory for optimism over pessimism, but a victory for social science over natural science. There is a widespread tendency to give natural scientists more respect than social scientists, since they more often produce usable technologies. But the Ehrlich-Simon bet showed that a social scientist, by being syncretic and looking at a wide array of data sources, could sometimes forecast broad trends better than a natural scientist who focused too narrowly on his own personal area of expertise. 

But before we conclude that Simon was right, and that technology will always bail us out of a tight spot, we should think about why Ehrlich’s grim forecasts failed to come true. Even a little thought will show that blithe, Simon-style optimism is a mistake. 

Ehrlich’s predictions of population catastrophe flopped mostly because he was too pessimistic about technology. The Green Revolution increased crop yields, allowing us to feed the multitudes who would otherwise go hungry. But crop yields can’t be increased infinitely. In recent years, food demand has begun to outpace improvements in crop yields. Technology continues to improve, but not fast enough to stop food prices from rising once again. The increased demand is largely due to rising consumption in places that have gotten richer, such as China, and that is a good thing. But it is small comfort to the people in poor countries such as Egypt, the Philippines and Nigeria, whose growing populations will be less able to afford food at higher prices. 

As for the Ehrlich-Simon bet, it's true that resource prices came down in the '80s. Some of that was due to technology, like the new solvent extraction and electrowinning (SX-EW) technique for extracting copper from ore. But one big reason for that wasn't technological progress -- as Simon predicted -- but the collapse of international resource cartels, such as the International Tin Council, or the disarray among member of the Organization of the Petroleum Exporting Countries oil cartel. 

As many others have noted, Simon was pretty lucky to win the bet. In most of the years since 1980, Ehrlich would have won. Resource prices plunged in the 1980s, stayed low in the 1990s (helped by the collapse of the Soviet bloc, which dumped cheap resources on the market), and then began a slow steady rise that has continued into recent years. 

So while Ehrlich was way too apocalyptic in his predictions, Simon was way too sunny in his. Technology is amazing, but it isn't a magical force that will automatically rise to meet any challenge, spurred on only by the pressure of market prices. That was Simon’s argument in his 1981 book, "The Ultimate Resource," but it’s not correct. 

First of all, technology is partially a public good, since it’s difficult to keep the fruits of one’s research to oneself. This implies a big role for governments in promoting research and development. Second, and more ominously, sometimes there just aren’t new technologies to discover. For example, the main solution to overpopulation in those 1960s sci-fi novels -- colonizing other planets -- looks like it won’t be possible any time soon.

So in the long run, Ehrlich’s message -- though overblown and sensationalized -- is still valuable and important. Only by limiting fertility, ultimately, can we avoid hitting our true resource constraints, whatever those are. Fortunately, most of the world has done an amazing job of reducing fertility to sustainable levels since the 1960s -- global fertility is now approaching the replacement level of 2.1, at which point we’ll probably be safe in the long run. Government policies to educate women and make birth control widely available have been very important in that process. 

So don’t be worried by Ehrlich, who still stands by his overall predictions of apocalypse. But don’t put all of your faith in technology either. Technology often needs a helping hand from government policy.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

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