Monday, May 16, 2005

Norman Borlaug Against the Fall of Night

A correspondent, Lichanos, told me of a bet made twenty-five years ago between Dr. Julian L. Simon and Dr. Paul Ehrlich.

During his illustrious career, Dr. Simon’s research was highlighted by a bet he made with Stanford biologist Paul Ehrlich. Wanting to prove his theory that natural resources are not finite in a true sense, Julian challenged Ehrlich in 1980 to choose five commodities that he believed would become more scarce, and therefore more expensive, over a decade. Ten years later, the price of each metal had fallen. In commemoration of the bet, the Julian L. Simon Award includes a sculpture of oak leaves, with the veins representing the five metals chosen by Ehrlich: chromium, copper, nickel, tin, and tungsten.

Ehrlich has been characterized as a pessimist, a doomster, someone who finds the cloud for every silver lining. Simon as a man who treasured the innovative spirit, reveled in endless horizons of human triumph. But this bet is merely the continuation of an argument that started with the thoughts of Adam Smith and Thomas Robert Malthus. Smith said that wealth comes from Capital. Malthus says that poverty comes from population growth. The argument is not going to disappear any time soon, because both of them are right.

Currently the Simon-Smith side of the argument seems ascendant because, as with the millennial prophets who forecast the immanent end of the world, the predictions are repeatedly punctured by the facts. The current forecast of Peak Oil, that I’ve talked about previously, is the latest in a seemingly unending series of Ehrlichian forebodings. The brave followers of Malthus and Ehrlich predict that world oil production will begin slowly collapsing in 5 years or 10 years or maybe 40 years. Bears accept it. Bulls ignore it.

The fact is thathuman ingenuity and Capitalism actto increase our wealth in a parallel race with population growth, which steals from that wealth. You see, Malthus was not wrong. He can’t be wrong because his argument was mathematical. Population growth must follow and does follow an exponential growth rate. This implies that there is a fixed period of time in which the population will double. If you’ve ever looked at an interest rate chart, you know that every dollar you invest works at duplicating itself according to the Rule of 72. At a 3 percent growth rate, my dollar will double, due to the magic of compound growth, in 72/3, or 24 years. At 6 percent, it will double in 72/6, or 12 years. If you invested 1,000 dollars in the stock market at age 21, expecting a conservative yield of 10% annually, you will die a millionaire at 93.

Most people know this and accept this, but can’t bring themselves to apply it to humanity. Now let’s assume, for argument sake, that the human race began as two people about 7,000 years ago. Guessing conservatively that there has been an average yield of 0.7 percent, which is pretty low, (I’m not sure if the rule of 72 still works for values that low), then the doubling time would be about 100 years. The doubling time is less than that today, as I’m sure you are aware. Given these assumptions and 70 centuries, then the population today would be 2 raised to the 70th power, approximately 10 to the 21st power, or one followed by 21 zeros. The population today is actually about 6 billion (is that right?), but at any rate less than 10 to the 10th power. For every person alive today, there should have been an entire planet of people. What happened to them all?

The answer is that the population stopped doubling at some point, just as Malthus predicted. The death rate caught up to the growth rate for many reasons, but primarily because the population had reached the carrying capacity of the available habitat. The population was stifled at particular levels for long periods of time. As people discovered new technologies the habitat was effectively changed into one that would support more people, but this happened in fits and starts, lifting the population lid at certain points in time.

Lately, the technological wonders have been lifting that limit faster than we can meet it. Does that mean that Malthus was wrong or that he’s obsolete? No. It only means that Adam Smith was right. The Hidden Hand of Capitalism has pushed us into feats of productivity undreamed of in his day.

But what do I mean when I say Capitalism has pushed us? I mean that all of us have contributed, minutely changing their efforts from day to day until the end result is unrecognizable compared to the beginning. I mean also that some of us have changed things quite a great deal. One of the most productive people on the planet is a man named Norman Borlaug. Through the efforts of this great man, we have fended off Malthus for half a century. Have you heard of him? He saved more lives than Genghis Khan ever ended. You’ve probably heard of him.

One thing I wanted to tell you about Norman Borlaug. He’s not happy with us. He spent his considerable life’s effort giving us a little breathing room, hoping we would find some civilized way to stabilize our population at a level below the carrying capacity of the planet. We haven’t done so, and because of people like Julian L. Simon, we don’t, for the most part, even recognize the need to do so.

Once again, Borlaug and Simon are both right, sort of. We can keep up this race for quite some time if we keep getting smarter, more innovative, more imaginative. There is no way to predict where we will take that final wrong step that leads to population collapse, but I can tell you this, it is possible to take a bad step. We know that because we have seen what happened to the Soviet Union.

Vladimir Putin recently asserted something to the effect that the end of the Soviet Empire was the single greatest social catastrophe of the twentieth century. We laughed in astonishment, but he has a different point of view. The dropping population of Russia is just an interesting statistic to us, but to the Russians it is 30 million agonizing tales of woe. Their embrace of Capitalism will eventually pull them out of this slide, even with all the corruption, but it has not been a walk in the park for them. And it will not be a walk in the park for the rest of us if we don’t keep our heads up.

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