The late, great Julian Simon spent decades battling intellectually against biologists and zoologists who were convinced that human population growth, if governments did not hold it in check with draconian measures, would spell doom for multitudes of humans. (I might as well have used the present tense above, because many of the scientists with whom Simon did battle, including the most prominent, Paul Ehrlich, are still alive.) These students of animal development and behavior insist that every species inhabits an environment with a natural “carrying capacity.” If the population of a species grows in number beyond the limits of its environment’s carrying capacity, the death rate of members of that species will rise, while its members’ birth rate falls, because species members will confront unusual difficulty gaining access to food, water, and shelter. The species’ population is thus confined to the limits of its environment’s carrying capacity by the brutality of uncaring nature.
Simon argued that humans, at least those of us who live in free societies, are a categorically different sort of species. He observed that to the extent to which we, members of the human species, inhabit a social environment characterized by free and innovative markets, our species does not inhabit a natural environment with a finite carrying capacity. Simon’s argument starts with the fact that we humans are uniquely enterprising and innovative. When this fact combines with the further reality that market prices are signals about which specific resources are becoming more scarce relative to other resources, human entrepreneurship and creativity are incited to discover ways both to make currently known stocks of scarce resources go further and, more importantly, to discover either new sources of those resources or more abundant substitutes. When we succeed in these endeavors, as we now normally do, we literally produce more resources.
Simon’s explanation is revolutionary. Contrary to what most people seem to believe, we don’t obtain resources from an existing stock created for us by nature, leaving fewer resources available for use tomorrow each time we withdraw some amount for our use today. Instead, resources are ultimately fruits of the human mind and effort. And so we produce more petroleum, more tungsten, more copper, more bauxite in the same way that, when our demand for apple pies or Apple laptops increases, we produce more apple pies and Apple laptops.
For humans in market economies, therefore, the environment has no natural ‘carrying capacity.’
As Simon tirelessly documented, his account of humans’ relationship with the natural environment is amply confirmed by history, especially by modern history. Over the past few centuries the human population has grown remarkably – earlier this month it hit eight billion. At the same time there’s also been astounding growth in humans’ standard of living. Were there a natural carrying capacity on earth for the human population, history offers no evidence of it. Quite the contrary.
Despite the economic soundness of his argument and its consistency with the data – and despite his famous victory in a 1980 wager with Ehrlich on whether or not a bundle of five natural resources would become more scarce over the course of a decade – Simon’s argument left many biologists and zoologists unconvinced. And biologists and zoologists aren’t alone. Pick at random a professor, student, news reporter, or blogger and ask him if we humans are today threatening our long-term survival by overusing resources. Chances are high that the answer you’ll get is an unhesitating yes. You’ll likely be further told that our only hope of avoiding the terrible fate of billions of us being done in by natural forces is for us, especially those of us in rich countries, to dramatically reduce our consumption.
There is, I suppose, something gratifying in counseling personal sacrifice. Sacrifice often is admirable and worthwhile, as when you sacrifice your time to help a neighbor in distress, or sacrifice your comfort today in order to undergo painful medical treatments that will better ensure that you’ll survive past tomorrow. But sacrifice for sacrifice’s sake is, at best, pointless. Costs are incurred in exchange for no benefits. (I understand that practicing at sacrificing can help to build character. To the extent that such character-building is real, it’s a benefit that potentially makes practicing at sacrificing worthwhile. Such sacrifice, however, isn’t sacrifice for its own sake.)
If Simon is correct, green-inspired efforts to encourage or compel those of us in market economies to reduce our consumption today yield no benefits. Such efforts conserve no resources; they simply result in our producing fewer resources, an outcome that is utterly useless. The uselessness of this outcome lies in the reality that whenever we “need” new resources, we can produce these.
Was Simon naively pollyannaish? Has history’s apparent confirmation of his thesis simply been a matter of good luck? No.
Consider a recent essay in the Wall Street Journal – an essay whose title speaks volumes: “One Man’s Trash Is Another’s Clean Fuel.” The authors, Nick Stork and Joe Malchow, report very Simonesque news:
“In a lesson about how the energy transition is likely to play out, landfill operators’ ability to make use of excess gas has exploded in recent years. New facilities are being created to convert trash into renewable natural gas, molecularly identical to the gas that heats homes. The process cuts down greenhouse-gas emissions while creating a low-carbon energy source…
“The potential has spurred major sanitation and energy companies to break into this new market. This year Houston’s Waste Management Corp. announced an $825 million investment to boost renewable natural-gas capture. In October the British company BP agreed to acquire Archaea Energy (which one of us founded and the other invested in), a company that designs, builds and operates RNG plants in the U.S. to convert waste emissions. Archaea produces 6,000 oil-equivalent barrels a day through 13 RNG facilities with plans to construct 88 more to serve rising demand. Our only input is trash.
“Quiet, private innovation in gas processing made this possible. Archaea sells largely to voluntary buyers who wish to lock in clean gas at fair prices. RNG still comes at a premium compared with other fuel sources, but driving down the cost of producing RNG will mean more of it is available to buyers on attractive terms. We are working to lower the price of RNG by creating standardized and modular production facilities with decreased operating costs, higher processing efficiency, and uptime rates that start above 90 percent.”
Energy – indeed, low-carbon energy – from trash!
If turning trash into energy that’s transmissible over long distances nevertheless sounds either fanciful or likely insignificant in its long-term impact, imagine yourself as a native American roaming 600 years ago through the woodlands of what is today western Pennsylvania. You’re thirsty and bend down to enjoy a drink of water from a brook, only to discover that the water at that spot is undrinkable because it’s polluted with a smelly, oily, noxious substance oozing out a few feet upstream. How plausible would this You of 600 years ago have found a prediction that the icky stuff that pollutes your drinking water would, in just a few centuries, be a much-sought-after ‘natural’ resource that powers much of humanity’s activities?
Julian Simon died almost twenty-five years ago, just shy of his 66th birthday. Were he still alive today, he would surely celebrate our population of eight billion and remind anyone who would listen that, far from pushing humans closer to the earth’s carrying capacity, the creative potential of those eight billion human minds will further expand our access to resources. We need only to allow this creativity to operate freely.
Donald J. Boudreaux is a senior fellow with American Institute for Economic Research and with the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at George Mason University.
Originally published by the American Institute for Economic Research. Republished with permission under a Creative Commons Attribution 4.0 International License.
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For more on natural resources, click here.