Wednesday, March 28, 2001
The Halifax Chronicle Herald

Betting on human ingenuity

by Brian Lee Crowley

THE FALSE PROPHETS of doom are at it again. Something in the human psyche believes that good fortune is the product of undeserved luck, and that we will be punished tomorrow for enjoyment and success today. As the mother of an old friend used to say, whenever he would exult about a fine summer’s day, “Aye, laddie, and ye can be sure we’ll pay for it later.”

Thomas Malthus earned economics the nickname of “the dismal science” in the 18th century by observing that the population was growing faster than the food supply. He predicted mass starvation.

In the 1970s, the Club of Rome predicted massive shortages of natural resources due to overconsumption and overpopulation, with disastrous effects on human health and material well-being.

On the front page of this newspaper recently, it was claimed that the resources of four more planets would be needed to maintain us at our current levels of consumption. We were exhorted to give up cars for bicycles.

Time and again, people have looked at growing human prosperity, improving health and population increase and told us that we were living in a fool’s paradise, that it obviously couldn’t continue, that our prosperity was at the cost of others such as the poor or future generations, and that we would pay the price for our irresponsible wickedness.

We’re still waiting.

The reason we’re still waiting, why the ecosystem hasn’t collapsed, why we are still successful in feeding ourselves, why incomes are rising and health status improving around the globe is that the doomsayers have completely misunderstood the way the world works.

Of all their misunderstandings, two stand out. They don’t understand what natural resources are. And they don’t understand that the greatest natural resource of all is human ingenuity.

It may be popular, but it is quite incorrect to think of natural resources as exhaustible, as something of which there is only so much and when we use it up, it is gone forever. If, for example, natural resources were actually getting scarcer, then the price would go up. That’s part of what prices are for, to signal shortages and availability.

But the price of natural resources has been in decline for centuries. Remember the famous bet between ecologist Paul Ehrlich and economist Julian Simon. Simon bet Ehrlich that the prices of any five natural resources Ehrlich chose would drop over a 10-year period, whereas Ehrlich, inspired by the Club of Rome, was convinced that we were on the cusp of huge shortages driven by overconsumption and population growth. Ehrlich paid up in 1990.

Ehrlich, like his many forerunners, forgot that shortages and rising prices are an opportunity. Malthus didn’t foresee that farmers could become hugely more productive in response to rising demand for food, eventually unleashing this century’s Green Revolution. Aquaculture, hydroponics and other technologies will allow us to keep feeding the world’s population, probably at a declining real cost. And note that we in the West do not feed ourselves at the expense of people in the Third World. On the contrary, it is Western innovation that has largely made it possible for the burgeoning populations of the world to be fed. Human ingenuity has vastly increased the carrying capacity of the planet. And we are nowhere near the limit of what such innovation and inventiveness can accomplish.

That’s the other thing that the pessimists haven’t understood. Human beings are not simply parasites on the bounty of nature. The two greatest forces now shaping the world are nature and human ingenuity, and the latter is our greatest natural resource. We now require less and less land to feed each human being. We need less and less steel for each car and copper for each telephone connection and gas for each mile travelled than we ever did before. Those resources are valuable, and it makes no sense to use more than the minimum necessary in each instance. And that minimum is falling all the time, because it pays to make it fall. When things get in short supply, human ingenuity comes up with cheaper alternatives, or invests time and intelligence in increasing the supply, both of which ease the shortage.

As the successful bettor, Julian Simon, once said, “The ultimate resource is people, especially skilled, spirited, hopeful young people who will exert their will and imagination for their own benefit and in doing so, will inevitably benefit the rest of us as well.” All that can hold us back, he said, is our fear and lack of imagination. When those come to dominate our thinking, the result is policies that restrain freedom, curtail choices, and dampen the spirit of enterprise and experimentation. Yet freedom, choice and enterprise are the only forces that can master and overcome humanity’s challenges

Brian Lee Crowley is president of the Atlantic Institute for Market Studies, a public policy think tank in Halifax. E-mail: BrianLeeCrowley@aims.ca