How Models (Ideas) Mislead

There's a short article on the Economist website that points out how the doomsayers keep misleading us. Their reasoning is seductive, but it overlooks human ingenuity. This point is made at length 27 years ago by Julian Simon in his book The Ultimate Resource.

The Economist article is a nice antidote to the current gloom-and-doom crowd. It discusses Malthus and his misleading ideas and the current food shortage scare. But the authors point at the more general problem of letting our models of how the world works mislead us because of their seductive simplicity:

Although neo-Malthusianism naturally has much to say about food scarcity, the doctrine emerges more generally as the idea of absolute limits on resources and energy, such as the notion of “peak oil”. Following the earlier scares of the 1970s, oil companies defied the pessimists by finding extra fields, not least since higher prices had spurred new exploration. But even if oil wells were to run dry, economies can still adapt by finding and exploiting other energy sources.

A new form of Malthusian limit has more recently emerged through the need to constrain greenhouse-gas emissions in order to tackle global warming. But this too can be overcome by shifting to a low-carbon economy. As with agriculture, the main difficulty in making the necessary adjustment comes from poor policies, such as governments' reluctance to impose a carbon tax. There may be curbs on traditional forms of growth, but there is no limit to human ingenuity. That is why Malthus remains as wrong today as he was two centuries ago.