Here is another classic example of this truism by John Tierny in an article for the NY Times:
Five years ago, Matthew R. Simmons and I bet $5,000. It was a wager about the future of energy supplies — a Malthusian pessimist versus a Cornucopian optimist — and now the day of reckoning is nigh: Jan. 1, 2011.For those who have been kept in the dark by all the noise from the sky-is-falling crowd, Julian Simon is the economist who wrote the seminal book on how human ingenuity is consistently ignored by the linear extrapolationists known as "the knowledgeable pundit class" and/or "the doomsayers". You can read Julian Simon's text The Ultimate Resource on-line. Go ahead, dare to be different and embrace life and the possibility of a better tomorrow. Dare to be an optimist!
The bet was occasioned by a cover article in August 2005 in The New York Times Magazine titled “The Breaking Point.” It featured predictions of soaring oil prices from Mr. Simmons, who was a member of the Council on Foreign Relations, the head of a Houston investment bank specializing in the energy industry, and the author of “Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy.”
I called Mr. Simmons to discuss a bet. To his credit — and unlike some other Malthusians — he was eager to back his predictions with cash. He expected the price of oil, then about $65 a barrel, to more than triple in the next five years, even after adjusting for inflation. He offered to bet $5,000 that the average price of oil over the course of 2010 would be at least $200 a barrel in 2005 dollars.
I took him up on it, not because I knew much about Saudi oil production or the other “peak oil” arguments that global production was headed downward. I was just following a rule learned from a mentor and a friend, the economist Julian L. Simon.
As the leader of the Cornucopians, the optimists who believed there would always be abundant supplies of energy and other resources, Julian figured that betting was the best way to make his argument. Optimism, he found, didn’t make for cover stories and front-page headlines.
No matter how many cheery long-term statistics he produced, he couldn’t get as much attention as the gloomy Malthusians like Paul Ehrlich, the best-selling ecologist. Their forecasts of energy crises and resource shortages seemed not only newsier but also more intuitively correct. In a finite world with a growing population, wasn’t it logical to expect resources to become scarcer and more expensive?
As an alternative to arguing, Julian offered to bet that the price of any natural resource chosen by a Malthusian wouldn’t rise in the future. Dr. Ehrlich accepted and formed a consortium with two colleagues at Berkeley, John P. Holdren and John Harte, who were supposed to be experts in natural resources. In 1980, they picked five metals and bet that the prices would rise during the next 10 years.
By 1990, the prices were lower, and the Malthusians paid up, although they didn’t seem to suffer any professional consequences. Dr. Ehrlich and Dr. Holdren both won MacArthur “genius awards” (Julian never did). Dr. Holdren went on to lead the American Association for the Advancement of Science, and today he serves as President Obama’s science adviser.
Julian, who died in 1998, never managed to persuade Dr. Ehrlich or Dr. Holdren or other prominent doomsayers to take his bets again.
Sadly, an economist I respect, Brad DeLong at UC Berkeley denounces the NY Times and John Tierney for publishing what he views as wrong-headed optimism. Might I suggest that DeLong put his money where his mouth is and make a bet with Tierney for say $50,000 due on Jan 1, 2030 that fossil fuel derived energy for the average consumer will be taking a bigger bit out of the household budget than it now does? Notice, I'm not willing to bet that oil won't go higher, but if you really believe in ingenuity, you expect that some energy equivalent will be discovered or engineered to replace any "expired" oil. But... oil may just surprise us. Take a look here where I report that there are 2 TRILLION BARRELS of oil in the Canadian oil sands. At current rates of use which are well under 100 million barrel per day, that is 20,000 days worth of oil, or roughly 50 years worth of oil. And I happen to know that there has been very little exploration in Canada's North. Who knows what energy resource lie up there. (A more conservative estimate is on Wikipedia. As well as a near 2 trillion estimate here on Wikipedia. Remember, it is not in the interests of the oil companies to find more oil than they can produce in the relatively near future, so there will always be a chronic estimate of "only a few years" of supply available.)
4 comments:
I read this article recently and had a lot of thoughts about its message.. Anyway, I was going to send you a link to point it out to you and got sidetracked. Now, I am glad to see you found it on your own..
I do think we are conditioned to believe doomsayers from childhood stories like Jonah and the Great Fish to The Boy Who Cried Wolf.. These things in the back of one's mind make them careful not to ignore warnings or prophecies from crazy old men.
Another thing I thought of was the city of Pompeii covered with ash from a volcano. I wonder what those people were told about all the warning signs coming from the smoking mountain next door. I am not saying that running around scared of the falling sky is the answer, but ridiculing the messenger sometimes isn't in our best interest either... or, so the stories tell us. I think that is why some believe the pessimists or scary predictions.. May cooler heads prevail but long lines at gas pumps from rumors of a shortage show us that is not usually the case.
Thomas:
As that great sage Yogi Berra once said "Predicting the future is hard, especially if it hasn't happened yet."
Nobody really knows the future. Science is a tool to help, but unless the system is deterministic, science can't nail it down. Simple meso-scale physical systems (think billiard balls) are deterministic. But stuff at the atomic scale isn't and maybe stuff at the galactic scale is but scientist are still be surprised by things like the 1990s discovery that expansion is speeding up. So there are no solid theories there.
The really interesting stuff in life, people, economics, water flow, etc. are generally not predictable because they are chaotic or non-deterministic. Those who claim to know the energy needs 50 years from now are kidding themselves. Nobody in 1960 was predicting that US energy growth would slow despite population growth and GDP growth. Who can honestly know what technologies will be in place in 2050?
What I do know is that humans will surprise you. That when faced with a problem a certain percentage will throw up their hands and give themselves over to thoughts of doom. But others will get busy trying to figure a way out. I'm with the latter, not the former.
I think CO2 is a red herring. But even if there was a serious "global warming" problem due to CO2, I expect by 2050 we will be deeply into weaning ourselves away from fossil fuels in favour of other energy technologies. I don't know specific because I'm betting on human ingenuity, not some specific current technology linearly extrapolated into the future.
I remember some of the predictions when I was in school about how great things would be by a certain date and now that we are here those things have not happened.. I was reminded of this to a degree watching "Back To The Future" and the sequels recently. I didn't even think about it for awhile, but then realized that we were almost there, and no, there are no flying cars zipping around.. So, you nail it pretty well with your reply, about being able to see the future with "current technologies extrapolated linearly into the future". I can see how things change direction even with one little invention or discovery.
Thomas: One of my favourite "predictions" was one I remember from the early 1960s telling us that nuclear fusion power was "only" 10-20 years in the future. If you talk to physicists today, they will tell you that nuclear fusion is "only" 10-20 years in the future. That's 50 years of a technology being stuck looking like it is "only" 10-20 years from fruition.
As for you Jetson dream, this is a nice summary of the state-of-the-art as of the summer of 2010. Will the Jetson dream ever be reality? Well, the future is hard to predict. In 1905 most people would have predicted electric cars, not internal combustion gas-powered cars.
The fun thing about the future is how unexpected stuff just "pops out" of nowhere. I remember in the early 1990s thinking that "there's not much really new technology these days". But that was just before the Internet exploded. I'm quite happy with the Internet. It is an information future that was realized. I now have more information at my fingertips that I could have honestly hoped for 20 years ago. Back in 1990 the "future" was some hypertext system that was constrained to your desktop and its file system. That Tim Berners-Lee's web-based system would explode on the scene with the Mosaic browser in just a couple of years was unexpected.
On the other hand, I remember working on projects to demonstrate Tim Berneers-Lee's semantic web which was envisioned as being "rolled out" in 2010. Well, it didn't make that deadline. People are still working on it, but it is looking more like nuclear fusion than the WWW browser that exploded from the earlier Berners-Lee vision.
What's the next big thing? I'm hoping the Widom-Larsen LENR reactor will be the next big surprise. Here's the exciting technical possibility presentation on LENR. To my mind this is a lot more likely than nuclear fusion power.
The future just isn't ever going to be what the "experts" predict it to be. It is always going to be surprising and a lot more fun (if you ignore war and depressions).
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