Tuesday, September 1, 2009

Doomsdayers, Geniuses and the Nonsense of Scarsity Economics

Tweet It!
I am always amused when I hear an opinion prefaced with the statement; "I'm no rocket scientist but..." The implication being that you don't need to be a genius to debate a subject. It's amusing because the passing of time often renders yesterday's "rocket scientists" as naive in the extreme, and more often than not, patently wrong in their predictions. no doubt the original flat Earth Society were highly regarded for their insight at the time.

You may never have heard of Paul Ehlrich, or Thomas Malthus unless you have an interest in the economic principles of scarcity. In fact Malthus died back in 1834. His Principle 'The Malthusian Catastrophe' however lives on.

Mr Ehlrich published a couple of best selling books between 1968 and 1971, including ‘Population Explosion', ‘Eco-Catastrophe', (that word again!), and ‘The End of Affluence’,. At the time they were the best selling environmental books to date, selling millions of copies. These were the epitome of doomsday thinking.

So well regarded was his work that he received the ‘prestigious’ Macarthur Foundation Genius Award in acknowledgment of his ‘wisdom’. Why the parentheses you ask? Well, remember the aforementioned Malthus? He was the chap that declared in volumes of scientific rhetoric, that the price of societal improvement and welfare was impending doom, manifested as epidemic, pestilence, plague and starvation. You see the principle of scarcity states that in a world of limited resources there can be no place for aspiration to achieve.

Presumably we should live in huts and embrace a life of privation and subsistence. Happy times! Paul Ehlrich inhabits the same doomsday world as Malthus. His best selling books that garnered him his reputation including his ‘genius’ award, predicted apocalyptic disasters on a scale never before seen. Hundreds of millions would starve to death. Famine, plague and societal disintegration would become the norm. Indeed the world as we know it would collapse like a house of cards. When will this happen, you might ask? Ehlrich was remarkably specific. During the 1970’s!

I must admit to being perplexed as to the predictions his vanquished competitors came up with in the ‘genius’ award category, if he won! In a previous article I asked ‘Is Truth a Myth?’ and facetiously postulated that truth is entirely contextual and biased by our subconscious belief and value systems, which are largely a factor of our cultural up-bringing. Hindsight is a great ally when predicting and forecasting outcomes.

At the other end of the Truth spectrum is Julian Simon, who won a famous bet with Ehlrich, that resources actually drop in price over time and therefore are not scarce, and by predicting that contrary to the assertion that we live in a world of scarcity, we actually live in a world of untold abundance. The air is cleaner. We use less land to produce more food, thanks to the ubiquitous Corn Economy, that accounts for so much of our food and packaging.

The point here is not to gloat over the misguided predictions of past scholars, but it is interesting that negative doom and gloom catastrophe and impending apocalypse is easier to sell than the more likely script, which is that the power of innovation to replace and refine our technologies is inevitably more likely.

All innovation starts with the seed of a ‘what can we improve?’ question. Doomsayers prefer to build their audience on the Principles of Malthus and Ehlrich. Maybe the doomsdayers are right but their timing is out. It seems to me however that given a choice,I'd prefer living a life of optimism, aspiration and enthusiasm, which is profoundly more fulfilling than that proposed by the aforementioned 'rocket scientists'.

No comments: