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VOLUME 6 (1999)

The Ultimate Resource - 2 (revised edition). By Julian L. Simon. 1996. Princeton, NJ: Princeton University Press. 734pp.

Reviewed by Peter Harries-Jones, Department of Anthropology, York University, Toronto, Ontario, Canada.

This re-issued and revised volume of a book originally published in 1981 is bound to touch a hot spot of any interested environmentalist. Simon's major expertise lies in the field of population economics and one of the main motivations for his original volume was a profound academic disagreement with the conclusions of Paul and Anne Ehrlich, together with the United Nations and their supporters, over interpretation of population and resource issues. In the earlier edition Simon predicted correctly, entirely against UN evidence at that time, a slowing rate of population growth in the world, especially Third World. A major theme of this revised edition is to rephrase and reverse Malthus' equation between subsistence and population. Simon's Law is as follows: whether or not population grows exponentially, subsistence grows at an even faster exponential rate, largely but not entirely because of population growth. And capacity to improve other aspects of the standard of living, beyond subsistence, grows at a still faster exponential rate, due largely to the growth of human knowledge (1996: 106).

What may have begun as legitimate dispute about the effects of growth trends in human population evidently turned Simon against "anti-population growth environmentalists" in toto, along with anyone who predicts dire consequences from rapid depletion of natural resources. A conceptual quantity, such as "natural resources" is not finite or infinite in itself, he says, but rather finite or infinite according to definitions of "resource." In relation to most definitions of "resource," the problems of global population growth have been wildly exaggerated. According to Simon, humanity has demonstrated an inherited capacity • through human rules and customs • to deal successfully with resource problems through history. Adding people may exacerbate the problems in the short run, but high fertility leads in the long run to increased survival of the group, through demand for goods and supply of ingenious minds (1996: 75).

For example, the amount of arable land is increasing year by year in the world and even if some of this arable land is of poor quality, taken as a whole, we should not worry about diminishing returns in the long run ( 1996: 128). As for desertification, this is the result of faulty economic arrangements rather than of population growth. While biologists and environmentalists focus on the physical aspects of desertification and how it is likely to be exacerbated by global warming, Simon believes the social aspects are predominant. Satellite evidence of desertification in the western United Sates has shown that this degradation is taking place on public lands, where individuals do not have a stake in maintaining the value of land assets. Where land is privately owned, the satellite apparently does not report degradation. As for loss of arable land, the Sahel famine of 1968-1973, in which 300,000 people were alleged to have died was "largely a public relations stunt." Moreover, human beings have not even begun to investigate the potential of hydroponic farming.

Simon has received notable media attention mainly because he launches wholesale attack against all environmentalist interpretation and because his own style reduces subtle interpretation to the media ploy of cops and robbers, or in this case, "optimists and doomsayers". For Simon, environmentalists are "doomsters," who draw their conclusions from vague signs of environmental disruption, even though there is no indication of incipient collapse. To give Simon his due, if he were still basing his arguments upon the dark public mood in the 1970's, when the activities of the oil cartel and subsequent inflation in industrial countries resulted in extravagant scenarios of paucity of natural resources, mapped against rapid population growth, as in the Club of Rome Report, they would have historical merit. Yet the grounds of the whole environmental argument has shifted over time from resource inventories to questions about total effects of resource use. In addition, the "vague signs" have become replaced by hard evidence, but Simon seems unaware of this. Take the case of stratospheric ozone depletion. Simon argues that the ozone issue is a transient concern. To quote him: "evidence on the geography or the time pattern of skin cancers over the years does not square with the thickness of the ozone layer." Scares come and go, Simon says, but as with global warming and acid rain that there will be series of favorable technological responses to ozone depletion, both medical and non-medical, that will ensure effect on human health will be negligible. Meanwhile environmentalists are responsible for creating unsubstantiated fears of CFCs which "has led to added regulation of private behavior and new police powers [with regard to refrigeration systems]" (1996:270-272). He even asserts that "increased ultra-violet radiation stemming from decreased ozone may have beneficial effects in reducing rickets disease."

Compare this to James Lovelock, of Gaia fame, who regarded his own findings from his experimentation in the Antarctic to detect chlorofluorocarbons (CFCs) in the atmosphere as constituting only "a remote and hypothetical threat" to the earth's ozone layer in 1972. In fact, Lovelock joined a group of scientists who opposed legislation to stop emissions of CFC's, since he believed at that time that there was no scientific merit in the case. But Lovelock shifted his position: by 1990 the increase of CFCs and industrial halocarbons had increased by 500 percent and there is clear evidence on a global scale that UV-B intensities at the Earth's surface are increasing. Lovelock is now positive that without chlorine from industrial gases there would be no thinning of the ozone layer at the South Pole. Though skeptical about the direct relationship of ozone depletion to skin cancers, and to natural ecosystems in general, he recognizes the 'knock on' effect of CFCs in the atmosphere, and has joined forces with those urging regulation of emissions, because ozone depletion increases the greenhouse effect (J. Lovelock, 1990:164-170). In fact, certain causality links UV-B sunburn and to the development of non-melanoma skin cancer, but the evidence of this link between UV-B and melanoma, the most lethal form of skin cancer, is confined to laboratory findings with mice. Other suspected risks are from increased UV-B are cataracts in the eyes and the depression of the human immune system (Environment Canada reporting on the 10th anniversary of the signing of the Montreal Protocol to control production of ozone depleting substances).

Simon ignores "knock on" effects, or positive feedback throughout natural ecosystems. The admission is crucial, for here environmental argument is in basic disagreement with the conventional approach of extrapolation from historical data or trends. Simon believes in a passive environment on which humanity is able to act without long run penalties because, in the long term, humanity is able to employ an infinite series of technological fixes, one at a time, to correct adverse circumstances deriving from natural resource exploitation. He believes the historical record supports this claim: the more resources we use, the better off we become and there is no practical limit to improving our lot forever (1996:73). Some environmentalists have labeled him a "cornucopian" for holding the views but he replies that he does not suggest that nature is limitlessly bountiful. He is simply arguing that the possibilities of the world are sufficiently great so that with the present state of knowledge, even discounting future knowledge, "we and our descendants" can manipulate the elements in order to have all the raw materials we desire at prices ever smaller relative to other goods and to our total incomes.

One must wonder who "we" is in this quotation. Environmentalists always point the finger at North Americans, but Simon dismisses their finger-pointing. While the United States may consume 40 percent of world resources with only 5 percent of the world's population, environmentalists do not take into account the creation of resources by the same U.S. population, he says. The more we use in resources, the better off we become. Our growing ability to create new resources more than makes up for temporary setbacks due to local resource exhaustion, pollution, population growth and so forth. There's no practical limit to improving our human lot forever.

The Ultimate Resource-2 covers a great deal of ground in the 734 pages validating its case. Simon's style of authorship is to repeat something often enough so that the repetition seems to gain a ring of truth. As a result, Chapter 18, a chapter that might have been 'colorful' and controversial in the earlier edition of this book, is full of inaccurate assertions. Here he takes a look at the "calendar" of what he terms "bad environmental and resource scares" and dismisses them one by one. Under "definitely disproven threats" are such are one-liners such as: "nuclear winter - as a threat to humanity as a whole this was soon found to be shoddy science" (no evidence for this statement cited and for evidence contra see P. Harries-Jones, 1985). Another one-liner: "the assertion that bovine somatotropin, a growth-producing element, will make cows more liable to infection has been proven false" (no evidence cited and I note in today's newspaper that the Canadian Government will not allow the use of BST in Canada on these precise grounds). The evidence Simon presents for acid rain, global warming and the ozone layer as being no more that "environmental scares" is not well researched and this edition would have been more credible if the whole of this chapter had been edited out.

Simon can get away with academic bombast because he has a political agenda behind his assertions. His three main assumptions against the environmentalists are first, that market price is an appropriate signal for environmental resources since market pricing covers as many "externalities" as can reasonably be surmised; second, that the source of human civilization lies in technical fixes, and third, environmental activists are subverting appropriate pricing and/or technical fixes. His political agenda is that of securing private ownership of natural resources, along with "economic freedom" in agricultural and resource markets - meaning absence of any marketing boards or government control of price of food. Simon's political agenda approximates that of the World Bank during the 1980s and 1990s - until its seeming change of heart following the financial meltdown of the so-called Asian miracle.

There are deeper methodological lessons to be learned from this book, which reveal how facile is the presentation of "optimists versus doomsayers." Since environmentalists believe that environment is not simply a passive register of human actions carried out upon it, mutual co-adjustments between human activity and its surround must be accounted for, otherwise "knock on," or feed-forward effects will change the condition of ecological oscillations, but will go unobserved. While the paths of this co-adjustment are exceedingly difficult to discern because they display multiple patterns at different times and places, they cannot be ignored. Moreover, observed feed-forward must necessarily constrain human activity in its interactive relationship with its own environment.

The reference to methodology ushers in Simon's famous bet. In the first edition of the book he offered to stake $10,000 that mineral resources or food or other commodities, that are not government controlled, would not rise in price in future years - adjusted for inflation. He originally formalized the bet with Paul Ehrlich and others on the prices of a basket of commodities that Ehrlich and his cohort chose. Simon won at settling time in 1990. In this edition he enlarges his bet. The long-run material prospects are so favorable for our species that his "new expanded offer" bets "that just about any environmental and economic trend pertaining to basic human material welfare ...will show improvement in the long run" including rate of species extinction, whether the Earth's forested area is increasing or decreasing, possible ill effects of any ozone layer depletion and greenhouse warming and infant mortality" (1996: 36). In addition, he bets "a week's or a month's pay that just about any trend pertaining to human welfare will improve rather than get worse, with his winnings going to charity" (1996:586).

Are the executors of his estate prepared? I will take the case of the fishing industry. According to Simon, fish crops are not fundamentally different from field crops. By 1988 the global fish catch had reached 98 million metric tons a year and was still rising rapidly. There was "no limit to harvest of wild varieties of seafood in sight," and fish farms had begun to produce at or near competitive prices (tilapia, catfish, salmon) to wild varieties of fish (1996: 104). True, in 1988. In July 1992 the Canadian government declared a moratorium on fishing northern cod stock, a vast ecological resource which played a major part in the settling of European peoples in North America. And the government put a severe reduction in the catch of other major groundfish species, all in all an industry worth $3 - 6 billion annually to Newfoundland and Labrador.

The moratorium was declared because the northern cod, the major source for the cod fishing industry, had been fished to near extinction. The moratorium persists this year, and the population of the province of Newfoundland anticipates only limited return to fishing when and if the moratorium is lifted. For many communities the loss of fishing and plant work income from processing northern cod has been devastating, with large decreases in community income, and downturn in business and as much as 30 per cent out migration in the last two to three years. Houses normally selling for $80,000 now sell for far less, some fetching as little as $2-3,000 [all figures from The East Coast Report, March 1998, House of Commons, Ottawa]. This near extinction of northern cod was brought about by the rush to subsidize privately owned fishing fleets off the Grand Banks in order to secure a market driven demand for fish, in which the government-supported Canadian fishing companies competed against other subsidized international fishing fleets such as those of Japan and Spain. The rush to privatize a public resource, the very program that Simon urges, increased the rate of rapid ecological collapse. The fate of the northern cod fish is one example of a global trend for fish as global fish production has been dropping since 1989 and of the 15 major oceanic fisheries, 9 -11 are already in decline. Fish farming has not offset the decline in the much larger wild marine catch (L. Brown, 1994:10-11).

Simon might reply that his bet concerned the price of fish, all fish not simply codfish, and in any event the cod moratorium is a typical example of inappropriate government action that cannot be considered as a case which proves him wrong. Simon would no doubt object, as he objects in this book, that Lester Brown is always unreliable.

Not this time. Not every forecast of "the doomsayers" is turning out "flat wrong." In the longer run, it would appear that the use of natural resources is limited as in the short run, but for very different reasons. The longer-run differences lie first in the multiple temporal levels that lead to accumulation and dissipation in an ecological setting, which a simple pricing system cannot estimate. Thus, emergent circumstances of interaction between humanity and environment can arise, for example, when a dramatic increase in market forces among an enlarged human population impinges upon stable biotic stocks. Then causalities in the emergent circumstances become different and, as suggested above, historical trends of prior market price soon become false signals for resource use (P. Harries-Jones, A Rotstein and P. Timmerman, 1999).

Second, a crucial characteristic of global market forces, one Simon ignores, is that market forces generate damaging collective effects that are not either desired nor chosen by any individual firm or household. In fact, environmental analysis introduces a new sense of the human collective, which, different in origin from class analysis, brings with it a similar approach to issues of social justice. Under present circumstances risk from global pollution cannot be avoided by anyone, yet the treadmill of global production in a neo-liberal global economy is allowed to continue to produce more and more pollution. Jacobs calls this "the invisible elbow," that is, market forces affect the welfare of the victim in many spheres, even where the victim is geographically distant or is yet unborn (M. Jacobs 1993:127 and 16ff). The impact of environmental crisis is not felt in the same way by every victim and because, in general, poor people live in the worst environments, so poor people die earlier. On this ground alone, Simon's whole analysis, which rests on demonstrating trends through raw figures, is suspect.

References Cited:

Brown, Lester.

1994. State of the World: a Worldwatch Institute Report. New York: W.W. Norton.

Canada, Standing Committee on Fisheries and Oceans. March 1998. The East Coast Report. Ottawa: House of Commons.

Environment Canada. September 3, 1997. State of the Environment (SOE) Bulletin 97-2.

Harries-Jones, Peter.

January 31, 1985. The Nuclear Winter Hypothesis: a broadened definition. In Nuclear Winter and Associated Effects: A Canadian appraisal of the environmental impact of nuclear war. Ottawa: The Royal Society of Canada. pp. 374-382.

Harries-Jones, Peter, Rotstein, Abraham and Peter Timmerman.

1999. A Signal Failure: ecology and economy after the Earth Summit. In Future Multilateralism: the political and social framework, ed. Michael G. Schechter. Tokyo and New York: United Nations University Press. pp. 101-135.

Jacobs, Michael E.

1993. The Green Economy: Environment, Sustainable Development and the Politics of the Future. Vancouver: University of British Columbia Press.

Lovelock, James.

1988. The Ages of Gaia: a biography of our living earth. New York and Toronto: Bantam Books.

Julian L. Simon.

1996. The Ultimate Resource - 2. Princeton, New Jersey: Princeton University Press. (revised edition) 734pp.