Truth Serum: The Other Ehrlich Bets

Desroches/Geloso/Szurmak's Analysis

We’ve all heard about the Ehrlich-Simon bet. Simon the cornucopian bet that resources would get cheaper, Ehrlich the doomsayer bet that they would get pricier, and Simon crushed him. There’s a whole book on it. What you probably don’t know, however, is that in 1995, Paul Ehrlich and Steve Schneider proposed a long list of new bets for Simon - and that Simon refused them all.

Why did Simon refuse? Critics naturally hold that Simon lacked the courage of his convictions. But Simon’s story was that the new bets weren’t really about human well-being:

Let me characterize their offer as follows. I predict, and this is for real, that the average performances in the next Olympics will be better than those in the last Olympics. On average, the performances have gotten better, Olympics to Olympics, for a variety of reasons. What Ehrlich and others say is that they don't want to bet on athletic performances, they want to bet on the conditions of the track, or the weather, or the officials, or any other such indirect measure.

As a betting man myself, I maintain that anyone can offer betting terms so lop-sided that no sensible opponent will agree to bet. The epistemic force of a bet comes from mutual consent: If both sides agree ex ante that a measure counts, then it’s comical/pathetic for the loser to ex post declare, “I really won.” So even though I read about the proposed followup bets back in 1995, I hadn’t really given them a second thought since.

Until… I discovered that my new colleague Vincent Geloso (together with Pierre Desroches and Joanna Szurmak) had a two-part 2021 paper in Social Science Quarterly analyzing what would have happened if Simon had opted for the rematch. The piece is called “Care to Wager Again? An Appraisal of Paul Ehrlich’s Counterbet Offer to Julian Simon.” Part 1 is “Outcomes”; Part 2 is “Critical Analysis.” What do Desroches, Geloso, and Szurmak (DGS) discover?

First, they review the 15 bets Ehrlich and Schneider offered. If you ever needed proof that betting makes people more rational, look no further. No glimmer of Ehrlich’s infamous hyperbole remains, just 15 mild-mannered claims.

Note further that a few of these predictions are precisely what you’d expect if human progress continues!

• Wealthy humans consume near-zero firewood.

• Unless progress is amazingly uniform, you’d expect the richest 10% to pull away from the poorest 10%. The world’s poorest people are stuck in true hellholes - and even if their government lets them flee, no other country on Earth will take them.

• Oceanic fisheries are a commons, so in the absence of privatization, you’d expect them to be depleted as demand grows - but more than replaced by fishing farming.

That said, Part 1 of DGS just takes the 15 bets at face value and forges on to the evaluation stage. Initial verdict: Ehrlich and Schneider chose a mixture of bets they could win and bets that are hard to measure.

Bottom line for Part 1:

Simon wins on only one indicator while Ehrlich and Schneider win on eleven. There is too much uncertainty to adjudicate a winner for three claims. Table 5 also includes a column on measurement quality. The use of the word “problematic” in this column refers to the selection and quality of proxy data when the terms used by Ehrlich and Schneider did not match clearly defined or measured quantities in the scientific literature. We also did not refrain from declaring Ehrlich and Schneider winners on their own terms when simple logic dictated the outcome even in the absence of suitable indicators. For instance, while “fertile cropland” is not an indicator found in the technical literature, a significant increase in population that occurred between 1994 and 2004 must mean that less farmland would be available per capita at the end of the time period even if cropland were to be created through, for instance, the draining of wetlands and the conversion of pasturelands. On their own terms then, Ehrlich and Schneider can be declared the winners of this wager. (emphasis mine)

In Part 2, DGS start by extending the bet resolution year from 1994 to the most recent data. Now Simon wins a few more:

Simon would win three claims, with trends in two more clearly favoring his perspective, while Ehrlich and Schneider win nine. Three indicators remain uncertain. The word “problematic” refers to the use of proxy data when the concepts used by Ehrlich and Schneider did not have equivalents in the literature, or else when they can hardly be considered as supportive of the Ehrlich–Schneider worldview (e.g., land per capita).

Take AIDS deaths. Ehrlich and Schneider were right to forecast a large global rise - but neglected to predict a subsequent crash.

DGS then review Simon’s original reservations in detail. Ehrlich and Schneider picked bets that Ehrlich, Schneider, and Simon should all expect Simon to lose… if Simon were right about the world!

Simon offered three reasons for his rejection the second bet offer: the role of government policy; a personal version of the process more widely known as the environmental Kuznets curve; and the preference for direct measures of human welfare. The last of these reasons explains the indicators on which Simon proposed to wager a counterbet.

On government policy:

In the 1980 bet, Simon insisted on betting on commodities that were not subjected to important government interventions (e.g., price control, quotas, trade, or production restrictions) to reflect his view that creative individuals in free markets are able to produce solutions to deal with environmental problems. Implicit in this outlook is the notion that government policies can hinder the ability of markets to provide environmental solutions. Thus environmental problems could be—as Simon often pointed out—caused by governments meddling with markets or by governments failing to secure private property rights.

DGS then remind us that Simon had a counter-offer to Ehrlich and Schneider’s counter-offer. Simon picked bets that Ehrlich, Schneider, and Simon should all expect Simon to win if Simon were right about the world. And in hindsight, win he did:

When he rejected Ehrlich and Schneider’s offer, Simon stated he would rather use “measures of actual welfare, rather than intermediate conditions.” Without formally proposing a new bet, Simon (n.d.) suggested some indicators on which he would be willing to wager: “mortality and morbidity,” “life expectancy,” “future calorie intake, food prices, or food output,” “fish consumption which includes (…) fish farming” and “skin cancer death” (to reflect ozone-related problems).

Shifting to these indicators gives Simon’s a clear win. For example, in Table 2 we already showed that the overall food supply (measured in calories per capita) has increased over the time window of the bet, which explains why global indicators of malnutrition have shown marked improvements in recent decades (Roser and Ritchie, 2013). Life expectancy at birth rose from 66.1 years in 1994 to 68.7 in 2004 and 72.6 in 2018 (World Bank, 2020). When wild catch and aquaculture fisheries are added to each other, fish consumption per capita increased 7 percent from 1994 to 2004 and a further 17 percent to 2015 (FAO, 2020b). Simon would only lose with regard to one of his proposed indicators: skin cancer rates which, when age-standardized, have increased mildly since 1995 (IHME, 2020).

DGS charmingly conclude their two-part article by bluntly telling us their own conclusion:

The fact that Ehrlich and Schneider’s own choice of indicators yielded mixed results in the long run, coupled with the fact that Simon’s preferred indicators of direct human welfare yielded largely favorable outcomes is, in our opinion, sufficient to claim that Simon’s optimistic perspective was once again largely validated.

If I were a fourth co-author, though, I would have insisted on a much deeper and broader lesson: Betting is so epistemically purifying that even the prospect of betting dramatically raises the quality of thought. Betting is a Truth Serum potent enough to make even notorious doomsayers temporarily reasonable. If the world of ideas took my Betting Norm to heart, to quote Homer Simpson, there’d be no need for heaven. We’d already be there.