BETTING ALL HUMAN WELFARE WILL IMPROVE Julian L. Simon Stanford professors Paul Ehrlich and Stephen Schneider, in an article that they have published and publicised in a variety of media, have responded to the offer of a wager on the future of human welfare I again made on Earth Day this year. They're ready to bet, they say. This is the background: In 1970 Paul Ehrlich wrote, "If I were a gambler, I would take even money that England will not exist in the year 2000." In 1980 I offered to take that bet, or more realistically, wager that natural resources would become cheaper rather than more expensive. "This is a public offer to stake $10,000, in separate transactions of $1,000 or $100 each, on my belief that the cost of non-governmentally-controlled raw materials (including grain and oil) will not rise in the long run", I wrote, and I offered to let the other person specify any future date. Professor Ehrlich and two colleagues chose five metals -- copper, chrome, nickel, tin, and tungsten -- and a ten year period. At settling time of the $1000 wager in September, 1990, not only the sum of the prices, but also the price of each individual metal, had fallen. They sent me a check for $576.07. Commentators said that a single bet proves little, and they are right. Hence I offered to repeat the wager, but there were no takers. The commentators also said that the bet was too narrow and should encompass environmental and other measures of human welfare. Hence I broadened the offer as follows: I'll bet a week's or a month's pay that just about any trend pertaining to material human welfare will improve rather than get worse. You pick the trend - perhaps the death rate, the price of a natural resource, some measure of air or water pollution, or the number of telephones per person - and you choose the area of the world and the future year in which the comparison is to be made. If I win, my winnings go to non-profit research. The details are as follows: 1. Five years or more, to ensure that there is time for conditions to change and to reduce the likelihood of statistical blip. 2. Measures of actual welfare, rather than intermediate conditions. That is, mortality and morbidity, for example, rather than incidences of particular diseases. 3. The measures that I would consider most appropriate are: Life expectancy; ambient concentrations of air and water pollu- tants - that is, the cleanliness of air and water; purchasing power of any group; ownership of specific household goods; costs of natural resources; amount of leisure time; amount of school- ing; amount of housing space. 4. I would prefer to make multiple bets - perhaps a collection of countries rather than one country, for example, or a variety of measures of human nutrition - rather than on just one item. Ehrlich and Schneider have not accepted my offer. Instead they suggest betting on what they call "indirect measures", most of which pertain to physical conditions rather than directly to human welfare. And they suggest aspects of our environment whose connection to human welfare is questionable and perhaps subjective, instead of being objectively measurable, Still, I hope we can find a way to join the issue, as follows: The main effects on human welfare of global warming, cropland, soil conditions, and rice-wheat production (items Ehrlich and Schneider suggest) all relate to food and nutrition, as they themselves note. I therefore will be delighted to wager with them on future calorie intake, food prices, or food output. Firewood (an E and S item) pertains to energy. So let's bet on energy prices and quantities used. Re oceanic fishing (E and S): Let's bet on fish consumption per person, which includes not just the ocean catch but also fish farming. Re the gap between rich and poor (E and S): Let's bet on whether the poorest 10 percent of the world will be poorer or richer than now. (Whether the rich also get richer does not affect the material welfare of the poor.) Re AIDS: Rather than betting on deaths from AIDS or heart attacks or hang gliding, let's bet on life expectancy. It's the relevant indicator, and it is well-measured. Re nitrous oxide and sulfur dioxide: Here we can easily get together on a wager about whether the amounts of the pollutants in the air that U. S. residents breathe will be greater or lesser than now. There apparently is agreement among us that the condition of humanity is the ultimate interest. But Ehrlich-Schneider say that "Our basic message is that 'indirect trends' such as those [they list] are more relevant to human welfare than direct ones such as the prices of metals". This puzzles me, and introduces difficulties where there are none. Consider, for example, their first item, global warming: It is not even obvious whether warming is bad or good; it may well increase agricultural productivity. Two decades ago Stephen Schneider was predicting impending global cooling and warning us of its ill effects, which presumably implies that warming would be a good thing. And given the level of controversy about the matter, it would be exceedingly difficult to find an agreed-upon measure of warming or cooling. In contrast, for the previous bet between us, Ehrlich and colleagues were able to find perfectly objective measures of metals prices in standard reference sources for the exact date that they chose. To understand the difference between us, imagine that you offer to bet that the winning times in each of the races in the next Olympics will be faster than the times in 1984, to show that progress is occurring. The other person counters with an offer to bet that the weather or the field conditions or the efficiency with which the games are run will be worse next time than in 1984 on each of the days of the competition, saying that these are indirect measures of performance. Would that make sense to you? Since this engagement may take place in the pages of the Wall Street Journal, perhaps the paper will help bring the parties together on a meaningful set of wagers, hold the moneys in escrow and periodically publish the course of the trends in question. I hope so. page 1 article5 ehrlich6 5-8-59