The PRC Forum - Julian Simon (1of6)

Summary

In this transcript, economist Julian Simon discusses the remarkable increase in life expectancy and living standards over the past 200 years, particularly in richer countries. He challenges the notion of resource scarcity, arguing that as we use more natural resources, we actually have more available. Simon explains that higher demand leads to innovation, making resources more accessible and cheaper. He emphasizes the importance of population growth, asserting that more people create both the demand and the solutions for better living standards.

Takeaways

• 🌟 Life expectancy has dramatically increased in the past 200 years, especially in the richest countries, where it has risen from under 30 to over 70 years.
• 📈 The increase in life expectancy is not limited to rich countries; even poorer countries have seen a significant rise of 15-20 years in the last 30-40 years post-World War II.
• 📉 Contrary to common belief, the use of natural resources has not led to scarcity; instead, they have become more available over time.
• 💰 The price of natural resources, including food, has been decreasing throughout human history, making them more affordable.
• ⏳ The process of resource availability involves initial shortages leading to price increases, which in turn drive innovation and new supply methods.
• 💡 Innovation and problem-solving are driven by the need to meet increased demand, often resulting in better solutions than before the problem arose.
• 🧠 Population growth is essential for economic and technological progress, as it provides both the demand and the intellectual capacity to create solutions.
• 🌱 If the human population had remained small, as it was thousands of years ago, we would lack many modern conveniences and medical advancements.
• 🌱 The speaker argues that we need more people, not fewer, to continue driving demand and innovation, which are key to improving living standards.
• 🌐 The script challenges Malthusian thinking, suggesting that more people and resource usage lead to increased availability and better living conditions.

Q & A

What significant change in human history has Julian Simon observed in the past 200 years?

Julian Simon has observed a significant increase in life expectancy, particularly in the richest countries, from under 30 years to well over 70, as one of the most important and exciting events in human history.

According to Simon, what has been the trend of natural resources' availability as human population and usage have increased?

Contrary to common belief, Simon argues that natural resources have become more available, not scarcer, as their prices have been going down throughout human history.

How does Simon explain the decrease in the price of natural resources over time?

Simon explains that as the demand for natural resources increases, it creates opportunities for innovation, leading to more efficient extraction, cheaper refining processes, or the discovery of substitutes, which in turn lowers the price.

What role does Simon believe problems play in the advancement of human society?

Simon posits that problems are essential for societal advancement as they stimulate challenges that lead to new solutions and an increasing standard of living.

Why does Simon argue that we need more people according to the transcript?

Simon argues that we need more people because they create demand by using more resources and also provide the brains to create ideas and solutions to meet those demands.

What is Simon's stance on the relationship between population growth and technological advancement?

Simon believes that population growth is crucial for technological advancement because it increases the number of minds available to generate new ideas and solutions.

How does Simon's perspective on resource availability challenge the Malthusian view?

Simon's perspective challenges the Malthusian view by asserting that as we use more natural resources, we find ways to make them more available, rather than depleting them, thus contradicting the idea of inevitable resource scarcity.

What example does Simon use to illustrate the decrease in the cost of acquiring natural resources?

Simon uses the example of copper, stating that it now takes a fraction of the human time to earn enough to buy a ton of copper compared to 200 years ago.

What thought experiment does Simon propose to demonstrate the importance of population growth?

Simon proposes a thought experiment where if the Earth's population had remained at 1 million or 10 million, we might not have advanced technologies like electricity, television, air-conditioning, or penicillin.

What does Simon imply about the necessity of problems for societal progress?

Simon implies that problems are necessary for societal progress because they drive innovation and the development of new solutions, ultimately leaving us better off than before the problem arose.

Outlines

00:00

📈 The Impact of Population Growth on Resource Availability

Julian Simon, an economist and business administration professor at the University of Maryland, discusses the significant increase in life expectancy over the past 200 years, particularly in the richest countries. He points out that contrary to common belief, the use of natural resources has not led to scarcity but has actually increased their availability. Simon argues that the price of natural resources, including food, has been decreasing over human history. He uses the example of copper to illustrate how the cost to acquire it has significantly reduced when measured in terms of human time and effort. Simon suggests that the increase in population and resource usage has paradoxically led to more resources being available, challenging the Malthusian view of resource scarcity.

05:04

💡 Innovation and Problem-Solving Driven by Resource Scarcity

Simon further explains the economic process that occurs when resources become scarce. As the demand for resources like copper increases and their prices rise, individuals and industries are incentivized to find new sources or more efficient ways to extract and use these resources. This leads to innovation, where successful solutions not only meet the demand but also improve the overall situation, leaving society better off than before the scarcity occurred. Simon emphasizes the importance of problems in driving technological advancements and improving living standards. He argues that a larger population is necessary for both creating demand and supplying solutions, suggesting that more people lead to more ideas and innovations. He concludes with a thought experiment, questioning whether modern conveniences like electricity, television, and air-conditioning would exist if the global population had remained small, highlighting the positive role of population growth in human progress.

Keywords

💡Life Expectancy

Life expectancy refers to the average number of years a person is expected to live, based on the year of their birth. In the video, Julian Simon discusses the remarkable increase in life expectancy over the past 200 years, particularly in the richest countries, which has risen from under 30 to over 70 years. This increase is presented as one of the most important events in human history, illustrating the improvement in living standards and health.

💡Natural Resources

Natural resources are materials and elements found in nature that are valuable to humans, such as copper, wheat, and water. The script challenges the common belief that as we use more of these resources, they become scarcer. Instead, Simon argues that the opposite has occurred historically; as we've used more, we've found ways to make them more available, often through technological innovation or substitution.

💡Scarcity

Scarcity in economics refers to a situation where the demand for a resource exceeds its availability. In the video, Simon discusses how perceived scarcity of natural resources has historically led to innovation, as people seek to find new ways to meet the demand, thus making resources more available over time.

💡Population

Population is the total number of people in a particular area or the world. Simon posits that an increase in population has been a driving force behind economic and technological advancements. More people mean more demand and, importantly, more minds to create solutions to the challenges that arise from increased demand.

💡Technological Innovation

Technological innovation refers to the development of new or improved products, processes, or services. In the context of the video, Simon suggests that challenges posed by resource scarcity have spurred technological innovation, leading to more efficient use of resources and the development of substitutes.

💡Economics

Economics is the social science that studies the production, distribution, and consumption of goods and services. Simon, an economist, uses economic principles to explain how the perceived scarcity of resources has been overcome through market forces and human ingenuity, leading to increased availability and lower prices for natural resources.

💡Malthusian Thinking

Malthusian thinking is based on the theories of Thomas Malthus, who predicted that population growth would outstrip the ability of the Earth to produce enough food, leading to famine and disaster. Simon counters this view by arguing that human innovation and the increase in population have actually led to greater availability of resources and improved living standards.

💡Substitution

Substitution in economics refers to the act of replacing one resource or good with another. Simon discusses how, in response to shortages, people have found substitutes for natural resources, which has contributed to the increased availability of those resources over time.

💡Human Imagination

Human imagination is the ability to create new ideas or concepts. The video emphasizes the importance of human imagination in driving innovation and problem-solving, which has led to advancements in technology and improvements in living standards.

💡Problems

In the context of the video, problems are seen as catalysts for innovation and progress. Simon argues that problems, such as resource scarcity, stimulate the need for new solutions, which in turn lead to technological advancements and improved living conditions.

Highlights

Life expectancy has dramatically increased in the last 200 years, especially in the richest countries.

In France 200 years ago, the life expectancy was less than 30 years.

Over the past 200 years, life expectancy has risen from under 30 to over 70 in rich countries.

Post-World War II has seen a 15-20 year increase in life expectancy in poorer countries.

Contrary to common belief, the use of natural resources has led to their increased availability, not scarcity.

The price of natural resources has been decreasing throughout human history.

It now takes significantly less time to earn enough to buy a ton of copper compared to 200 years ago.

All natural resources, including food, have become more available over time.

The process of using more resources leads to shortages, which in turn create opportunities for innovation.

In response to shortages, people find new ways to supply needs, leading to a better outcome than before the problem arose.

Problems are necessary for progress; they drive the creation of new solutions.

Population growth is essential for creating demand and supplying solutions to problems.

If the global population had remained small, we would lack the technological advancements we have today.

The increase in population has been crucial for the development of modern conveniences like electricity and air conditioning.

The need for more people is not just about quantity but also about the diversity of ideas and solutions they can provide.

Transcripts

I'm Julian Simon I'm an economist by

trade I teach business administration at

the University of Maryland for a living

and I've spent most of my time last 20

years writing about the economics of

population about the effects of more and

fewer people on other people let me

begin with some of the facts of life the

most important and exciting event that's

occurred in the whole history of

civilization has occurred in the last

200 years in the richest countries in

the world 200 years ago in France which

was then the richest country in the

world the chance of a person who was

born of living beyond the age of 27 28

29 was just about 50/50 that is the life

expectancy of the average person in the

richest country in the world was less

than 30 years and it had been less than

30 years for ten thousand years twenty

thousand years a very very long time

very very little it happens over the

whole history of the human enterprise

and then just in the past 200 years

which is a mere blip in history life

expectancy at Birth has gone up from

under 30 to well over 70 in the rich

countries in the world and the poorer

countries of the world another

extraordinary achievement has occurred

in just the 30 or 40 years since World

War two life expectancy has gone up 15

or 20 years throughout the whole poor

part of the world so I ask you has

anything else that's ever happened in

human history come close to this in its

importance this is meant that people

have not only lived longer but they're

living healthier and they're living

better lives

our material lives to have been getting

better rather than getting worse the

newspaper story she custom early read

would tell you that we should be

worrying about running out of natural

resources copper or wheat what have you

but the history of the past 200 years in

fact the whole history of humanity has

shown us the extraordinary event contra

Dahl common sense that the more that we

use of Natural Resources the more we

have of them that is rather than Natural

Resources becoming more scarce as we use

them they have been becoming more

available when I say more available I

mean that when we look at Natural

Resources with the measure that we as

economists use and the measure that's

important to us is consumers that is how

much do we have to pay to get these

resources we see that the price of

Natural Resources has been going down

rather than up throughout all of human

history let's take an example if you

want a ton of copper delivered on your

front lawn it would only cost you about

one-twentieth as much of the most

valuable thing you have which is your

human time to earn enough to buy a ton

of copper as it did 200 years ago and it

will only take you about 1 mm as much of

your time now to earn enough to buy a

ton of copper as it would have for a

thousand years ago and it's the same

story with every single natural resource

is the same with iron it's the same with

aluminum it's the same you name it it's

the same story that all of the natural

resources and that includes all the

foods wheat and corn and rice all of

them have been becoming more available

rather than more scarce contrary to all

common sense to all standard Malthusian

thinking so that what they're saying

is that more seems to be better more

people and more use of natural resources

somehow does the reverse and what our

common sense tone that's exactly right

the more we use the more we have and

perhaps we should take a minute to

explain the process by which this occurs

when we use more of something we have

more people when our income goes up so

that we can buy more there is for a

while a shortage these are a real sort

shortage or an expected shortage we use

more and the price goes up but the

process doesn't end here and that's

what's fundamental in response to these

shortages some people look at the

situation and say AHA here's opportunity

the price is going up if I can find some

way to get my hands on something I can

sell some and make some money on this so

people begin to look around this

shortage and say how can I find some

more copper or how can I use the old

copper mines to refine to get the copper

out more cheaply or how can I refine it

more cheaply or even more important in

the history of people how can we find

something to replace the copper with so

people look some succeed and some fail

and the people who succeed sooner or

later in finding ways to supply our need

for this copper and responds to the

higher price find ways to do it and the

exciting part of it is that at the

endpoint of this process after people

find new ways to supply our need for

copper we are left better off than if

the problem had never arisen in the

first place

that's what's extraordinary yes we're

left better off than if the problem had

never arisen and what this means is that

we need our problems in some fundamental

way we need bigger and better problems

that's not to say we should run out to

create any problems because we managed

to create problems pretty well but we do

need our problems if problems didn't

arise if population hadn't grown

so that people ran short of food if we

still had 10 million people on earth as

we had perhaps 10,000 years ago and

people were still living an average of

30 years or less at Birth we wouldn't

have had this fancy lunch that you and I

had today but instead we've been out

chasing rabbits and digging roots not

worried about a shortage of rabbits or

roots but that's the kind of lunch we

would have had what's the names to me

most people would agree with the if you

would the technological side of what

you're saying that the problems create

challenge which lead to new ways to meet

those and and an increasing standard of

living but I don't think nearly as many

people would agree with you on the

people side that we need all these

people around and yet you feel very

strongly about that

well imagine it cast your mind back to

this thought experiment which I raised

with you a minute ago imagine what would

have happened if we for the population

of our earth had remained that 1 million

or 10 million people as it was tens of

thousands of years ago 10,000 years ago

perhaps do you think that the processes

would have begun and played out so that

we would now have the electricity to run

this videotaping do you think that

people would have come up with the ideas

to produce television do you think that

we would have had enough human minds and

enough human imagination to have

produced the air-conditioning what's

keeping this room cool or the penicillin

which may have cured your daughter of

strep throat last month I think that if

we didn't have human beings to do two

things and let's name those two things

one is we need people to create more

demand for things by using more that is

to make the problems but we also need

the people to create the solutions so we

need their mouths to eat and create the

demand we need their brains to create

the ideas to supply our new needs

without these a population had never

grown we would as I say still be chasing

rabbits and eating

roots and trying to cool ourselves with

fans instead of his air conditioning and

we would be lighting this room with a

there wouldn't be a room here if you

want more people you must like people