Wager between Julian Simon and Paul Ehrlich

Julian Simon and Paul Ehrlich entered in a famous wager in 1980, betting on a mutually agreed upon measure of resource scarcity over the decade leading up to 1990.

The wager

Simon had Ehrlich choose five of several commodity metals. Ehrlich chose 5 metals: copper, chrome, nickel, tin, and tungsten. Simon bet that their prices would go down. Ehrlich bet they would go up.

Related Topics:
Copper - Chrome - Nickel - Tin - Tungsten

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"The face-off occurred in the pages of Social Science Quarterly, where Simon challenged Ehrlich to put his money where his mouth was. In response to Ehrlich's published claim that "If I were a gambler, I would take even money that England will not exist in the year 2000" - a proposition Simon regarded as too silly to bother with - Simon countered with "a public offer to stake US$10,000 ... on my belief that the cost of non-government-controlled raw materials (including grain and oil) will not rise in the long run.

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You could name your own terms: select any raw material you wanted - copper, tin, whatever - and select any date in the future, "any date more than a year away," and Simon would bet that the commodity's price on that date would be lower than what it was at the time of the wager."

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Ehrlich and his colleagues picked five metals that they thought would undergo big price rises: chromium, copper, nickel, tin, and tungsten. Then, on paper, they bought $200 worth of each, for a total bet of $1,000, using the prices on September 29, 1980, as an index. They designated September 29, 1990, 10 years hence, as the payoff date. If the inflation-adjusted prices of the various metals rose in the interim, Simon would pay Ehrlich the combined difference; if the prices fell, Ehrlich et alia would pay Simon.

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Between 1980 and 1990, the world's population grew by more than 800 million, the largest increase in one decade in all of history. But by September 1990, without a single exception, the price of each of Ehrlich's selected metals had fallen, and in some cases had dropped through the floor. Chrome, which had sold for $3.90 a pound in 1980, was down to $3.70 in 1990. Tin, which was $8.72 a pound in 1980, was down to $3.88 a decade later. http://www.wired.com/wired/archive/5.02/ffsimon_pr.html

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As a result, in October 1990, Paul Ehrlich mailed Julian Simon a check for $576.07 to settle the wager in Simon's favor.

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