Don’t Forget History
I am a long-time subscriber to PERC Reports and enjoy reading each issue.
But I object to the premise implied in “Betting on the Wealth of Nature” by David
McClintick and Ross Emmett (September 2005) regarding natural resource prices
and availability. The Simon-Ehrlich wager was based on metals that have long been
substitutable, wracked by cartel-like supply and demand, and subject to technological
supplantation. The authors use the “wager” in a disingenuous attempt, by
extension, to show us that there is no need to worry about running out of natural
History is replete with civilizations, some advanced, that have failed because
they depleted their natural resources.
-Carl D. Peterson
Don’t Forget Energy
“Betting on the Wealth of Nature”
by David McClintick and Ross Emmett
reminded me of a discussion I had
with Julian Simon at a PERC conference
in Bozeman. My bet was that
prices for raw materials would go up
over the long term because substitutes
(and poorer ore) would require more
energy to process, and that energy itself
would get more expensive because
convenient substitutes are tough to
But the very fact that energy costs
go up drives inflation, so the inflation-
adjusted price for the metals is
an imperfect measure. One better
measure (and one that would tend to
vindicate Ehrlich) is the “price” per ton
of metal measured in the BTUs needed
to produce it.
On the other hand, a point that
the McClintick/Emmett article ignores
tends to vindicate Simon: Over the
past century, the percent of national
income or percent of national energy
demand that has gone into the five
metals has probably declined drastically,
precisely because substitutes have
become available. Fiber optic cable for
copper is a good example, as is quartz
lighting for tungsten. In both cases, a
cheap, low-energy-to-produce material
is replacing many uses of the metal.
The energy price effect shows up
on the curve you published, too. Cheap
Texas crude kicked in nicely after
World War I, dropping prices of the
five metals drastically. They rose and
fell with demand, energy prices, etc.,
and are now, in the aggregate, about
where they were 80 years ago.
It’s time to bet on something else.
My bet is that we’re never going to
see cheap oil again-say, under $40 a
-Steven S. Ross
New York, New York
You Can’t Subsidize the Sun
Thomas Tanton (“Distorting the
Wealth of Nature,” September) has the
right idea: Subsidies are bad. But he
fails to mention that it is impossible
to account for the ways that we use
renewable energy, and therefore that
subsidies for renewables favor some
renewables over others.
As Tanton does, one can compare
fossil fuels with the uses of solar energy
that impersonate fossil fuels-using
solar power to produce electricity.
But there are many other uses of
the sun: clotheslines versus dryers,
windows versus electric lights, solarpowered
walking or bicycling versus
driving, architecture that uses passive
heating and cooling versus traditional
heating and cooling. These are too
numerous and too subtle for bookkeepers-
and I havenâ??t even mentioned
lighting and heating the outside, distilling
our water, growing our food and
forests, or lighting our moon! Only the
marketplace notices these.
Jane S. Shaw welcomes vigorous debate
about controversial environmental topics.
Send your letters to her at: PERC Reports,
2048 Analysis Drive, Suite A, Bozeman,
MT 59718 or email@example.com.