What is it about our inclination to pessimism? The fact is, our brains are hard-wired this way. All our optimistic ancestors have long since exited the gene pool, nourishment for sabre-toothed tigers. As a result, we are drawn to doomsday predictions.
Despite all evidence to the contrary, we are persistently attracted to stories of our imminent demise. Meanwhile, the daily grind of human progress continues, quietly compounding across countless areas of our endeavour.
The grandfather of modern economic pessimism is the Reverend Thomas Malthus, who in 1798 proposed that while populations grow geometrically, the resources required for sustenance only grow linearly. The man his parishioners called “the Dismal Parson” predicted humanity would be locked into a future of famines, plagues and systemic loss of moral virtue. His belief that we would forever outrun our ability to sustain ourselves was all part of God's way of encouraging us to do better.
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However, the economic reality of the two centuries following his death incinerated Malthus' Theory of Population. Yet his dismal ghost haunts us today through cohorts of gloomsters and doomsters who view every addition to the world's wondrous population of eight billion as a step toward our inevitable demise.
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Indeed, as the human population clock clicked past eight billion in November 2022, The New York Times featured a radical Malthusian group called The Voluntary Human Extinction Movement (VHEMT). The piece, referring to its founder and leader, Les Knight, was entitled Earth Now Has 8 Billion Humans. This Man Wishes There Were None. Knight said he disagreed with China's one-child policy, as even one child is too many. It is tempting to discard Knight and his 100,000 followers as fringe anti-human cranks. But when such self-loathing is profiled with curiosity rather than contempt, at a time when human progress is often framed as a planetary crime, it seems that a pro-human stance has become a contrarian position in many circles.
The deluded Malthusian tradition lost a key leader this month with the death of biologist Dr Paul Ehrlich, author of The Population Bomb and a contributor to the 1970s environmentalist handbook The Limits to Growth. Both books were Malthusian retreads with headline-grabbing end-of-the-world predictions. And just like Malthus's predictions before them, none of Ehrlich's prognostications proved remotely accurate.
Despite this, The New York Times claimed in a 2015 article about his work that he wasn't wrong but premature, a man ahead of his time. The article said that expanding human populations cannot be sustained on an Earth with finite carrying capacity; the only uncertainty concerns the timing and severity of the rebalancing that must inevitably occur. Blind Malthusian assertions continue despite centuries of evidence to the contrary.
In his day, the linear-thinking Malthus duelled with the systems-thinking, positive-sum economist David Ricardo, he of the Theory of Comparative Advantage. Ricardo understood markets, and he applied that understanding to earn a fortune in the City of London while still a young man. His ideas helped spur the growth of global free trade, contributing to the geometric expansion of the world's wealth over the following 200 years. By the 1970s and 1980s, Ehrlich's deluded fatalism famously collided with economic reality in the person of Julian Simon. Following his rigorous work on economic scarcity, outlined in his seminal text The Ultimate Resource, and tired of environmental hysteria, Simon challenged Ehrlich to put his money where his mouth was.
Simon proposed that Ehrlich select five natural resources (he chose chromium, copper, nickel, tin and tungsten) that he had predicted were on the verge of terminal depletion. Simon said the real price of this basket would fall over the following decade, making its constituents less scarce. Ehrlich accepted the bet, disputing Simon's point that resource price signals incentivise new supply, including improved technology and the discovery of substitutes. As Zaki Yamani, Saudi Arabia's former minister of petroleum, noted, the Stone Age didn't end because we ran out of stones.
Why pessimism isn't the way forward
The bet was settled in 1990. All five metals had dropped in price. Simon won decisively. However, despite settling the bet with a cheque for $576.07 on 11 October 1990, Ehrlich's refusal to accept the lesson was telling. He completely missed the essence of Simon's optimism, and his refusal to accept pro-human thinking endures. Today, many more people are aware of Thomas Malthus's ideas than of David Ricardo's.
However, while the intellectual rewards and public adoration might flow to Ehrlich and Malthus, the financial prize is repeatedly won by those prepared to back human adaptation. Simon's lasting insight is that the only truly scarce resource is the connected minds of free people. Over the long haul, human adaptation makes physical limits irrelevant, an important point to remember as large parts of the world's hydrocarbon supply chain remain locked on the wrong side of the Strait of Hormuz. The Simon-Ehrlich wager was far more than a financial bet. It was a trial between two philosophies: is humanity the victim of a finite Earth or the creator of an infinite future?
Human ingenuity is our only hope, and it is time we stopped apologising for our existence and started celebrating our capacity to evolve a better future. Our daily grind of improvement deserves celebration. The passing of deluded Malthusian charlatans like Ehrlich, like any loss of human life, should be mourned. But their anti-human ideas deserve to die with them.
Jeremy McKeown is market strategist at Dowgate Wealth, writes the HyperNormalTimes Substack and hosts the podcast In The Company of Mavericks.
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