"The natural effort of every individual to better his own condition, when suffered to exert itself with freedom and security is so powerful a principle that it is alone, and without any assistance, not only capable of carrying on the society to wealth and prosperity, but of surmounting a hundred impertinent obstructions with which the folly of human laws too often incumbers its operations; though the effect of these obstructions is always more or less either to encroach upon its freedom, or to diminish its security."

--Adam Smith, The Wealth of Nations

SHELDON RICHMAN, senior fellow at The Future of Freedom Foundation in Fairfax, Va. and editor of The Freeman magazine, writes the following essay in honor of JULIAN SIMON (1932-1998).


On February 8, economist Julian Simon, 65, died. It is a great loss on many levels. He was, first of all, a wonderful human being -- ever positive, smiling, and encouraging; a complete joy to be around.

After that, he was one of freedom's great crusaders. When our age was first sinking into the despair of what is called environmentalism, with its agenda of expropriation, restricted consumption, and population control, Julian Simon strode center stage, impish grin on his countenance, to sing his song of scientifically grounded optimism. To those who wailed that, environmentally speaking, things could hardly get worse, Julian Simon replied: Do you want to see worse? Read about how people lived a mere 100 years ago; look at what age and of what they died. Now look at our time through the lens of historical perspective. With all the self-conscious moaning about our killer environment, people the world over live longer and better than ever before. That is why the population grows. Women aren't having more babies --actually, they have far fewer than just a short time ago. The population grows because the death rate falls. And a growing population is good.

That leads to Julian Simon's landmark contribution to our understanding of the world: his work on the nature of resources. How often do we hear people warn that "we are running out of resources"? Too often, especially since Julian Simon's magnum opus, "The Ultimate Resource,"came out over a decade ago. In that book, and its updated, 1996 edition, he asked a simple question: if we are running out of resources, why do prices fall rather than rise? Everyone accepts as a law of economics that as anything of value becomes more scarce, its price goes up. That law has been repealed with respect to natural resources. Or so it seemed. As Julian Simon showed, resources in fact are not becoming more scarce at all!

On the contrary, they are more plentiful than ever. Simon was confident that the long-term trends of the past would continue into the future -- so confident that he was willing to bet on it. Environmental alarmist Paul Ehrlich made the mistake of accepting the challenge. In 1980 Ehrlich picked five metals and bet Simon that ten years later the combined prices would be higher in inflation-adjusted terms. Ehrlich lost. Even in unadjusted terms, the price of each was lower. Julian Simon kept his offer to bet open till the end of his life. There were no other takers.

Why was Julian Simon so confident that the benign trends would continue? Because he understood that, strictly speaking, there are no natural resources. Nature provides us with lots of variegated stuff. But stuff is only a potential. To transform it into a resource, a creative person must first stamp it with a human purpose. People create resources. They turn sand -- sand! -- into computer chips and fiber optic cables. The ultimate resource is human intelligence. If individuals are free to think and create, we will have an unending supply of resources. The more people, the more creators. By the same token, immigration is a good thing.

Julian Simon was never complacent about human progress. It requires effort. As an economist, he understood that certain institutions favor discovery and creation, including property rights and the market's free-pricing system. Given freedom, human beings create and make their fellows better off in the process.

That is Julian Simon's inestimable legacy. When the presumptuous environmental movement is long forgotten, that legacy will live on to honor his name.


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