Betting Stakes and Julian Simon
By David Henderson
When writing my previous post on my own experience with stakes in betting, I couldn’t find a bet that I had thought I offered. Now I have. In a Red Herring article in June 1998, at http://www.davidrhenderson.com/articles/0698_inmemoriamjuliansimon.html, “In Memoriam: Julian Simon,” after having detailed Simon’s $100,000 bet that no one was willing to take and the various bits of evidence for Simon’s conclusions, I wrote the following:
You might think, with evidence like this, that virtually all economists would agree with Simon. Yet even so sensible an economist as Paul Krugman at the Massachusetts Institute of Technology wrote, in a 1996 article in the New York Times, that the price of minerals and oil will rise as expanding population pushes against finite resources.
To Mr. Krugman, I offer a version of the Simonian bet that I first made to him in the February 1997 Red Herring (see my article at http://www.davidrhenderson.com/articles/0297_isthereanewdigital.html “Is There a New Digital Economy of Ideas?”). I will bet him $10,000 that ten years from now, the prices of natural resources generally (he can pick any five) will be lower than they are today.