Every hungry mouth comes a pair of hands and a brain capable of thought, planning, and innovation.
Marian L. Tupy, Gale Pooley —
It is 1980, and you are getting married. Your parents decide to celebrate your nuptials by inviting 100 guests to a wedding reception. The reception cost them $100 per person or $10,000 in total. Fast forward to 2018. Now it is you who is throwing a wedding reception for your child. The guest list has increased by 72 percent (some of the old folk are no longer around, but the cousins have exploded in number). That means that you are now catering to 172 people. The price per guest remained the same (suspend your disbelief and ignore inflation for now), and you expect to get a bill for $17,200. Instead, the bill comes to $4,816, which is less than half of what your parents paid for you. How is that possible, you ask the caterer? The caterer responds that for every one percent increase in attendance, the bill fell by one percent. And so, while the number of guests rose by 72 percent, your bill declined by 72 percent. Surely, things like that don’t happen in real life, or do they?
In fact, that’s exactly what has happened to the affordability of 50 basic commodities between 1980 and 2018. Over those 38 years, the world’s population rose from 4.458 billion to 7.631 billion or 71.2 percent. Over the same time period, basic commodities, including energy, food, materials, and metals became 71.6 percent more affordable on average. For every one percent increase in population, in other words, resources became slightly more than one percent more abundant. Put differently, the time it took to earn enough money to buy one unit in that basket of 50 commodities in 1980 bought 3.62 units in 2018. The compounded growth rate of abundance came to 3.44 percent per annum. That means that the affordability of our basket of commodities doubled every 20.49 years. This relationship between population growth and resource abundance is deeply counterintuitive, yet it is no less true. The facts surprised us, and they will surprise you too.
Generations of people throughout the world have been taught to believe that there is an inverse relationship between population growth and availability of resources, which is to say that as population grows, resources become more “scarce.” That was, historically speaking, true. In the animal world, a sudden increase in the availability of resources, such as grass after unusually plentiful rain, leads to an animal population explosion. The population explosion then leads to the exhaustion of resources. Finally, the exhaustion of resources leads to population collapse. If you take the Theory of Evolution seriously—and we do—you’ll appreciate that human beings evolved from much humbler beginnings and were, as such, much more exposed to vicissitudes of fortune.
Over time, however, humans have developed sophisticated forms of cooperation that increase their wealth and chances of survival. Consider, for example, trade and exchange. As the British writer Matt Ridley observed in his 2010 book The Rational Optimist: How Prosperity Evolves, “There is strikingly little use of barter in any other animal species. There is sharing within families, and there is food‐for‐sex exchange in many animals including insects and apes, but there are no cases in which one animal gives an unrelated animal one thing in exchange for a different thing.” Trade is particularly important during famines. A country struck by drought, for example, can purchase food from abroad. This is not an option available to other animals.
But the most important difference between people and nonhuman animals is our superior intelligence and the use of that intelligence to invent and to innovate. “In a way, everything is technology,” noted one of the world’s greatest economic historians Fernand Braudel (1902–1985) in his book Civilization and Capitalism. “Not only man’s most strenuous endeavors but also his patient and monotonous efforts to make a mark on the external world; not only the rapid changes… but also the slow improvements in processes and tools, and those innumerable actions which may have no immediate innovative significance but which are the fruit of accumulated knowledge.”
And so, over many millennia of trial and error, we have accumulated a store of knowledge that has allowed us to reach escape velocity—from scarcity to abundance—somewhere toward the end of the 18th century. The Four Horsemen of the Apocalypse (war, famine, pestilence, and death) have not completely disappeared—that would be a miracle, not progress. But the world is incomparably richer than it was just two centuries ago. If you don’t believe us, ponder for a moment the 768 types of breakfast cereal that you can buy at Walmart for just a few minutes of labor on a minimum wage.
We measure abundance in Time Prices. A Time Price is the length of time that a person is required to work in order to earn enough money to buy something. It is the money price divided by hourly income. Money prices are expressed in dollars and cents, while Time Prices are expressed in hours and minutes. For example, if a barrel of oil costs $75 and you earn $15 an hour, the Time Price will come to five hours. If oil falls to $60 a barrel and your income increases to $20 an hour, the Time Price will decrease to three hours. The money price falls by 20 percent, but because your hourly income rose by 33 percent, the Time Price will fall by 40 percent.
Time Prices make much more sense than money prices for at least three reasons. First, Time Prices avoid the contention and subjectivity of commonly-used inflation adjustments. Second, since innovation shows up in both lower prices and higher incomes (more productive people are better-paid people), Time Prices more fully capture the effects of innovation. Third, Time Prices are independent of currency fluctuations. Instead of gauging the standards of living in India and the United States by comparing the purchasing power parity adjusted prices of a gallon of milk in Indian rupees and American dollars, Time Prices provide a universal and standardized way (hours and minutes) to measure changes in well-being.
Our research into Time Prices and resource abundance began when we looked at updating the famous wager between the late University of Maryland economist Julian Simon and the Stanford University biologist Paul Ehrlich. The wager was based on the inflation-adjusted prices of five metals: chromium, copper, nickel, tin, and tungsten, and lasted from October 1980 to October 1990. Ehrlich predicted that because of population growth, metals would become more expensive. Simon argued that because of population growth, metals would become cheaper.
Ehrlich thought like a biologist, who did not seem particularly interested in economics. “Since natural resources are finite, increasing consumption obviously must ‘inevitably lead to depletion and scarcity,’” he wrote. He continued:
Currently there are very large supplies of many mineral resources, including iron and coal. But when they become “depleted” or “scarce” will depend not simply on how much is in the ground but also on the rate at which they can be produced and the amount societies can afford to pay, in standard economic or environmental terms, for their extraction and use. For most resources, economic and environmental constraints will limit consumption while substantial quantities remain… For others, however, global “depletion”—that is, decline to a point where worldwide demand can no longer be met economically—is already on the horizon. Petroleum is a textbook example of such a resource.
Simon, on the other hand, thought like an economist who understood the powers of incentives and the price mechanism to overcome resource shortages. Instead of the quantity of resources, he looked at the prices of resources. He saw resource scarcity as a temporary challenge that can be solved through greater efficiency, increased supply, development of substitutes, and so on. The relationship between prices and innovation, he insisted, is dynamic. Relative scarcity leads to higher prices, higher prices create incentives for innovations, and innovations lead to abundance. Scarcity gets converted to abundance through the price system. The price system functions as long as the economy is based on property rights, the rule of law, and free exchange. In relatively free economies, therefore, resources do not get depleted in the way that Ehrlich feared they would. In fact, resources tend to become more abundant.
Simon, as is well known, won his bet with Ehrlich when the real (which is to say inflation-adjusted) price of the five metals fell by 36 percent between October 1980 and October 1990. Simon’s victory would have been even more impressive had he used, as we do, Time Prices. Those fell by 55 percent between 1980 and 1990. In fact, when we extended the Simon-Ehrlich wager over many decades and greatly expanded the number of commodities analyzed, we found a consistent trend toward greater availability of resources relative to the cost of human labor. It is, consequently, heartening that, in recent years, scholars have started to write about the age of abundance, a state of affairs in which “technology has the potential to significantly raise the basic standards of living for every man, woman, and child on the planet.”
Unfortunately, it will take much more than a single wager between two scholars—or, for that matter, this article—to rid the world of the old and very pernicious idea that population growth and resource depletion go hand in hand. But, we have to start somewhere. And so, as you listen to the purveyors of doom on the television and the radio, and read apocalyptic predictions of humanity’s future on Twitter and in the newspapers, bear in mind that with every hungry mouth comes a pair of hands and a brain capable of thought, planning, and innovation.
Update on the Five Metals from the Simon–Ehrlich Bet
Since 1900, the average abundance of these five metals has increased 36.5 percent faster than the population.
Gale Pooley —
Summary: The Simon–Ehrlich wager famously demonstrated that population growth does not lead to resource scarcity but instead drives innovation and abundance. Since 1900, the production of five metals featured in the bet has risen dramatically. This bolsters Julian Simon’s argument that human ingenuity and technological progress enable us to produce more resources at lower costs, ensuring greater abundance even as populations grow.
Hannah Richie at OurWorldinData.org recently published an insightful article on the five metals featured in the Simon–Ehrlich wager. In 1990, Paul Ehrlich lost the 10-year bet and had to write a check to Julian Simon for $576.07. Simon had let Ehrlich pick the five metals in 1980 when the bet started. The payment reflected the inflation-adjusted decline of 36 percent in the average price of the five metals over the decade. This was despite an extraordinary global population increase during the 1980s of 850 million people (19 percent)—the largest growth in human history. Yet, even with this surge, resource prices dropped, reinforcing Simon’s argument that human population growth, coupled with ingenuity and the freedom to innovate, drives resource abundance rather than scarcity.
Richie highlights an important trend: The long-term abundance of these metals has increased significantly. Take a look at the staggering growth in their production since the early 1900s:
Between 1900 and 2000, the global population grew by 400 percent, from 1.6 billion to 8 billion. During the same period, the production of the five metals soared: Chromium increased by an astounding 78,082 percent, copper by 4,062 percent, nickel by 26,918 percent, tin by 226 percent, and tungsten by 4,829 percent. On average, production of these metals rose by 22,823 percent.
The relationship between population growth and resource production is captured by the production elasticity of the population. It is the ratio of the percentage change in production divided by the percentage change in population. On average, every 1 percent increase in population corresponded to a 57.06 percent increase in the production of these five metals.
In our book Superabundance, we compared the time prices of these five metals for blue-collar workers from 1900 to 2018 and have since updated the data to 2022.
The charts below detail the growth in abundance for each resource since 1900. Please note that vertical scales differ across the charts. The charts generally show the effects of 9/11, the financial crisis of 2008, and COVID-19 lockdown policies.
This table summarizes our findings.
From 1900 to 2022, the global population increased by 400 percent. Over the same period, the abundance of these five metals increased by an average of 546 percent, demonstrating that abundance has grown 36.5 percent faster than the population.
Some have suggested that Simon was just lucky. This is why looking at a much longer time period reveals underlying trends behind temporary fluctuations.
These data reinforce Simon’s prediction: The more people, the more we produce, and the lower the prices.
The Earth was 509.4 percent more abundant in 2023 than it was in 1980.
Marian L. Tupy, Gale Pooley —
The Simon Abundance Index (SAI) quantifies and measures the relationship between resources and population. The SAI converts the relative abundance of 50 basic commodities and the global population into a single value. The index started in 1980 with a base value of 100. In 2023, the SAI stood at 609.4, indicating that resources have become 509.4 percent more abundant over the past 43 years. All 50 commodities were more abundant in 2023 than in 1980.
Figure 1: The Simon Abundance Index: 1980–2023 (1980 = 100)
The SAI is based on the ideas of University of Maryland economist and Cato Institute senior fellow Julian Simon, who pioneered research on and analysis of the relationship between population growth and resource abundance. If resources are finite, Simon’s opponents argued, then an increase in population should lead to higher prices and scarcity. Yet Simon discovered through exhaustive research over many years that the opposite was true. As the global population increased, virtually all resources became more abundant. How is that possible?
Simon recognized that raw materials without the knowledge of how to use them have no economic value. It is knowledge that transforms raw materials into resources, and new knowledge is potentially limitless. Simon also understood that it is only human beings who discover and create knowledge. Therefore, resources can grow infinitely and indefinitely. In fact, human beings are the ultimate resource.
Visualizing the Change
Resource abundance can be measured at both the personal level and the population level. We can use a pizza analogy to understand how that works. Personal-level abundance measures the size of an individual pizza slice. Population-level abundance measures the size of the entire pizza pie. The pizza pie can get larger in two ways: the slices can get larger, or the number of slices can increase. Both can happen at the same time.
Growth in resource abundance can be illustrated by comparing two box charts. Create the first chart, representing the population on the horizontal axis and personal resource abundance on the vertical axis. Draw a yellow square to represent the start year of 1980. Index both population and personal resource abundance to a value of one. Then draw a second chart for the end year of 2023. Use blue to distinguish this second chart. Scale it horizontally for the growth in population and vertically for the growth in personal resource abundance from 1980. Finally, overlay the yellow start-year chart on the blue end-year chart to see the difference in resource abundance between 1980 and 2023.
Figure 2: Visualization of the Relationship between Global Population Growth and Personal Resource Abundance of the 50 Basic Commodities (1980–2023)
Between 1980 and 2023, the average time price of the 50 basic commodities fell by 70.4 percent. For the time required to earn the money to buy one unit of this commodity basket in 1980, you would get 3.38 units in 2023. Consequently, the height of the vertical personal resource abundance axis in the blue box has risen to 3.38. Moreover, during this 43-year period, the world’s population grew by 3.6 billion, from 4.4 billion to over 8 billion, indicating an 80.2 percent increase. As such, the width of the blue box on the horizontal axis has expanded to 1.802. The size of the blue box, therefore, has grown to 3.38 by 1.802, or 6.094 (see the middle box in Figure 2).
As the box on the right shows, personal resource abundance grew by 238 percent; the population grew by 80.2 percent. The yellow start box has a size of 1.0, while the blue end box has a size of 6.094. That represents a 509.4 percent increase in population-level resource abundance. Population-level resource abundance grew at a compound annual rate of 4.3 percent over this 43-year period. Also note that every 1-percentage-point increase in population corresponded to a 6.35-percentage-point increase in population-level resource abundance (509.4 ÷ 80.2 = 6.35).
Individual Commodity Changes: 1980–2023
As noted, the average time price of the 50 basic commodities fell by 70.4 percent between 1980 and 2023. As such, the 50 commodities became 238.1 percent more abundant (on average). Lamb grew most abundant (675.1 percent), while the abundance of coal grew the least (30.7 percent).
Figure 3: Individual Commodities, Percentage Change in Time Price and Percentage Change in Abundance: 1980–2023
Individual Commodity Changes: 2022–2023
The SAI increased from a value of 520.1 in 2022 to 609.4 in 2023, indicating a 17.1 percent increase. Over those 12 months, 37 of the 50 commodities in the data set increased in abundance, while 13 decreased in abundance. Abundance ranged from a 220.8 percent increase for natural gas in Europe to a 38.9 percent decrease for oranges.
Figure 4: Individual Commodities, Percentage Change in Abundance: 2022–2023
Conclusion
After a sharp downturn between 2021 and 2022, which was caused by the COVID-19 pandemic, government lockdowns and accompanying monetary expansion, and the Russian invasion of Ukraine, the SAI is making a strong recovery. As noted, since 1980 resource abundance has been increasing at a much faster rate than population. We call that relationship superabundance. We explore this topic in our bookSuperabundance: The Story of Population Growth, Innovation, and Human Flourishing on an Infinitely Bountiful Planet.
Appendix A: Alternative Figure 1 with a Regression Line, Equation, R-Square, and Population
Appendix B: The Basic 50 Commodities Analysis: 1980–2023
Appendix C: Why Time Is Better Than Money for Measuring Resource Abundance
To better understand changes in our standard of living, we must move from thinking in quantities to thinking in prices. While the quantities of a resource are important, economists think in prices. This is because prices contain more information than quantities. Prices indicate if a product is becoming more or less abundant.
But prices can be distorted by inflation. Economists attempt to adjust for inflation by converting a current or nominal price into a real or constant price. This process can be subjective and contentious, however. To overcome such problems, we use time prices. What is most important to consider is how much time it takes to earn the money to buy a product. A time price is simply the nominal money price divided by the nominal hourly income. Money prices are expressed in dollars and cents, while time prices are expressed in hours and minutes. There are six reasons time is a better way than money to measure prices.
First, time prices contain more information than money prices do. Since innovation lowers prices and increases wages, time prices more fully capture the benefits of valuable new knowledge and the growth in human capital. To just look at prices without also looking at wages tells only half the story. Time prices make it easier to see the whole picture.
Second, time prices transcend the complications associated with converting nominal prices to real prices. Time prices avoid subjective and disputed adjustments such as the Consumer Price Index (CPI), the GDP Deflator or Implicit Price Deflator (IPD), the Personal Consumption Expenditures price index (PCE), and the Purchasing Power Parity (PPP). Time prices use the nominal price and the nominal hourly income at each point in time, so inflation adjustments are not necessary.
Third, time prices can be calculated on any product with any currency at any time and in any place. This means you can compare the time price of bread in France in 1850 to the time price of bread in New York in 2023. Analysts are also free to select from a variety of hourly income rates to use as the denominator when calculating time prices.
Fourth, time is an objective and universal constant. As the American economist George Gilder has noted, the International System of Units (SI) has established seven key metrics, of which six are bounded in one way or another by the passage of time. As the only irreversible element in the universe, with directionality imparted by thermodynamic entropy, time is the ultimate frame of reference for almost all measured values.
Fifth, time cannot be inflated or counterfeited. It is both fixed and continuous.
Sixth, we have perfect equality of time with exactly 24 hours in a day. As such, we should be comparing time inequality, not income inequality. When we measure differences in time inequality instead of income inequality, we get an even more positive view of the global standards of living.
These six reasons make using time prices superior to using money prices for measuring resource abundance. Time prices are elegant, intuitive, and simple. They are the true prices we pay for the things we buy.
The World Bank and the International Monetary Fund (IMF) track and report nominal prices on a wide variety of basic commodities. Analysts can use any hourly wage rate series as the denominator to calculate the time price. For the SAI, we created a proxy for global hourly income by using data from the World Bank and the Conference Board to calculate nominal GDP per hour worked.
With this data, we calculated the time prices for all 50 of the basic commodities for each year and then compared the change in time prices over time. If time prices are decreasing, personal resource abundance is increasing. For example, if a resource’s time price decreases by 50 percent, then for the same amount of time you get twice as much, or 100 percent more. The abundance of that resource has doubled. Or, to use the pizza analogy, an individual slice is twice as large. If the population increases by 25 percent over the same period, there will be 25 percent more slices. The pizza pie will thus be 150 percent larger [(2.0 x 1.25) – 1].
1,000 Bits of Good News You May Have Missed in 2023
A necessary balance to the torrent of negativity.
Malcolm Cochran —
Reading the news can leave you depressed and misinformed. It’s partisan, shallow, and, above all, hopelessly negative. As Steven Pinker from Harvard University quipped, “The news is a nonrandom sample of the worst events happening on the planet on a given day.”
So, why does Human Progress feature so many news items? And why did I compile them in this giant list? Here are a few reasons:
Statistics are vital to a proper understanding of the world, but many find anecdotes more compelling.
Many people acknowledge humanity’s progress compared to the past but remain unreasonably pessimistic about the present—not to mention the future. Positive news can help improve their state of mind.
We have agency to make the world better. It is appropriate to recognize and be grateful for those who do.
Below is a nonrandom sample (n = ~1000) of positive news we collected this year, separated by topic area. Please scroll, skim, and click. Or—to be even more enlightened—read this blog post and then look through our collection of long-term trends and datasets.
