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Julian Simon's Wager With Paul Ehrlich


Tags Calculation and KnowledgeCapital and Interest Theory

I'm sure most readers of this blog are familiar with Julian Simon's wager with Paul "The Population Bomb" Ehrlich. For those who don't know, Simon let Ehrich pick any five metals in 1980, and he bet that a basket of them would be cheaper (after adjusting for inflation) in 1990. Simon easily won, and Ehrlich's boasts at the time of the wager are funny (assuming this website is accurate).

While doing some research on futures markets, it occurred to me that perhaps Simon wasn't so "prescient" after all. Does anybody know what the futures prices of these metals were back in 1980? Specifically, could Simon have hedged his bet so that he made money no matter what happened?

Robert P. Murphy is a Senior Fellow with the Mises Institute and Research Assistant Professor with the Free Market Institute at Texas Tech University. He is the author of many books. His latest is Contra Krugman: Smashing the Errors of America's Most Famous Keynesian. His other words include Chaos Theory, Lessons for the Young Economist, and Choice: Cooperation, Enterprise, and Human Action (Independent Institute, 2015) which is a modern distillation of the essentials of Mises's thought for the layperson. Murphy is co-host, with Tom Woods, of the popular podcast Contra Krugman, which is a weekly refutation of Paul Krugman's New York Times column. He is also host of The Bob Murphy Show.

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