A wager for the history books gives us a glimpse into our future

Summary

Marketplace Morning Report: "A Wager for the History Books Gives Us a Glimpse into Our Future"

Release Date: February 17, 2025

In this episode of the Marketplace Morning Report, host Nova Safo and senior economics contributor Chris Farrell delve into a historic economic wager that continues to influence our understanding of resource consumption and innovation. Additionally, the report explores groundbreaking efforts to preserve our digital legacy in the Arctic World Archive. Here's a detailed breakdown of the episode's key discussions, insights, and conclusions.

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1. The Ehrlich-Simon Wager: A Decade-Long Contest on Resource Prices

Background of the Wager

The episode opens with Nova Safo introducing a pivotal bet from the past half-century that has piqued the interest of economists worldwide. This wager wasn't about sports or politics but centered on the valuation of five critical metals over a decade.

Nova Safo [00:02]: "A wager for the history books gives us a glimpse into our future."

Paul Ehrlich vs. Julian Simon

Chris Farrell provides the context of the bet, highlighting the contrasting viewpoints of biologist and environmentalist Paul Ehrlich and economist Julian Simon.

Chris Farrell [00:50]: "Paul Ehrlich... predicted population growth would deplete the planet's resources and the increasing scarcity of resources would drive commodity prices higher."

In stark contrast, Julian Simon remained optimistic about human ingenuity overcoming resource shortages, anticipating that commodity prices would decline due to innovation and increased supply.

Chris Farrell [01:18]: "Simon... believed human innovation and ingenuity would overcome commodity shortages. Prices would fall over time rather than rise."

The Terms and Outcome of the Bet

The wager specifically targeted the inflation-adjusted prices of five metals: copper, chrome, nickel, tin, and tungsten between September 1980 and September 1990.

Chris Farrell [01:23]: "If the inflation adjusted prices of these metals were higher in September 1990 compared to September 1980, Ehrlich would win."

Ultimately, Julian Simon triumphed as the prices of all five metals declined over the decade, despite a significant increase in the world's population by 800 million people.

Chris Farrell [01:46]: "At the end of the decade... nominal prices and inflation adjusted prices of each of the five commodities were down. Ehrlich wrote Simon a check."

Revisiting the Wager with Modern Research

Fast forward 35 years, and Chris Farrell discusses new research by Hannah Richie from Oxford University, who examines the price trends of these metals over a more extended period starting from 1900.

Chris Farrell [02:11]: "Hannah Richie... found that prices didn't change much over the past century, even though the economy is dramatically different today."

Richie's analysis reveals that despite a 40-fold increase in copper production and a 250-fold rise in nickel production since 1900, prices have remained relatively stable. This supports Simon’s original thesis that human innovation mitigates resource scarcity.

Chris Farrell [02:39]: "She finds herself closer to Simon's perspective about the impact of human innovation... the price signal unleashes human ingenuity, and new supplies bring prices back down."

2. Preserving Our Digital Legacy: The Arctic World Archive

Transitioning from economic forecasts to data preservation, the episode highlights the Arctic World Archive—a cutting-edge facility in Svalbard, Norway, dedicated to safeguarding humanity's digital memories.

Overview of the Arctic World Archive

Reporter Adrienne Murray takes listeners on a journey to the remote archipelago, emphasizing the archive's strategic location as a secure and isolated repository.

Adrienne Murray [04:20]: "Svalbard is an archipelago high above the Arctic Circle... it's home to a vault that aims to be the ultimate backup for our data."

Secure and Sustainable Preservation

Rune Bjagstren, the founder of the archive, discusses the safety measures in place, citing its isolation from geopolitical conflicts and its status as a demilitarized zone under international treaties.

Rune Bjagstren [04:46]: "It's a remote destination, far away from wars, crises, terrorism disasters. And it's regulated by an international treaty."

The Process of Data Preservation

The archive utilizes a former coal mine to store data on film reels, ensuring longevity and resistance to technological obsolescence. Kyle Diego from GitHub underscores the importance of preserving software's open-source code.

Kyle Diego [05:47]: "It's incredibly important for humanity to secure the future of software... we're essentially building another wonder of the world every day by working together to write software."

Alexei Mantsev of Picor explains the technical aspect of converting digital data into physical film.

Alexei Mantsev [06:21]: "We convert the sequence of the bits which come from our clients data into images... we can decode the data, just the same way as reading data from a hard drive."

Significance and Future of the Archive

While the longevity of the archive remains uncertain, the initiative represents a proactive approach to preserving our digital footprint against potential technological, environmental, or human-made threats.

Adrienne Murray [06:40]: "No one knows how long this archive will last, but plans are being made to preserve the digital memories we have today, no matter how uncertain the future."

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Conclusion

This episode of the Marketplace Morning Report seamlessly weaves together a historical economic debate with contemporary efforts to preserve digital history. The Ehrlich-Simon wager serves as a testament to the enduring power of human innovation in addressing resource challenges, while the Arctic World Archive exemplifies our commitment to safeguarding the vast and growing digital legacy of humanity. Together, these stories offer a profound glimpse into how our past and present decisions shape our future.

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Notable Quotes:

• Chris Farrell [02:39]: "The price signal unleashes human ingenuity, and new supplies bring prices back down."
• Kyle Diego [05:47]: "We're essentially building another wonder of the world every day by working together to write software."
• Adrienne Murray [06:40]: "Plans are being made to preserve the digital memories we have today, no matter how uncertain the future."

Transcript

[Nova Safo]

A wager for the history books gives us a glimpse into our future. For Marketplace, I'm NovaSafo in for David Brancaccio. One of the most famous bets in the past half century, at least among economists, wasn't about the super bowl or presidential election. No, it was about the price of medals. That is whether five critical medals would be worth more or less between 1980 and and 1990. Really, this was about how we consume natural resources and whether we would just gobble up more and more as the human population grew or figure out a better way. Researchers are now looking at this question all over again. And Marketplace's senior economics contributor Chris Farrell went back to the future along with my colleague David Brancaccio.

[David Brancaccio]

What's the full story on this crazy bet?

[Chris Farrell]

So it's famed biologist and environmentalist Paul Ehrlich. And he predicted population growth would deplete the planet's resources and the increasing scarc to resources would drive commodity prices higher. Now this iconoclastic economist, Julian Simon, now he just didn't buy this forecast. He believed human innovation and ingenuity would overcome commodity shortages. Prices would fall over time rather than rise. So Simon, being an economist, challenged Ehrlich to put some money on the line.

[David Brancaccio]

All right, real money. Challenge accepted. Exactly what were they betting on?

[Chris Farrell]

Okay, so they wagered on the decade long price of 5 metals. Copper, Chrome, nickel, tiny and tungsten. Ehrlich would win the so called scholarly wager of the decade if the inflation adjusted prices of these metals were higher in September 1990 compared to September 1980. Simon, of course, would win if prices were lower.

[David Brancaccio]

And I vaguely remember this. Simon wins the bet, right?

[Chris Farrell]

He does. So at the end of the decade, the world's population had risen by 800 million people while nominal prices and inflation adjusted prices of each of the five commodities were down. Ehrlich wrote Simon a check the bet, by the way, David. I mean, obviously it's long over, but its meaning, its significance and its symbolism are still being debated 35 years later.

[David Brancaccio]

Enter some new research on this. What did you see?

[Chris Farrell]

Hannah Richie is a senior researcher at Oxford University and deputy editor of Our World Data. And she looked at the price trend of the five metals starting in 1900. Prices didn't change much over the past century, even though the economy is dramatically different today. Studies going back as far as 1840 show that a broader basket of mineral price has been essentially trendless.

[David Brancaccio]

She says, all right, fun numbers, but what's the big conclusion here?

[Chris Farrell]

So looking at price trends over the long haul, she finds herself Closer to Simon's perspective about the impact of human innovation, for instance, she notes that the world produces 40 times as much copper annually and 250 times as much nickel as it did in 1900. Yet prices aren't that different from 1900. She says the lesson in the price when resources become scarce, the price signal unleashes human ingenuity, and new supplies bring prices back down.

[David Brancaccio]

All right, if past performance gives us some indication of the future, I guess. Marketplace's senior economics contributor Chris Farrell. Thank you.

[Chris Farrell]

Thanks a lot.

[Nova Safo]

And that was David Brancaccio with that interview. The New York Stock Exchange, the NASDAQ stock market and bond markets are closed today in observance of President's Day and Washington's birthday. Depending on how you look at it, markets will reopen tomorrow. Every day, our digital footprint is growing. Each photo, document or email adding to the mass of data we produce. Over time, some of that data will be lost as technologies become redundant. Data can also be wiped out by human error or worse, environmental or human made disasters. To safeguard data for future generations, some are storing digital artifacts inside the Arctic world archive. The BBC's Adrienne Murray took the frigid journey to the Arctic Circle and filed this report.

[Adrienne Murray]

Svalbard is an archipelago high above the Arctic Circle. Isolated and far away, it's home to a vault that aims to be the ultimate backup for our data. We're about to head inside a former coal mine. It closed down three decades ago and now it's home to the Arctic World Archive. Rune Bjagstren is its founder.

[Rune Bjagstren]

It's a remote destination, far away from wars, crises, terrorism disasters. And it's regulated by an international treaty. It's a demilitarized zone, so what could be safer?

[Adrienne Murray]

By the light of our head torches, we descend the dark passageway 300 meters deep into the permafrost where temperatures are sub zero. And behind heavy doors is the vault instead. On the site are stacks of silver packets containing reels of film.

[Rune Bjagstren]

Now we have more than 100 deposits from 30 plus countries across the world. So it's a wide selection of cultural heritage, history, literature, art, music, you name it. This is a very special container.

[Adrienne Murray]

In another large box is a copy of the world's open source code, the building blocks of most of the software and websites that we use. Kyle Diego is the chief operating officer of GitHub, which is behind this code vault.

[Kyle Diego]

It's incredibly important for humanity to secure the future of software. It's become so critical to our day to day lives. We're essentially building another wonder of the world every day by working together to write software.

[Adrienne Murray]

The archive is the commercial operation run by data preservation company Picor. And back at its Norwegian offices in Dramen, an hour from Oslo, all those files are printed onto film. Alexei Mantsev is a senior product developer at Pico.

[Alexei Mantsev]

We convert the sequence of the bits which come from our clients data into images. We are sending those raw images onto film. After that, we develop the film, we can scan it back, and we can decode the data, just the same way a user could see of reading data from a hard drive.

[Adrienne Murray]

No one knows how long this archive will last, but plans are being made to preserve the digital memories we have today, no matter how uncertain the Future. I'm the BBC's Adrienne Murray for Marketplace.

[Nova Safo]

And I'm Nova Sapo with a Marketplace morning report from apm, American Public Media.