Five years ago, New York Times columnist John Tierney bet Matthew R. Simmons $5000 that oil prices would not triple by the end of 2010. To Simmons, this result, or something close to it, was inevitable, given increasing global demand for scarce resources, and especially because of the prospect of Peak Oil. One can assume his beliefs were bolstered by sophisticated econometric models with predictions that seemed so strong that the five grand looked like easy money.
But Tierney, a friend and student of the late Julian Simon, knew something about the Law of Supply and its role in causing Malthusian predictions to almost always turn out wrong. With this in mind, and knowing well the results of Simon's similar bet with Paul Ehrlich, Tierney felt safe betting against another Chicken Little.
Tierney writes about his experience in this morning's Times.
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