Marian Tupy, a senior fellow at the Cato Institute, discusses his book “Super Abundance” with Gene Tunny. Tupy argues that resources are becoming more abundant relative to global population, a concept he calls “super abundance.” He explains that human ingenuity has led to cheaper commodities over time. Tupy refutes Malthusian predictions of resource scarcity, citing examples like the Haber-Bosch process for synthetic fertilizer. He also addresses environmental concerns, emphasizing that economic growth and technological advancements can mitigate issues like ocean and air pollution and resource depletion.
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About this episode’s guest: Marian Tupy, Cato Institute
Marian L. Tupy is the founder and editor of HumanProgress.org, and a senior fellow at the Cato Institute’s Center for Global Liberty and Prosperity.
He is the co-author of the Simon Abundance Index, Superabundance: The Story of Population Growth, Innovation, and Human Flourishing on an Infinitely Bountiful Planet (2022) and Ten Global Trends Every Smart Person Should Know: And Many Others You Will Find Interesting (2020).
His articles have been published in the Financial Times, the Washington Post, the Los Angeles Times, the Wall Street Journal, The Atlantic, Newsweek, the U.K. Spectator, Foreign Policy, and various other outlets both in the United States and overseas. He has appeared on BBC, CNN, CNBC, MSNBC, Fox News, Fox Business, and other channels.
Tupy received his BA in international relations and classics from the University of the Witwatersrand in Johannesburg, South Africa, and his PhD in international relations from the University of St. Andrews in the United Kingdom.
Source: https://www.cato.org/people/marian-l-tupy
Timestamps for EP258
- Introduction and Overview of the Podcast (0:00)
- Explaining the Concept of Super Abundance (2:30)
- Methodology and Stylized Facts (6:48)
- Julian Simon and the Bet with Paul Ehrlich (9:46)
- Future Prospects and Human Ingenuity (12:45)
- Environmental Concerns and Degrowth (22:59)
- Population Growth and Resource Use (33:11)
- Final Thoughts and Future Prospects (34:08)
Takeaways
- Tupy argues that human ingenuity continuously expands the resource base, making resources more abundant even as populations grow.
- The concept of “time prices” shows that resources are becoming cheaper relative to wages, supporting the thesis of super abundance.
- The famous Simon-Ehrlich bet demonstrates that commodities became cheaper over time, disproving doomsday predictions about resource depletion.
- Technological advancements, such as desalination and agricultural productivity, are key to sustaining resource abundance.
- Economic prosperity and technological innovation are essential for environmental protection.
Links relevant to the conversation
Marian’s book Superabundance:
https://www.amazon.com.au/Superabundance-Population-Growth-Innovation-Flourishing/dp/1952223393
Simon–Ehrlich wager Wikipedia entry:
https://en.wikipedia.org/wiki/Simon%E2%80%93Ehrlich_wager
Regarding the question, “Is it true that the majority of plastic in the oceans comes from Asia and Africa?” see:
https://www.perplexity.ai/search/is-it-true-that-the-majority-o-3aYOSMTyT6m9CcULDm7Iug
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Transcript: Abundance Mindset: Exploring the Super Abundance Thesis w/ Marian Tupy, Cato Institute – EP258
N.B. This is a lightly edited version of a transcript originally created using the AI application otter.ai. It may not be 100 percent accurate, but should be pretty close. If you’d like to quote from it, please check the quoted segment in the recording.
Marian Tupy 00:03
The air in western rich countries is now cleaner than it has been since before industrialization. If you look at the Yale index of environmental protection and then you compare it with GDP per capita. If you combine these two statistics, what it shows you is a very strong correlation between income per capita and Environment Protection.
Gene Tunny 00:35
Welcome to the economics explored podcast, a frank and fearless exploration of important economic issues. I’m your host gene Tunny. I’m a professional economist and former Australian Treasury official. The aim of this show is to help you better understand the big economic issues affecting all our lives. We do this by considering the theory evidence and by hearing a wide range of views. I’m delighted that you can join me for this episode. Please check out the show notes for relevant information. Now on to the show. Hello and welcome to the show. Today, I have a fascinating conversation with Marian TUPE, senior fellow at the Cato Institute, and co author of the book super abundance. Marian dives into an optimistic view of the future, highlighting how human ingenuity has consistently overcome perceived limits on our resources, even with a growing global population, we delve into the famous Simon Ehrlich wager with Marian, explaining how exploration and innovation mean that we continue to defy Malthusian predictions of decline. Toward the end of the episode, we shift gears and discuss migration, exploring its impacts on housing affordability, public service delivery and social cohesion. Thanks to Lumo coffee for sponsoring this episode. This grade one organic specialty coffee from the highlands of Peru is jam packed full of healthy antioxidants. There’s a 10% discount for economics explored. Listeners. Details are in the show notes. Okay? Without further ado, let’s dive into the episode. I hope you enjoy it. Marianne TUPE, welcome to the program.
Marian Tupy 02:14
Thank you very much for having me.
Gene Tunny 02:17
It’s excellent to have you on so you’ve written a really interesting book called super abundance, and it’s on an issue that I think about a lot, which is on the Limits to Growth, whether there are limits to growth, whether we need to move to something called degrowth, which is becoming popular in certain circles. To begin with. Marion, could you tell us a bit about what is this concept of super abundance that you have? Please?
Marian Tupy 02:49
Well, super abundance is not just name of the book. There it is. It is also a it’s got a technical term, which is to say, when resources are becoming abundant at a higher rate than population growth. Because, why? Why bother about the link between population growth and and resources? Because, because, when people think about population growth, they usually think that there is sort of a fixed pie of resources, and the more people you have, the fewer resources you end up with. So you know, if you have 10 people at dinner, you know you have so much food to go around. If you bring 100 people to dinner, everybody has to do with a small plate, because, you know, more people are going to exalt resources more quickly. But of course, humanity is different. Humanity can grow the size of the pie. Humanity can bring additional resources to dinner, so that even 100 people can get fed, even 1000 people can get fed, or, for that matter, 10 billion people can get fed. But anyway, the point is that for the longest time, people were worried that as population increases, we will run out of resources. And in fact, what we found was that resources are becoming cheaper. And in fact, abundance of resources increasing at a faster pace than population. That’s what we call super abundance,
Gene Tunny 04:05
right? Okay, so what sort of resources do you mean are becoming cheaper? This is the majority of commodities you studied. Could you tell us a bit more about that please?
Marian Tupy 04:15
Yeah, I guess it’s useful to actually start by defining resource, if we can. You know, people talk a lot about natural resources, but I think that’s a bit confused. I think that you should really start by thinking about natural endowment, or you should talk about raw materials. You know, raw materials such as whatever minerals in the crust of the earth, metals, things like that. And when you apply human intelligence to raw materials, you end up with a resource. So take just soil, you know, it’s a it’s a raw material. It’s it’s that. But when you apply human ingenuity, such as, you know, using it in order to grow crops. Then the resource becomes wheat, right? And so in the book, we look at hundreds of different types of commodities, really, which is to say food, fuel, minerals, metals, and even, actually some services. But that’s that we can talk about it later. But the bottom line is that we look at, we could look at traded commodities, anything from uranium to zinc to iron to wheat and barley and oil and natural gas. Basically, you know, we start with the big 50, which are, which are measured, or rather, which are, which are being tracked by the IMF and the World Bank, and then we expand it going back 170 years. But yes, so, so there are these raw materials, and when you apply human intelligence to them, you get resources. That’s essentially how we define resource.
Gene Tunny 05:54
Okay, so have you established some stylized facts about the prices of these resources? Is that the main point of the book, and can you just go over that again? I just want to make sure I understand is, are you saying there’s a general tendency for them to become cheaper, or is it on average, they’re becoming less expensive, or is it the majority? Or is it a just one, a bit bit more to understand. Is it? I mean, are you trying to are you proclaiming a general law of super abundance? I just want to understand what, what your thesis is exactly.
Marian Tupy 06:27
Yeah. So usually, when people look at resources, they look at a real price of resources, meaning, you take a price of resource in, say, 1900 you compare it to a price of resource in 2000 you discounted for inflation, and that tells you whether something has gotten more or less expensive. Now, we were dissatisfied with this kind of analysis for a simple reason. We wanted to take the resources back in time as much as possible, and we wanted to include as many countries as possible. Now, when you start looking at resource abundance from a global perspective and over hundreds of years, you quickly run into a problem, which is, you know what happens to exchange rates? You know what happens to inflation rates? What if you don’t have inflation rates in 1850, or 1900 you know, how do you deal with it? And so we came up with a different methodology, which is called time prices. Basically, what we look at is nominal wage per hour, and we look at nominal price of a resource. So let’s say, let’s, let’s give a stylized example, a pound of beef costs you. Let’s say that you are making $20 an hour in the United States, and a pound of beef costs $20 Okay, so a pound of beef will cost you an hour of later, but if in 50 years time, the price of beef may go up to $40 an hour, but you are now making $80 an hour, then now you have two pounds of B for an hour of work. So everything we do, we do in terms of time cost or time price, it’s really the nominal price of something relative to nominal wage that you are making at the time of the purchase. And the beauty behind time prices is that inflation doesn’t matter because you are only dealing with nominal prices and nominal wages. So it doesn’t really matter whether the inflation is 10% or 1,000,000% over the intervening period, because you’re looking only at nominal prices, then it doesn’t really matter. And also, an hour of work is the same in Australia as in the United States, as in China. So that way you can basically make these comparisons between different countries over different periods of time, in in a in an intellectually honest and methodology methodologically sound way. Did that make that make any sense? Yeah,
Gene Tunny 08:56
yeah, that that does make sense. Understand what you’re what you’re doing there. I mean, I think the general point you make is a is a good one. And I mean, you go back long enough. I mean, you go back to the I mean, I remember when I was in school and we were hearing about the limits of growth and all of that, and and then that was, you know, before we had the rise of China and India and, you know, massive expansion of global trade world, GDP. More recently, we’ve had peak oil. That was prior to the financial crisis, that that proved not to be really something that we’re at yet, or at least doesn’t, we don’t appear to be at it. And so, yeah, I guess I’m very sympathetic to the argument about about super abundance. Can I ask? Is this a continuation of the work that Julian Simon has done? Is this because I see on your CV or your bio, you’re part of something called the Simon. Project. Could you tell us what that is and whether this is continuing his work? Yes, yes,
Marian Tupy 10:05
yes, absolutely. So. Julian was a, obviously, a huge inspiration, but so he was actually a senior fellow at Cato before I joined the Cato Institute. He died in 1998 but he was senior fellow there, so we never met. But what I wanted to do back in 2017 is to look at his work and update it, you know, to the present. And I found that his bet with with Ehrlich, he would still win. In other words, commodities continued to get cheaper, at least the ones that Julian looked at, but I was using the old methodology. I was just looking at real prices of commodities. And my co author, Gail Pooley, got in touch with me, and he says, well, let’s turn them into time prices. Let’s look, let’s look at the price of commodities relative to wages, how much more you can buy for an hour of work than your ancestors could. And then we published a paper in 2018 with this new methodology. And indeed we found, once again, that Julian was right. And then we decided to turn into a book which goes back to 1850 and basically what we find is that commodities, relative to wages, are constantly getting cheaper. If it’s a long enough period, everything is getting cheaper, including gold. The only thing that continues to become more and more expensive over the centuries is human labor, essentially the human input. And we might as well talk about Simon and Ehrlich wager, right? Yes, yes, yes, yeah, please. So Julian Simon, since we mentioned him, he was an economist at the University of Maryland, here in the United States, and he was basically looking at the data. And he was noticing that things were getting cheaper, even though population was expanding whilst over in California, at Stanford University, Paul Ehrlich, who is still alive, he’s 93 years old now, was predicting doom and gloom. He was basically saying, you know, as population increases, we are going to run out of everything, and there’s going to be mass famine. And, you know, starvation of hundreds of millions of people. And so they had a bet between 1980 and 1990 on the price of five commodities, nickel, tungsten, tin, chromium and copper. And basically, they made a futures contract for $1,000 and when the period came to an end in 1990 Ehrlich had to send a check for $576 to Simon, because commodities became 36% cheaper. Had Simon implemented our methodology, he would have won even bigger. He would have won by about 40, 42% rather than 36
Gene Tunny 12:45
very good. Yes, yeah, that’s, I’ll put a link in the show notes to that, that wager. Yep, I remember that because I think that was still very when I, when I first started learning economics, I think that wager had just, it had just been decided, and yes, it Yeah, certainly in Simon’s favor. But yep, I mean in terms of this idea of the limits to growth, or the, you know, how many earths we need to support ourselves, which is something I think you and your co author, Gail, were were reacting against, because in the blurb for your book, it goes generations of people have been taught that population growth makes resources scarcer in 2021 for example, one widely publicized report argue the world’s rapidly growing population is consuming the planet’s natural resources at an alarming rate. The world currently needs 1.6 Earths to satisfy the demand for natural resources, a figure that could rise to two planets by 2030 now what I’m interested in, Marion, have you thought about like your analysis? You’ve looked at it over. Was it 150 years or a couple 100 years? 170 170 What are you by the way,
Marian Tupy 14:05
it’s 170 because that’s, that’s all the data that we could get. Yeah. Gotcha, yeah.
Gene Tunny 14:09
What are your thoughts on where we’re going? Because we’re still, I mean, up until, say, 2070 or 2080 we’re still going to have growing global population. We still have rising living standards in well, we’ve got convergence catch up in China, India, other emerging economies. Do you think this super abundance thesis will hold despite this continuing economic growth? Or do you have any? Do you have any concerns? How confident are you in the this super abundance hypothesis?
Marian Tupy 14:47
I’m 100% confident I’m not investing in commodities, and I wouldn’t, unless you know I think that there would be a good hedge against inflation. But. No, I don’t think that commodities are going to, you know that they are, that they are going to somehow explode in price. Now, before I answer that question, let me make a couple of points. So the world’s population is going to peak at about 18, sorry, 2065 maybe 2017 and it’s going to start declining. But the question over population growth and resources that’s remains relevant, even if population plateaus and even starts declining, because the expectation is that as we become richer, we are going to be using more resources. We are going to be consuming more resources. So it’s very important to understand the exact relationship between population growth and resource abundance. But but my prediction is that even if that, even if population continues to grow, or even if plateaus, or even if we just start consuming much more resources than we currently do, we are still going to have more abundant resource based and then we currently do for a simple reason that human ingenuity just doesn’t stop. I mean, human ingenuity depends on population growth. So the more people you have, the more ideas you are actually going to have in order to increase your resource base, right? So as I said, you know, in the olden days, maybe you could produce 40 bushels of corn or wheat per acre of land. Now you have 200 bushels of wheat per acre of land. That’s human ingenuity that is applying scientific methods, GMOs, genetic modified organisms, that is applying modern fertilizer, modern watering techniques and whatever else, and pesticides and fungicides in order to produce more food. That’s, that’s, that’s really, that’s all comes from the human mind, right? And so the more people you have, the the more opportunity you have to come up with new ideas. So what are the new ideas? One we can increase the supply of resources simply by discovering new fields, or, for example, oil, gas or whatever else, much of them continues to be unexploited, and certainly on much of it hasn’t even been properly, properly. You know, checked for for resources, we don’t really know how much oil or gas we have, how much iron we have, how much, how much other metals or minerals we have, because we have only explored a tiny percentage of the world. Secondly, we can of the planet. Secondly, of course, we can increase our technology so it enables us to get to resources which were previously uneconomically expensive. So you know, many of the oil fields and gas fields which we are exploring and exploiting here in the United States were prohibitively expensive under the old drilling methods, but are perfectly economical based on fracking, right? Recycling is is another way of doing it. Dematerialization is a great way of doing it. You know, if we can, if we can, if we can do more with less meaning. 20 years ago, you walked into any, any hotel room and it would have a thick copper cable running from the wall to your computer. That’s the only way that you could get on the internet. Now it’s been completely dematerialized. We can do that functionality without actually using any materials whatsoever. We can dematerialize our car fleet. For example, if we can have cars which are powered by AI, cars are 90% of the time cars are not being used. So basically, we could get rid of 90% of cars, including all the metal and plastic that goes into them, and simply have autonomous vehicles picking us up when we need it. So that’s another way of going around the problem of material use. So efficiencies, you know, we can have relative as well as absolute efficiency. So, you know, a can of Coke or water or whatever else uses much less materials than it used to in the past. But also when, when, when you look at very sophisticated economies such as the United States and the United Kingdom, what you observe is that the total, the absolute amount of resources they use every year in order to produce GDP, is actually decreased things. So there has been a certain level of decoupling between resource use and economic growth. So that’s that’s also important. So there are many different ways in which you can actually increase your resource base, but it all requires innovations. It requires new ideas that are born in human mind.
Gene Tunny 19:46
Yep, gotcha. And I mean, that requires that we have a, you know, a good education system, too. And I mean, well, that’s another that’s an issue for another, another podcast. But I was,
Marian Tupy 19:55
in case, I was, I was going into too many details. Let me put it this way. Yeah. Today’s population is 8 billion people. Half of us would be dead if it if it wasn’t for artificial synthetic fertilizer. Our ancestors, 200 years ago, used horse manure, and they used even human excrement. They would compost and do all sorts of other things in order to produce very little yield in agriculture today, what we are using is ammonia, which is essentially a compound made from natural gas. We are using natural gas in order to create artificial synthetic fertilizer, which enables our crops to grow very fast and very big and and who would have thought that you can use natural gas in order to fertilize our crops? But haber bosch discovered this process in the early 20th century, and ever since then, half of humanity has depended on this kind of fertilizer in order to feed humanity. But it was born in human mind.
Gene Tunny 20:56
Oh, exactly. And that’s, that’s one of the points that I think Ed Conway makes, in his book, material world, a substantial story of our past and future, which I’d recommend if you’re listening. And do you want to learn more about what’s been happening with our use of resources and materials, that that book’s absolutely fascinating. And, I mean, I’m sure yours will go along that. I mean, you’ve, you’ve got some great reviews already on on your book, which is terribly just on the I’d like to talk about this issue of exploration, because, yep, that’s, that’s one of the ways that we get around this, this constraint, because of it as if things do become scarcer, then the price increases, and that sends a signal that makes it economic to mine less, you know, deposits that are of that are harder to get to. It makes it economic, or it can support exploration activity. Have you crunched the numbers on to what extent is your super abundant story being driven by, you know greater discoveries. You know exploration, finding more reserves of resources. To what extent is it driven by increases in the efficiency of extraction? Or you haven’t, no okay, because
Marian Tupy 22:19
we didn’t break it down like that. And I don’t even know if anybody has done that, but, but the main point of the book is is things are getting cheaper because of human innovation.
Gene Tunny 22:32
Yeah, yeah. And so the other option is that it could be because of general productivity, the productivity more broadly, because we’re becoming wealth, more productive, wealthier,
Marian Tupy 22:44
sure, but of course, but productivity is just another word for innovation, right?
Gene Tunny 22:49
Yeah, yeah, yeah, absolutely, yep. I think it’s a valid hypothesis. Before we sort of wrap up, I just want to ask whether you think there are other constraints on growth like this is something that I’m confronted with. You know, I generally think, I think this whole degrowth argument, I’m not a fan of it. I’ve, I’ve argued against it in various places, so I’m not a supporter of it. What the degrowth advocates will argue is that we’re reaching these planetary boundaries. I mean, one, we have concerns about climate change, and that’s in their view, that’s leading to, well, there’s the increase in temperatures, there’s the concerns about heat stress and whether humans can cope with that. There’s concerns about, I mean, all of the concerns about what it means for agriculture and and also natural disasters. So there’s that, there’s also, there are concerns about ecological collapse, in some cases. To Have you thought about those issues at all. Marion, are you concerned? Do you see any limits to growth coming from from other issues, some other environmental issues?
Marian Tupy 24:00
Yes, so I try to think about it as much as I can, as time permits. But okay, so we need to distinguish between what I would call the primitive version of degrowth, which is the claim that we are going to run out of oil, or we are going to run out of pound or something like that, and then a more sophisticated version of degrowth, or the degrowth criticism, which would be something like, we are going to poison our oceans, we are going to run out of the biosphere. We are going to kill all the animals, etc, etc. Now, this is a huge subject, and I’m very happy to come on to your program in the future, but, but let’s, let’s take as many as we can within a within a reasonable time window. Let’s think about plastics in the ocean, and let’s think about pollution of the oceans. 90% 95% of all plastic in the oceans comes from eight rivers, all of them are in. Asia and in Africa. Two are in Africa. Six of them are in Asia. What does that tell us? It tells us that when a society is rich, such as Europe, you know, Australia, North America, people are so rich that they insist on living in a clean environment and being protect and protecting their environment, which is why stuff doesn’t plastic and other poisons do not emerge from our rivers into the oceans. It’s the poor countries that do that. So the answer to having clean oceans without plastic is actually economic growth and prosperity, which will allow Asia and Africa to implement the kind of environmental policies that we have in order to prevent poison from running into the oceans. Let’s look at a second subject, which could be something like the biosphere. So I’m an environmentalist as much as you are, and probably anybody else, in a sense that we like clean environment, we like animals, we like plants. We don’t want to destroy the Earth. I love nature. So now what is, what is the best way to protect the biosphere? What is the best way to ensure that there is plenty of acreage in the world where animals can thrive. Well, the best way to do it is to have hyper efficient agriculture so that we can produce more food on fewer and fewer acres of land. If 8 billion people in the world today lived on the same amount of land as our hunter gathering ancestors, we wouldn’t need one planet, we would need 10 planets, right? But because we can produce a lot of food on acre of land, and then we can produce twice as much food in 50 years, and maybe another twice as much in another 50 years, that should enable us to feed more people on less and less land, which means that we can return land back to animals. Jesse asubel from Rockefeller University once calculated that if the world’s farmer, the average world’s farmer, became as productive as the American farmer, we could return the land mass the size of India, back to nature. So it’s all about agricultural productivity, right? The more we can make our land, the better we are water. There are concerns over running out of out of fresh water. I’m not concerned because I know that this Desalination is absurdly cheap. Israel now recycles 98% of its water and it desalinates the rest. The ideal version of desalination is to combine desalination with solar or wind power. And in fact, Israel not just supplies its own water, but it actually supplies palestines and Egypt and Jordan with fresh water out of desalination, recycling. What else is there? Fresh air. Sorry, clean air. So this is something that obviously requires global action, because, you know, there are no property rights in in the atmosphere. However, I would like to point out that the air in western rich countries is now cleaner than it has been since before industrialization. So the particulate map in the air has been declining. And in fact, if you look at the Yale, the Yale index of environmental protection, and then you compare it with GDP per capita, if you combine these two statistics, what it shows you is a very strong correlation between income per capita and environmental protection. So we talked about, you know, animals and plants preserving biosphere, but by returning more land to nature, we are talking about our oceans. Now, another thing which we could talk about is overfishing. This is something that a lot of people are concerned with, and here the answer, of course, rests in aquaculture. Already, 50% of all the fish that are being consumed around the world are being grown for the specific purpose of being eaten by essentially seafood farmers. Right? These are not fish from the wild, and obviously what we want to do is to get to 100% as soon as possible. So there are all of these different ways in which we are supposed to bump against planetary, planetary boundaries, but, but when you look at again human ingenuity and the way that we’ve been able to tackle such things as, I don’t know, desalination or aquaculture, agricultural production, it. Gives you hope that we’ll be able to do this in the future. Just more of it.
Gene Tunny 30:06
Okay, we’ll take a short break here for a word from our sponsor.
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Gene Tunny 30:41
now back to the show. That figure you gave about plastics in the ocean that was striking. 95% of the plastics in the ocean come from eight rivers in Asia and Africa. I mean that that’s that’s extraordinary. I’ll have to look that up, because that’s a I know a lot of people who’d be, who’d be fascinated by that, and I know my the producer of my podcast, Josh, has asked me about that Pacific Island garbage patch in the past, and has said I should cover it on the show. So it’s, it’s interesting to know what the source of those plastics, predominantly is. Do you remember where that where that comes from is that one of Bjorn Lomborg figures. Would you know this?
Marian Tupy 31:29
I can’t remember, and I sure as hell hope that I’m I’m 90 How about this? I’m 95% right that it’s 95% of plastics out of plausible. We can
Gene Tunny 31:40
go, it sounds plausible, because I imagine that, yeah, because when you think about it, yeah, be we, like in Brisbane here, we’ve done a lot of work cleaning up the Brisbane River, so it looks a lot better than it did 20 or 30 years ago. So, I mean, it’s, it’s plausible. I mean, I know that, yeah, a lot of the environmental, uh, problems we see that, yeah, they they see more acute in those in those emerging economies. So anyway, I’ll have a I’ll have a look for that. I agree with your, your general point. The other thing that your remarks, what had brought, what came to mind in the 2000s here, we had a thing called the Millennium drought in Australia, and there were concerns that, oh, it’s never going to rain again, or we’re going to have much lower rainfall than ever. And you know that people were linking this to climate change. And then we had, and then we had record, or near record rainfall, or whatever it was, in 20, 1011, it just kept it just rained for weeks, and all the cashflows got soaked, and there’s massive flood. So Brisbane flooded. I was caught in the flood at Toowong, and, yeah, but prior to that, we were worried about water security, and we went on a recycle we built a recycle water plant, then we built a decal plant, a desalination plant at Tugan for I don’t know whether it was a couple of billion, it was a lot of money, and we, we hardly ever use it. We use it occasionally, for brief periods. It’s, it’s, it’s not, it wasn’t really required. It just goes to show you, if you, if you make your decisions based on some imagined catastrophe in the future, you can end up making some, some really bad, really bad decisions. So that was a you
Marian Tupy 33:27
I remember distinctly, I was skiing in Whistler in Canada in 2014 and, you know, the the old dogs who’ve been skiing there for, for for decades, were absolutely certain that 2014 was the last year in which it was going to snow. Because, you know, the year before there was more snow, and the year before there was more snow, and now it seemed like there was ever less snow up there. But these things are not linear. And of course, all the predictions about, you know, snow free winters, remember those from 20 years ago, all gone broad. You know, Arctic, ice free, Arctic that never happened. So, you know, the earth is warming. Planet is changing. Climate change is not a myth. It is not a lie. It is it is really happening, but figuring out what exactly is happening the exact consequences of climate change on the planet, that is much more complicated, and we certainly have time. Look, I’m not suggesting this is not a problem. What I’m saying is that the notion that we have six years left, or when, when Prince Charles was still Prince Charles, before King Charles, he said something like, you know, we have 48 months to fix the world, or something ridiculous. The point is that. The point is that a lot of people have been burned by making predictions about how the world is going to end. And we it’s not that we have five years or 10 years. We have decades in which. Need to think about maybe burning less fossil fuels, maybe having more nuclear, maybe having fusion energy, but we have time to adjust. And, you know, the world is not running out of anything, and we just have to be, you know, we just have to apply our ingenuity to fixing our problems. We have. We have fixed tremendous problems before. Let’s remember that life expectancy around the world, until recently, was 35 years. 50% of babies before the age of 15 died due to natural causes, and famines were omnipresent. 10s of millions of people died every year due to famine. We have solved a lot of problems, and there is no reason to think that we cannot solve them in the future. We are a very special animal. We can think. We can long term plan. We have reason, we have cooperation, we have trade. So you know that there’s there’s rational grounds for rational optimism. Absolutely,
Gene Tunny 36:02
very good. And it’s about ingenuity and relying on on free markets letting you know, providing the incentives for people to to innovate and to reap the rewards of their of their innovation. So very good. Mario Toby, anything else before we wrap up? I really enjoyed this conversation, and it’s a good start to the day. I’m in Australia, and it’s just it’s gone past 630 so it’s a really good start to the day for me having this conversation. Anything else before we wrap up?
Marian Tupy 36:36
I would just say I very much enjoyed my trip to Australia. You are the lucky country. Very beautiful. A lot of resources. Lovely people. Keep it going. I understand you are going to build some nuclear power stations. Is that true?
Gene Tunny 36:49
Possibly, I’m I think, I think they’re worth exploring. I’m skeptical about whether we will ever build them here in Australia. I think there’s too much of a an environmental movement here in Australia for us to ever build nuclear power. I could be wrong about that. It’s looking like the cost of moving towards 80% or 90% renewable energy, or whatever they want it to be, that’s just going to be too high. So we’re going to have to do something else that possibly could be nuclear. But just knowing the Australian, Australian politics of people, just how prominent the Greens movement is, I think it’ll be hard to get nuclear reactors built in Australia. But having said that, I mean, they could end up being the path of least resistance, or there is no alternative, because the alternative, at the moment, looks to be hideously expensive electricity due to this rollout of renewables and that are unreliable, we’re trying to build this Snowy Hydro. I don’t know if you’ve heard about our Snowy Hydro 2.0 project that that was initially supposed to cost. I don’t know. Maybe it was 10 billion. Now it’s blown out to 20 billion or so. I’ll put the right numbers in the show notes. So it’s just keeps blowing out, because I have all sorts of issues. We we ended up with one of the tunnel boring machines stuck in the rock, okay, like this is, it’s been stuck for months, and this is just this. It’s just symbolic of just how dread, hopeless this project has been. So we’re having to do these, you know, massive engineering projects to back up all of the intermittent wind farms and solar farms. And it’s just, yeah, it’s a, it’s a, well, you never know.
Marian Tupy 38:43
You never know. You know. In Europe, 10 years ago, it looked like the greens, the Climate Lobby was all powerful. They’re losing power all over the place because, basically, energy became so expensive that Europe industrializing. People’s standards of living are decreasing because energy and electricity is so expensive, and energy goes into everything. It goes into literally, it impacts the price of price of tomatoes in the shop. So you never know. We certainly see very positive changes amongst environmentalists here in the United States, they’ve now recognized the importance of nuclear. If you want to get away from, from from fossil fuels, at least to some extent. We are never going to get away from completely from fossil fuels. That’s just not possible. There is not going to be energy transition. We are just going to add new stuff to energy. We are still burning coal and sorry, we are still burning wood. So you know that’s not going anywhere but, but we can. We can. We can certainly limit it, and I’m a huge proponent of nuclear especially if we can learn to make it cheaper. So we’ll see. But certainly, congratulations on being born in such a beautiful country, and I hope that you can keep it prosperous and happy. Yes,
Gene Tunny 39:59
yeah. Yes, I hope so too. I mean, one, one thing I should note, because it just comes up with this issue of population, just if you got another second, because I did what I did want to wrap up, but I thought there’s one thing, one point you made about population before I agree with you. Over the long term, I think for any individual country, this relates to your last your concluding what, what was going to be your concluded covid, about Australia, and I think you’re generally right. I mean, it is a prosperous country. It is the lucky country. We’re facing big challenges in the short term or over the next few years, because we’ve had a massive surge in population post covid, which is related to very lax immigration policy settings that are very favorable to overseas students. So then possibly rorting of the student visas, because it’s, you know, it’s a way you can get access to the Australian Labor Market. So I think that’s one of the issues we’ve got to grapple with. I know that’s an issue in other countries too, but that would just be my one qualification to this general optimism about, you know, having a larger population, more more ingenuity, that sort of thing. So I just wanted to make that that comment, it just occurred to me. But if you’ve got any reactions to that, please, please, let me know.
Marian Tupy 41:22
I mean, the question is, the question is, what? What is the negative effect? Is it? Is it increases prices of real estate, like increasing
Gene Tunny 41:30
real estate, just general congestion, I think, an inability of public services to keep up with the the population growth, yeah, just a general feeling that the country has, the country’s changing in a way that, yeah, think things just don’t seem to work as well, or it’s not the same country as generally, not as friendly or as Welcoming as it once was that would be, that would be the, my sort of take on it, yeah. But generally I think, yeah, it’s the housing issue, where it comes up the most, but it’s congestion in other areas too, well. I
Marian Tupy 42:12
mean, obviously I think that every country has a right to decide who comes in. You know, you know, I’m very I’m very liberal on immigration, but I do think that we need to know who is coming in. Are these people posing any kind of terrorist threat? Do they have criminal records? We just don’t know, because a lot of people come in illegally. I wish we could go back to the time from 20 years ago, when you know people would come in legally, and they would go through the process of having background checks and whatever else, and if they can contribute to the economy, then so much the better. And when it comes to housing, look, if Australia cannot solve it, I don’t know who can, because you’ve got a lot of land. One thing which puzzles me is that we have stopped building new cities, which is kind of bizarre when you think about it. People used to, yeah, cities left and right. And it seems just so difficult nowadays in the West to actually start properly, start a new city. You know, there are states in the United States where the federal government owns 90% of the land. If the federal government just gave it back to the States, and the states simply said, Go forth and conquer and build new cities. You know, it could be done. But ultimately, I don’t think that the issue here is lack of land. I don’t think there are the issue is lack of resources. I think the problem here is tends to be over regulation and governments putting putting barriers in in the way of human ingenuity and human enterprise. So, you know, there’s that’s certainly the case in the United States when it comes to housing. Yeah,
Gene Tunny 43:48
absolutely okay. We might end there. I think that was a good point to end on. Barry and Tubi from the Cato Institute. Thanks so much for all your work, for a great conversation, and I’ll put a link in the show notes to your new book, super abundance looks terrific and all the best for the future, and I hope to catch up with you sometime again soon. Thank
Marian Tupy 44:09
you very much. All the best.
Gene Tunny 44:12
Righto, thanks for listening to this episode of economics explored. If you have any questions, comments or suggestions, please get in touch. I’d love to hear from you. You can send me an email via contact at economics, explore.com or a voicemail via SpeakPipe. You can find the link in the show notes. If you’ve enjoyed the show, I’d be grateful if you could tell anyone you think would be interested about it. Word of mouth is one of the main ways that people learn about the show. Finally, if your podcasting app lets you, then please write a review and leave a writing. Thanks for listening. I hope you can join me again next week.
Obsidian 44:59
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Credits
Thanks to the show’s sponsor, Gene’s consultancy business, www.adepteconomics.com.au. Full transcripts are available a few days after the episode is first published at www.economicsexplored.com. Economics Explored is available via Apple Podcasts and other podcasting platforms.
