In an interview on Pioneering Conservatism

Which brings us naturally to Julian Simon. I remember having an argument with you back in our undergraduate days at Yale. You insisted that oil was never going to run out, I insisted that that was insane because it’s a finite resource so of course it would run out. You had read Julian Simon, I hadn’t.

Simon’s point is that there is nothing less natural than a natural resource. All of these things are developed by an investment of knowledge, effort and labour. People do that according to whether it pays. The natural way to think about natural resources is that there is so much copper in the ground and then, after you’ve dug it all up, you don’t have any more. And what he argued is no, the world’s supply of copper is like the grocery store’s supply of cans of tomato sauce. So long as people are buying the cans of tomato sauce the store will maintain an inventory of tomato sauce. If there is more of a demand for tomato sauce, then the store will invest more capital to maintain a bigger inventory of tomato sauce. But the idea of how many cans of tomato sauce are there in the world, that is not an answerable question. How many do people want? What will they pay?

This was a book that was powerful because it destroyed another core liberal or prevalent belief of the late 1970s, which is that command and control was the way to mobilise scarce natural resources most effectively. Everyone who is buying gold today would do well to read this book because one of the lessons of this book is that people will say, ‘Hey, gold, which used to be worth $300 an ounce, is now worth $1,400 an ounce – let’s make a whole bunch more.’ Right now people are digging this stuff up all over the planet and Julian Simon would be the one to tell you, if you are banking on $2,000 an ounce gold, don’t.

First Simon demolishes the myth of scarcity for ever and second he says when there is scarcity, command and control is the wrong way to deal with it. Is that fair?

The ultimate resource is the title, The State of Humanity, the ability of human beings to re-imagine, and he’s got lots of great stories in the book. One is the great pine tree shortage of the 1830s and 40s. If you have a war ship, you need to have great big sails to make it go faster and if you need a big sail, then you need a big mast, and the way that you get that is by having a very, very tall tree. The British preserved these tall trees, first in Scandinavia and then in Canada, and they got worried because people were cutting down these tall pines faster than they would grow. And the question was, how would you have masts and then how could you have sails and how could you have battleships? But now, no one knows how many pine trees there are in the world and no one cares – because we thought of a better way of making battleships than of having them with masts and sails.

So is this book also on the list mainly because it entered at a moment when the temper of the times was very much in the other direction? It’s not inherently conservative is it?

All these things become the common property of everybody. I don’t believe two eternal categories – one called conservative, one called liberal – exist, and that you can look at people from 1950, or 1930 or 1900 and project forward and backward. Questions get resolved, new questions get opened, intellectual resources become the common property of everybody and also we see things from different points of view. One of my favourite books is Robert Skidelsky’s biography of Keynes. He rediscovers Keynes as a profoundly conservative thinker and that’s not the way people wanted to read Keynes in the 1960s and 70s. It was a way to read Keynes that made sense in the 1990s. In the same way that Simon, at the time, was very much a creature of the right. Right-wing people liked him and left-wing people didn’t. By the way, I don’t think he was completely right about everything. In some ways he was cavalier about population growth and immigration – people are not just fungible economic units. But his insights are available for all, just in the way that Friedman and Schwartz insights are available for all. Just as when good, liberal social science is done, it’s available for all.