When you have a toddler, your only sanctuary is a locked bathroom. On one trip to the bathroom, I used my precious solitude to read up on, well, toddlers. The book? What to Expect: The Toddler Years, which is surely one of the most popular texts on advice for first-time parents. As many useful tidbits as there are in the book, I was horrified to come across the following passage in a section titled “Caring about the Earth—Teaching Environmental Concern”:

Explain to your toddler that every time you use another bag or box or carton it adds to the junk on the earth, and that if people keep using so many “things” there won’t be any place left to keep the trash. ‘It would be like filling up your room with garbage until there was no room left for you to sleep or play.’

Now, I’m used to having Malthusian nonsense preached at me by confused environmentalists or college kids with new beards. But I was now being instructed by a woman with a dulcet NPR voice (in my head, anyway) to share these ideas with my own child. At that moment I realized the discredited thought of Thomas Malthus had been thoroughly recycled.

And this kind of stuff just keeps coming and coming and coming.

Now. If you’ve never heard of Thomas Malthus, he’s the guy who scared us all into believing that – due to the Industrial Revolution – our success would mean our undoing. Malthusian thinking is deceptive because it’s straightforward and linear. Here’s the basic idea:  Resources are scarce. People multiply. Every place in the world has a carrying capacity. As with animals, if you have more consumers than resources, you’ll reach a point where the area simply cannot sustain the population. Many will die—perhaps needlessly.

Seems reasonable, right?

That’s why Malthusian logic is so seductive. (And when there are no prices and property rules, Malthusians are actually correct.) Contemporary strands of the Malthus-meme carry over into contemporary works--from Jared Diamond’s Collapse to the failed doomsaying of Paul Ehrlich and the Club of Rome.

One of the biggest Malthusian concerns continues to be “peak oil.” Consider this recent piece from John Timmer of Ars Technica:

Many of the plans for addressing climate change rely on 20- to 50-year roadmaps of increased efficiency and use of renewable energy. But, as Nobel Laureate Robert Laughlin pointed out in his talk at the Lindau Meeting, we're going to have to deal with alternative technologies on that time scale no matter what—many projections indicate we're going to be out of oil within 60 years (usable coal will last a century and a half longer, give or take). So, even if you don't think climate change is something to worry about, Laughlin suggested you might want to be thinking about the sorts of technologies we'd need to do without fossil fuels—and that, in turn, requires some thought about what existing technologies we'd want to bring forward.

We who? First, we need to figure out who Laughlin is talking about. Usually when people say “we,” they mean those who represent us in Washington. What we get from that “we” is bad energy planning that didn’t work in the Carter years and won’t work now. Well-intentioned bureaucrats are terrible at making bets on energy innovations. But if by “we” Laughlin means profit-seeking innovators in the marketplace, there is no need to “plan” at all. In fact, there can be no plan--only trial, error and successful innovation that springs from the distributed experimentation process.

The price system and substitution will do a much better job of converting us to other forms of energy in fifty years.

Don’t believe me?

Did we need planners to ensure that cars and petroleum supplanted buggies and whale oil? Did we need government geniuses to plan for silicon replacing copper wires (i.e. fiber optics)? No. Likewise, we won’t need government geniuses to take lots of unearned capital and put it into what they think is going to fuel the economy in 50 years. That’s just such linear thinking. Moreover, it’s wasteful soothsaying.

Substitution is a function of market prices sending signals to innovators and producers. As long as we don’t subsidize people to overconsume resources and don’t have excessive common-pool ownership of resources (leading to overexploitation), the use of earth’s resources will continue to be “sustainable.” Spend some time with Julian Simon and Steven Leavitt, they’ll explain.

Note: this article on the NYTimes Freakonomics blog - referenced above - was written five years ago. The bet Leavitt refers to in the article, had it occured, would be coming due next month. Would Leavitt have won his Julian Simon-style bet against Matthew Simmons?