Simon's 1981 book The Ultimate Resource is a criticism of what was then the conventional wisdom on population growth, raw-material scarcity and resource consumption. Simon argues that our notions of increasing resource-scarcity ignore the long-term declines in wage-adjusted raw material prices. Viewed economically, he argues, increasing wealth and technology make more resources available; although supplies may be limited physically they may be viewed as economically indefinite as old resources are recycled and new alternatives are developed by the market. Simon challenged the notion of an impending Malthusian catastrophe—that an increase in population has negative economic consequences; that population is a drain on natural resources; and that we stand at risk of running out of resources through over-consumption. Simon argues that population is the solution to resource scarcities and environmental problems, since people and markets innovate. His ideas were praised by Nobel Laureate economists Friedrich Hayek and Milton Friedman, the latter in a 1998 foreword to The Ultimate Resource II, but they have also attracted critics such as Paul R. Ehrlich and Albert Bartlett.

Simon examined different raw materials, especially metals and their prices in historical times. He assumed that besides temporary shortfalls, in the long run prices for raw materials remain at similar levels or even decrease. E.g. aluminium was never as expensive as before 1886 and steel used for medieval armor carried a much higher price tag in current dollars than any modern parallel. His 1984 book The Resourceful Earth (co-edited by Herman Kahn), is a similar criticism of the conventional wisdom on population growth and resource consumption and a direct response to the Global 2000 report. For example, it predicted that "There is no compelling reason to believe that world oil prices will rise in the coming decades. In fact, prices may well fall below current levels". With respect to oil, the price in 2008 reached the $100 peak it reached (inflation adjusted) before 1880. In line with Simons predictions it had fallen after the 1970s oil shortages to comparably low levels in the 1980s and should do so in the future again.

Simon was skeptical, in 1994, of claims that human activity caused global environmental damage, notably in relation to CFCs, ozone depletion and climate change, the latter primarily because of the perceived rapid switch from fears of global cooling and a new ice age (in the mid 1970s) to the later fears of global warming. Simon also listed numerous claims about severe environmental damage and health dangers from pollution as "definitely disproved". These included claims about lead pollution & IQ, DDT, PCBs, malathion, Agent Orange, asbestos, and the chemical contamination at Love Canal.

Influence

Simon was one of the founders of free-market environmentalism.An article entitled "The Doomslayer" profiling Julian Simon in Wired magazine inspired Bjørn Lomborg to write the book The Skeptical Environmentalist.

Simon was also the first to suggest that airlines should provide rewards for travelers to give up their seats on overbooked flights, rather than arbitrarily taking random passengers off the plane (a practice known as "bumping"). Although the airline industry initially rejected it, his plan was later implemented with resounding success, as recounted by Milton Friedman in the foreword to The Ultimate Resource II. Economist James Heins said in 2009 that the practice had added $100 billion to the United States economy in the last 30 years. Simon gave away his idea to federal de-regulators and never received any personal profit from his solution.

Although not all of Simon's arguments were universally accepted, they contributed to a shift in opinion in the literature on demographic economics from a strongly Malthusian negative view of population growth to a more neutral view. More recent theoretical developments, based on the ideas of the demographic dividend and demographic window, have contributed to another shift this time away from the debate viewing population growth as either good or bad.

Simon wrote a memoir, A Life Against the Grain, which was published by his wife after his death.

Paul R. Ehrlich — first wager

Simon challenged Paul Ehrlich to a wager in 1980 over the price of metals a decade later; Simon had been challenging environmental scientists to the bet for some time. Ehrlich, John Harte and John Holdren selected a basket of five metals that they thought would rise in price with increasing scarcity and depletion.

Simon won the bet, with all five metals dropping in price. Supporters of Ehrlich's position suggest that much of this price drop came because of an oil spike driving prices up in 1980 and a recession driving prices down in 1990, pointing out that the price of the basket of metals actually rose from 1950 to 1975. They also suggest that Ehrlich did not consider the prices of these metals to be critical indicators, and that Ehrlich took the bet with great reluctance. On the other hand, Ehrlich selected the metals to be used himself, and at the time of the bet called it an "astonishing offer" that he was accepting "before other greedy people jump in," hardly suggesting reluctance.

The total supply in none of these metals increased during this time, but prices declined for a variety of reasons:

• The price of tin went down because of an increased use of aluminium, a much more abundant, useful and inexpensive material.
• Better mining technologies allowed for the discovery of vast nickel lodes, which ended the near monopoly that was enjoyed on the market.
• Tungsten fell due to the rise of the use of ceramics in cookware.
• The price of chromium fell due to better smelting techniques.
• The price of copper began to fall due to the invention of fiber optic cable (which is derived from sand), which serves a number of the functions once reserved only for copper wire.

In all of these cases, better technology allowed for either more efficient use of existing resources, or substitution with a more abundant and less expensive resource, as Simon predicted.

Paul R. Ehrlich — proposed second wager

In 1995, Simon issued a challenge for a second bet. Ehrlich declined, and proposed instead that they bet on a metric for human welfare. Ehrlich offered Simon a set of 15 metrics over 10 years, victor to be determined by scientists chosen by the president of the National Academy of Sciences in 2005. There was no [meeting of minds, because Simon felt that too many of the metrics measured attributes of the world not directly related to human welfare, e.g. the amount of nitrous oxide in the atmosphere. For such indirect, supposedly bad indicators to be considered "bad", they would ultimately have to have some measurable detrimental effect on actual human welfare. Ehrlich refused to leave out measures considered by Simon to be trivial.

Simon summarized the bet with the following analogy:

"Let me characterize their [Ehrlich and Schneider's] offer as follows. I predict, and this is for real, that the average performances in the next Olympics will be better than those in the last Olympics. On average, the performances have gotten better, Olympics to Olympics, for a variety of reasons. What Ehrlich and others says is that they don't want to bet on athletic performances, they want to bet on the conditions of the track, or the weather, or the officials, or any other such indirect measure."

David South

The same year as his second challenge to Ehrlich, Simon also began a wager with David South, professor of the Auburn University School of Forestry. The Simon / South wager concerned timber prices. Consistent with his cornucopian analysis of this issue in The Ultimate Resource, Simon wagered that at the end of a five-year term the consumer price of pine timber would have decreased; South wagered that it would increase. Before five years had elapsed, Simon saw that market and extra-market forces were driving up the price of timber, and he paid Professor South $1,000. Simon died before the agreed-upon date of the end of the bet, by which time timber prices had risen further.

Simon's reasoning for his early exit out of the bet was due to "the far-reaching quantity and price effects of logging restrictions in the Pacific-northwest." He believed this counted as interference from the Canadian government, which rendered the bet worthless according to his economic principles. Simon's bet only considered the possibility of prices being driven up by South Carolina's government; he did not believe anything worthwhile was shown when Canadian import restrictions drove the prices up.

Jared Diamond in his book Collapse, Albert Bartlett and Garrett Hardin describe Simon as being too optimistic and some of his assumptions being not in line with natural limitations.

Diamond claims that a continued stable growth rate of earth's population would result in extreme over-population long before the suggested time limit. Regarding the attributed population predictions Simon did not specify that he was assuming a fixed growth rate as Diamond, Bartlett and Hardin have done. Simon argued that people do not become poorer as the population expands; increasing numbers produce what they needed to support themselves, and have and will prosper while food prices sink.

Diamond believes, and finds absurd, Simon implies it would be possible to produce metals, e.g. copper, from other elements. For Simon, human resource needs are comparably small compared to the wealth of nature. He therefore argued physical limitations play a minor role and shortages of raw materials tend to be local and temporary. The main scarcity pointed out by Simon is the amount of human brain power (i.e. "The Ultimate Resource") which allows for the perpetuation of human activities for practically unlimited time. For example, before copper ore became scarce and prices soared due to global increasing demand for copper wires and cablings, the global data and telecommunication networks have switched to glass fiber backbone networks.

This and other quotations in Wired are supposed to be the reason for Bjørn Lomborg's The Skeptical Environmentalist. Lomborg has stated that he began his research as an attempt to counter what he saw as Simons' anti-ecological arguments but changed his mind after starting to analyze the data.

The Institute for the Study of Labor established the annual Julian L. Simon Lecture to honor Simon's work in population economics. The University of Illinois at Urbana-Champaign held a symposium discussing Simon's work on April 24, 2002. The university also established the Julian Simon Memorial Faculty Scholar Endowment to fund an associate faculty member in the business school. India's Liberty Institute also holds a Julian Simon Memorial Lecture. The Competitive Enterprise Institute gives the Julian Simon Memorial Award annually to an economist in the vein of Simon; the first recipient was Stephen Moore, who had served as a research fellow under Simon in the 1980s.

Simon was married to Rita James Simon, who was also a longtime member of the faculty at the University of Illinois at Urbana-Champaign and later became a public affairs professor at American University. Simon suffered from a long time depression, which allowed him to work only a few productive hours in a day. He also studied psychology of depression and wrote a book [1] on overcoming it. One of his theses was, that when you feel inferior and failed, you should just mentally force yourself to stop the comparisons between yourself and other people.