I find Julian Simon's position to be somewhat contradictory: humans are the essential resource, check, and using ingenuity will come up with creative means to gain in the face of scarcity, check.
But he seems to take a view that naturally imposed constraints will naturally be overcome, while artificial (i.e. chosen) constraints are bad. Will not all constraints lead to creative innovation? Is this not one of the key findings of economics? Is it not true that the past is not prologue - and we better not bank on overcoming a given problem?
I understand that additional constraints seem like the last thing we want - nature is niggardly enough, but is it not worth being open about potential gains?
We can all agree that the intended effects of constraints are often not what occurs, but are Pigou taxes and regulation bad by default? For example, many free marketers seem to want to say that constraints on trade, for example, lead to poor outcomes across the board. I agree, mostly, and we also have to be careful and clear in discussing things, as many are prone to dislike free trade and other economic principles and hold on to their biases. But consider the example of France/Britian trade barriers on wine - this lead to both great British beer and excellent French wine. The lesson seems to be that a constraint can be overcome and add value, one may question if the overall effect was worth it and the loss in wealth overcomes this tasty benifit. But there it is.
Now onto resource scarity - we all know oil is a dwindling resource. We also know that the "oil revolution" made huge HUGE impact for the better on our society. It is hard to clearly see just how much oil has improved our lives, and every day I learn more and more amazing things related to this, and things fundamentally related to oil that I didn't realize (i.e. consider the huge amout of chemicals and fertalizers and other materials made cheaply from oil, we also can see a "chemical" revolution in our society that is dependent on the supply of cheap oil). Oil is literally like manna from heaven - it sustains our society and is exteamly energy dense.
We have no viable means to replace oil. Yes, we may find something(s) to do so. But oil is probabally the single most valuable resource (other than people and the fundamentals, i.e. food, etc.) to our society. Oil is literally wealth.
Is it not reasonable to at least consider a Pigou tax on oil, to help spawn efforts to replace and preserve it? Neccessity is not the mother of invention, opportunity is. Might it not be in our best interest to increase the amount of time that we have the opportunity to find a relacement?
The state is not going away any time soon, but if we shifted from income/business taxes to "carbon" taxes in an (attempted) neutral manner we would have incentives placed to spur innovation on preserving and finding subsitutes. Best is the enemy of better - a Pigou tax on carbon is better than an income tax. Perhaps no tax at all would be best (though this is really an undecidable thing until post play analysis - expectation value would suggest a Pigou tax would be in our best interest) but better is important, and doing what is viable and better is what one should push for. Even getting people thinking about Pigou taxes would shift attitudes towards taxes - post a "Pigou revolution" would people be as willing to incure income taxes, or other taxes not justified in and of themselves? Forcing political classes to at least pretend to justify things would be an important development. Seeing just how hard it is to actually justify a tax would make more people aware of the complexity of society, and perhaps some appreciation of liberty and just how sweet we have it right now.
Consider just how much oil has impacted our wealth - how much we gain from this. It is a mind boggling blessing. Now consider human ingenouity in overcoming constraints. Perhaps it is time to shift the incentive structure to reward ingenuity where it matters in an extreamly important and deep way to humans - perserving and extending the great wealth we are blessed with at this time in history.
Simon made very important contributions - and his view is positive and productive, but the view - as often presented - must be nauanced with some hard truths: we may not get suitable subsitutes for oil (need and desire does not influence outcome), and self imposed contraints are often good in the long run (such as the student who forces constant study instead of assuming an all nighter will get them by). Yes, yes - many people are overly pessimistic, but lets not try to get a realistic average by being naively optimistic, many people discount economics before even pretending to listen and trying to understand, but lets not undercut our position with policies and statements that don't feel right because they ignore truths most feel. And yes, those self imposed constraints have real costs. But would you counsel a student to study?
We can sip one of our excellent choices in beer (or wine if you prefer) and think on this - should we constrain ourselves intentionally?