In 1980, optimist and economist Julian Simon made a bet with those who think that human population growth is outstripping the Earth's ability to sustain life. If the doomsayers are correct, Simon reasoned, then the price of natural resources should rise as growing world population increases competition for them.

But Simon knew the pessimists were wrong and suckered them by betting that prices would fall.

Biologist and world-famous doom-monger Paul Ehrlich, who already had predicted wrongly the starvation of hundreds of millions in the 1970s, unwisely took the bet, choosing five commercially valuable metals whose prices he predicted would rise as they became depleted.

Ten years later, Simon won the wager, after the prices of the metals declined by more than 40 percent.

Simon's wager exposed the flaws in the reasoning of modern followers of Thomas Malthus, the 18th-century English economist who founded modern doom-ology. In 1798, Malthus argued that the human race was in trouble because population expands faster than food supplies.

He has been proved wrong every year for the past 204 years, but that hasn't deterred his intellectual heirs, including Ehrlich and the authors of a study published last month called "Tracking the Ecological Overshoot of the Human Economy.''

This report, put together by a nonprofit environmental organization called Redefining Progress, goes one step further than Malthus. Humanity is not just on a collision course with looming scarcity, the report argues, the collision already has occurred. Humanity already is using 20 percent more of the Earth's resources than the Earth can regenerate.

Reacting to the report, Sierra Club President Carl Pope said, "We are not on a sustainable path, and these measures show us the situation is getting worse and we should be concerned and start taking action.''

What such prognosticators fail to understand is that no human culture has ever been "sustainable.'' In fact, the story of human progress has been one of constant adaptation to changing circumstances, including changes in the availability of resources.

Humanity has been running out of stuff from the dawn of time, probably beginning with the woolly mammoths that once were a prime food supply. But far from leading to the destruction of the human race, the recurring scarcity challenge has been the great engine of human progress.

The mechanism for this is straightforward. As any resource begins to grow scarce, its value, or price, increases. Higher prices encourage more production of the resource and spurs the search for substitutes. These processes lead either to improved production of the threatened resource or the discovery of a substitute -- or a combination of both.

This is why humans now grow their food instead of hunting or foraging for it. This is why they use atoms and petroleum and natural gas for fuel rather than wood or whale oil. This is why they drive cars or fly in airplanes rather than riding horses and camels.

Predictors of doom take no account of this dynamic. They simply take current consumption patterns and project them into the future with the assumption that nothing else will change. Despite all the evidence of history, the pessimists assume that humans will blindly consume resources until they're gone, then die of their own shortsightedness.

But it is the pessimists who are shortsighted, which is why Simon was certain he could not lose his bet with the notoriously wrong Ehrlich. Simon knew that all indicators were showing the human condition improving and that as affluence increases, the birth rate and the pollution of the enviroment decline, easing the pressure on resources and on the environment.

A recent book by Danish economist Bjorn Lomborg, The Skeptical Environmentalist, has the pessimists in a tizzy. Lomborg, a left-leaning former Greenpeace member, set out in 1997 to prove that Simon's optimism was unfounded. Instead, as he examined the statistics about human population and resource use, Lomborg discovered that Simon was right.

Among Lomborg's findings:

* Natural resources will not run out any time soon. Known reserves of fossil fuels and most valuable metals are greater today than in 1972 when the Club of Rome predicted their imminent exhaustion. Lomborg reports that The Economist's index of prices for industrial raw materials has dropped 80 percent in real terms since 1845.

* Food production continues to outpace the growth in population. Agricultural production has increased by 52 percent per person in the developing world in the past 41 years. Worldwide malnutrition continues to decline. In 1949, 49 percent of the Earth's population was malnourished. Today the figure is 18 percent and dropping. Food prices have declined 90 percent since 1900.

* The end of human population growth is in sight. Birth rates are declining worldwide, and the United Nations now projects that population growth will stabilize by the end of the century at about 11 billion people.

* Along with birth rates, pollution declines as societies become more affluent. Even in developing nations where pollution currently is increasing, decreases will likely follow growing affluence, repeating the pattern seen in the developed world.

* Estimates of forest destruction and extinction of animal species are wildly exaggerated. Lomborg notes a 1997 press release from the Worldwide Fund for Nature that claimed "two-thirds of the world's forest lost forever.'' The true figure is 20 percent.

Unfortunately, Lomborg points out, too many environmentalists have come to rely on such exaggerations and fear-mongering because these are the most effective ways to gain attention and political influence, raise money and win research grants. He warns that citizens should be as skeptical of environmental lobbyists as they are of other kinds of lobbyists. Just as a business lobbyist has an incentive to minimize environmental concerns, an environmentalist has an incentive to exaggerate them.

Lomborg does not argue that there are not serious environmental and hunger problems in the world. Certainly there are. But he finds that far from being overwhelmed by these problems, humanity is showing itself quite capable of coping with them, just as it always has.