Population growth and economics

Nowadays, humanity suffers from many worldwide problems that don’t stop at a nation’s borders such as environmental degradation, refugees, narcotics, terrorism, organized crime, and most importantly overpopulation. Statistics show that our earth has become overpopulated where more than 7 billion people live on this planet. The main fear is that in the near future there won’t be enough resources and food for the survival of the population since the latter is increasing at a rate that outweighs the increase in food supply. We are also running out of natural scarce resources like petrol and gas who are not renewable in the short term and we suffer from climate changes that threaten our existence. Many economists were concerned by these facts and questions were raised about the economic growth future given the increasing world population. In fact, this topic is very debatable and economists did not succeed in reaching a final agreement whether there is a correlation between population and economic growth or not. In this paper, we are going to interpret the findings of two economists: Thomas Robert Malthus who considered that people will adjust their economic behavior to prevent starvation whenever they feel that population became a threat in one hand and Julian Simon who considered that overpopulation has a positive impact on economic growth on the other hand.

Malthus was interested in population related topics. He studied demography very closely and tried to relate it to economic factors. You may think that Malthus was being logical since economics is targeted towards social welfare and aims to store equilibrium; but Malthus’ biggest mistake is that he relied on mathematics and numbers to study human behavior. He used concrete palpable methods to study intangible things: he compared food supply to an arithmetic series that increases at a lower rate than the increase in population which was compared to a geometric series. So, people were only numbers to Malthus, numbers that should be reduced at any cost to prevent starvation and to obtain higher economic growth. This point of view was highly criticized by Julian Simon, an instructor at the University of Maryland and the author of many economic books. He considered the belief that population growth slows economic development is so inaccurate and legalizes inhumane unethical programs like sterilization programs, birth control, imposing abortion and more. Simon referred to public events to reinforce his point of view: “In 1973, Supreme Court Justice Potter Stewart’s vote in Roe v. Wade was influenced by this idea, according to Bob Woodward and Scott Armstrong: “as Stewart saw it, abortion was becoming one reasonable solution to population control”. The concerns that Malthus raised about the population future given the diminishing returns have been made artificial by Simon. The latter acknowledges that economists shaped the Malthusian principles for so long but does not hesitate to give his opinion and to state that the economic thinking started to rotate and accept the increase in population that was described before as a “plague”. Simon relied on statistical evidence, the findings of the National Research Council and the National Academy of sciences more specifically, to falsify all the previous concepts and conclude that “the impact of rapid population growth on resource exhaustion has often been exaggerated”. Simon also claimed that resources are not fixed and actually uses Malthus’ own idea about the adjustment in economic behavior to prove that. He said that whenever people feel that they are facing a shortage, they will adjust their behavior and create other resources, thus, the diminishing returns logic won’t apply anymore. This idea was illustrated by an example that I believe it made the concept more understandable: “when schoolhouses become crowded, we build new schools – more modern and better than the old ones”. And he stated that it isn’t only limited to man-made production, it also covers the natural resources. Of course, a person would feel more at ease if he had to think about new innovations to survive instead of searching for extreme methods to limit population growth like reducing health care and warfare as suggested Malthus. Moreover, Malthus didn’t appreciate technology when it comes to food production, so, we can say that he was so pessimistic and close-minded, dependent on extreme solutions.

Simon didn’t only work on refuting Malthus’ ideas, he also proved how overpopulation can have a positive effect on economic growth. He considered that if more people were born than we will benefit from more intellectuals and more physical capital will be created to lessen the shortage: “the most important benefit of population size and growth is the increase it brings to the stock of useful knowledge”. Therefore, according to Simon, bigger population is more skills available which implies more technology, thus, the scarcity of raw materials diminishes. Statistically speaking, Simon’s argument makes sense but what he missed is that more human beings doesn’t necessarily mean more quality. If we wanted to take a look at the birth rates worldwide, we will find that in general, this rate is very high in the countries that suffer from the worst economies, and endure bad standards of living. Hence, the possibility to have skilled persons and intellects in these countries is too small. On the other hand, some countries have proved the positive correlation between overpopulation and economic growth. Let’s take Japan as an example. Japan is a small country (377944 km2) relative to its huge population (127 million). At some point, Japanese were afraid that there won’t be enough lands for people to build houses and settle down within the country’s borders. But, when they assumed the impossibility of living horizontally, they started to think about living vertically and ended up building skyscrapers. And when they felt the threat of natural conditions on their lives, they shaped advanced technologies to prevent their buildings from crashing when facing earthquakes and tsunamis. In this way, Japan performed an outstanding adjustment in their behavior to deal with the shortage of land. Moreover, they also profited from their huge population to innovate and produce using very advanced technologies that lead them to be one of the leading economies in the world. So, as I said earlier, it is never a matter a quantity, it is a matter of quality. Simon also praised other achievements that the population reached, it is the decrease in world’s death rates that he described it as “the greatest human achievement in history”. He relates this achievement to the advances in agriculture, sanitation and medicine. He tempted to compare between life expectancies and survival back in history and today only to show the advancement we have reached in our life due to technology in a trial to make overpopulation smoother. However, Simon appeared to be very emotional as he seemed to manipulate his audience and trying to leave a judgmental impression on the people who have conflicting ideas with him: “one would expect lovers of humanity to jump with joy at this triumph…. Instead, many lament that there are so many people alive….”

To sum up, we should understand that this is a long-lasting debate. The truth is that economists and socialists will always argue whether increasing population is good for the economy or not or whether it is possible to survive in an overpopulated world. It is hard to get a final generalized answer but we should consider the relativity concept. Empirical evidence shows that overpopulation had positive effects on economic growth in some countries and negative effects in other countries and with the advanced technologies that we enjoy today, survival is not a concern anymore, it is the quality of life we aim to live that is taking the whole attention. So, it makes sense to think that people are considering decreasing the world population so they can enjoy more space and better standards of living. But again, the problem isn’t with the huge amount of people on this planet, the problem is with the quality of people. Some of them make our life look better but sadly the majority is just a waste of oxygen. So, the key to a well-functioning society is education. In our days, education is what measures and distinguishes people and societies; it is not birth control, it is not overpopulation, it is education!



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