Economic Arguments Contra Population Control

Economic Arguments Contra Population Control by filipinofreedomfighter
Posted with permission.


Population has become a subject of heated debate during the past few years. Proponents of the Reproductive Health (RH) bill argue that the Philippines is becoming overpopulated and that it is undermining the public welfare. Everybody will partake less of the economic pie because resources, especially land is fixed. Neighboring Asian countries have enacted population control measures and are doing better than the Philippines, so therefore, higher per capita GDP must be because of population control measures! And in the name of sustainable development, the Philippine government must enact population control measures here. The idea is that lower population equals more wealth, and more happiness!

There are many problems with this sort of thinking, but to start off, we must remember that per capita GDP describes an aggregate, and does not describe the distribution of income throughout society. A hypothetical country wherein 90% are poor but 10% are extremely rich would still yield high per capita figures. More importantly, a lower population does not imply that everybody gets a little bit more. Economic demand is not constituted solely by desire, but by desire plus purchasing power. An infinite desire to have a BMW does not mean infinite demand. Demand only exists where there is purchasing power accompanying desire. If the population of the Philippines were reduced by 1/3, the poor would not be any better financially. If we assume that the 1/3 that disappeared were part of the labor force, then society would be worse off because there would be less productivity. Division of labor is compromised making goods and services less available and more expensive.

The concept to grasp here is Say’s Law, named after classical liberal economist Jean Baptiste Say. A farmers supply of wheat excess of what he consumes constitutes his demand for all other goods. You first need to produce in order to consume. A lower population means less productive labor, and hence less ability to consume.

On the individual level, the population of your country says nothing about the quality of life you can achieve. If you want to better your lot in life then you work, you take part in the division of labor. The more people take part in the division of labor, the more the specialization, and the more efficient wealth creation becomes for everybody.

The market system is not a zero-sum game. If you want to consume then you have to produce, you have to add to the economic pie. Prices determine what you must produce and what to consume. Prices of labor or wages guide people in getting jobs, as with prices for other items. The only thing government can do is impede this process and create more consumers than producers, as most Western welfare schemes, by subsidizing the unemployed. They have changed the rules of the game. For now you can earn an income and consume goods without working, ignoring the Biblical tenet “For even when we were with you, we gave you this rule: If a man will not work, he shall not eat.”(2 Thessalonians 3:10)

It is vain to take the collectivistic approach and deal with charts and figures rather than real, living, changing economic agents at the ground level who are unique and make different choices. The government simply cannot look at population growth charts, compare them with population charts with other countries, and ex post facto come to a conclusion that will lead to the creation of another corrupt bureaucracy.

Empirical evidence does not warrant the claims of the population controllers. Hong Kong, Monaco, and Singapore are ranked in the top five in population density yet those three countries are also among the top ten in terms of per capita GDP. At the other end of the list, it is the poorest countries that have the lowest population density. Countries like Congo, Mozambique, Mali, and Zambia. It is important to note that just because less population does not equal more wealth for everybody, does not mean more population necessarily means more wealth for everybody. It is only when the productive worker or entrepreneur produces more than he consumes, or in the act of saving, that he can benefit society the most. The point is that in order to have high population numbers, there must be, or must have been a good workforce and capital goods enough to support it.

Poor Southeast Asian and Latin American countries have a large portion of their labor force in the agricultural sector where many working hands are needed. Large family sizes make good financial sense in the context of rural life. Children in rural areas are viewed as assets in the financial sense because they contribute to the family income at a young age. Urban families have less children because children are viewed as ‘liabilities’, their education and various other consumption items unavailable to rural children are expenses of the family. So contrary to the claims of the population controllers, having many children are actually good for rural families. And how could they not be? Rural folks do not mindlessly produce more children without weighing the costs and benefits. Families in the rural area are just as responsible as those in the cities. Or maybe the political establishment thinks differently?

The truth is that the poverty of the Filipino people have nothing to do with population. The Philippines is suffering because of the government interventionism hampering the market process and a majority that refuses to recognize and accept the inherent evil of state coercion.

Side notes:

If the goal is to reduce population numbers as such, then capital accumulation, particularly, machination and modernization of the agricultural sector is key. In the agricultural areas, the benefits of having children surpass the benefits of not having children. The solution is to reverse this. By making it unnecessary for agriculture to be labor intensive, labor will move to higher paying industrial and service-oriented sectors where children will not be needed on the fields and can be sent to school. And the only way this can happen is to get the government out of agriculture, out of fertilizer subsidies, import quotas and customs fees for agricultural commodities, out of the provision of irrigation, out of crop insurance, but that is another topic for another day.

I will be forever dumbfounded by the silly attitude of the political establishment in accusing lack of education for the alleged overpopulation of the country. This is typical leftist blame the victim mentality. For who, in fact is educating the masses of the people, the freakin’ government is!

Sources:

http://mises.org/econsense/ch41.asp
http://www.pop.org/
http://www.youtube.com/watch?v=bV9GCo5_D8Y

Comments and Criticisms:

Comment: Very good points although I don’t think it puts a focus on the Philippine context we have to acknowledge differences in cultures across countries. Yes lower population doesn’t equal more wealth but don’t you agree a high population that can…not be controlled by the government and cannot be provided for is a bad thing even in a economic standpoint. Lastly we have to understand simply adding to the workforce will not have a great increase to the economic pie to oversimplify this we can put this into the context of law of diminishing returns the more you add to the workforce with a limited set of capital the increase to productivity will be very small; take account of empirical data such as unemployment and poverty.

Yes I agree only through modernization of different economic sectors will the Philippines prosper but I believe we shouldn’t put the burden to the gov’t but to ourselves. (cause i have zero faith in the gov’t :))) for what class is this???

My Response: An increased labor supply does mean lower wages. Ignoring licensing requirements, more doctors mean lower wages for all doctors. But this also means lower prices for medical services, which benefits us all. Moreover, economic value is subjective. Diamonds are not valuable because it is costly to mine them. We mine diamonds because they are valuable.

Further, there is as much demand for human labor as there are unfulfilled desires. It is a myth that jobs are limited and should be rationed by government. Primitive societies start off with agriculture and, with an increase in the population, increase in labor force. It doesn’t mean they are worse off because now they can consume more as well. Eventually, the peasant farmers will move into new industries and fill demand for other services. It is a win-win situation.

If we take your assumption to be correct, then no civilization would have ever gotten out of subsistence agriculture.

Comment: the main argument for population control is the limited amount of resources we have to go about. Given your argument that production can only increase with an increase in labor input, whether manual or capital. However, you must also c…onsider the materials and resources needed for production. We may have the workforce necessary to produce 2,000,000 tonnes of food, but without the requisite resources we will not get very far. Let us take money out of the equation as money is merely an idea. All the money in the world cannot buy food when there is none to be bought.

You may argue that this threat to existence may force mankind to develop new technologies to look for resources elsewhere or to adapt biologically, thus moving us forward, but I will ask you – forward to what? It has been said that we are beings of infinite needs and wants living in a finite reality. More will only make us want more.

My Response: Let us assume you are correct. How is the RH Bill supposed to solved this problem? If having more children is advantageous to those living in rural areas, then they will not participate in the population control program. Hence, th…e RH Bill becomes another government boondoggle by creating a gigantic commission has no practical use.

Now to the main point. The law of scarcity in economics is often misunderstood. Mankind was more of a burden to nature 2000 years ago because they did not know how to transform nature-given goods efficiently. Cattle were hunted down and were replenished only by nature, unlike now with cattle farms that replenish the supply of cattle faster. Whereas it took 200 hectares of land to produce 200 tonnes of food before, now it only takes a tiny fraction of land to do that.

Also, the economically usable supply of resources today is far greater than that 1000 years ago because of technology. We can now mine in areas where it would be impossible to mine 100 years ago. And the economically usable supply of goods today is still a tiny fraction of nature’s raw contribution since we are unable to mine in asteroids and stuff.

Yes, we do have infinite desires but that is the reason money and prices exist to help us decide what is best. If money and prices disappeared tomorrow, then no consumer goods will be left after a week and after several months, 90% of humanity will die off.

The price system, even in its debilitated state today, by guiding the activities of 6 billion people in an economically rational way, supports life.

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Posted in The Economic Perspective, The Myth of Overpopulation
One comment on “Economic Arguments Contra Population Control
  1. Dave says:

    Is the Proposed Trans Global Highway a solution for population concerns and global warming? Perhaps. One tremendous solution to future population concerns as well as alleviating many of the effects of potential global warming is the proposal for the construction of the “Trans Global Highway”. The proposed Trans Global Highway would create a world wide network of standardized roads, railroads, water pipe lines, oil and gas pipelines, electrical and communication cables. The result of this remarkable, far sighted project will be global unity through far better distribution of resources, including including heretofore difficult to obtain or unaccessible raw materials, fresh water, finished products and vastly lower global transportation costs.
    With greatly expanded global fresh water distribution, arid lands could be cultivated resulting in a huge abundance of global food supplies. The most conservative estimate is that with the construction of the Trans Global Highway, the planet will be able to feed between 14 and 16 Billion people, just using presently available modern farming technologies. With a present global population of just under 7 billion people and at the United Nations projection of population increase, the world will produce enough food surpluses to feed the expected increased population for the next 425 years. Thomas Robert Malthus’s famous dire food shortage predictions of 1798 failed to take into consideration modern advances in farming, transportation, food storage and food abundance. Further information on the proposed Trans Global Highway can be found at http://www.TransGlobalHighway.com .

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