Response on Population-BECKER

I agree that population density is an important variable. I did not single density out because population level and density are necessarily strongly correlated in an overall sense. But to be sure, cities have been more productive than rural areas in part because they are more densely populated. In a human capital specialization model, density reduces the cost of coordinating different specialists. Obviously, fossil fuels have been used up during the past 100 years as population and industrialization have grown rapidly in the world. But new sources of old fuels and new fuels continued to be discovered, so that known reserves of fossil fuels are far greater now than 60 years ago. So given this history, why is it prudent to assume that such progress will not continue in the future? On the contrary, for the reasons I gave, I believe the prudent assumption is that progress will continue, although the precise directions of the progress cannot be foresee at present. But the numerous possibilities include harnessing solar power, hydrogen fuel cells, greater use of nuclear power, more efficient wind power, and so on. A larger population gives greater incentives to innovate along these and other lines, which is one of the main points of my disucssion. I certainly do not believe that poor countries have been held back from progress because of low IQ’s. This belief is not based on political correctness but evidence. Prior to 1980, an IQ interpretation applied to the poverty of India and China-now 37 % of world’s population-would have been totally wrong about their prospects from introducing more sensible economic policies. The same is true of Africa, and other countries that continue poor: bad policies are by far the overwhelming determinant of their poverty. I do not believe that any country-wide differences in ability- still not documented--are important explanations of country differences in poverty. I know Smith's chapters on specialization very well and I do not believe the reader who claims I misquoted Smith can back up that claim. Can you? India did begin its progress in the late 1980's because economic reforms began at that time. But India's economy really began to take off after the more significant reforms introduced in the early 1990's by Dr. Singh, the former Finance Minister, and the present Prime Minister. I did not explicitly mention the Solow growth model, although it is an important achievement. But implicitly I am criticizing the population assumption in that model because it does not distinguish mortality from fertility, and especially because it assumes constant returns to population. Solow growth theory does not recognize the increasing returns to population that more modern growth analysis considers to be important. Of course, I do believe that medical research and education are important in understanding growth and increased life expectancy. I have worked on both these questions for a long time. However, I am not convinced that 90-100 years is an upper limit to human populations. All the genetic and other evidence of the past 20 years suggests, although it does not prove, that within several decades a significant number of persons may be living reasonably healthy lives when they are past 100 years old.

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