Comment on Overpopulation-BECKER

Posner makes as good a case as can be made for worrying a lot about overpopulation, but I do not believe the case is good enough. I will argue that at this time, in the United States and most other parts of the world, greater population has greater benefits than costs. I will to some extent be reiterating arguments I made in my blog posting on October 3, 2005. In considering the effects of greater population it is important to distinguish clearly between more rapid population growth and larger population levels. I start first with an evaluation of population growth rates. With the present system of financing social security and medical care of the elderly, faster population growth helps since it increases the number of working individuals relative to the number of retired persons. For taxes on workers provide the revenue to finance the spending and care of retirees. So with greater numbers of younger person relative to older persons, tax revenues would rise relative to payouts to the elderly. To be sure, I have argued in previous blog postings for a different system of financing income and health care to the elderly, but until we get these reforms, additional younger persons help reduce the burden of the elderly. Although the present system has clear flaws, it is not a ponzi scheme in the sense that it could continue for many, many generations if there are enough younger persons with the incomes to be taxed. Younger persons also produce a disproportionate share of the new ideas and products, whether in science, business, or the arts. Declines in their numbers, absolutely and even relatively, lead to more stagnating societies. These innovations have been good for economies and culture, unless one believes that the typical person in the world was better off 250 years ago. Population grows faster in a country mainly if either fertility is higher or more people immigrate into the country. Both contribute to an increase in the number of younger persons, although the fertility effects on the number of working individuals are delayed. Immigration has an immediate effects since most immigrants are young and of working ages, but there is opposition in most countries to large numbers of immigrants. Higher fertility will tend to negatively affect how much parents and societies invest in younger persons because the total cost of these investments become greater where there are more children to invest in. This is a serious consideration for many African countries, or Asian countries like Bangladesh, with very high birth rates, but is much less important in Europe or Japan or China where birth rates are low. Even in the United States the typical family has only a little less than two children, so the trade off with investment per child is not a big factor here either. Although, of course, faster population growth will lead to larger populations, population level effects differ from these population growth effects. I believe there are two fundamental positive aspects of larger populations. The greater the population, the larger the market for new products, such as medical drugs, iPods and other high tech innovations, and for still other new products that depend on larger markets. This has been convincingly demonstrated in studies of pharmaceutical innovations-for example, the larger the number of elderly persons, the more new drugs developed to help diseases of the elderly (see e.g., Acemoglou and Linn, “Market size in Innovations: Theory and Evidence From the Pharmaceutical Industry”, Quarterly Journal of Economics, August, 2004.). In addition, the larger is the level of population, the greater the scope for the division of labor, either within a country, or worldwide when considering world population levels. It might seem that with 6 billion persons on the earth, there is more than enough population for the finest degree of specialization and division of labor. However, the growth of global trade has made the gains from increasing degrees of specialization and trade much greater than in the past. Outsourcing and the rapid growth of China and India are just examples of this development. The advantages of greater population are more questionable for poor dense populated countries with high birth rates. Bangladesh, Pakistan, and some African nations fit this description. Yet, I would not overemphasize this point since India, which is a rather densely populated country with only limited high quality land and other natural resources, showed that it could grow rapidly once it reformed economic policies. So I am doubtful whether India's large and rapidly growing population had in the past hindered its growth in per capita incomes or improvements in health of the average Indian family. To be sure, the main focus nowadays of the opponents of greater population is the effects on the environment, both within nations, and globally through greenhouse warming and other forms of global pollution. It is interesting how the arguments of Malthusians and neo-Malthusians have shifted over time as each of their predictions bit the dust. Yet while these falsified predictions makes one alert to the dubious assumptions of many Malthusian-like arguments, it does not mean there is no reason to be concerned about harmful environmental effects. Clearly, with per capita income, technologies, and pricing held fixed, greater population would lead to increased congestion and emission of more harmful pollutants. But there is no reason to believe that these variables will be held fixed. Per capita income will be growing, and given my arguments above, perhaps even faster with larger populations. Then the so-called Kuznets environmental curve will kick in. This curve summarizes a well-documented empirical relation that as a country's income begins to grow, at first its environment gets worse. Then, however, the environment gets better as the country spends more on reducing pollutants and has better technologies to do this. My argument above also suggests that technologies to control pollution are likely to be rising in population, country or worldwide, because the market for these technologies from both the private sector and from governments would expand. The error made in many of the scariest environmental scenarios is the implicit assumption that technologies are held fixed as population and other variables of environmental concern increase. In fact, technologies progress rapidly in the modern world, and more rapidly as population is larger or per capita incomes are larger. So while I am not claiming to have disposed of the many legitimate environmental concerns of greater population, I do believe that they are considerably exaggerated by neglecting the Kuznets curve, and the effects of exogenous and induced technological advances.

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