Does the World Need More People? Posner

To answer my own question: I am dubious. 

It is true that a country can get into economic trouble if the number of elderly people, who invariably impose heavy costs on a country’s health care system, becomes very large relative to the number of persons of working age, because then the financial burden on the working population can become extremely heavy. The reverse, however, is also true: too high a ratio of young to old can be destabilizing. The experience of many of the poor nations of the world has been that a large youth population creates severe unemployment problems and can lead to violent unrest, as in a number of Middle Eastern countries in the last few years—the naively heralded “Arab Spring” having quickly become a nightmare of violence, political disorder, and regional instability. 

It’s amazing that a poor, largely arid country like Egypt should have a population of 84 million. That cannot be a good thing. Much of Egypt’s current problems stem from inability to grow enough food to feed its population, and insufficient productivity to buy abroad all the food its huge population needs.

A growing population implies a growing number of children—not just persons of working age—and children impose heavy opportunity costs on parents (unless child labor is permitted, which however is likely to prevent children from becoming educated) and are costly to educate. A fast-rising population can not only create heavy youth unemployment but also strain public services (such as public educational institutions). And all this is in addition to the environmental impact of increased population, for example on global warming, species extinctions, and traffic congestion. 

If children were a “superior” good in the economist’s sense—that is, a good that is purchased in greater quantity when people’s incomes rise—one would expect the birthrate in wealthy countries to be high and rising, but the opposite in most such countries is true. Maybe children are actually an “inferior” good, valued most by poor people either because the children of the poor work to augment family income or because the family lacks the resources for such child substitutes as expensive cars, clothes, homes, entertainment, and travel. Increasingly in the wealthy countries both spouses work, increasing the opportunity costs to both parents of raising children. 

A better and certainly cheaper answer to the problem of declining population in countries like Germany and Japan—wealthy countries (though not all countries with declining populations are wealthy—Russia is not, for example)—is immigration. There are some two and a half billion people in China, India, and South Korea alone. Their average IQ seems similar to (maybe even higher than) that of the inhabitants of the United States and the other wealthy countries, including those wealthy countries whose populations are declining (a category that excludes the United States). This implies a very large number of East Asians with IQs well above 100. (Assuming that IQ is normally distributed, an average IQ of 100 means that 2.5 percent of the population has an IQ of at least 130—and 2.5 percent of 2.5 billion is 62.5 million.)  Obviously not all want to emigrate, but many are quite open to the possibility. The problem is that few wealthy countries, other than the United States and the other English-speaking countries, are welcoming to immigrants. They have immigrants—Germany for example has many citizens of Turkish origin; Japan has many Koreans. But these countries tend to be insular, ethnocentric, downright hostile to immigrants, and their immigrant populations—not just the first generation, either—have difficulty assimilating, unlike immigrants to the United States, which still really is a melting pot. If those countries can’t solve the assimilation problem, thereby making themselves more attractive to high-quality immigrants, their populations will continue to decline, because the countries probably can’t afford the subsidies necessary to halt the decline. 

There is no necessary connection between population and economic growth. The sharp decline of Europe’s population because of the Black Death is thought to have increased per capita incomes significantly by reducing the ratio of people to arable land, resulting in improved nutrition. A larger population can, as Becker points out, increase the rate of technological progress by increasing the number of geniuses and other very creative people. But so can assortative mating, which has become much more common in the advanced countries as a result of falling discrimination and Internet dating search. At some point there may be diminishing returns to the increasing number of computer engineers.  

Paying people to have children sounds odd though it can be defended on economic grounds if the additional children yield a net economic benefit. (So for that matter could paying elderly people to forgo end of life medical expenses likewise be defended on economic grounds, depending on how large the subsidy would have to be and how it would be financed.) I am skeptical that such a defense can be established. Too little is known about the economic effects of continued growth of a world population that has now surpassed seven billion.

Comments

[Garrett Petersen]

I'm not sure that it matters what the IQs of potential migrants are. Even those with low IQs have a comparative advantage in something.

[Mary_Kronkowski]

@garrett, I had a similar thought, but both jurists make an economic argument in birth rates funding future populations.
It logically follows that high IQs bring innovation, thus new revenue streams in overall societal advancement.
However, the down side is the higher the mental function, the higher the mental illness. Source: http://www.sciencedaily.com/releases/2012/12/121202164325.htm.
So perhaps mental stability should be a factor to consider within the intelligence quotient.

[jim kirby]

Garrett: the proper term is "competitive advantage." Comparative advantage means something different.

The problem with increasing breeding is that rearing them requires that present wealth be sacrificed for future gain. Those of us who are childfree have already voted against such a sacrifice and don't care to be taxed to support others' interest in the future.

[Neilehat]

Does the World need more People? Perhaps. Does the World need less People? Perhaps. If one looks at the Historical Population density statistical data, both geographically and world wide, one will find that it is a dynamic phenomenon, not a static one. On the historical timeline one will find that at times the density is expanding, at other times it is contracting. This seems to point to the fact that there is a naturally occuring regulation of population levels. Both geographically and worldwide. This is a form of "wildlife management" if you please.

As rational and controlling creatures we can affect the naturally controlling population density regulator to guarantee our continued survival, our we can destablize it and cause our extinction. The proper actions need to take into account the idea of creating the "greatest good for the greatest number" without destabilizing the regulator by allowing it to continue to run as a dynamic controller. As it has through the eons...

[Terry Bennett]

Rick Jarow has written on the fundamental perspectives of scarcity and abundance. Putting aside the logistics of allocation for the moment, do you think there is enough for everybody, or don't you? People who believe in abundance (i.e., optimists) tend to be happier and more successful.

Beyond the psychology, there is an objective question, and it's not simply, "Does the world have too many people?" Rather, we must factor in the progression of technology over time. If the United States had today's population and the technology of 1789, we'd probably have mass starvation/dehydration, decimations by disease, and wars driven by demand for resources. Can the world support 10 billion? Not right now, but very possibly in 50 or 100 years. In 2013 A.D., a large portion of the 7 billion currently alive are not living very well. To some, that's the same as saying we're overpopulated. Others might say it proves the haves are too selfish to provide for the have nots. (To the extent that I am a have, it is solely because I'm also a went out and got. I do not see why anyone wishing to be a have cannot simply choose to work and meet that goal, in whatever desired degree, and I reject the communist argument.)

Does a new child born today represent a net positive or a net negative over a coming lifetime, production minus consumption? According to Mitt Romney we're already at 47% net negatives. I suspect it's actually higher. The entire World War II generation is being subsidized out the wazoo with modern health care they did not earn (at least in a strict economic sense), and the baby boomers stand to be even more decidedly takers rather than givers. I have zero reason for optimism that larger numbers of individuals in future generations will pull their own weight than in recent generations. I think it's just going to get worse, and therefore as an economic endeavor, I'd give 5 to 1 that any new child will be a loser. Jim Kirby is right that immigrants bring with them the positive externality of their formative costs, but even so I think they are mostly economic losers too. The costs of modern life are simply too high for most people to meet. (Immigrants also tend to have more kids, which means more costs to us.)

So if most people are net negatives, where is the production coming from to feed us right now? Some of it comes from past surplus, some of it comes from current production, and a very disturbing piece of it comes from borrowing against the future. If we were in fact pulling our own weight, we wouldn't be needing to borrow, would we now? Stated another way, where is all this money we borrow going? It's going to pay for the consumption of people who have not produced enough to pay for it themselves. The poor demand subsidy; the rich refuse to pay for it. We aren't ones to let a little impasse like that stop us. We borrow, and everybody's happy - except future generations, but they aren't here to gripe, so they can just eat cake and pound sand.

[Neilehat]

Terry, As in the past, it's called Revolution by "Redistribution. Or the "Guillotine" approach. Now mind those steps on the way up, they do get slippery - We can't disappoint the "Levee en Masse" or deprive them of their entertainment...

[Terry Bennett]

Neilehat, I sense you are trying to tell me something important, and I will continue trying to figure out what it is. I hope I will not be too late.