Monday, March 29, 2010

Population Paradigms

While walking to work today, I had a pleasant surprise while reading a little Ludwig von Mises (Economic Policy: Thoughts for Today and Tomorrow, 1979). He argues that one of the indicators of the success of capitalism has been the "unprecedented increase in world population. ... The mere fact that you are living today is proof that capitalism has succeeded..."

Out here in nutrition and many development conferences I've been to, increased population is almost everywhere condemned as a Bad Thing. The assumption is that because of an accounting identity (GDP per capita = GDP divided by people) the more people you have, the poorer you are.

Von Mises turns the argument on its head by adding appropriate time subscripts: it is earlier growth in incomes that produces higher population. He argues that "man is different" from the animals and microbes bioligsts study in that "an increase in real wages results not only in an increase in population, it results also, and first of all, in an improvement in the average standard of living."

He notes that where medicines alone have traveled to developing countries without the economic growth (read: "a corresponding increase in the amount of capital invested"), you have population growth without improved standards of living and a population 'problem.' But not a problem a little economic growth couldn't handle.

An interesting way to see the world.

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