030374 osv Theory and Fact -About The Population Crisis

DR. COLIN CLARK

FOR thousands of years the population of the world increased with extreme slowness. In the whole course of history until the last few centuries, instances of rapid population growth were very rare indeed. Population growth first appeared in Western Europe and North America in the 18th century, and the cause - as you all know - was not an increase in the size of family but a decrease in mortality. The history of population growth since then has been essentially one of medical improvements; it is bound up with the history of medicine, and, instead of being grateful to Almighty God for the contribution which medicine has been making to the well-being of mankind, we do nothing but complain about it!

The improvements which first appeared in the 18th century we re due to the eradication of some of the worst epidemics in those days. Smallpox was mitigated by vaccination. The bubonic plague which so frequently ravaged Europe was checked by a biological event: the brown rats that carried the plague were accidental invasion of grey rats

The improvements went on through the 19th century, but they were slow; there were various improvements in public health and in medical science and the first beginnings of immunization.

The really striking improvement came before antibiotics; we tend to forget, the 1930s saw the discovery of chemotherapy, which enabled doctors for the first time
to completely check diseases such as pneumonia, which had previously been a killer.

Then, in the 1940s came antibiotics. And, with the improvement in communications, these discoveries made in Europe and America, spread rapidly over the whole world.

So the demographic consequence has been a very great acceleration of the rate of increase of world population. Throughout the 19th century and the early 20th, world population had been increasing at less than one percent per year, and this sudden acceleration during the 1930s, was temporarily checked by World War II then proceeded more rapidly in the 1950s and the 1960s.

According to all that we are told, this acceleration in the growth of world population should be causing poverty and famine; but this is entirely contrary to the facts. The facts have been the opposite: the rate of world economic improvement has not been reduced but greatly accelerated. In all the years since 1945, since the ending of World War II, the rate of economic improvement in practically every country in the world has been very much more rapid than it ever was before.

We are often asked about India. I have recently spent a few days lecturing there - this constitutes my l2th visit to that country, and I am beginning to know something of its problems. I was asked to advise the Government of India in the year 1947, just after India had become an independent country. And I might mention that, at that time, I was, I think, one of the last foreign visitors to have a personal conversation with Mahatma Gandhi, the religious and political leader who was murdered a few weeks afterwards, and who was a believer in population growth, in free market economics, and in the decentralization of population: he believed in all the things which his successors have failed to carry out. But, at that time, so far as Indian 6conomic development was concerned, the most optimistic Indian economists thought that it would be difficult for Indian production per head to increase at the rate of even 0.5 percent per year. Now, since 1945 India has made many mistakes; nonetheless, the rate of economic progress has been many times higher than the most optimistic estimate which Indian economists were making in 1947, which were based on India's past experience. For a hundred years before 1947, India had been living in peace and with little population growth and little economic progress. And in India, as everywhere else, accelerated population growth has been accompanied by accelerated economic progress.

Not Mere Coincidence

Now, you may say: this is a coincidence. You probably all have firmly fixed in your mind the theory that population growth inevitably brings poverty.

I must give you some more facts. I have mentioned that in history, cases of rapid population growth have been rare, but when they have occurred they have proved extraordinarily fruitful, not only in the economic but also in the political and cultural spheres. There was rapid population growth in ancient Greece, which produced one of the finest civilizations the world has ever seen. There was rapid population growth in Europe in the 11th and 12th centuries. One of the most extraordinary instances of population growth is among the Dutch, a small people on a very limited area of land, in the 16th century, who rose to become the world's'greatest trading and naval power and also a great cultural center. And Dutch historians point out that, when their population growth stopped in the 18th century, their political and economic advance stopped also. It was population growth in 18th century England which provoked industrialization and scientific development of the 19th century. Strangely, exactly the same thing happened in Japan one hundred years later, and is happening in India now.

Current Evidence

If you are not concerned with the historical evidence, let us looi at what is happening at the present day. The OECD, centered in Paris, has collected all the available information. You may find it hard to believe what I am going to tell you, therefore I recommend to you that you spend half an hour looking at the actual information in the OECD Report: National Accounts of Less Developed Countries. And I want to apply a simple scientific test to theory that in the less developed countries population growth hinders economic development. All that you have to do is take the information for the different developing countries and classify them into groups according to their rate of population growth. And you will find that the average rate of growth of production per head of population is highest in the countries with the highest rate of population growth. Now, there are a number of reasons why this should be the case. The theory of Malthus, which was published in 1798, cannot be regarded as a scientific theory, because it conflicts with many of the facts, both historical and geographical. Malthus thought that mankind was living permanently in a state of near starvation; and that, when any improvement in agricultural or industrial productivity occurred (and Malthus was quite unaware of the great technical improvements which were taking place in his own lifetime), the population would rapidly increase to consume its entire product, and leave mankind in the same state of poverty as it was before.

This is clearly not true, in the historical evidence, nor on the geographical evidence. There are very large parts of the world where the productive capacity is still remaining unused.

The issue was expressed very clearly at the World Population Conference which was held in Rome in 1954; and the most striking speech came from the delegate from France, Prof. Sauvy, who said to the assembled demographers: "Many of you are thinking that you can accelerate your country's economic progress by chee ' king population growth. If your theory is true, he said, France should be the richest country in the world!" France unlike other countries - has been checking population growth ever since the 18th century. The evidence, which has now been carefully analyzed, showed that the size of family began to fall in France as early as 1780 and in other countries not until much later. And so, far from having beneficial economic results, it had the opposite effect. French economic historians point out that their country's comparatively late start in the industrialization must be expIained by the lack of population pressure.

Analyze Improvements

It is the same with agricultural improvements. The Danish economist Ester Boserup, in a very interesting study, has analyzed agricultural improvement both in present-day Africa and in medieval Europe. The English historians might point out the agricultural improvements which England made in the 18th century, such as the introduction of turnips into livestock feeding. It is clear they did not know their ancient history.

If you read the Georgics of Virgil which were ancient books on agriculture you will find that many of these agricultural techniques were known in the ancient world. They were forgotten, then reintroduced into Western Europe when the pressure of Population demanded them. And the very primitive methods of agriculture which Africans use, where they just cut down a stretch of forest and burn it and grow two crops in the ashes, then cut down another stretch of forest - the Africans used these primitive methods not because they knew no better, but because they were less laborious. Africans are quite capable of cultivating land to a far greater productivity when they have to do so.

The economic advantages of population growth were first and most effectively analyzed by the American economist Everett Hagen of the Massachusetts Institute of Technology. He drew our attention to the important point that capital requirements do not increase in proportion to population. So, there have been many very erroneous economic analyses based on the idea that - if with your present population there are four units of capital per each unit of population; if you then have a one percent increase in population, it is very easy but entirely mistaken to say that you will have to save four percent of your national product in order to equip with capital this additional one percent of your population. The amount of capital required for a population addition is very much less than the amount required for, the existing population.

This is clear when you come to think of it. Matters such as the transport system, roads, the harbors, the railways, have to be built even for a small population; and, as Population increases, little if any addition to them is needed. This applies not only to public capital but to many forms of private capital as well.

So, we get the unexpected result that population growth economizes in per head capital requirements.

Modigliani's work

Now, the next step was taken by the Italian economist Modigliani in a piece of work which you have to be a mathematician to understand fully. But Modigliani~, working in collaboration with Brumberg, and on certain assumptions of rational conduct of the incentive to save, was able to show that population growth increased the rate of saving. This may surprise you. When you think of population growth, you think of the cost of feeding and clothing the children, and you say to yourself: it must be obvious, a country with more children will have to spend more on feeding and clothing them and will have less to save for capital accumulation. But there are things which one forgets. A country which reduces population growth will have, before long, an increased ratio of old people to young people; it will have fewer children to support, but more pensioners to support; and the average pensioner consumes a great deal more than the average child. And a growing population will have a high proportion of men in their most productive and saving age.

You may say that you are discontented with Prof. Modigliani's theory, although it is a very brilliant piece of economic mathematics.

So, if you are not willing to accept the theory, I will ask you to accept the facts!

The rates of saving in the Asian countries with high population growth are quite remarkably high. But perhaps the most striking instance is India, which I have already mentioned. When I first went to India, in the early 1950s the rate of net saving - Indian statisticians give their figures net, excluding amortization - the rate of net saving as a proportion of net national product, was five percent; and now it is 10 percent. So, in spite of all the difficulties, India has greatly increased her rate of saving. And India has achieved this is a word coined by the economic historian Prof. Rostow, with which you must be familiar the take-off - take-off is an English airmen's word which has become an international language. And India has precisely fulfilled the condition that Rostow made, that savings must rise from five percent to 10 percent of national product. And what we have been witnessing - those who live at the time of historic events often fail to recognize them - is the rapid take-off of the Indian economy.

I now turn to questions of food and raw materials. People often complain about population growth destroying resources. They do not understand the meaning of the word "resources," as applied by economists. To an economist, resources are all those things that can be used for production. And the principal resource is labor, with its various skills and attributes. So, if you are going to use the word "resources," it is your duty to make it clear whether you are using it in the economic sense or in the more limited sense. Perhaps you are referring only to natural resources.

In this case once again, let me remind you, you can describe food or timber or wood pulp as natural resources; but, after all, they are produced every year, and the natural resource is the land, and we can obtain from it less or - if we use the right technology - a great deal more in the way of food and forest products.

Dr. Colin Clark writes from Australia.