The Tragedy of Baby Six Billion: Some Micro-Economics Aspects of International Socio-economic Development

Many policy makers and economists contend that the more people there are, the less there will be of the material goods of this earth for each person. The simplistic solution offered is that the number of people must therefore be reduced so that the people who are permitted to exist may live according to a “higher standard.” in this framework of analysis and under these assumptions, the birth of “Baby Six Billion” is a horrifying tragedy of apocalyptic dimensions! The only solution is to reduce population so the “proper” number of people can enjoy a “decent” living.

On the contrary. Unprejudiced economic evidence strongly suggests that a stable or increasing population is necessary for economic and social development. The incidence of widespread poverty in developing or undeveloped countries is due solely to the fact that financial and economic institutions have not kept pace with technological development. To be brief’, as technology advances, it fulfills its primary purpose of displacing human labor from the production process. When most people are constrained to earn their living solely from wages paid for human labor, they are left without recourse as they are replaced by machines or new systems designed to use existing resources more efficiently. Progress in a wage system is a disaster.

Those who are thus cut off from the productive and economic process must be supported by redistributing the wealth of others. The recipients become drags on society. They presumably pull down others by existing only as consumers, not as producers. Obviously there are flaws in a system which relics almost exclusively on the mechanism of wages paid for labor to provide subsistence for the vast majority of people, especially when human labor is being replaced as a factor of production.

The Benefit of Population

There is also the parallel development that an increasing population provides the demand for the increased goods and services produced by advancing technology. Many people label the dictum “‘materialistic” and automatically reject it, but no one can deny that the purpose of production is consumption. Without a sufficient population, demand for goods and services will fall, sometimes dramatically, resulting in an ‘“economic tailspin” as the demand base decreases past the point of sustainability.

Some economists, such as John Maynard Keynes, have maintained that the purpose of production is to provide employment so that workers can gain income. According to this view, the purpose of production is “job creation,” As Keynes himself was forced to admit, however, this makes wasteful production necessary. Resources must be used to generate production that will be destroyed, set aside, or wasted.1 The underlying assumption is that ordinary people can only gain income from wages. As the productiveness of capital increases more than geometrically in contrast to Malthus’ assumption of strict arithmetical increase, far more is produced than can be consumed or even purchased if ordinary people are cut off from legitimate access to the income generated by capital. Wages alone cannot generate sufficient income to dispose of all production without waste.

Justice and Charity

The solution to this conundrum is to take cognizance of the individual human person. If human labor cannot generate sufficient income (production), then the ordinary person must somehow be granted access to the means of acquiring and possessing the technology that is displacing his labor from the productive process. Just as labor-through-wages represents the distributive mechanism for human production, ownership-through-property (i.e., participation in profits) represents the distributive mechanism for what is produced by capital.

When an individual does not own the capital which is generating production (income), then he has no absolute right to receive a distribution of the profit generated from that capital, Technically, he can only receive an adequate income by being in receipt of alms (an act of charity), or by a coerced redistribution of income generated by capital that belongs by right of property to the owners of capital (an act of injustice). This inculcates resentment that results when owners of capital are deprived of what is due to them through their ownership.

It does no good to say that, “Well, they should just share what they have, since they have so much and others have so little.” The rich, when they have enough to maintain their station in lite and a surplus, should share that surplus with the less fortunate. The problem is that, in the civil order, justice demands that owners receive the full fruits of their ownership; and “sharing” is an act of charity and, in the civil order, cannot be demanded or coerced. If the rich, of their own free will, authentically choose to share, they engage in a charitable act. If the state or other association, however, coerces a redistribution from the rich, in other than an emergency situation, that is an act of injustice. On the other hand, it is easy to see the logical contortion of blanketing the developing world with so-called reproductive health supplies, at the expense of basic and maternal health supplies, or stimulants for authentic economic development. Foreign investment in the developing world often results in slave wages for the average worker, tor such is the current economic system. Population control is commonplace for the poor are deemed too numerous.

There is a solution to this problem. The reasoning is simple. Everyone has the right to own property, individually and in association with others. Capital (property) is responsible for most production (income). Rights of property demand that owners receive the full limits of their ownership, that is, all the income generated by their capital. Therefore, ordinary people should be empowered with the means of acquiring and possessing private, productive property to supplement and, in some cases, replace altogether inadequate or non-existent wage income.

The chief objection to a program of expanded ownership of the means of production is the acceptance of Malthusian constraints, that is, the notion that the world’s resources are fixed quantitatively and are threatened by moderate population growth. This cuts to the heart of the rights of women in the developing world to continue to have children. Resources can only decrease or become unavailable. Hence, there can never be enough for all, because every person born represents the need to divide the pie into smaller and smaller pieces. The standard fall-back position in Foreign Aid policy is to provide help, with population control strings attached.

Overturning Malthus

Contradicting Malthusian assumptions is the proven fact wealth increases every day. This is the result of discoveries of new resources, substitutes, and advancing technology that allows people to “do more with less.” that is, apply know-how and come up with a more efficient way of doing things. This is a process R. Buckminster Fuller called “ephemeralization;” namely, a re-invention of the science of invention, which is responsible for the enormous growth of production and productive capacity that has characterized the twentieth century. The implicitly pessimistic and archane Malthusian theories of decreasing wealth have become enshrined as an economic orthodoxy that no economist dare contradict if he wants to keep his job. Perhaps the biggest challenge lacing economists in the new Millennium will be to restore the science of economics from the falsehoods of Thomas Malthus, which have persisted throughout this century. As the economist Joseph Schumpeter states:

[T]he teaching of Malthus’…[has become] firmly entrenched in the system of the economic orthodoxy…in spite of the fact that it should have been recognized as fundamentally untenable or worthless by 1803…It became the “right” view on population, just as free trade had become the “right” policy, which only ignorance or obliquity could possibly fail to accept…Objectors might be lectured, if they were worthy of the effort, but they could not be taken seriously. No wonder that some people, utterly disgusted at this intolerable presumption which had so little to back it, began to loathe this “science of economics,” quite independently of class or party considerations — a feeling that has been an important factor in that science’s fate ever after.2

Opening up ownership of the future wealth,” that is, the wealth that remains to be created — and is created every day — is the solution to the problem of generating sufficient income for everyone in the world, even the “apocalyptic” Baby Six Billion. This answers the “problem” of where the ordinary person tits into the grand scheme of things. If ordinary people are unable to generate sufficient income to take care of themselves through wages paid for labor, they must he empowered with individual ownership of the means of production — capital.

This takes nothing away from the currently wealthy. For they cannot claim to own what does not yet exist: The unlimited pool of future wealth.” Breaking the dependence on past savings, which are owned by the currently wealthy, and opening up ownership opportunities of future wealth” through access to money and credit not only eliminates demands on the existing wealth of the rich, it contains within itself the capacity to make the average person economically independent.

What about the dangers of overpopulation? As economists have noted tor centuries, the poor increase, the middle classes stabilize, and the rich fail to reproduce. Reducing (or attempting to reduce) the number of people to achieve economic and social development is to put the cart before the horse — and then to shoot the horse. Development in which everyone has the opportunity to participate — and does participate — stabilizes or reduces population automatically. Contrary to popular hysteria, demographics of developed versus undeveloped countries demonstrate that population regulates itself to the proper level after development takes place, not as a precondition of development.3

A rising population provides the incentive to engage in development by increasing demand. It is not a barrier that must be removed before development can take place. Artificially reducing population removes both the means and the incentive for development. It insures a permanent condition of poverty and dependency on people in the undeveloped or developing world, especially those who are prevented from participation through ownership in whatever development does take place, The birth of Baby Six Billion, far from being the tragedy that anti-populationist hysteria makes it out to be, represents both the opportunity and the means to engage in real economic and social development and achieve a decent standard of living for everyone. Baby Six Billion is only a tragedy if that opportunity is not seized or the proper means employed to take full advantage of what Baby Six Billion represents.

Michael D. Greaney is the Director of Research for the Center for Economic and Social Justice, in Washington, D.C.

Endnotes

1 John Maynard Keynes, General Theory, Book III, Chapter 10, & VI: “When involuntary unemployment exists, the marginal disutility of labor is necessarily less than the utility of the marginal product…”

2 Joseph Schumpeter, A History of Economics Analysis, London: Oxford University Press, 1986, 582.

3 See Jane Jacobs, The Economy of Cities. New York: Vantage Press, 1970.

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