Population and Growth – a reply to Kelvin Thomson

On 17 Feb. 2014, Kelvin Thomson MHR gave a lecture at the Skeptics Cafe on "Population Policy". I normally find these talks interesting and informative. Out of about 50 people there, I was the only one who voiced any dissent from the views put. The rest were all appeared to be in support of Thomson. I did make some comments, but there was no chance to explain my views. Hence I posted the comments below to the Victorian Skeptics email list.

Is there any other area, apart from economics, where the less people know, the more they think they know? Has there been any other occasion when the Skeptics have gratefully and willingly swallowed such a load of complete codswallop? I am talking about Kelvin Thomson's lecture tonight.

Economics is about supply, demand, prices, incomes, growth, wealth, poverty, the allocation of resources, the distribution of income, development, opportunity costs, GDP, revenue, expenditure, national income, macroeconomic management, inflation, unemployment, interest rates, exchange rates, imports, exports, microeconomic management, production, wages, profits, etc etc. After finishing a science degree I studied economics for ten years and then worked in the field for another thirty years. I did that because I saw that economics was highly relevant to the nature and well-being of society. Some economists use their knowledge to espouse a right wing ideological view. I don't. Yet I know that my views differ from most or all of my freethought colleagues.

So, knowing that I will earn the ire of many of you, I nevertheless offer my views on Mr Thomson. His premise is that all problems are caused by economic growth. I pointed out that in the word of his former colleague Lindsay Tanner, this is "absolute nonsense". I made some notes on his propositions. Here are my comments on each.

"Growth does not make us wealthier." Wrong. I pointed out that in the 1850's the population growth rate was 25% per annum, with Melbourne growing from 50,000 to 500,000 in ten years and at the same time was one of the richest cities on earth. Is it too trite to point out that without population growth we would not be here?

"Growth concept is flawed and GDP as a measure is flawed." Wrong. Per capita GDP is a good measure of per capita income and this is still a good correlate of social well being.

"Growth causes inequality." Wrong, Growth increases per capita wealth. Failure to apply adequate income redistribution policies causes inequality.

"Population growth is not related to religion", mentioning Italy. Wrong. Many Muslim communities have high growth rates (but by country the correlation is not strong). Mr Thomson quite disingenuously failed to mention that Italy, like all developed countries with low immigration, have falling populations because the birthrate has dropped below replacement level.

"Population ageing - don't worry it is good." Wrong. It is going to cause enormous government budget problems all over the already indebted developed world because government revenues will fall while expenditures increase due to demographics.

"Immigration is increasing." Wrong. In percent terms (as it should be measured) it is around 1% as is has been for the last five decades.

"Population increases the cost of housing." OK it is a factor. Without immigration we may have had a housing bust like has happened universally elsewhere. Another house price factor is negative gearing which subsidies a high income rentier class at the expense of first home buyers.

Population will not "take care of itself". Wrong, It has already done it in most developed countries, which will suffer because of population decline.

"Population increases infrastructure costs." Well yes, but the entire population benefits and for a fixed cost the per capita costs are lower for a higher population.

"Population causes price rises." Wrong. Economies of scale in production and distribution allow prices to fall in bigger markets. What rises over time is the cost of the more labour intensive goods and services relative to manufactured goods.

"Economic growth is bad for the environment." Generally wrong. Environmental protection is expensive. The worst degradation usually occurs in poor countries. Economic development allows environmental protection measures to be better afforded and more effectively enforced.

"Conflict and violence in Syria, Egypt and Iraq is caused by population." Wrong. Islam is the cause. It is a growing crisis. Get real Mr Thomson.

So much for Mr Thomson’s talk. Here are some comments on population, resources and fertility.

Economic growth per capita. i.e. rising income per capita, does not necessarily mean increased resource use per capita. Usually the reverse, because technical progress produces greater efficiencies,

As resources become scarce, substitutes and recycling will become more relatively more economic. Yes, it is a truism, and it is true.

The best way to reduce fertility in developing countries is to educate women. Births per woman decrease by one baby for every additional year that a girl stays in school. The widespread provision of education requires a degree of economic development.

Malthus has been wrong for 200 years and is still wrong and will always be wrong. I know people don't get it, but the reason is technical progress. Technical progress has always far outstripped population growth, and has given us an exponentially rising standard of living. It will continue. We need to use it more wisely.

Australia has just 0.3 percent of total world population. We are not overpopulated, especially in the north. We get enormous benefits and amenities from cities that are not available in regional areas. Per capita costs are lower from centralisation and economies of scale.

The TV program Superized Earth gave a vision of the grand schemes that human ingenuity can achieve.


Note how they grow tomatoes in Spain, We do not need to fear population. In any case, further economic development is the only solution.

What we do need to worry about is the destructive power that pseudo science, myths, superstitions, and religions (especially Islam) have over the human mind. We need to help people to be rational and demythologize their ancient traditions.

What we do need to worry about is global warming, which is going to get us, unless we do something, no matter what the population size. If the solution is a fixed cost. a higher population will be an advantage in paying for it.

Further comments in subsequent email:

Even if the population is static, technical progress will deliver higher productivity, with (likely) less resource use per capita, and higher incomes per capita. i.e. economic growth. That is good, not bad.

If you think global population is to high, what is your solution? My solution is to provide the economic means by which women cane be educated. When this is done, birthrates drop below replacement level.

To halt immigration in Australia would be a self-inflicted crippling of the economy with lasting negative consequences. To deal with the issues you are concerned about we need increased infrastructure investment and increased environmental protection.

I find it amazing that 49 out of 50 Skeptics could be impressed and persuaded by a litany of uninformed and bogus populist arguments based on fear and whatever.

I might just add a further point that young populations have "demographic dividend" due to the higher working age proportion, whereas developed countries now have an increasing demographic deficit. This dividend is a per capita benefit unless the population growth is so high that infrastructure provision cannot keep pace.

Some African countries still have a fertility rate of over 7, but in most cases it has declined substantially. Some alternative global projections are here.
I think the UN projection specifically states that they do not account for declining fertility due to economic development. I have done my own projections which have global population peaking around 2070 more as per Deutche Bank.