Optimal Economic Growth and Non-Stable Population

Optimal Economic Growth and Non-Stable Population

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But it is undeniable that the size of population should be determined by the scarcity of resources and the need for ecological balance.

If population is fixed at a certain level, everything else will be adjusted relative to that level. Growth was necessary not only for improving the standard of living but also for accommodating the exploding population. The driving force for economic growth has been the explosion of population. Stability of population will make growth unnecessary although it could take place when technological and other production improvements raise the biocapacity of the Earth. It is not an economy in stagnation. All the things that happen in a free economy would also happen in a steady-state economy.

However, such an economy would not be free of the problems that constantly appear in a free economy. Scientific discoveries, new technological applications, changing consumer preferences, new products, and new methods of production and management would constantly change the structure of demand and therefore adjustments in production would be necessary. Unless prices are perfectly flexible and adjust automatically, which is rather unrealistic to expect, it would be necessary for the state to intervene.

Also, public schools and public health systems would require the intervention of the state. Finally, natural disasters, such as earthquakes and floods, would make intervention necessary. Generally speaking, the frictions of the capitalist system and the myopia of many individuals in providing for the future would make it necessary for the state to play a corrective role. It is certainly premature to discuss what the role of the state should be in a steady-state economy and what concrete measures it should take as this depends on the nature of the problems that are likeky to appear.

What is urgent today is to discuss and think of ways to reduce the size of world population. Reducing Population. The current world population is close to 7. Every day a new city of approximately thousand people is born. According to a United Nations study Gerland et al. If we accept that the Earth is overpopulated then the population must be reduced to preserve the natural powers of the planet in a condition conducive to human life.

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At various times several ways have been suggested for population control including moral abstinence, guidance to the young, delaying marriages, availability of contraceptives, abortions by consent, voluntary sterilization, coercion, and economic incentives and disincentives. The fact is, however, that these methods, to the extent they were applied, have not given the expected results. Actually, in some countries incentives have been given for population growth rather than reduction.

It is often suggested e. Conly, that education and economic incentives may be effective. Thus, it is interesting to discuss briefly the likely effects of economic incentives. Given that stability of population requires 2. Such a policy is not without problems.

First, families that have no intention or desire for more than one child would also be rewarded and will raise the cost of the program. Second, it is unknown what size of monetary reward in cash or kind would be sufficient to convince the family to have only one child. For example, would covering all the educational expenses of the only child up to university be sufficient or would subsidies be required equal to the total income that the second child is expected to bring to the family?

Uneconomic Growth

One can think of other types of financial incentives as, for example, free social security benefits when the parents reach a certain age. Third, those families that would be willing to participate in such a program would certainly be among the poorest and thus in effect such a program would be discriminatory.

A policy of economic disincentives should involve economic punishment for those families that decide to have two or more children. The punishment can be something like a progressive tax for each child after the first, high enough to make the marginal utility of the money paid higher than the utility of the additional child. To the extent that such policy is successful it is also discriminatory against the poor and it is certain that it will meet strong opposition.

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In general, although economic incentives and disincentives seem to be, at least in theory, a good idea, in practice they will be very costly and very unpopular. Another way for reducing world population is by monetizing the problem and creating a market for human reproduction rights [1].

Age Structure, Population Growth, and Economic Development

One model for implementing such a program can be described as follows. Each share represents the right of the couple to participate in the creation of the next generation and all couples have the same rights. Thus, a couple in Canada that wishes to have two children can buy one share from a couple in China. Similarly, a couple that wishes to have three children would have to buy three shares etc. If all couples wish to have two children, no trade will take place and therefore the one-and-a-half policy becomes in practice a one-child policy.

However, it is certain that there will be people in all countries that would be willing to buy and others than would willing to sell shares. Thus, the one-and-a-half child program will at the same time become a program of income transfers, probably from relatively rich people to relatively poor, within each country and between countries. China, India, Indonesia, etc.

However, since the population problem is universal, the full impact will be seen if its application is global. Thus, it is desirable that it has the support of all governments and also of various institutions, e. It is very likely that some governments that favour the large family model would prefer not to adopt the one-and-a-half children policy. However, if the international demand for shares is high and a substantial sum of money is received by those who sell one or more of their shares, the popular demand for the adoption of the plan in those countries would be strong.

For example, the black markets for adoption of children that exist in some perhaps many countries would practically disappear since there would be not many children for sale. Also, the adoption of orphans will be much easier. In addition, very substantial money flows would be directed from rich families and countries to poor ones.

Of course, negative side effects are certain to appear as in the case of unintended pregnancies of married women who have sold their shares. Variations of the basic idea are possible. For example, some people may argue that the right to give birth to children should be given to individuals and not to couples since there are many people who wish to have children but not get married. In other words, the right to give birth to a child is an individual right, separate from the way couples decide to live.

Also, instead of each share corresponding to half-a-child, different values may be given, e.

To facilitate exchanges of reproduction rights an international stock exchange can be established where reproductive rights would easily, and with a minimum cost, be sold and bought. Thus, a couple in one geographical region can very easily buy or sell a reproduction share from or to another couple living in a very distant place.

Needless to say, such a scheme of population reduction will often be violated, at least at the beginning. Problems of non-compliance will certainly arise and no easy treatment is available. However, fines and other measures of an administrative nature can be used so that compliance is encouraged and non-compliance discouraged. Information about the problem of overpopulation and moral suasion can contribute to the acceptance by the public of the proposed solution.

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This plan has two advantages and one important disadvantage. The advantages are that essentially it would be cost-free and it treats everybody equally [2]. The disadvantage is that it is coercive. Of course, controlling the family size in this way violates a basic human right. Many people would be very skeptical about introducing laws that force families to reduce the number of our offspring. For example, Conly rejects the claim that people have a fundamental right to have as many children as they want but refuses to accept enforcements on the number of people that a family may have.

However, the offence of this violation should be weighed against the alternatives. There is, also, an intergenerational social justice issue involved in this discussion.

Optimum population

Forcing people to have fewer children than they might want to have will certainly reduce the level of utility happiness they enjoy. However, if they are allowed to have as many children as they want, the level of utility of the future generations will be much lower given the limited resources that would be available to them just because the present generation contributes to overpopulation. In a real sense, the present generation by its numbers and its consumption habits is using resources that will be lost for the future generations.

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