Freeman

ARTICLE

On Breeding Prosperity

AUGUST 01, 1963 by F. A. HARPER

Dr. Harper is Secretary of the Institute for Humane Studies at Stanford, California.

The population explosion in our country and around the world is commonly met with mixed emo­tions. On the one hand, there is the discomfort of being so pressed together that we stand on each other’s feet, elbow our way through crowded subways, be­come submerged in traffic jams, or find distant recreation forests about as peaceful as Times Square at 5:15 p.m. On the other hand, there is the appeal of more cus­tomers for all who believe that a rising population assures pros­perity.

The fact that the population has been rising rapidly during recent decades, and that more is in pros­pect for some time, seems beyond question. A common prediction is that the present world population of nearly three billion will reach nearly five billion by 1984.

Some authors in a Science article a few years ago reported that by extrapolating from past trends of recorded data, the world population will approach infinity on November 13, AD 2026. But the outlook cannot be as gloomy as that. Before that time the trend would flatten out from a new Malthusian corrective because per­sons would become crushed to death. And even before that, as a university president once re­minded us, the population increase will probably terminate before reaching the point of standing room only, due to other obvious reasons.

Leaving these predictions for others to ponder, our present con­cern is with an economic notion which seems even more prolific than the human organism itself, namely that increasing popula­tion assures prosperity. To review the notion briefly, as any restau­rant owner or storekeeper knows, his sales and profits are raised by more persons entering his store to buy. And they cannot enter his store without having first been born. Each birth today, then, means more persons in stores later; diapers will be bought at once, childrens’ clothes later, and adult needs on through life. The more the births, the more will have to be sold to meet the grow­ing needs, ipso facto, according to this simple reasoning. But on further thought and analysis, is this reasoning sound?

Wants Are Insatiable

Let us begin to analyze it this way: Human wants, over-all, are insatiable. If a President of the United States with "rigorous economy" spends $111,000,000,000 in a year, it seems probable that he might easily spend the entire national income if he were to let himself go on a spending binge.

Any one person’s capacity to eat popcorn at one sitting may have its limits, but there is no known limit to his capacity to own more suits, cars, servants, servants for the servants…. So if there is any limit to human wants, it surely lies beyond the horizon of our im­agination. This means that the limit on sales in stores, and the like, is set by something other than too few persons. By the same reasoning, more persons do not as­sure more sales and more welfare. What is it that sets the limit?

The limit to the satisfaction of wants is set by the quantity of things produced. Should some of production be wasted, fewer wants will be satisfied, but no miracle is available by which to satisfy wants with things not produced. Some persons may get more of the supply and others less, but that is a question separate from the one we are discussing; and in any event it does not make consump­tion any greater than production.

What Limits Production

The total quantity of goods and other services produced in the na­tion in a year depends on three things:

1. The number of persons working

2. The number of hours worked per person

3. The output of product per hour

We are considering prosperity, and the effect of an increase in population on prosperity. Our con­cern is with the welfare of the individual, not the nation. China or India produce more than Switzerland or Canada as a na­tional total, but who yearns for that sort of prosperity? Thus, we can largely ignore from our con­cern in this connection the first factor of the number of persons, because as increasing population brings more producers it also brings more stores for more con­sumers to enter. Over-all, persons as producers are also consumers, and in part storekeepers.

The number of hours worked can also be largely ignored for our present concern. The change over time has not been drastic; it is minor as compared with other factors. We used to point, with pride that might be questioned in certain respects, to the reduction of about three-sevenths in the average hours worked in the United States. Now the careful research of Sebastian de Grazia brings this into serious doubt, when account is taken of the added hours getting ready to work and getting to and from the "forty hours of work." In grand­father’s day, most workers when they awoke in the morning were only a pair of overalls and a closed door away from their day’s task.

This leaves us only the last point as having much to do with our question, namely, the output per hour of work. What effect does an increasing population have on that?

Output per hour of work is al­most entirely a matter of the tools at hand to aid the efforts of those who produce. They are of many types and forms. Some tools aid physical work, and others aid men­tal work or the processes of spirit, morals, and motivation. In the latter category, especially, there are negative as well as positive tools. Among the negative tools, 1 would suggest, are all those eco­nomic misconceptions which pre­vail and persist in the minds of most persons in our society. Among these misconceptions is the notion that increases in popu­lation assure prosperity—by which one would have to conclude that even illegitimate children are a contribution to national welfare and thereby worth the mounting costs of public aid to support them.

In our society in the United States, from the standpoint of energy alone, we have devised ways to bring to the aid of the average worker the equivalent of more than thirty diligent slaves to help him. In addition, there are untold ways by which we have harnessed additional help for him which is not measured in terms of energy horsepower. But in measuring increases in economic welfare of persons in the United States over its entire history, or the differences between nations in this respect at the present time, the amount of energy harnessed to aid the average worker serves amazingly well as a measure.

What Raises Production?

The question then resolves into the processes by which tools are brought to the aid of the average worker. In outline, these are the steps involved:

1. Basic discoveries

2. Innovations and adaptions of discoveries

3. Savings invested in tools

4. Effective use of tools

Nothing is so vital to the whole process of progress in the develop­ment and use of tools of produc­tion as is liberty of individual per­sons in society. Slavery in any of its varied forms and by any name is poison to the processes re­quired. If slavery has any advan­tage anywhere over paying free-workers the prevailing wage, which is doubtful, it is for menial tasks like piling stones upon one another to build pyramids, and the like. Tools once produced can be enslaved, but enslavement of man­kind is birth control at its worst for tool-creation.

Thinking now of a single new­born babe in the neighbor’s fam­ily, the question at its core can be tested by this simple question: Does the fact of his birth as one more census unit add one iota to any of these four parts of the job as compared with any other per­son previously born and already in our society? He may turn out to be a discoverer, but is there any reason to expect him to be more so than a random selection of a per­son already here? Any more an innovator or adapter than someone already here? Any more a saver and investor? Any more an effi­cient user of tools? I see no reason to expect him to be superior to another baby born yesterday.

The final and important fact is that at birth each addition to the population automatically reduces the tools available per person in the population. At birth, in other words, the little precious is clearly an economic parasite who dilutes rather than enhances welfare. The way it does this is clear from a simple analysis.

In the United States at present the investment in production as­sets is over $20,000 per produc­tion worker, both in manufactur­ing and in agriculture. This rep­resents the "more than thirty slaves" the average worker has at his command to aid his own efforts in production. If we assume for sake of illustration that there were a hundred workers in some iso­lated society who have an average of $20,000 of tools to help them, and two lone survivors of a ship­wreck—about the current annual rate of population increase in the United States—float to the island to join them, the tools per worker immediately decline to about $19,­600. And with more shipwreck ad­ditions, it would decline more and more until it would eventually sink the island into starvation.

It may be noted, of course, that tools can be added to the pile in use. But whatever the original hundred persons invent, create, and add must not only replace the wear that goes on year by year, but must be shared with the im­migrants. The additions to the population will add to the aver­age tools per worker only after they have themselves saved and added to that society more than $20,000 worth of effective tools in use. Until their contribution reaches $20,000, they are in this sense economic parasites on the society they have joined.

How soon will it be until the neighbor’s newborn babe can add the required $20,000 to the na­tion’s tools-in-use? That is our question in its essential form. We could go on down the street to other neighbors’ newborn babes, but that merely compounds our question in magnitude rather than to change it in essence.

The merchant selling diapers may do quite well for a while when this goes on and on in the nation, but only at the even greater loss of business by someone selling other things which the parents cannot now buy instead. Soon, by reason of discouragement if not bankruptcy, they will have to close up shop and go into business sell­ing diapers, or something. The advantage to the diaper salesman then disappears, and he is ready to read some dusty article like this to see why his forecast of hope from help by the storks went afoul. He is then ready to ponder the question which should have occurred to him at the outset: If population increases cause pros­perity per se, why were countries like China and India in persistent poverty over untold centuries?

In a country of extremely sparse population, special circumstances can exist whereby an increase in population can cause enough in­crease in the efficiency of use of tools they already have to result in rising welfare for a time. But this is not the situation in our na­tion, or perhaps any nation in the world today.

In summary we may, therefore, herald with goodwill the coming into our society of newborn babes, but the joy should not be because they will automatically bring with them any sort of economic wel­fare. When they come, they will not bring with them the $20,000 of capital equipment needed to carry their share of productive means now operating in our so­ciety. Each of them will dilute the ratio of tools to persons, which is the only real base for prosper­ity. Each of them, or someone else, will have to save and provide more than $20,000 of tools before their presence will have the effect of increasing the average prosperity of the nation.

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August 1963

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