Why Markets Are the Answer to Concerns about "Overpopulation"

It is clear that for the planet to keep up with a rapidly growing population, it is absolutely necessary to liberate the global economy from the fetters of needless regulation and burdensome taxes and instead pursue policies that not only sustain the status quo but also encourage further production and economic growth.

It is difficult to place oneself in the national conversation without entering the hotly debated sphere of “sustainability” and what needs to be done to create a “sustainable” future, characterized by the use of resources such that future prosperity is not hindered. It would seem as though the key to ensuring the existence of sufficient resources for the future is to prevent the “overconsumption” of present resources, which appears impossible as the population grows and consumes more of the limited resource stock on the Earth.

Overpopulation, defined by biologist Paul Ehrlich, who once described overpopulation as a ticking time bomb, occurs when a “population can’t be maintained without rapidly depleting nonrenewable resources (or converting renewable resources into nonrenewable ones) and without degrading the capacity of the environment to support the population.” With the finite resources on the planet, it’s only a matter of time before we strip the planet bare to deal with the billions more on the way in the coming decades. India has thrust itself into this debate in the past with its consideration of a two-child policy.

The Market Response

Fortunately, the market economy is not a zero-sum game, which led to Ehrlich famously losing a bet with economist Julian Simon, who astutely put his money on resource costs falling in the face of population growth. A growing economy can combat much of the risks of a “population bomb” because for growth to occur, resources cannot just be used up by consumers, but, per Say’s Law of markets, they also must be produced and used increasingly efficiently by actors in the market.

As the world’s population grows, markets respond to increased demand for necessities, by changing prices and incentivizing producers.

As the world’s population grows, markets respond to increased demand for necessities, like food and energy, by changing prices and incentivizing producers to either produce more of that demanded good or explore new and innovative ways to extract resources, leading to greater and more efficient overall production. Contrary to the predictions of the doomsayers, food prices have dropped enormously in the last century. In India alone, food production has nearly quadrupled since the 1960s. Other resources, like energy, metals, and timber, have also enjoyed massive boosts in production, all enabled by global economic growth.

Of course, this logic might appear to fail to translate into the production of non-renewable resources, like coal, petroleum, and other fossil fuels, which must eventually run out. However, the virtue of the price system is still prevalent; producers do not simply find out one day that fossil fuels have disappeared. As non-renewable resources become increasingly scarce, prices respond by rising, incentivizing market participants to move toward different resources, such as green energy from fossil fuels. This argument is borne out in the facts as renewable sources of energy become progressively cheaper relative to fossil fuels and make up a gradually larger portion of world energy consumption despite enormous subsidies to the fossil fuel industry.

A Laissez-Faire Solution

Even the United Nations, hardly a bastion for the advocacy of laissez-faire, recognizes the value of growth in promoting sustainability. To achieve a goal of sustainable economic growth, the United Nations essentially suggests achieving a higher GDP and a lower unemployment rate. Though economists of all stripes criticize contemporary methods of measuring economic growth, the empirical and theoretical evidence on this matter should lead policymakers in the direction of a more laissez-faire attitude toward the economy.

As an economy expands, it tends to move away from ecologically harmful behavior while raising the standard of living of its participants.

Admittedly, boundless economic activity is often linked with environmental destruction, which would appear antithetical to any reasonable notion of sustainability. The immense growth of Indian industry has no doubt been accompanied by an inspissating smog in the Delhi sky, and Parisians also seem to find themselves in the midst of the pollution debate, with riots breaking out in the streets over measures to counter them, such as carbon taxes, which do seem like an attractive way out to some. Such an outlook would be mistaken.

As an economy expands, resource usage becomes increasingly efficient, and economies tend to move away from ecologically harmful behavior while raising the standard of living of its participants. In fact, the 2018 Yale Environmental Performance Index shows a clear positive correlation between economic growth and environmental performance.

It is clear that for the planet to keep up with a rapidly growing population, it is absolutely necessary to liberate the global economy from the fetters of needless regulation and burdensome taxes and instead pursue policies that not only sustain the status quo but also encourage further production and economic growth. Of course, all activity is not without some impact on the planet, but allowing markets to work and economies to grow is our best hope at moving in a direction that can deal with a global population, which shows no signs of reducing anytime soon, while gradually pushing economies towards greater sustainability. Though much of the Earth’s resources are finite, there is no limit to human ingenuity and potential, which should be harnessed to its absolute maximum to advance human freedom and flourishing.

This article was reprinted from the Mises Institute via Mises India.

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