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Population and the Steady State Economy

(Image credit: Sérgio Valle Duarte, Wikimedia Commons)

By Max Kummerow

Sir David Attenborough remarked in a 2011 presidential lecture to the Royal Society that “every environmental and social problem is made more difficult and ultimately impossible to solve with ever more people.” Wherever women’s status has improved and societies modernized, he said, birth rates have fallen. He begged his audience to “talk about population.”

We often hear politicians call for “more jobs.” Growing populations require a bigger economy to prevent unemployment. So if you assume population growth is good and/or unavoidable, you probably favor economic growth to prevent unemployment. And even if there was a steady-state population, the world desires (and some of it needs) higher incomes, more consumption, and more wealth.

Many regard growth as a moral imperative to alleviate extreme poverty. Two billion people still live on two dollars a day. How can their lives improve without economic growth? Attention is focused almost exclusively on economic growth as the path to supporting more people at higher living standards. But there is another path.

A conventional measure of economic well-being is Y/P, or output divided by population (that is, per capita income). Y in this equation represents GDP (gross domestic product). We can acknowledge that a growing GDP per capita may increase wellbeing, but only when GDP is not beyond the optimum level. A growing GDP causes environmental, economic, and social problems. Various measures of well-being (such as the Genuine Progress Indicator, the Happiness Index, and the Human Development Index) help us determine when GDP is beyond optimum. Indeed, numerous analysts inside and out of the CASSE network believe that is now the case – that GDP is beyond the optimum – and perhaps has been so since the mid-late 20th century.

(Graph created from UN World Population Prospects 2017 data.)

 

In a crowded world facing physical limits to growth, then, why not think more about reducing the denominator? If population falls, we can get by with fewer jobs. There will be more land per family for poor subsistence farmers. Wages will tend to rise and the prices of commodities—housing, fuel, food, etc.—will tend to fall.

To examine the problem if we do not reduce population, let us consider a simple equation comparing the Earth’s carrying capacity—or its ability to provide all that we need from it—with our use of the supply. When we exceed carrying capacity, we also reduce it. Carrying capacity is the Earth interest generated by Earth principal (natural capital, in other words). When we use more in a year than the Earth interest generated that year, we use up some Earth principal, so next year less interest can be generated. Many ecological economists and sustainability scholars have described in theoretical and empirical terms how we are currently over long-run carrying capacity, and we are using up Earth principal (biodiversity, for example). So every year there is less interest and less long-term capacity.

Before family planning, most women bore many children, and infant and maternal mortality rates were extremely high. In The Wealth of Nations Adam Smith wrote, “It is not uncommon… in the Highlands of Scotland, I have been frequently told, for a mother who has borne twenty children not to have two alive” (Book 1, Chapter 8).

In 1970, global fertility still averaged five children per woman. Now the global average fertility rate has fallen to 2.4 children per woman. In about 90 countries, women currently average less than 2.1 children each, which is the replacement fertility rate (two children reaching adulthood for every couple equals replacement). When fertility falls, it takes about 50 years for “demographic momentum” to play out so that growth stops. Young populations have to grow up, have children and age before death rates exceed birth rates. That has finally happened in a handful of countries. Germany and Japan, with declining populations, are doing much better than high fertility countries. Scarcity caused by growth is not alleviated by more growth. Growth is the problem, not the solution.

Country average fertility rates currently range from about 1.1 (Singapore, now one of the richest per capita) to 7 (Niger, one of the poorest). Europe’s fertility averages about 1.7. Sub-Saharan Africa’s fertility rate of 5 children/woman is falling slowly. But death rates by country are falling faster, so natural increase (births minus deaths) is higher now than in 1960 (the current rate is about 2.7% population growth per year).

Globally, annual population growth fell from 2% in 1970 to 1.1% in 2010. Meanwhile, world population doubled from 3.5 billion to 7 billion. World population is therefore growing as fast as ever (2% x 3.5 =1% x 7) and increasing by about one billion every 12 years, which means it is headed from 3 billion in 1960 to 10 billion by 2050.

(Graph created from UN 2017 population prospects data.)

Completing the fertility transition in places with corrupt governments and poor people will be difficult. Fundamentalists in all religions have more children. But modernization helps fertility rates fall, especially education and improving the status of women. Low fertility rates in Cuba, Iran, Brazil, Botswana, Thailand, and about 85 other countries shows that fertility transitions are possible anywhere. There are trade-offs, but countries with small families are usually better off economically and their children tend to be better educated.

Lower fertility rates have numerous benefits for individuals, families and societies. It is possible to stabilize world population and to reduce population back down toward global carrying capacity. Education can help change family size norms to reflect the reality that we live on a small planet that doesn’t get bigger when we add more people.

With declining population, the strongest arguments for economic growth disappear, and a steady state economy with universal prosperity becomes both physically and politically more feasible.

Max Kummerow is a retired Real Estate professor. He has presented a dozen papers at the Ecological Society and Population Association and other meetings advocating completing the global demographic transition.

 


 

The Populations Problem

by Herman Daly

Herman DalyThe population problem should be considered from the point of view of all populations — populations of both humans and their artifacts (cars, houses, livestock, cell phones, etc.) — in short, populations of all “dissipative structures” engendered, bred, or built by humans. In other words, the populations of human bodies and of their extensions. Or in yet other words, the populations of all organs that support human life and the enjoyment thereof, both endosomatic (within the skin) and exosomatic (outside the skin) organs.

All of these organs are capital equipment that support our lives. The endosomatic equipment — heart, lungs, kidneys — support our lives quite directly. The exosomatic organs — farms, factories, electric grids, transportation networks — support our lives indirectly. One should also add “natural capital” (e.g., the hydrologic cycle, carbon cycle, etc.) which is exosomatic capital comprised of structures complementary to endosomatic organs, but not made by humans (forests, rivers, soil, atmosphere).

The reason for pluralizing the “population problem” to the populations of all dissipative structures is two-fold. First, all these populations require a metabolic throughput from low-entropy resources extracted from the environment and eventually returned to the environment as high-entropy wastes, encountering both depletion and pollution limits. In a physical sense the final product of the economic activity of converting nature into ourselves and our stuff, and then using up or wearing out what we have made, is waste. Second, what keeps this from being an idiotic activity, grinding up the world into waste, is the fact that all these populations of dissipative structures have the common purpose of supporting the maintenance and enjoyment of life.

What good are endosomatic organs without the support of exosomatic natural capital?

As A. J. Lotka pointed out, ownership of endosomatic organs is equally distributed, while the exosomatic organs are not. Ownership of the latter may be collective or individual, equally or unequally distributed. Control of these external organs may be democratic or dictatorial. Owning one’s own kidneys is not enough to support one’s life if one does not have access to water from rivers, lakes, or rain, either because of scarcity or monopoly ownership of the complementary exosomatic organ. Likewise our lungs are of little value without the complementary natural capital of green plants and atmospheric stocks of oxygen. Therefore all life-supporting organs, including natural capital, form a unity. They have a common function, regardless of whether they are located within the boundary of human skin or outside that boundary. In addition to being united by common purpose, they are also united by their role as dissipative structures. They are all physical structures whose default tendency is to dissipate or fall apart, in accordance with the entropy law.

Our standard of living is roughly measured by the ratio of outside-skin to inside-skin capital — that is, the ratio of human-made artifacts to human bodies, the ratio of one kind of dissipative structure to another kind. Within-skin capital is made and maintained overwhelmingly from renewable resources, while outside-skin capital relies heavily on nonrenewable resources. The rate of evolutionary change of endosomatic organs is exceedingly slow; the rate of change of exosomatic organs has become very rapid. In fact the evolution of human beings is now overwhelmingly centered on exosomatic organs. This evolution is goal-directed, not random, and its driving purpose has become “economic growth,” and that growth has been achieved largely by the depletion of non renewable resources.

Although human evolution is now decidedly purpose-driven we continue to be enthralled by neo-Darwinist aversion to teleology and devotion to random. Economic growth, by promising “more for everyone eventually,” becomes the de facto purpose, the social glue that keeps things from falling apart. What happens when growth becomes uneconomic, increasing costs faster than benefits? How do we know that this is not already the case? If one asks such questions one is told to talk about something else, like space colonies on Mars, or unlimited energy from cold fusion, or geo-engineering, or the wonders of globalization, and to remember that all these glorious purposes require growth now in order to provide still more growth in the future. Growth is good, end of discussion, now shut up!

Let us reconsider in the light of these facts, the idea of demographic transition. By definition this is the transition from a human population maintained by high birth rates equal to high death rates, to one maintained by low birth rates equal to low death rates, and consequently from a population with low life expectancy to one with high life expectancy. Statistically such transitions have been observed as standard of living (ratio of exosomatic to endosomatic capital) increases. Many studies have attempted to explain this fact, and much hope has been invested in it as an automatic cure for overpopulation. “Development is the best contraceptive” is a related slogan, partly based in fact, and partly in wishful thinking.

There are a couple of thoughts I’d like to add to the discussion of demographic transition. The first and most obvious one is that populations of artifacts can undergo an analogous transition from high rates of production and depreciation to low ones. The lower rates will maintain a constant population of longer-lived, more durable artifacts.

Our economy has a growth-oriented focus on maximizing production flows (birth rates of artifacts) that keeps us in the pre-transition mode, giving rise to growing artifact populations, low product lifetimes, high GDP, and high throughput, with consequent environmental destruction. The transition from a high-maintenance throughput to a low one applies to both human and artifact populations independently. From an environmental perspective, lower throughput is desirable in both cases, at least up to some distant limit.

The second thought I would like to add to the discussion of demographic transition is a question: does the human transition, when induced by rising standard of living, as usually assumed, increase or decrease the total load of all dissipative structures on the environment? Specifically, if Indian fertility is to fall to the Swedish level, must Indian per capita possession of artifacts (standard of living) rise to the Swedish level? If so, would this not likely increase the total load of all dissipative structures on the Indian environment, perhaps beyond capacity to sustain the required throughput?

The point of this speculation is to suggest that “solving” the population problem by relying on the demographic transition to lower birth rates could impose a larger burden on the environment rather than the smaller burden that would be the case with direct reduction in fertility. Of course reduction in fertility by automatic correlation with rising standard of living is politically easy, while direct fertility reduction is politically difficult. But what is politically easy may be environmentally destructive.

To put it another way, consider the I = PAT formula. P, population of human bodies, is one set of dissipative structures. A, affluence, or GDP per capita, reflects another set of dissipative structures — cars, buildings, ships, toasters, iPads, cell phones, etc. (not to mention populations of livestock and agricultural plants). In a finite world some populations grow at the expense of others. Cars and humans are now competing for land, water, and sunlight to grow either food or fuel. More nonhuman dissipative structures will at some point force a reduction in other dissipative structures, namely human bodies. This forced demographic transition is less optimistic than the voluntary one induced by chasing a higher standard of living more effectively with fewer dependents. In an empty world we saw the trade-off between artifacts and people as induced by desire for a higher standard of living. In the full world that trade-off seems forced by competition for limited resources.

The usual counter to such thoughts is that we can improve the efficiency by which throughput maintains dissipative structures — technology, T in the formula, measured as throughput per unit of GDP. For example a car that lasts longer and gets better mileage is still a dissipative structure, but with a more efficient metabolism that allows it to live on a lower rate of throughput.

Likewise, human organisms might be genetically redesigned to require less food, air, and water. Indeed smaller people would be the simplest way of increasing metabolic efficiency (measured as number of people maintained by a given resource throughput). To my knowledge no one has yet suggested breeding smaller people as a way to avoid limiting births, but that probably just reflects my ignorance. We have, however, been busy breeding and genetically engineering larger and faster-growing plants and livestock. So far, the latter dissipative structures have been complementary with populations of human bodies, but in a finite and full world, the relationship will soon become competitive.

Indeed, if we think of population as the cumulative number of people ever to live over time, then many artifact populations are already competitive with the human population. That is, more consumption today of terrestrial low entropy in non-vital uses (Cadillacs, rockets, weapons) means less terrestrial low entropy available for capturing solar energy tomorrow (plows, solar collectors, ecosystem regeneration). The solar energy that will still fall on the earth for millions of years after the material structures needed to capture it are dissipated, will be wasted, just like the solar energy that shines on the moon.

There is a limit to how many dissipative structures the ecosphere can sustain — more endosomatic capital must ultimately displace some exosomatic capital and vice versa. Some of our exosomatic capital is critical — for example, that part which can photosynthesize, the green plants. Our endosomatic capital cannot long endure without the critical exosomatic capital of green plants (along with soil and water, and of course sunlight). In sum, demographers’ interest should extend to the populations of all dissipative structures, their metabolic throughputs, and the relations of complementarity and substitutability among them. Economists should analyze the supply, demand, production, and consumption of all these populations within an ecosphere that is finite, non-growing, entropic, and open only to a fixed flow of solar energy. This reflects a paradigm shift from the empty-world vision to the full-world vision — a world full of human-made dissipative structures that both depend upon and displace natural structures. Growth looks very different depending on from which paradigm it is viewed.

Carrying capacity of the ecosystem depends on how many dissipative structures of all kinds have to be carried. Some will say to others, “You can’t have a glass of wine and piece of meat for dinner because I need the grain required by your fine diet to feed my three hungry children.” The answer will be, “You can’t have three children at the expense of my and my one child’s already modest standard of living.” Both have a good point. That conflict will be difficult to resolve, but we are not yet there.

Rather, now some are saying, “You can’t have three houses and fly all over the world twice a year, because I need the resources to feed my eight children.” And the current reply is, “You can’t have eight children at the expense of my small family’s luxurious standard of living.” In the second case neither side elicits much sympathy, and there is great room for compromise to limit both excessive population and per capita consumption. Better to face limits to both human and artifact populations before the terms of the trade-off get too harsh.

Population and a Dose of Common Sense

by Blake Alcott

It isn’t true that population size (relative to the size of the earth and its resources) is the “main cause” of unsustainable environmental impact, or the “main problem” when it comes to depletion, pollution, and other concerns over health and happiness for people today and in the future. It also isn’t true that “the real problem” is too much consumption per person by rich people. It is both. It is P x A in the formula:

Impact = f(Population, Affluence, Technology), or simply IPAT.

Many researchers have measured the relative contributions of population and affluence to various kinds of impact. However, since decreases in population can be offset by increases in affluence, and vice versa, changes in either factor do not necessarily lower impact.

Can we be complacent about population size? Can we count on declining birth rates to stabilize or even lower population, now over 7 billion and increasing by 80 million per year (the size of Ethiopia’s population)? We are also, after all, experiencing declining death rates, and rising life expectancy counterbalances declining fertility to some extent. The deeper question is whether a population of 7 billion — or 8 billion or even 11 billion (low and high projections) — exceeds the earth’s carrying capacity.

The number of people that can live on earth obviously depends on how much food we can produce now and over the long term. The evidence suggests that we cannot count on food production to keep pace with population growth:

  • Very little land remains to be converted into agricultural hectares;
  • Such land conversion incurs high costs;
  • Yields per hectare can rise significantly only in Africa and South America;
  • Soil degradation and groundwater depletion curtail production;
  • Petroleum scarcity will increasingly constrain food production because agriculture requires fuel for machinery, water-pumping, and transport as well as oil-derived fertilizers and plastics.

A population’s sustainability depends on its affluence. Therefore, before any society can compute its carrying capacity, it must first decide what material lifestyle it wants — how much it wants to consume. Does it want to eat meat (and not just grain), or use land for sports and entertainment (and not just agriculture), and does it want wilderness for other species? If so, its maximum population is proportionally lower. Once a society has politically decided its desired level of affluence, it can assess appropriate technologies for producing its goods and services most efficiently. Only then can a number be calculated for a desirable and sustainable population size.

Population and affluence are both components of overall environmental impact.  Credit: www.TheEnvironmentalBlog.org

Many countries, if they were to estimate these parameters, would conclude that they are overpopulated, especially if they remember that sustainable size takes into account the rights of future generations and the desirability (on either utilitarian or ethical grounds) of leaving room and resources for non-humans.

Once overpopulation has been recognized, the search for appropriate population policies begins. In the rich countries (the ecological footprint of a rich child, ceteris paribus, will be greater than that of one born in poverty) one could end subsidies for child-bearing, including tax breaks, salary bonuses, parental leave from work and even one-off payments for having a child. Any policy change must consider the rights of already-born children and the goal of gender equality. In poorer societies there is unmet demand for the means of preventing pregnancy. Birth control “technology,” if available to all who want it, would cut today’s 80 million excess of births over deaths by perhaps two-thirds.

Whether rich or poor, a country could also choose to adopt direct policies. Some possibilities, as promoted by many ecological economists, are:

  • Ending subsidies after a couple’s second child;
  • Offering payments for sterilization;
  • Imposing tax penalties for large families; and
  • Setting quotas for child-bearing.

These measures however raise the question of whether a society has the right to legislate how many children its members can have. On this issue, two questions are often confused: (1) the legitimacy of restrictions on individual procreative freedom itself, and (2) the legitimacy of the political process deciding them. If it is an inalienable right to have as many children as one wants, then quotas and other constraining policies would be out of bounds. Treating procreation in this way fits well with the laissez-faire, individualist philosophy of our time. The opposing view holds that reproductive freedom has limits, that at some population level, the interests of society are harmed, and restrictions that support the common good are acceptable and even desirable. Population size, moreover, is one of many issues affecting living beings without a vote, namely other animals and future humans. Concrete proposals have included the right to one child, with permits being transferable (for free or for a price) to someone else.

Such direct policies can be decided democratically or autocratically, and it is the latter that leads many to think immediately of “compulsion” or “coercion” when imagining them. However, every law, by definition, coerces us, so let us just agree to use a democratic process and reject the option of an authoritarian eco-regime. The question then becomes: is it legitimate for a majority — say, 51 or 60 or 66% of the voters — to restrict everybody’s procreative activity? A majority cannot, after all, legitimately legislate the incarceration or death of all red-heads.  But red-heads don’t pose the same problems that overpopulation does.

There is truth in the statement, attributed to David Attenborough, that one cannot conceive of an ecological problem that wouldn’t be easier to solve with fewer people. For example, in poorer countries, hunger and environmental degradation could immediately be mitigated if there were less demand for resources. The issue is to figure out first how many fewer people we’re aiming for, and second how to make a transition that is democratic, compassionate, and fair.

For more details on this topic, see the full paper, which raises more questions and offers many references for further reading.

Alcott, Blake, 2012, “Population matters in ecological economics,” Ecological Economics 80: 109-120. (accessible at www.blakealcott.org > Publications)