Population and the Wealth of Nations

WILLIAM MCGURN

In my own profession of journalism it is common enough to deride economists as practitioners of the "dismal science." Yet in most cases it is the economists who have maintained faith in human ingenuity and initiative and who have rejected counsels of despair and control. The majority of them have never been found on the front lines of the movement for population control.

By any measure, the future for this Asian country looked bleak. Enormously overcrowded, its normal population had skyrocketed, increased not just by a naturally high birthrate but also by revolution in a neighboring country forcing thousands of desperate refugees upon its borders. Lacking natural resources and utterly dependent upon its unpleasant neighbor for water and food, the country's situation had deteriorated so badly that a local UN official declared the only way for it to survive would be with massive Western aid. An American newspaper proclaimed the country to be "dying," and the government itself inclined to despair. Its own annual report painted a graphic picture:

Virtually every sizable vacant site . . . was occupied, and when there was no flat land remaining, [people] moved up to the hillsides and colonized the ravines and slopes which were too steep for normal development. The huts were constructed of such material as they could lay hands on at little or no cost-flattened sheets of tin, woodened boarding, cardboard, sacking slung on frames. . . . Land was scarce even for the squatters and the huts were packed like dense honeycombs or irregular warrens at different levels, with little ventilation and no regular access. The shacks themselves were crowded beyond endurance. . . . Density was at a rate of two thousand persons to an acre in single-story huts. There was, of course, no sanitation.
"The problem of a rapidly increasing population," the government lamented, "lies at the core of every problem facing the administration."

These words might describe dozens of countries around the world today. In fact, they were written in the 1950s about Hong Kong the same British colony that today has become a synonym for dynamism and development, with a per capita gross domestic product eclipsing Mother England's. Indeed, at the very moment these government reports were being written, Hong Kong was on the cusp of a general Asian economic boom that would see real income per capita in Japan and the Four Tigers (Hong Kong, Singapore, Taiwan, and South Korea) quadruple from 1960 to 1985. Though many observers felt as the American journalist John Robbins did in 1959, when he asserted that "Hong Kong's state of supersaturation" may be "a portent of things to come throughout Asia," the apocalypse they predicted never came to pass. Instead, Hong Kong witnessed the greatest economic boom of its history, and now boasts a population of more than six million people about five times the number the Hong Kong government in 1954 declared to be its carrying "capacity."

Though there are parts of Hong Kong that rank among the most densely packed areas in the world, it remains a peaceable and safe city a fact not unrelated to the tangible sense of opportunity granted by its (presently) open economic system. The lesson Hong Kong teaches is that there is no fixed level of resources, no natural capacity, no predefined limit to what people might do if given the opportunity to exercise the real factors in development: enterprise, creativity, and risk.

For the Catholic Church in particular, Hong Kong stands as a sharp rebuke to the reigning zero-sum ethos of the day and brings us back to the core of Catholic social teaching: the value of human life not only to its possessors but to their neighbors as well. In the dismal abacus of our day, when a pig is born in China, national wealth goes up; when a child is born, it goes down. Almost all the fervor for population control traces back to this premise, which reflects a theological confusion as much as an economic one, and it derives from the historical tendency of Western experts to see Asian peoples as mouths and not minds.

When the push for reducing population growth began in the 1950s and 1960s, it owed much to this reduction of the human being to a collection of animal appetites and urges. The philosophical father to this school of thought is, of course, Thomas Malthus, who argued in his Essay on the Principle of Population (1798) that "the perpetual tendency in the race of man to increase beyond the means of subsistence is one of the great general laws of animated nature which we can have no reason to expect will change." The catastrophes Malthus predicted never came to pass, but his brand of pessimism nonetheless continues.

In 1968 Paul Ehrlich opened his seminal work The Population Bomb with the declaration that "the battle to feed all of humanity is over. In the 1970s the world will undergo famines hundreds of millions of people are going to starve to death." In 1977 Robert McNamara, as head of the World Bank, saw in population growth the "gravest issue" short of nuclear war and in a particularly prophetic statement lamented that the decisions that had led to this growth were "not in the exclusive control of a few governments but rather in the literally hundreds of millions of individual parents who will determine the outcome." Back in the 1950s William Vogt, in his best-selling book, Road to Survival, attributed Asia's population growth to "untrammeled copulation" by "the backward billion," while A. J. Carlson warned in a 1955 article in the Journal of the American Medical Association that "if we breed like rabbits, in the long run we have to live and die like rabbits." Everywhere the distaste for human beings was on display joined to the notion that the poorer parts of the world were dragging down richer.

"It is easy to imagine the United States or Canada or Brazil, or even with somewhat more effort France supporting twice its 1960 population on a reasonably decent standard of living," observed John Robbins in his 1959 book, Too Many Asians. But how, he asked, "can twice as many Asians hope to live on even today's miserable scale?" As it turned out, of course, Asia more than doubled in size and set off a new industrial revolution whose impact on human welfare has been of revolutionary proportions by virtually any measure: infant mortality, literacy, life expectancy, caloric intake, etc. The Indian economist Amartya Sen notes, moreover, that the growth in per capita income has been about one-third greater in countries at the bottom of the economic heap than those at the high end, and that the figures would be even higher if sub-Saharan Africa were excluded.

There is no way to deny this achievement. In his recent book Asia Rising, the economist Jim Rohwer points out that from 1970 to 1990 the number of desperately poor East Asians fell from 400 million to 180 million, even while the population of those countries was rising by 425 million in other words, East Asia achieved a net rescue from poverty of almost 650 million people. It was done, moreover, in places with few natural resources and against all expectations.

A few observers did foresee this at the time. Amid all the headlines predicting famine and chaos, there appears an astounding paragraph written in a 1957 by Isamu Shimura, the Japanese managing director of Toyo Menka Kaisha. Inverting the usual way of looking at population and economics, he showed himself far more astute than many experts when he wrote:

Instead of thinking our population is too large for our economy, I believe it is more correct to say the scale of our economy is too small for our population. Instead of surplus, unwanted persons, we should view our people as our most valuable natural resource. This is not only the humane but the realistic view. The Japanese people are hard-working, energetic, resourceful, with a high level of education, skills, and competence. We are at the beginning of revolutionary industrial changes among which the recent achievements in synthetic chemistry and the potentialities in the peaceful use of atomic energy are mere portents. These new discoveries indicate clearly that in the economy of the future, whose beginnings are already among us, the economic resources which count will not be natural ones but human-intelligence, skill, and foresight.
It was an extraordinary insight at the time (Shimura also predicted that Japan would become a major producer of cars), and it remains telling today as we move toward a globalized economy. And the thoughts it voices about the relationship between people and wealth are equally applicable to modern China and Indonesia. Not only has China's embrace of the market ended food shortages, but in booming Canton the experiment with markets has been so successful that the province has had to import some ten million Chinese workers from other provinces. Indonesia started to throw off the shackles of socialism in the mid-1960s when President Suharto assumed power, and the result has been one of the fastest sustained economic growth rates in the world. To be sure, East Asia's revolution is not much different from that which the Western world experienced two hundred years before. Since the middle of the eighteenth century, the West's population has more than quadrupled while real income per head increased at least fivefold an even faster rate than today's population growth in the Third World.

This is not to say that population control has made no headway in Asia. Pushed incessantly by figures like the World Bank's McNamara, the idea that nations could become rich only if they moved to control their population rates became an article of faith among Western and Western- educated intellectuals in Asia a faith backed up by aid dollars linked to the willingness of recipient countries to develop control measures. In the Philippines, for example, the U.S. Agency for International Development obtained a provision in the Marcos-era constitution granting the state authority over population levels. The Western missionary fervor once directed at Christianizing Asia has been channeled, in the second half of the twentieth century, into proselytizing for fewer Asians.

Despite its notable failures, moreover, population control has become orthodoxy in a number of states, especially China. Through the 1950s, Maoist doctrine held large populations to be assets, with increased size corresponding to increased output. In this Mao was right, as the subsequent development of its neighbors demonstrates. Where Chinese communism erred was not in its estimation of the Chinese but in its estimation of communism.

This is not the place to discuss the well-documented horrors of population control in Asia: the forced abortions, sterilizations, and even infanticides. I want to suggest, however, that these horrors are a direct consequence of the idea that development requires poor nations to limit their populations which also explains, I believe, the pronounced indifference in the West to practices that would provoke outrage were they applied to people in Scarsdale or San Francisco instead of Shanghai and Bombay. Without the economic imperative underlying population control, the abuses have no rational motivation. And so long as that dismal imperative is accepted, reservations (such as those expressed so eloquently by Pope John Paul II) are dismissed as a luxury the world literally cannot afford.

It is worth noting that two to three decades of sustained pressure for the suppression of population growth is beginning to have consequences unforeseen by its advocates. Most of the freer Asian countries at one time or another adopted policies penalizing large families or offering incentives to small families, whether through the tax code or through benefits like preferential housing and jobs. And over the years most of these nations have succeeded in lowering their total fertility rates. From 1953 to 1993, the annual number of births per thousand people in Taiwan dropped from forty-five to sixteen and the average number of children in a Taiwanese family dropped from seven to 1.7 (below the number for the U.S., Britain, and even China). With increased average lifespans, it means a grayer and grayer Taiwan: In 1994 people over sixty-five years old accounted for only 7 percent of the population; by 2036 the figure will be three times as large which means a smaller percentage of workers. In response to such trends, Singapore has already shifted from promoting smaller families to promoting larger ones. It is in China, however, where population control has been stringent, that two nasty side effects appear most clearly: the world's most rapidly aging society and a dangerously skewed ratio between boys and girls.

The demographic shifts are obvious to the most casual visitor. In the Temple of Heaven Park in Beijing, there are legions of adults for each child. The Chinese press regularly reports on the "little emperors," the army of spoilt only-children used to getting their own way. And these children are the same people who as adults will be called upon to make enormous sacrifices to support China's growing ranks of the elderly for not only is China graying, it is doing it faster than any population in history. A process that took eighty-five years in Sweden and thirty-two years in Japan will take only twenty-one years in China, according to the Beijing Center of Gerontology. China already has the largest number of elderly in the world, and the projections of the number of workers compared to the number of retirees are stark. The Chinese Statistics Bureau reports that in 1987 the people over sixty years were 13.5 percent. As the effects of the one-child program make themselves felt, however, the numbers leap dramatically: to 23.8 percent in 2020, 36 percent in 2030, and 44.9 percent in 2050 when more than 400 million Chinese will be over sixty years of age, and there will be almost one retiree for every two workers. The Japanese are already paying higher taxes imposed by leaders worried about their own graying society. But Japan's problems pale beside China's, which is nowhere near as wealthy, about ten times more populous, and aging at a much faster clip.

The practice of sex selection creates related problems. Within Asia generally, there exists a strong cultural preference for sons, based on the not irrational idea that sons support their parents in old age and carry on the family name. In China the combination of this bias in favor of sons and the one-child policy has in practice meant the aborting of many fetuses simply because they are girls. The result is that whereas the normal relationship is 104 to 107 boys for every 100 girls born, China now sees 119 boys born for every 100 girls. (Other Asian countries have corresponding figures: 114 in South Korea, 110 in Taiwan, and as many as 112 in India.) This shift too will begin to make itself felt when whole generations of boys suddenly find themselves unable to find wives, with harrowing ramifications for social order.

If the 1995 UN Conference on Population in Cairo demonstrated anything, it is that the Catholic Church remains the chief stumbling block to the true believers in population control. Yet even the Church at times does not seem to realize the strength of its own teaching its conformity with laws of economics as well as nature and its congruence with what we can now see is the real path to development and opportunity. Unfortunately too the Church can show a keener appreciation of its enemies than its friends, and it needs to express more clearly the fundamental unity of its teachings for individuals and its teachings for societies.

This unity is commonly understood in most areas of Church teaching: Traditional morality has always asserted that both the individuals themselves and society in general will be better off if individuals don't steal, don't cheat, and so on down the line. But when it comes to reproduction, the understanding seems to disappear. As a matter of living responsibly, a good case might be made for the bare assertion "no abortion or birth control and damn the consequences." But the Church has faltered in explaining the link between our reproductive behavior as individuals and the health of society. This is why Church leaders who concede the problem of overpopulation find themselves in the losing position of acknowledging a problem for which they must then rule out the obvious solution. Not surprisingly, their position looks arbitrary and unintelligible. And in the West, at least, the result is considerable media pressure for the Church to change its teaching and an expectation that it will once it faces up to the evidence.

In the case of population, the irony is that no serious market economist accepts the problem as defined, much less the proposed solutions. Whatever their personal views on abortion or birth control as an individual preference, neither Milton Friedman or Gary Becker argue that societies need to curb population growth for development. The more free-market the orientation of economists, the more they recognize that in an open economy individuals produce more than they consume. (It is no coincidence that those thumping the loudest for a state role in controlling population promote a bigger state role in lots of other things as well: A "Catholics Speak Out" advertisement that appeared just before the Cairo conference called upon the Church's "male celibate hierarchy" to revise its teachings on sex, and in the very next sentence described the need to "redistribute" resources.)

Even John Paul II complicates matters for himself when he concedes "grave and serious problems" caused by overpopulation but then encourages people to have as many children as they see fit given their circumstances. Yet the lines are being drawn. For the real and sustained opposition to Church teaching today is, as the Pope indicated in his encyclical Evangelium Vitae, an ascendant "culture of death" that has turned legitimate concerns (such as the state of the environment) into frankly pagan movements. When these movements find themselves opposed to Rome, as they did so dramatically in recent UN conferences, it is not because they are illogical, but because they are simply following their assumptions to their inevitable conclusions. At its core the argument today is not over how many people a given country should have, or even whether abortion and birth control should be legal. At the core, the real argument has to do with the nature of man. Well before it was popular, Gunnar Myrdal realized that "the population question" held out the potential to become "the most effective argument for a thorough and radical socialist remodeling of society." Today the tactical arguments of this crowd have wisely shifted away from control toward "choice," "public health," and "empowerment," but the impetus remains the same.

In my own profession of journalism it is common enough to deride economists as practitioners of the "dismal science." Yet in most cases it is the economists who have maintained faith in human ingenuity and initiative and who have rejected counsels of despair and control. The majority of them have never been found on the front lines of the movement for population control. And the reason is that the best economists spend their lives emphasizing that economic life is not about numbers, but about the triumph of the human mind when given the freedom to innovate and respond. It is the market economist who argues for hope, who points to creativity when others push for control, who recognizes that people are good, in a fundamental, real sense: assets, not liabilities.

It was this human capital that took a desperate refugee population in Hong Kong and turned it into a world-class financial center; this human capital that saw Japan and South Korea arise from the ashes of war; this human capital whose success in turning around centuries of poverty has led to what the World Bank calls "The East Asian Miracle." And it is this philosophy of freedom that offers an answer, really the only answer, to the challenge posed to us by what John Paul II has so presciently recognized as a culture of death.

Certainly in a world where many still go hungry at night there is much to be done. But instead of looking for ways to reduce the number of those seeking to take their place at the table, we should look for ways to eliminate the perverse policies that prevent a bigger banquet. And here Adam Smith will prove a more gracious host than Thomas Malthus.

 


ACKNOWLEDGEMENT

William McGurn. "Population and the Wealth of Nations." First Things 68 (December 1996): 22-25.

This article is reprinted with permission from First Things: A Monthly Journal of Religion and Public Life published by the Institute on Religion and Public Life, 156 Fifth Avenue, Suite 400, New York, NY 10010. To subscribe to First Things call 1-800-783-4903.

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THE AUTHOR

William McGurn is Senior Editor of the Far Eastern Economic Review.

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