Global Population Decline And Economic Growth

Rising population was thought to be bad for our standard of living, with classic books such as Limits to Growth and Population Bomb projecting fewer resources per person and environmental collapse. A new book, Empty Planet, makes the forecast that world population will hit a peak and then decline. The authors take this as positive in general, with some challenges along the way. I want to focus on one downside of less population: fewer one-in-a-million people.

The old pessimists made very poor forecasts. Famine did not kill millions of people. The air in developed countries got cleaner, not dirtier. The world produced more food, not less. The prices of oil and other commodities did not soar persistently. The pessimists missed how technological improvement would enable the world to grow more food, use fewer finite resources per unit of production, and improve environmental quality all at the same time. Those technological improvements didn’t just happen, but were the result of people finding better ways to do things. The green revolution in agriculture is a good example, and owes much to one great scientist, Norman Borlaug. Behind many of the great innovations of the past century lie one person with brains, vision and drive.

There are many smart people in the world. Some, but not all, are also creative. And some of these, but not all, are highly energetic and ambitious in their goals. At the extreme, we have superstars in science, engineering, business and the arts who are one-in-a-million in developing valuable innovations. These people produce new ideas that millions of other people can use. This is a huge point: the benefits of the creative geniuses are enjoyed by the rest of us.

Nobel laureate William Nordhaus looked at business innovators and concluded that they were able to capture only two percent of the total social benefits of their innovations. The other 98 percent of the benefit was spread across consumers and workers. The whole world benefits from the great innovators.

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