Economics Questions

Re: World Population Growth and Economic Growth

ToxicAssets — Mon, 21 Jan 2013 10:50:40 GMT

It's very hard to talk about general social trends, because they have so many different components acting on different time frames. These are only a few sparse thoughts on the matter, not necessarily coherent as a whole.

The exponential growth law is a great intellectual achievement, but it has so many counter-intuitive implications that it usually eludes every one. It's not surprising that it's discoverer would be the first to get himself confused about its meaning. Malthus observation on population was precise, and even his idea of trap is very much what happens sometimes, when local regions get crowded beyond their support capacity.

Crowding offers advantages as it reduces costs of transactions thus allowing better division of labor, and that's why cities emerge.

But given a technological level, there's a limit to the support capacity of cities, imposed by the costs of bringing and storing food from the surrounding areas and dealing with concentrated waste and other problems generated by excessive crowding.

Only a few geographical regions are suited for large-scale crowding given a technological level. These areas once settled rapidly grow and reach their support capacity.

Support capacities tend to rise with overall technological increases. And this growth is also of exponential-like behavior.

Before the industrial era, the rate of growth of support capacities was generally lower than the rate biological rate of growth of people and Malthusian traps were very common.

But since then the situation seems to have reversed.

Re: World Population Growth and Economic Growth

z1235 — Sat, 12 Jan 2013 19:44:08 GMT

EmbraceLiberty:

z1235, yes or we run out of resources like I previously mentioned.

What are "resources" and where do they disappear after we use them?

Re: World Population Growth and Economic Growth

EmbraceLiberty — Sat, 12 Jan 2013 19:22:03 GMT

z1235, yes or we run out of resources like I previously mentioned.

Re: World Population Growth and Economic Growth

z1235 — Sat, 12 Jan 2013 18:49:40 GMT

EmbraceLiberty:

z1235,

What I mean by this is that output and production is increasing which in turn raises the standard of living. More production, more goods, lower prices, better standard of living. If the economy does not grow then the pie does not expand which does not benefit the average person.

If voluntary (inter)action, by definition, replaces a state of affairs with one considered to be better (improved), wouldn't a halt in "growth" imply a halt in action (and life) itself?

Re: World Population Growth and Economic Growth

you12 — Sat, 12 Jan 2013 15:55:50 GMT

I think the population explosion can be explained largely by longer lives instead of TFR. TFR is also linked with religious fervor.

Re: World Population Growth and Economic Growth

Jack Roberts — Sat, 12 Jan 2013 13:53:44 GMT

Some what unrelated post but I thought I would mention it. Recently I realized that socialism is dependent on population growth as it is a kin to ponzi scheme, in most cases, it requires an increase in "contributions" to sustain the unfunded liabilities of the socialist system. When we have a top heavy socialist system, like we will have in the UK, we will start to see the baby boom generation reach retirement and there will be more people that are going to be retiring, than there will be new people joining the ponzi scheme. This is going to result in an increase in debt and inflation, as that will be the only means the state has to fund the programs.

Re: World Population Growth and Economic Growth

EmbraceLiberty — Sat, 12 Jan 2013 09:19:23 GMT

Bogart, can I get the soure for number 3?

Re: World Population Growth and Economic Growth

EmbraceLiberty — Sat, 12 Jan 2013 02:13:49 GMT

LogisticEarth, The flaw I see in your argument is that the population was agrarian pre-industrial revolution. It became less agrarian and people started migrating to the cities when the population explosion happened. Why were people in the cities all over the developing world having so many children (and continued to have children) until just recently? Yes, children have needs but economic growth should make these needs more affordable and sustain the fertility rate that coutries previously had.

Re: World Population Growth and Economic Growth

EmbraceLiberty — Sat, 12 Jan 2013 02:06:17 GMT

John James:

But even if you reject that notion, you'd still have to figure just how long it would take before all the matter and energy in the universe is being used by the society you're talking about. The universe will probably cease to exist before you even come close to that point.

Now, this is where the question ultimately leads to, but then again, there is plenty of open space, abundance of food, etc. and yet population is on its way to decline. I mean wouldn't we all have predicted that until every habitable area was populated with skyscrapers would population begin to decline, like we are now saying about the economy that until every atom is utilized will the economy seize to grow?

Re: World Population Growth and Economic Growth

EmbraceLiberty — Sat, 12 Jan 2013 01:56:21 GMT

z1235,

What I mean by this is that output and production is increasing which in turn raises the standard of living. More production, more goods, lower prices, better standard of living. If the economy does not grow then the pie does not expand which does not benefit the average person.

Re: World Population Growth and Economic Growth

z1235 — Fri, 11 Jan 2013 23:16:05 GMT

EmbraceLiberty:

I dream about living in Coruscant every other day. So, one day we will hit a point that the economy no longer grows?

What does it mean (definition?) that an "economy" "grows", and why is it good that it does so?

Re: World Population Growth and Economic Growth

John James — Fri, 11 Jan 2013 21:57:54 GMT

EmbraceLiberty:
So, one day we will hit a point that the economy no longer grows?

Not necessarily. Many physicists and cosmologists believe the universe is constantly expanding. But even if you reject that notion, you'd still have to figure just how long it would take before all the matter and energy in the universe is being used by the society you're talking about. The universe will probably cease to exist before you even come close to that point.

And just to help give even the slightest appreciation for what I mean by "universe", see here.

Re: World Population Growth and Economic Growth

dude6935 — Fri, 11 Jan 2013 21:23:50 GMT

I agree with LogicEarth's answer.

Also WRT:

The law, to my understanding is simply "an approximate physical law as it is generally acknowledged that nothing can grow at a constant rate indefinitely."

Nothing can grow at any rate (constant or variable) indefinitely. And an-cap societies will likely experience strong immigration. So I see no reason why an an-cap area can't continually outpace its neighbors in both population and output growth.

Re: World Population Growth and Economic Growth

Bogart — Fri, 11 Jan 2013 21:07:35 GMT

I believe that inflation indirectly incentivizes people to have fewer offspring indirectly. Inflation is the mechanism where governments fund their welfare states which in my opinion is directly responsible for declining birthrates. Here are several ways the welfare state reduces birthrates:

1. Government transfers wealth from poor but productive young people to old wealthier people in the form of anti-Social in-Security and its more awful partner: anti-Medicare. The social consequences of these programs are huge. These programs divert trillions in scarce capital from those that would use to fund entrepreneurial activities to current spending on older folks. These programs directly raise the price of labor thus hurting employers and making them more inclined to use automation instead of labor, or worse to forgo business opportunities. These programs have caused older people to stop saving and thus make them completely dependent on these programs.

And these are direct transfers based upon life expectancy where young men, especially minority men, get to pay into a system where the beneficiaries are old women.

2. Government sponsors education. This has really warped the behavior of both women and men through propaganda. And to make matters worse it has convinced people, young men in particular, to go to college thus robbing the work force of productive time, robbing them of getting responsibility, and it has saddled these folks with mountains of debt.

3. Government pays for direct welfare payments. This is not the worst for society but is the worst for minority communities. These communities prior to the welfare state had higher marriage rates and lower rates of fatherless children than the white community. But now it has more than flipped. And then the structure is so sick that it penalizes families and employment.

4. Government pays for people not to work. This is awful as well because younger and younger men are going on the gravy train instead of employing themselves in making society better.

Re: World Population Growth and Economic Growth

LogisticEarth — Fri, 11 Jan 2013 12:57:41 GMT

The reason that people stop having children in developed countries isn't because inflation has degraded the standard of living (although it has), it's because developed societies are less agrarian. In an agrarian lifestyle, each additional kid is capable of "working on the farm" at an age of probably about 5 or so (if not younger) for simple tasks. Thus each new kid brings new labor into the family economy very quickly. In a developed society, where less people own farms, and more people live on small lots, or in muli-family housing, and more people work in skilled/industrial/service jobs, children need to be fed, clothed, educated, etc. They end up becoming a net cost rather than a net gain. Furthermore, people have goals beyond having children. People would rather "get on with their lives" than continue to raise kids thier entire life. So, combined with modern birth control, people naturally end up tending to have two, one, or none.

The malthusian idea of overpopulation was based on the idea that the lower classes were mindless animals that would continue to have children until they starved. Luckily people are more intelligent than that, and modern science and the market has made cheap birth control widely available.