One Finite Planet

Wealth Vs Population: Farming Humans?

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The powerful and the wealthy argue that increasing population is good for the economy.

But it turns out, the larger the population, the greater the power in being leader of the population.

The larger the population, the greater the wealth of the very wealthy, who enjoy a larger share of resources, even when there are less resources per person on average a population grows.

So, perhaps another an independent at who benefits from population growth, and when is appropriate?

Why do the rich and powerful argue for population growth?

GDP per Capita: What Matters To the Average Person.

For the average citizen, living standards are determined by GDP per capita. This means for the average citizen, economic growth is only a good thing, only if it also delivers personal economic growth. Economic growth through population growth will typically only deliver personal economic growth for the average individual, in countries where there land not allocated to any current purpose to allocate to the new individuals, or resources in excess of those than can be utilised by the current population.

Total GDP can increase through population growth, even if per capita GDP falls, and per capita wealth logically does fall as population increases.

Who Is Motivated Primarily By Total GDP?

Companies with national, multi-national, or global markets.

Unlike individuals, national and global organisations that can expect to maintain market share as population grows, are mainly impacted only by total GDP, and have little preference for individual wealth levels to increase, or even be maintained, over total wealth levels rising as a result of population growth. Even if these organisations earn less wealth per individual, if there are sufficient extra individuals to earn from, then they can still earn more in total. Individual wealth is unimportant to these organisations, as their income is a fraction of the total of all wealth, so GDP per capita is unimportant.

Highly Wealthy Individuals.

These are often the owners, of shareholders of the companies described above. Once an individual has sufficient investment in such companies, their financial fortunes become aligned with those companies.

Politicians.

Politicians do not get to keep the tax revenue themselves, but the greater the tax revenue, the more valuable the assets they have control over, so the greater their sense of power.

Yet tax revenue depends not on wealth per capita, just total wealth so there is no difference between people getting richer, and just having more people. Only total wealth matters. As an example, the government in Australia, the developed nation with the highest ratio of population growth in the G20, was questioned about a ‘per capita recession‘, where living standards decline, but the economy grows through population growth, the government stated only the overall result mattered, thus implying wealth per individual did not matter.

In 2019, the Prime minister of Australia declared that a per capita recession was not an economic term worthy of recognition. Effectively declaring that the per capita GDP was unimportant, with total GDP being the only statistic that was important, at least to him.

Sky News:

This is effectively declaring that, to that government, individual wealth is not significant. Government economic success is most often measured by economic indicators that reflect the situation for big business, and the small percentage of very wealthily individuals who own those big businesses. That ‘per capita recession’ is a made up term is true, but are not all economic terms made up?

This topic is covered in more detail in ‘Economic Growth: Holy Grail?‘.

Economists.

Many economist are commissioned by governments or large companies, and thus often view economies in terms economic activity, and how well the performance of only the largest companies, which are the only companies included in stock market indexes.

The end result is the economists often only consider total GDP, rather then per capita GDP.

But then, there is the famous quote:

Anyone who believes in indefinite growth in anything physical, on a physically finite planet, is either mad or an economist.”

Attributed to Kenneth Boulding in: United States. Congress. House (1973) 

Summary.

In summary, governments and economists may argue for increased population as it will grow the overall economy, even if at the expense of average individual wealth, because they are rewarded for delivering total economic growth. Total economic growth is all that is required to provide positive economic indicators, and to keep those most likely to provide substantial political funding happy.

Economy Vs Population.

Is a larger population good for the economy?

Answer: yes depending on what is meant by ‘the economy’, but again potentially bad for each citizen

The economy is often measured by total GDP, and as pointed out by the Australian prime minister, the wealth of typical individual citizens is not part that equation.

All else being equal, a larger population will mean a larger total economy. Most likely less wealth per person on average, but typically more wealth for the leaders and the richest members of society.

Looking at counties ranked by GDP, it is clear that it is not in the same order as a list of countries by population, which means that answer is: certainly not always.

This is because GDP per capita changes significantly between countries. Simplistically, the total economy is:

 Total GDP  = GDP per capita x total population

Clearly, if population increases without changing GDP per capita, then total GDP will increase. In reality, changing the population size will change, and typically decrease, GDP per capita. Total GDP is more complex than the simplistic formulae, and includes factors like ‘accessible natural resources‘. For example if farming is part of economy, adding more people will not proportionally add more farm land, unless that country still has unused land of the same quality as existing farm land. In the end, it can be difficult to add more people and retain the GDP per capita ratio, but every additional worker added, should result in some rise in total GDP.

So, moving a country to a larger total population should increase GDP of that country, even if the larger population lowers GDP per capita and reduces living standards. To use the image above as a metaphor, there should be some more additional money raining down, but there will be more people to get a share of that money, so the ratio of money to people would normally mean less money each.

Is a population growth good for the economy?

Answer: yes, but at the expense of increasing inequality.

In summary, the more people, the greater the total wealth, but unless the extra people enable accessing additional natural resources, the normal result is the less wealth per person, as the natural resources per person decreases.

How wealthy are the very wealthiest in society, is inextricably linked to population size.  The pharaohs of Ancient Egypt could never had enjoyed such wealth without a substantial population to generate that wealth.  This is a significant, complex and interesting topic.

Individual Wealth vs Population: How Are Individuals Affected?

Interests of Highly Wealthy Are Not always Aligned With The Average Person.

The wealthy gain wealth by receiving part of the wealth of percentage of the population. The result is that the greater the population, the greater the wealth of the wealthiest people. As the very wealthy gain their wealth through “trickle up economics”, earning small amounts of wealth from each person they can “tax” or sell things to, the more people the greater their wealth. However, unlike rulers or the very wealthy, most from do not automatically earn more as population increases.

Does Population Growth Correlate With Prosperity? No!

I am unsure exactly how countries such as Niger, Somalia and the Democratic Republic of Congo benefit from their exceptionally high birth-rates, but it does not seem to be through GDP per capita.

In fact the average GDP for the 10 countries with the lowest birth-rates, at $965 per annum, does not compare well with the 40x higher average for the 10 countries with the lowest birth-rates, at $38,580 per annum.

Ok, so if the growth itself is not so desirable, then perhaps the end result of growth, a larger population, is what is desired?

Does A Large Population Correlate With Prosperity? No!

Nor does a large population correlate well with per capita wealth. Of the worlds most populous countries, the USA is a standout being the 3rd most populous, and just missing the top 10 richest per capita at 11th, but next from the top 10 most populous is Russia, at 79th in that list.

While a low birth-rate is not a perfect correlation with a high living standard, there is clearly a strong link. The birth-rate projected for China brings China inline with many richer nations.

Does High Population Correlation With Happiness? No! (update 2021)

If you look at the worlds happiest countries 2022, for each of Australia at #12, Canada at #15 and the USA at #16, all countries above them on the list have a smaller population. With worlds happiest countries 2021, the UK followed the same pattern as well, but in 2022, fell below the even higher populated USA.

Governments, Billionaires and Multinationals: Farming Humans

As explored in “Trickle Up Economics: How the Wealthy Get Wealthy“, governments, Billionaires, Multinationals and even national organisations almost always earn their significant wealth by ‘taxing’ or earning some revenue from a significant percentage of the population.

The larger the population, the larger their revenue, so they desire the largest population possible.

Just as a chicken farmer earns more revenue if he can increase the population of his farm, those that earn revenue from the overall population, can earn more if their human ‘farm’ has a greater population. For each of these groups, either the people of a nation, or some segment of the global population, is ‘the farm’. At some point as populations rise, living standards may be compromised.

Jeff Bezos gave a heartfelt thanks to Amazon employees and customers following his record-setting trip to space Tuesday — noting that they “paid for all of this.”

“I … want to thank every Amazon employee, and every Amazon customer because you guys paid for all this,” the 57-year-old Amazon founder told reporters after returning from his trip to the edge of space.

“So seriously, for every Amazon customer out there, and every Amazon employee, thank you from the bottom of my heart, very much. It’s very appreciated.”

Jeff Bezos thanks Amazon workers, customers for bankrolling trip to space

In reality, if the work could be done without them, having less workers Amazon would increase Jeff’s wealth, but his wealth is in proportion to the size of the customer base. If the world still had the same population as it had one hundred years ago in 1921, Jeff Bezos would only have 1/4 of the wealth he has. Unlike the average person, Jeff Bezos is not impacted by increased competitions for housing and other resources as population grows.

Unfortunately, that fact that wealth trickles up, does not mean that the wealthy are necessarily motivated to raise the wealth level of the masses.

It may seem logical that the more wealth the population contributing has, then the more wealth there is available to earned by the wealthy, which would deliver ‘trickly up economics’ and give the wealthy economic incentive to try to improve overall wealth. The idea that masses gaining wealth is in the interests of the wealthy, since the wealthy derive their wealth from the masses.  But then consider that the Sultan of Brunei and  Carlos Slim of Mexico are some of the riches people in the world and their fortunes appear to be mostly aggregated from ‘masses’ who live very far away. The less wealth the people nearby, the greater the power of the wealthy, so when wealth does not arise from ‘the local market’, as is increasingly the case, any concept of ‘trickle up wealth’ breaks down. Then there is the fact that by increasing the wealth of the ‘masses’, inherently the ratio of ‘typical wealth’ to that a given wealthy person, and thus how wealthy they are perceived to be, decreases.

Conclusion.

The overall level of wealth, and happiness, per person starts to decline once the population passes the threshold where the there are sufficient people to fully access natural resources. Effectively, this is the point at which their part of the planet becomes noticeably finite, and is the optimum population. However, for a small elite not restricted to a proportionate share of the planet, including billionaires and politicians, no such constraints apply, and the more people there are, the greater their wealth and power.


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