The Invisible Hand of Population Control
The tragedy of the commons meets economic freedom
"The freedom to breed is intolerable," ecologist Garrett Hardin declared in his famous 1968 essay, "The Tragedy of the Commons." I recently re-read Hardin's call for population control, and this passage caught my attention: "We can make little progress in working toward optimum population size until we explicitly exorcize the spirit of Adam Smith in the field of practical demography." Hardin specifically wanted to exorcize Smith's claim in The Wealth of Nations that an individual who "intends only his own gain," is, as it were, "led by an invisible hand to promote…the public interest."
Hardin believed that Smith's metaphor of an invisible hand was contributing to "the dominant tendency of thought that has ever since interfered with positive action based on rational analysis, namely the tendency to assume that decisions reached individually will, in fact, be the best decisions for an entire society. If this assumption is correct it justifies the continuance of our present policy of laissez faire in reproduction." As the essay makes abundantly clear, Hardin is convinced that "rational analysis" will prove that Smith's invisible hand leads to inevitable population ruin.
In fact, several recent studies suggest that Hardin might have it backward. Under certain circumstances, there may actually be an invisible hand that leads to an optimum population.
"There is no prosperous population in the world today that has, and has had for some time, a growth rate of zero," Hardin declared. That's no longer true. Japan is now experiencing a fall in its population due to reduced fertility, as are Germany, Russia, Italy, Poland and 25 other countries and territories. And there are many societies in which total fertility rates are rapidly decelerating.
Let's take a look at two intriguing lists. The first is a list of countries ranked on the 2009 Index of Economic Freedom issued by the Heritage Foundation and The Wall Street Journal. Then compare the economic freedom index rankings with a list of countries ranked by their total fertility rates. Of the 30 countries that are ranked as being free or mostly free, only three have fertility rates above 2.1, e.g., New Zealand at 2.11, the Bahamas at 2.13, and Bahrain at 2.53. If one adds the next 53 countries that are ranked as moderately free, one finds that only 8 out of 83 countries have fertility rates above 3. It should be noted that low fertility rates can also be found in more repressive countries as well, e.g., China at 1.77, Cuba at 1.6, Iran at 1.71, and Russia at 1.4.
In 2002, Seth Norton, a business economics professor at Wheaton College in Illinois, published a remarkably interesting study on the inverse relationship between prosperity and fertility. Norton compared fertility rates of over 100 countries with their index rankings for economic freedom and another index for the rule of law. "Fertility rate is highest for those countries that have little economic freedom and little respect for the rule of law," wrote Norton. "The relationship is a powerful one. Fertility rates are more than twice as high in countries with low levels of economic freedom and the rule of law compared to countries with high levels of those measures."
Norton found that the fertility rate in countries that ranked low on economic freedom averaged 4.27 children per woman while countries with high economic freedom rankings had an average fertility rate of 1.82 children per woman. His results for the rule of law were similar; fertility rates in countries with low respect for the rule of law averaged 4.16 whereas countries with high respect for the rule of law had fertility rates averaging 1.55.
Economic freedom and the rule of law produce prosperity which dramatically lowers child mortality which, in turn, reduces the incentive to bear more children. In addition, along with increased prosperity comes more education for women, opening up more productive opportunities for them in the cash economy. This increases the opportunity costs for staying at home to rear children. Educating children to meet the productive challenges of growing economies also becomes more expensive and time consuming.
Thailand's experience over the past 30 years exemplifies this process. During that time, female literacy rose to 90 percent; 50 percent of the workforce is now female; and fertility fell from 6 children per woman in the 1960s to 1.64 today. Although Thailand is classified as only moderately free on the economic freedom index, its gross domestic product (GDP) grew in terms of purchasing power parity from just over $1,000 per capita in 1960 to over $7,000 per capita in 2003.
The income, investment and consumption opportunities that people forego when they choose to rear children are even greater in truly free economies. The U.S. government estimates that it costs an American family making less $45,000 per year in before tax income almost $150,000 to rear a child to age 18. Families making over $77,000 will spend nearly $300,000 per child. And that's before paying for college. In modern societies, children are no longer capital goods, but luxury consumption items.
Norton persuasively argues that Hardin's fears of a population tragedy of the commons are actually realized when the invisible hand of economic freedom is shackled. Many poor countries have poorly specified and enforced property rights. Poor property rights means that many resources are effectively left in open access commons where the incentive is to grab what one can before the other guy gets it. Norton points out that in such situations, more children mean more hands for grabbing unowned and unprotected resources such as water, fodder, timber, fish, pastures, and for land clearing. Lacking the institutional incentives to invest in and preserve resources, this drive to take as much as possible as quickly as possible leads to perpetual poverty.
In his essay, Hardin gives us the arresting example of a pasture open to all people in a village. Each herdsman, seeking to maximize his individual gain, puts as many cattle on the pasture as possible, leading eventually to its destruction from overgrazing. "Ruin is the destination toward which all men rush, each pursuing his own best interest in a society that believes in the freedom of the commons," writes Hardin. "Freedom in a commons brings ruin to us all."
But the problem is not the commons; it's the fact that it's open access. There are numerous examples in which property is held and effectively managed as a commons, e.g., condominium associations, medieval village commons, etc. Hardin is wrong when he concludes that "the inherent logic of the commons, remorselessly generates tragedy." Fortunately, the logic of an overused commons often ends its open access by remorselessly generating property, not tragedy.
But what about the past? Haven't societies collapsed due to overpopulation? To the extent that it is true that some societies have suffered collapses, we now know that it was because they lacked the proper institutions for channeling individual striving into a process of economic growth which ultimately promotes the public interest. Very few earlier societies could be characterized as either economically free or respecting the rule of law. Throughout history most people lived in the institutional equivalents of open access commons overseen by rapacious elites which encouraged high fertility rates and the plundering of natural resources.
The chief goal of all other species is to turn food into offspring. More food means more offspring. It is this biological logic that underlies the perennial fears of human overpopulation. Most creatures live in environments that correspond to open access commons. Recent fertility trends strongly suggest that the simple biological model of human breeding is wrong, or at least, is wrong when the institutions that support economic freedom and the rule of law, e.g., markets, price stability, honest bureaucracies, security of private property, and the fair enforcement of contracts, are well-developed. Economic freedom and the rule of law are the equivalent of enclosing the open access breeding commons, causing parents to bear more and more of the costs of rearing children. In other words, economic freedom actually generates an invisible hand of population control.
Ronald Bailey is Reason magazine's science correspondent. His book Liberation Biology: The Scientific and Moral Case for the Biotech Revolution is now available from Prometheus Books.