Marian Tupy and Gale Pooley: More People Means More Wealth

The Superabundance authors make a compelling case that the world is getting richer for everyone.

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Marian Tupy and Gale Pooley: More People Means More Wealth

"This universe is finite. Its resources, finite. If life is left unchecked, life will cease to exist." So declares the Marvel Comics supervillain Thanos near the end of Avengers: Infinity War, when he destroys half of humanity with the snap of his finger.

In Superabundance, Marian L. Tupy of the Cato Institute and Gale L. Pooley of Brigham Young University note that Thanos is simply channeling millennia-old critiques of progress and population growth. In the best-known version of this argument, the 19th-century economist Thomas Malthus contended that more people inevitably means famine and starvation. 

But Malthus—and Thanos—are wrong. The past 200 years have seen historically huge increases in the number of people living on planet Earth. Indeed, we've gone from 1 billion in 1800 to 8 billion in 2022, but we are flourishing more than ever before and living longer, more productive lives.

Tupy, who runs the website Human Progress, and Pooley, an economist, chart how the real prices of our most basic necessities—and most of our luxury goods—have declined over time and how free markets and human innovation mean that our planet is infinitely bountiful.

I think Superabundance is one of the most compelling—and uplifting books—in years. I think you will too.

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[Earth-based Human Skeptic]

"Indeed, we've gone from 1 billion in 1800 to 8 billion in 2022, but we are flourishing more than ever before and living longer, more productive lives."

But flourishing people are not dependent on or in thrall to some authoritarian leadership. Why do you hate despots?

[JesseAz]

And inflation has nothing to do with it.

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[Mickey Rat]

Then, Gillespie, your greatest enemy are the people so desperate to implement anti-growth policies in the name of "climate change" as represented by the likes of Greta Thunberg. There is a growing anti-humanity movement among the elites of the world. The going will be rough over the next decades.

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[RENATA the rational]

I am confident that the decline in marriages and children, the upswing in perversion, and abortion will necessarily CRASH the welfare state.
Scandinavia is where the wise eye is focused.
" A rapid decline in the birth rate is threatening Finland’s welfare system and public finances, the Nordic country’s finance minister Petteri Orpo told Reuters in an interview."
Look at housing market
"“What happens to mortgages in a country where real estate depreciates like a used car because the population is falling and we need fewer and fewer houses all the time? We’re totally unprepared for that.”

[Bill Dalasio]

This seems a bit....contrived.

It's taking a bunch of factors and attributing human progress to just one - population growth. Strictly, though, holding all factors constant, that isn't what economic theory suggests. You can summarize the factors of production as land (including natural resource inputs), labor and capital. A larger population is only increasing labor. Now, unless you believe we've somehow gotten around the law of diminishing marginal production, adding population, adding labor, will increase output, but at a diminishing rate. Now, I suppose that might be good if you're looking for economic numbers as bragging rights. But, if you're looking at economic numbers as a measure of human wealth or goods and services available to people, you've got a problem. You're increasing output at a diminishing rate and increasing the population consuming that output at a constant rate. That's going to mean output per capita, the amount of output any person can enjoy, is going to decline.

I'm not a Malthusian. I think human ingenuity and the power of markets is enough to outpace the process I describe above. And besides, I think people should be free to make the decisions they want. But, there's little evidence that just a larger population delivers those gains.

[Overt]

"Now, unless you believe we’ve somehow gotten around the law of diminishing marginal production"

This is a misreading of the law. This was always a law when applied to a closed system. You cannot keep hiring people in your Starbucks to increase revenue- because within that closed system, labor can only be applied in so many ways.

But the law never said you can't change that system. And the way Starbucks beat the law was by taking a well optimized store, and dropping a duplicate on the other side of an intersection. It worked (so long as demand held).

"You’re increasing output at a diminishing rate and increasing the population consuming that output at a constant rate."

This is absolutely untrue, as the basket-of-goods studies have shown. Output per person has been increasing, and as a result the cost of goods in worked-hours has been going down. In fact, we consume MORE per capita than hundreds of years ago, and yet the investment in labor has gone down.

"I think human ingenuity and the power of markets is enough to outpace the process I describe above."

But this is the whole point: increasing population means increasing the number of minds working on solving the problems that allow markets to expand. That is why growing populations are a boon, rather than a drag.

[MWAocdoc]

Excellent points and counterpoints! More discussion like this would be very welcome to me.

[Bill Dalasio]

And the way Starbucks beat the law was by taking a well optimized store, and dropping a duplicate on the other side of an intersection. It worked (so long as demand held).

Except the duplicate store doesn't generate as much revenue as the original store, pre-duplication. There's obvious cannibalization. Just not enough to offset the additional revenues. But, that doesn't mean marginal revenue doesn't decline.

But, you're missing an even more important point. You're not talking "open versus closed systems". You're talking about additional investments of land and capital in addition to that labor. So, adding another store completely fails the test you're trying to set.

In fact, we consume MORE per capita than hundreds of years ago, and yet the investment in labor has gone down.

Aaaannnnd you're doing exactly the first thing I criticize Gillespie for at the beginning of my comment. Sure, output per person isn't going down. Because we accumulate capital and make innovations in technology to better produce things. But, there's no evidence whatsoever to attribute that to increased population or increased labor inputs.

But this is the whole point: increasing population means increasing the number of minds working on solving the problems that allow markets to expand. That is why growing populations are a boon, rather than a drag.

And if that were the case, standards of living in population-dense China would wildly outpace standards of living in population-sparse North America. But, you just don't see that, even going back before the commies took over.

[Zeb]

Haven't standards of living in China increased pretty dramatically over the past few decades? China was also a major empire for millennia. I think a large population helped make that possible.
I agree that there are many factors beyond population. And there is likely a point of diminishing returns. But I'm pretty convinced that larger populations lead to greater per-capita wealth generation.

[Overt]

"Except the duplicate store doesn’t generate as much revenue as the original store, pre-duplication. There’s obvious cannibalization. "

This is not true.

In fact Starbucks had too much demand to serve out of their stores. They were leaving money on the table, because they could not service all the people wanting coffee during rush hour. By doubling their capacity, they did not cannibalize their revenue, they increased revenues.

Now since that time, demand has changed and the market has become saturated with competition. But the whole reason Starbucks were appearing on every corner was because it was a sound business decision.

"But, you’re missing an even more important point. You’re not talking “open versus closed systems”. You’re talking about additional investments of land and capital in addition to that labor. So, adding another store completely fails the test you’re trying to set."

Then you have failed the same test. Because if you think a growing population is only growing labor, then you are missing a large proportion of the economic effects of populations. A person is a source of labor AND a source of capital (intellectual and working) AND a source of technological breakthrough AND a source of revenue as a consumer.

As to the rest of your argument, you seem to be saying that there is more than just population in the mix. Sure, I would agree. But all things being equal (i.e. comparing two societies with roughly equal freedoms, respect for property, and regulatory burden) the one with the larger population will show the most innovation and efficiency gains. This is pretty clear when comparing lower populated vs higher populated areas in the same states or countries. It isn't just that there are more productive people between (say) Houston and San Antonio. Houston has higher per capita as well.

Again, I am not saying that more population is THE sole determinate of growth. But I am saying (as are they) that the narrative of "more population means less for everyone" has been proven wrong again and again and again.

[MWAocdoc]

Several other factors here: the more population the more consumers you have and the more potential producers there are. The crucial point is that if employment generally keeps up with consumption over time the gross product will increase in absolute terms, but cost will go down relatively only if productivity increases. Productivity is not a function of population but, rather, has to do with technological and logistic improvements together with training and so on. Meanwhile production can only expand if resources keep pace through exploration or technological inventions. The conclusions therefor are almost all negative: increasing population has not, so far resulted in a Malthusian outcome; that doesn’t mean that it won’t in the future.

[Rossami]

We have "gotten around the law of diminishing marginal production". Or more precisely, we've discovered that it doesn't apply in a market that allows labor mobility and innovation.

Diminishing marginal production applies only to the calculation of existing production. When you add innovation to the mix, what you find is that an increased labor supply means that the surplus of that supply are free to innovate. This creates entirely new products or services. When those products are added to the suite of existing goods, the sum of output increases.

Note that there are some necessary conditions for the surplus labor to result in innovation. I hinted at them and the article above assumes them. But so long as those conditions are met (and in the US, they largely are), the general rule that increasing population leads to increasing total wealth is well demonstrated.

[Rossami]

If you want a deeper discussion of those necessary conditions, I recommend "Why Nations Fail" by D Acemoglu. Some of the examples in that text are getting a bit dated but the history and underlying analysis are strong.

[mad.casual]

This seems a bit….contrived.

First... no shit! The doomsday scenarios based around a comic book supervillain seem contrived? You don't say!

Second, I haven't listened to the podcast and am not going to listen to an hour-long Reason podcast on Thanos' bad economic predictions, but you seem to have placed several carts before several horses. Namely, I don't get the impression that anyone's saying population is what is driving the growth, I get the distinct impression the population is the result of the growth. If populations were holding steady or shrinking (and not just shrinking their rate of growth), *that* would be a sign of being at capacity, but they clearly are not. Note: This should not be construed as an implication about social welfare nets or even whole fiat economies established on specific population growth rates.

Third, you're confusing strict production in a closed system with open markets and violating several economic principles in doing so. That is to say, a company could develop a way to produce 2X as much of their product, but if their customer base is only going to grow by 2%, the other 98% of the production increase is wasted. Moreover, you assume that because they didn't produce 2X as much, they can't, and after the previous violation of economic laws, we're well outside the realm of economics.

[TheReEncogitationer]

Agreed. It is more, better, and freer minds that ultimately creates more and better wealth. 8 billion people with a majority being drool-drippers living under controlled economies would not produce near as much as the same number with average or above-average intelligence in Free-Market economies.

[TJJ2000]

Left: Conquering and consuming is a zero-sum supply game.
Right: Earning (creating wealth) and consuming isn't. (E=mc^2)

The only reason anyone subscribes to the zero-sum left theology is to be able to consume without having to *EARN*. Criminals.

[Unicorn Abattoir]

"(E=mc^2)"

Uh - that's zero sum.

[TJJ2000]

No; that's constant summation. Nice try.

[Rossami]

No, there's no summation in that equation at all. It could just as easily be written as mc^2 - E = 0. Your original point (about political opinion) is correct. It's only your attempt at a parenthetical example that's off base.

[TheReEncogitationer]

Ackshuyally, the E and the MC Squared are multiplied, not added, so what you cited is not the reverse.

[TheReEncogitationer]

Opps, I'm sorry. I misread that. You are correct.

[Zeb]

Constant sum and zero-sum are exactly the same thing. You learned something today.

[TJJ2000]

Perhaps there's a better way to describe the "Only X amount of supplies" exist narrative played by the left than describing it as a zero-sum game? (as inferred it to be). Whereas E=mc^2 ensures that raw supply cannot be destroyed/consumed (subtractive).

[Zeb]

OK, I see where you were going with that. Perhaps a better way to describe it is that the left tends to view resources as limited and the economy as zero sum (as in, if one person gains, someone else must lose).

[Overt]

I have this argument with neo-malthusians almost constantly. For all intents and purposes, the resources of our universe are infinite. We have infinite oil, gold, water, whatever. It is just a matter of whether or not we have the technology to access those resources and a price that is worth the labor involved. Just as fraccing turned inaccessible oil into a useable resource, SpaceX's spaceflight will shortly turn near earth asteroids and the moon into useable resource.

Unless the elitist central planners win the day with their neo-malthusian, communist crap.

[Bill Dalasio]

There may be infinite resources in the universe. But, only a scarce portion of those resources are available to us at any given time. Sorry, but you can't just assume away scarcity.

[Rossami]

I believe you made a small but critical mistake there. That should be "Only a portion of those resources are available to us at any given time price point." We could reach the asteroids tomorrow if we thought there was enough of a reason. We don't because it's not (yet) cost-effective. Saying that does not assume away scarcity, it explains it.

[TJJ2000]

Or better stated, "The only 'scarcity' is the scarcity of people willing to EARN/CREATE said resources."

[MWAocdoc]

Not sure I agree that we could reach those resources tomorrow if the price was worth it. Columbus was an early example: Isabella was convinced that sailing east to trade in spices would result in a good return on her investment, but the crew of the ships almost died of starvation and failure of the wind to power them. It's probably true that we could reach the asteroids and mine them sooner or later, but "tomorrow" is an overstatement.

[TheReEncogitationer]

Remember also, according to Looney-Tunes, The Good Queen Isabella offered her "jewels" to her fellow Chris. 🙂

Bugs Bunny--Hare We Go
https://www.supercartoons.net/cartoon/1017/bugs-bunny-hare-we-go.html

[VinniUSMC]

There might be infinite resources in the universe, but due to the expansion of the universe, more and more of it becomes forever inaccessible without SciFi technology. Someday we will have the tools to make use of an increasing amount of our nearby resources (for an expanding definition of nearby as our technology advances), but that will only ever be a tiny fraction of the resources which make up the universe.

[Overt]

Hence the use of the phrase "for all intents and purposes". Humanity will very likely never need all the resources of the universe. There is very likely more water on Ceres than in the Earth's oceans. There are individual asteroids with more minerals than the sum total mined out of the Earth's crust to date. And that doesn't even account for the other major planetary bodies of the solar system.

[Overt]

"Sorry, but you can’t just assume away scarcity."

I didn't. The point I was making is that neo-malthusians are wrong when they think of scarcity as a "peak oil" (or whatever) problem. The real scarcity is human capacity.

[MWAocdoc]

It’s one of the most interesting conundrums I come up against regularly that I criticize the system we appear to be hobbled by at almost every turn, while the world struggling under that system appears to be improving in almost every way – except for liberty. The question seems to be: Are we getting better off BECAUSE of the intolerable limits on liberty imposed by governments or DESPITE them? In which case we might be even better off now and in the future with much less regulation. Or is it simply a trade-off between benefitting from regulation in some ways while being worse off in other ways?

[Rossami]

This one’s fairly easy – We are getting better off DESPITE the recent infringements on liberty because we are still benefiting from prior increases in liberty and because even considering those recent infringements, we are less bad than the alternatives. Property rights are not perfectly respected in the US but they are still much better respected than they were in feudal Europe. US guarantees of due process are not perfect either but they are far better than in Venezuela.

My old boss liked to say that the US economy was “the best car in the junkyard”.

[Spiritus Mundi]

When I think of highly populated places like Africa, India, and China, prosperity is the first thing that comes to mind. Good job Reason!

[TheReEncogitationer]

Yes, the way to test the proposition would be to measure the per capita wealth of more prolific, fecund populations versus those of other smaller populations. Does Red China have better per capita wealth than, say Monaco or Switzerland? Are Roman Catholic or Mormon or Muslim populations wealthier than Protestants or Jews or Atheists?

[MariaRoberts]

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[middlefinger]

Build Soviet style public housing. Ban Cars, parking spots, land ownership, fossil fuels, sugar and tobacco. Ration energy, air travel food and water. (except for billionaire democrat vacation enclaves).