Last week, I was part of the Cato Institute’s book forum on Laurence Siegel’s Fewer, Richer, Greener: Prospects for Humanity in an Age of Abundance. Here’s my commentary on the book.
1. Vast areas of agreement:
a. Until March, the world was getting richer at a marvelous pace. Absolute poverty has been disappearing before our eyes after ten thousand years of apparent permanence.
b. Conventional measures sharply understated the glorious reality, because the environment keeps getting cleaner and the quality of the goods keeps getting higher.
c. Like it or not, global population is leveling off.
2. Overarching complaint: Siegel is so excited to share his conclusions that he rushes through the arguments in their favor. When the arguments are strong, the rushing is harmless. When the arguments are weak, the rushing leads Siegel to embrace errors.
3. Error #1: Leveling off of population now is a good thing. Siegel has no argument for this other than to say that population growth can’t be a good thing forever. But this argument would have been just as true when global population was 8000, 8M, or 800M.
True, Simon dodged the question of when population would start to be a problem. But he genuinely demonstrated vast neglected upsides of population – especially the effect on innovation. Almost all innovation really does come from high-population areas – and this can hardly be a coincidence. Furthermore, the main downsides of population – pollution and congestion – can be easily mitigated with pollution taxes and tolls, rather than fewer births.
Key point: Siegel presents no evidence that extra population has ceased to be a good thing overall yet, so why is he so happy about falling birthrates? The world is still mostly uninhabited – you could fit the entire world’s population into the continental U.S. at the density of Los Angeles. So why not hope for a world population of 20B, 50B, 100B, or even a T? If this seems absurd, imagine how absurd multiplying humanity 25-fold would have seemed 1000 years ago. Yet this “absurdity” turned out to be awesome.
4. Error #2: We should just live with (or even celebrate) declining birth rates. If you do the math (as I have in an earlier Cato Unbound piece), you’ll discover that large tax credits for births are the holy grail of tax policy: They more than pay for themselves in the long-run. We can reasonably expect a $10k per birth one-time tax credit to increase fertility enough to ultimately yield about $250k in net present value for the Treasury. A fantastic deal!
Also: Housing deregulation. City-dwellers have few kids because they’re so cramped for space, but this is largely a product of zoning and land-use policies that grossly inflate the price of housing, especially in the country’s most desirable areas.
5. Error #3: Becker’s economics of the family readily explains declining family size. Reality: Kids were never a good financial investment. As a business model, hiring able-bodied farmers makes far more sense than breeding helpless infants and waiting 15 years for help. Yes, modern economies offer many extra opportunities for child-free fun, but they also drastically reduce the pain of child-rearing and offer many extra opportunities for family fun. Why rising wealth causes falling birthrates is a fascinating question that social scientists have still failed to successfully answer.
READER COMMENTS
Alexander Turok
Jul 29 2020 at 12:39pm
Extraordinary claim, where’s the extraordinary evidence? “It makes far more sense to invest in X, which pays immediate dividends, than Y, which won’t pay dividends for 15 years,” is not much of an argument.
A
Jul 29 2020 at 1:24pm
It certainly does not take 15 years for children to become helpful on a farm
mark
Jul 30 2020 at 7:00am
Yes (and maybe: no). I remember the claim (book by Marvin Harris?) that a farmers’s kid in Bangladesh “pays” for him/herself at age 8 and at age 14 or so has paid off the extra-cost/investment he caused till 8. – Kids surely were used to be seen as a worthwhile investment – and an outsider should be careful to think otherwise. – On a modern US/Dutch farm numbers probably look very different; still, a 12 year old might be a helper. – Anyway, always highly enjoyable when BC goes contrarian on the contrarians. “1 T” – wow, they will farm the oceans then, I assume. Yeah, and why not.
Isaac DiIanni
Aug 6 2020 at 1:18pm
“Helpful” is not the same as “net benefit.” I think it’s an interesting issue and I don’t know what the age is off the top of my head, but there’s an analogous historical case for which financial data for agricultural labor and age does exist: slavery. From Fogel and Engerman’s book Time on the Cross, p. 153: “Prior to age twenty-six, the accumulated expenditures by planters on slaves were greater than the average accumulated income which they took from them. After that age the reverse was true. Planters broke even early in the twenty-seventh year.”
This isn’t a perfect parallel to free farmers and their children, obviously, but it does mean that a break-even age of 15 or even higher is plausible. Fogel and Engerman go on to say that one factor that raised the break-even age for slaves was their high child mortality rate. That factor would be less significant for a free farmer, and practically irrelevant in a developed country. This would lower the break-even age for free farmers. But also, free parents spend much more on their children than slaveholders spent on slave children. That would raise the break-even age.
Given this, the claim that children were a good financial investment seems like the more extraordinary claim. I wouldn’t confidently make either claim myself, but if I was gambling I’d bet on Caplan’s.
Mactoul
Jul 31 2020 at 1:25am
In the question of optimum human population, biology can not be safely ignored. Man along with his livestock already exceeds the biomass of wild mammals by several times. Are we supposed to eat farm yeast and eat artificial meat as we innovate our way to 1 T?
Jens
Aug 2 2020 at 3:09pm
You only have to accelerate above the speed of light if you want to hear about the mission to Betelgeuse. It is just a question of innovation. I adore libertarians like Caplan for their stance on open borders. And I also largely agree that the state (any state) has a tendency to become a monster. But their stance on environmental issues is reliably primitive and stupid. A predictably unpopular but clear way would be to assign robust rights to the environment, nature and creatures. A legal system is fundamentally free to whom or what it recognizes as a legal entity. Not nature as an object of environmental protection or as a state goal, but as a legal entity. Of course this brings with it a rat tail of problems, who advocates it, who claims it, who determines its content etc. etc. But legal systems have found solutions to problems of this kind, the debate about these problems in relation to nature would probably be more feature as a bug.
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