By Professor Tor Hundloe
From an economic perspective the population debate is all about scale — economies of scale and the opposite, diseconomies of scale are, the key concepts.
Illustration by Alex Mankiewicz
From the day ex-Treasurer, Peter Costello, made the extraordinary plea “to have one for the country”, we have politicians on both sides, business leaders and media commentators calling for population growth.
It is no longer the ‘populate or perish’ rhetoric. We have come to realise wars are not won with a mass of ground troops supported by a thickly-populated countryside.
We have also come to accept that most of our country is arid or semi-arid and filling the vast inland with people would cost us in enormous and unsustainable subsidies.
More recently we have the ‘have one for your old-age’ all to the bedroom. Sure, we are living longer. If we remain healthy that is a wondrous gain. Time on the planet is our scarcest resource.
In Australia we have pushed through the 80-year barrier while there are numerous countries in sub-Sahara Africa where the 40-year barrier is still a forlorn wish.
On the ageing issue, I shall make one observation. If we live longer we can work longer to support ourselves. I’m not talking about slave-like labour in a sweat-shop in the desperately poor countries. With a few exceptions modern-day work is easy and often a pleasure.
And be mindful of the fact that various professionals including farmers tend to continue working until they die.
I admit that as we grow older there can be increased medical costs. However, these tend to be compensated by decreased expenditure on the children, the mortgage, and the costly sports and recreation of the young and middle-aged.
So what is the debate about? Business people have a case for supporting increased population, because the larger the market the lower the average cost of the good or service being sold and this means greater profits and ( assuming the market is competitive) lower prices for the consumer. Hard to ignore!
Cheap computers, television sets and mobile phones exist because there are enormous world markets for them. Economies of scale. Now consider the increase in costs of numerous goods and services. What happens when we notice higher costs is that diseconomies of scale have set in.
In other words, we are trying to provide goods and services to more and more people and we run into barriers.
We have most of the world’s arable land under cultivation. Most of the planet’s extremely limited supply of fresh water is already allocated or over-allocated.
We will recall the dramatic reduction in agricultural production in the drought affected parts of Australia. There are limits to growth.
In the recent drought, in the world’s best fine wool country, in the midlands in Tasmania, farmers attempted to save their sheep by borrowing money to buy stock food. In the drought their scale of operation was too high. Major diseconomies set in.
We would do as the farmers, but it is a completely different matter to call for more people to simply add to the profits of the rich.
This we call greed. To dress this up as something else (good for the economy, good for the country) is to attempt to hide the truth. Beware of anyone wanting to sell you on the idea of population growth.
At the turn of the 18th century, the Reverend Thomas Malthus stated that the human population would outstrip our ability to feed ourselves.
He said there would be periods of starvation, bloody conflict over food supplies and population ‘culls’. The mechanisation of farm machinery, the use of steam, then in the 20th century oil and the opening-up of the plains in America made Malthus look foolish.
Keep in mind that after Malthus wrote his thesis, Carlyle coined the phrase ‘the dismal science’ to describe economics. It has stuck to the present even though most economists are technological utopian dreamers when it comes to limits to growth.
Come the 20th century and the human population grew dramatically but had it not been for the ‘green revolution’ developed by Norman Borlaug our population would have stalled at about half its present number.
Because it did not, Malthus continued to be wrong. The human population is rapidly approaching 9 billion, another 2 billion in the next 40 years. Many will rightly claim a place at the middle class table we enjoy. Malthus is about to be proved right. Where do we find another two or three planet Earths?
Economics drives population numbers not the other way round. This our politicians don’t understand. Furthermore, they don’t comprehend that once people reach a certain level of wellbeing they do not have more children.
The proof is to be found in Catholic Italy as well as Protestant Holland. Readers can explore the history of ideas, inventions, ethics and population growth as they relate to the sustainability of the environment and human society, in my recent book From Buddha to Bono: Seeking Sustainability.
I conclude with a number. I have done a brief analysis of the economic cost of one aspect of the present level of population in the southeast of Queensland. I refer to the cost of congestion. Each and every one of us who is on our roads during peak hours causes a loss of valuable time for other motorists.
Some of us actually feel the lost time in our hip-pocket and can do something about recouping it. Many of us (salary and wage earners) have to accept it as simply less time with family and friends.
Tradies, doctors, delivery drivers, taxi drivers and anyone else who can charge by the hour builds into the cost of a job the time lost on our over-crowded roads.
This may or may not show up on the hourly charge rate ( it can be incorporated into the bill in other ways and you do not see it) , but since crowding became very serious 10 to 15 years ago there has been an added cost.
Each time we call out a ‘sparky’ or plumber, each delivery we get, each visit to the dentist we make is costing us. My figures are in real dollars (inflation has been taken out) and they are averaged across a range of professions.
In a nutshell, you can add between 15 per cent and 20 per cent to your bill simply because there are too many people in vehicles clogging up our roads. That’s a big tax.
Tor Hundloe is Emeritus Professor of Environmental Management at the University of Queensland; Research Professor in the Environment School, Griffith University; and Foundation Professor in Environmental Science, Bond University. His most recent book is The Planet of the Thinking Animal: Surviving the 21st Century.
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