An anti-Malthusian in the White House

Rafael Pampillón

27 May 2003

Harvard professor Gregory Mankiw was appointed last month as an economic adviser to George W. Bush. Mankiw is the author of two books – Principles of Economics and Macroeconomics – which are popular among economic students.

The first book is required reading at many universities. It even rivals others, such as Paul Samuelson’s classic, which nobody in decades has thought of removing as a textbook from the most prestigious universities.

Not long ago, a first-year economics student sent Mankiw an email, explaining how his professor did not agree with the Malthusian theses outlined in Principles of Economics. The democratization of society, advances of information technologies, universal use of electronic mail, the shortening of distances between students and professors and - let’s face it - the healthy boldness among today’s youth, all make it possible for free-flowing communication between students and professors across the world (even where the professor has a Nobel prize and the student is in his first year). It’s something impossible to imagine 20 years ago.

Mankiw replied by email, explaining how he had changed his theses and was moving to “natalism”. Among other things, Mankiw told him, “my wife and I are about to do something that some would label socially irresponsible. At the end of the summer our third child will be born. A third child means that my wife and I are contributing to the demographic expansion on our planet, and, for some, this decision proves counterproductive. I have just read a book that attempts to convince the reader of the wisdom of China’s policy of establishing a limit of one child per couple. This book was published too late for me, but even if it had arrived in time, I would not have abstained from furthering the reproduction process”.

Mankiw went on: “Two centuries ago, Thomas Malthus argued that a population that did not stop growing would lead to society grinding to a halt in production of goods and services. As a result, man was condemned to live forever in poverty". Fortunately, Malthus was mistaken. Although the world’s population has increased sixfold compared with a few centuries ago, the quality of life is greater. The reason is that the increase of new technologies and ideas is much greater than that of the population. New ideas on improvements in production and on goods that have to be produced have led us to an era of prosperity greater than anything Malthus (or any of his contemporaries) could have imagined.

The error in Malthus’ prediction has not stopped others from committing similar mistakes. The most famous modern Malthusian is the biologist Paul Ehrlich, whose 1968 book, The Population Bomb, warned that we would run out of food and natural resources. Thirty-five years later, most of our resources are abundant and available at low cost. Even the famines that frequently hit less-developed nations are rarely result of over-population, but rather of civil wars. Despite this, the fear of running out of food is fairly widespread.

Mankiw continued: “Those who fear overpopulation share a simple thesis: people use resources and, as these are scarce, the only way to improve the quality of life, according to the Malthusians, is to limit the number of people with whom we share those resources. The response to this argument is equally simple: people create resources. They invest their time, effort and ingenuity in this process and, so long as people pay for the resources they consume, there will be no problem. In a market economy, the price system ensures that nobody may use a resource without first having created one of greater value. Therefore, before deciding whether overpopulation is a plague or a blessing, we must ask ourselves whether or not the existence of one more person constitutes a problem, noting whether he consumes more than he produces, or vice-versa".

“Problems arise when resources do not have a stipulated price; for example, global warming due to the use of combustible fossils. People who use gasoline in their cars do not pay for the climatic damage they cause as a result. The solution does not lie in fewer people. The most straightforward answer would be a tax on fossil fuels. Perhaps the most important resource without a stipulated price is the capacity of society for generating new ideas. Each time a baby is born, there is a possibility it will become the next Newton, Darwin or Einstein. And when that happens, we all benefit. The government can protect the environment in a simple fashion through taxes on hydrocarbons, but fostering the production of great ideas is much more difficult. The best way to have more geniuses is to have more people”.

Mankiw ends his letter: “As a procreator, I have no apologies to make. When I welcome Peter Mankiw into this world, I shall do so with no remorse. I cannot guarantee he will discover a cure for cancer or a solution for global warming, but there is always the chance he will. And that chance harbors hope for our species”.

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