Posted by Jason | Posted in Economics, Technology | Posted on 10-10-2010
Thanks to some great friends on Facebook, I came across this video of John Lennon addressing overpopulation, which was posted as a tribute to Lennon on his 70th birthday on the LewRockwell.com Blog.
What I love is Lennon’s simplicity of explaining this. I don’t know whether he is familiar with the originator of this idea, Thomas Malthus, or not, but he pretty much explained why Malthus and modern day environmental disciples were wrong about over population.
In the late 1700s, Thomas Malthus published Essays on the Principles of Population, in which he argued that population would grow exponentially resulting in food supplies not being able to sustain it. What Malthus and modern day environuts miss is the human minds ability innovate.
When free markets are not hindered by government dictates, the economics of scarcity spurs the entrepreneur to address these concerns with solutions such as better farming techniques in Malthus’s day or living on the moon as Lennon so nonchalantly puts it. With that little quip, Lennon highlights the entire problem with Malthus’s thesis. Technological advances push back the day of Malthus’s catastrophe.
Because current generations cannot anticipate what future innovations will come, it would be completely immoral for them to decide they must do something now in the current generation to prevent population growth of the future.
The whole premise of this catastrophe prescribes government action as the solution, which would be the exact opposite of what you would want. What you would want to avoid this catastrophe is a free market, where capitalistic profits could direct resources to the most pressing needs.
Let’s say we are approaching the the supposed malthusian catastrophe. As this approaches, what would happen? The demand for food or whatever resource we are talking about would steadily out pace supply. What happens when demand rises while supplies decrease or stay the same? Prices climb. Now, there are two things that would cause the price to rise. 1) The amount of production taking place isn’t sufficient. The total cost of production is unchanged, but the amount of production isn’t keeping up with the growing demand. In this case, profits would rise. As profits rise, competitors would enter the food production business, bringing more food to market. The other scenario 2) is that production is taking place at the highest level with the given resources and profits have shrank to the point of leaving only the most efficient producers. Now, this sounds horrible, but what way could an intelligent entrepreneur increase his profits? He could innovate. He could develop a new way of producing food that would lower his cost of production. Keep in mind that some outsider could produce this innovation as well in hopes of reaping profits when he sells his idea to food producers.
So what happens when this new cost lowering innovation is put into place? Profits rise! What happens when profits rise? More product is produced either by the current producer or competitors looking to get in on the action. All result in more food for the masses, pushing Malthus’s catastrophe further out into the future when another free market entrepreneur can save mankind.