This Birthday Is Nothing to Celebrate

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The world's 7 billionth person is likely to be born today (Monday).

However, this birthday isn't something to celebrate.

Since the global population passed 6 billion only in late 1999, we've added more than 80 million people each year on average. And the environmental footprint of those people is expanding rapidly as emerging market populations modernize.

The planet may be able to accommodate these extra people and their consumption - but then again, it may not.

And if it can't, the drain on our planet's resources could harm us all.

So we'd better find a way to reduce population growth - fast.

Of course, if you think I'm about to propose something along the lines of China's one-child policy, you couldn't be more wrong.

We have economic means of population control that are neither coercive nor costly. And the sooner we implement them, the better.

A Disaster in the Making

When Thomas Malthus warned of overpopulation in 1798, the global population was approaching 1 billion - a level it reached in 1804. It had grown in the previous three centuries from 500 million in 1500. Thus, if the gradually increasing prosperity of 1500-1800 had continued - without the Industrial Revolution increasing world production capacity artificially - it would have reached 1.62 billion by 2011.

There is a very good case to be made that 1.62 billion is today's natural population, and that the growth since 1800 is artificial, caused by the Industrial Revolution removing previous limits on production. At that level, almost all serious environmental problems would go away. Even if all 1.62 billion of the world's inhabitants enjoyed Western living standards, the global warming and pollution effects of their output would be easily absorbed by the planetary ecosphere.

Around 2004, U.N. population projections had us reaching a population of 8 billion by 2027, then peaking at around 9.3 billion just before 2050 and declining slowly thereafter. Alas, the latest projections are not so sanguine. They have no peak in population this side of 2100, with population passing 10 billion and reaching 10.12 billion in 2100.

At this level, an environmental disaster is very likely.

For one thing, all those 10 billion people will want Western standards of living. We have seen that in the last two decades. As China, India, and other emerging markets fully entered the world economy, the number of people who can aspire to Western standards of living has increased from 600 million to about 3 billion, pushing up commodity prices and multiplying carbon emissions.

With a population of 10 billion affluent citizens, it's likely that the world economy will be unstable. At some point, we will run out of some crucial mineral, or a disease against which antibiotics are helpless will sweep the planet. The result will not be a gradual decline in living standards, because complex systems are not stable when put under stress. Instead, a collapse will occur, with perhaps 80% to 90% of the world's enlarged population being wiped out. Whether civilization will be reestablished after the collapse will depend on what caused it - and it is by no means certain.

We thus need to control population, "bending the curve" of its growth downwards so that it can peak as soon as possible and begin declining towards a safe level.

A Population Growth Plan

Most of the population control will need to take place in poor countries.

Japan has shown that in rich countries a natural process reduces population growth and produces a healthy decline. According to U.N. population projections, Japan's population will fall from its 2007 peak of 127 million to 91 million in 2020. At that point, it will be well on the way towards its pre-industrialization population of about 30 million. Conversely Nigeria's population is projected to be over 700 million in 2100 - one's mind can only boggle at what life in Lagos will be like!

I realize that China's "one child" policy has given population control a bad name - and rightfully so. Instituted in 1978, the policy is brutal and intrusive. However, China in 1978 was an extremely brutal society. It had just ended the Cultural Revolution that killed more than 1 million people - so it's not surprising that its government chose brutal means to achieve its goal. Certainly the policy has been successful. China today is nearing population equilibrium with nearly 400 million fewer people than it would otherwise have had - and a much wealthier society in consequence.

Still, brutality is completely unnecessary when economic means are available.

For example, it is well known that a big motivator for large families in poor countries is the need to provide for one's old age. We could thus introduce a program across Africa (where population growth is fastest and most dangerous) for a pension of, say, $2 per day for all Africans reaching 70. Since there are only about 30 million Africans of that age from a total population of 800 million, this would be relatively cheap - it would cost about $20 billion annually.

With this security in their old age, there would then be no need for the very large families that Africans have traditionally wanted. And over a generation, as in China, African population growth would slow to a more manageable level. That, in turn, would make Africa richer, because there would be less of a drain on schools, housing, and infrastructure. It also would slow population growth further, as lower fertility normally goes with higher income.

So let's mourn the arrival of the world's 7 billionth inhabitant - while welcoming the baby personally. And let's resolve to slow population growth, so that ideally it never reaches 8 billion.

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About the Author

Martin Hutchinson is the Global Investing Specialist for Money Map Press. A British-born investment banker with more than 30 years of experience, Martin has worked on both Wall Street and Fleet Street. He is now the editor of the Permanent Wealth Investor, where he focuses on "Alpha Bulldog" stocks that pay high dividends covered by earnings. In his Merchant Banker Alert, Martin uncovers the fastest-growing companies in the fastest-growing economies and brings those ideas back home to you. For more information about these services, call our VIP Services group at 855.509.6600 or 410.622.3004.

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