Organizations and Markets

Department of They Just Don’t Get It

11 July 2009 at 3:27 pm Peter G. Klein 4 comments

| Peter Klein |

Paul Ehrlich, author (with Anne Ehrlich) of The Population Bomb (1968), one of the biggest, um, bombs of the last several decades, is unrepentant. Ehrlich’s main thesis was that the world was running out of natural resources, and population growth was expanding exponentially, leading to an inevitable decline in living standards. Needless to say, none of the three predictions came true, and Bomb became one of those books that cultural anthropologists study for its train-wreck value. Now, apparently for laughs, the Electronic Journal of Sustainable Development has invited the Ehrlichs to write “The Population Bomb Revisited” for a forthcoming symposium. After all these years, the Ehrlichs are no closer to grasping the Econ 101 concept of “resources,” namely means used by human actors to achieve desired ends — not physical stocks of raw materials, but raw materials interacted with human knowledge and purpose.

To give you a flavor of the piece, consider this passage:

Equally silly statements are made about the relationship of human numbers to prosperity. As late as 2007, echoing Chairman Mao and Julian Simon, demographer Nicholas Eberstadt called people the “wealth of modern societies” (Eberstadt 2007). People, of course, can be regarded as productive assets (embodying, as economists would put it, “human capital”), but it is an error to consider increases in human numbers as automatically expanding real wealth — the capacity for wellbeing. Given the growing scarcity of natural resources, population growth normally reduces per capita genuine wealth, and can even shrink a nation’s total wealth (e.g., Arrow et al. 2004). If wealth were a function of population size, China and India each would be three to four times as rich as the United States and more affluent than all the nations of Europe combined, Africa’s wealth would outstrip that of North America or Europe, and Yemen would be three times as well off as Israel (Population
Reference Bureau 2008).

So, either population and real wealth have a negative linear relationship, or they have a positive linear relationship. Because the latter is untrue,  the former must be true. QED! The fact that population (and population growth) per se and real wealth have no statistically significant correlation — because the main determinants of economic well-being are knowledge, institutions, culture, stocks of accumulated capital, and the like — seemingly has not occurred to these distinguished Stanford University scholars.

(NB: Paul Ehrlich is widely known as something of a jerk, personally, and he does not disappoint here, managing to throw in a gratuitous jibe at Julian Simon, the guy who did the most to expose Ehrlich as a quack: “Perhaps the biggest barrier to acceptance of the central arguments of The Bomb was — and still is — an unwillingness of the vast majority of people to do simple math and take seriously the problems of exponential growth. . . . A classic example was the statement by a professor of business administration, specializing in mail-order marketing, Julian Simon, who found prominence as a critic of environmental science.” Simon was indeed a professor of marketing; he also happened to write three statistics books, and knew a little about quantitative methods. The Ehrlichs can’t seem to get beyond high-school algebra.)

Entry filed under: - Klein -, Myths and Realities, People.