Exploding Population Myths

by Jim Peron
The Free Market Foundation of Southern Africa

Contents

Introduction
About the author
A Personal Note
The Myth of Famine
The Myth Of Scarce Resources
The Myth of Overcrowding
Population Politics

Introduction

Michael A. Walker,
Executive Director, The Fraser Institute

OVER THE PAST SEVERAL YEARS, I HAVE written articles that were critical of international meetings about population questions hosted by the United Nations and other government bodies. These articles have usually got me in trouble with readers who have protested my indifference to the plight of poor nations burdened with "too many people." UNophiles, if I can call them that, have been upset that I have drawn attention to the fact that these meetings, called to discuss world poverty and over-population, have usually been held at high-class hotels in exotic spots at a cost of untold millions--including the limousines which frequently have to be flown in to accommodate the plenipotentiaries from the countries which are the target of everybody's angst.

"The population problem," was first raised by a parson, Thomas Malthus, in 1798 in his now famous Essay on the Principles of Population. His thesis was that since people procreate geometrically and, according to his understanding, food grew linearly, the world was bound to either run out of food, or experience the pestilence, famines, and wars that would control population so as to keep it in line with the output of food.

Of course, Malthus was dead wrong in his understanding about population growth and food production. Wrong because he couldn't have foreseen the evolution of technology and wrong because he misunderstood how human beings make decisions in response to economic factors. Contemporary Malthusians, like Paul Erhlich and Lester Brown, are just as wrong but do not have the excuse that Malthus could retrospectively claim, namely, that the power of the market was really not understood in his day.

The problem isn't population. It is politics, specifically, bad politics, driven by incorrect ideas about the power of the state to create wealth and ordain human outcomes. It's no coincidence that the wealthy but densely populated regions of the world are also regions that rely on markets, while the poor countries that are the target of our sympathies have typically been marxist, statist, and totalitarian.

The articulation of this response to my critics is something that I have long wanted to do. Fortunately, Jim Peron, an expatriate American living in South Africa, has done it for me in this wonderful Critical Issues Bulletin about the myths around our understanding about population. Since he has worked independently, we must disclaim any necessary connection with the views of the members or the Trustees of The Fraser Institute. Nevertheless, I commend it to you as a solid, but easily read, modern Essay on the Principles of Population.

About the author

JIM PERON is an American writer currently living in Johannesburg, South Africa. He is the co-author, with Jim Lewis, of the book Liberty Reclaimed. He has written for various magazines including Reason, Inquiry, Libertarian Review, and The Individualist. He has also written for many newspapers in the United States. He is a former policy analyst for the Pacific Policy Research Institute and also worked with the Connecticut Institute. He currently works with the Free Market Foundation of Southern Africa which published his last monograph, Affirmative Action, Apartheid and Capitalism.

He may be reached at Suite 251, P-Bag X-31, Saxonwold, 2132, South Africa.

A Personal Note

RESEARCHING AND WRITING THIS MONOGRAPH have been a learning experience. I began my study with an open mind. While my previous readings have tended to indicate that the so-called overpopulation problem was exaggerated, I had not considered many of the facts I present here.

For reasons which I cannot understand, this is, for many people, an emotional issue. It brings out the human passions and all the problems associated with non-rational thinking. The birth control movement, for example, has often launched unfair and bigoted attacks on opponents of population control. And because of these attacks it is my desire to lay my cards on the table.

I am not an opponent of birth control, nor would I make abortion illegal. I believe such issues should be decided by the individuals involved and not by the state. I do not believe that it is appropriate for any government to confiscate the wealth of its citizens in an attempt to promote one specific ideology--even if that ideology is my own.

It is often said that those who espouse the views I do are closet Catholics secretly pushing the Vatican line. But I am not a Catholic. I am an atheist.

I am not any of the things that the opposing camps on this issue use to stereotype each other. All things considered, I am probably closer ideologically to those on the left when it comes to social issues in that I am anti-censorship and pro-choice.

I believe the dichotomy that is created in these issues is a false one. The choice is not between the anti-sexual but pro-birth policies of the Vatican on one side, and the pro-sexual but anti-population attitudes of the population control movement on the other.

The two camps are similar ideologically in that both are fundamentally anti-choice. The birth control movement has its roots in the racist policies of the eugenics movement and its coercive population control. The Catholic church has opposed individual choice in the use of contraceptives and abortion. I believe that individuals and not institutions are the only valid decision-makers.

The population control advocates are similar to religious fundamentalists as well. Both seem to believe that apocalypse awaits us. It is not possible to use logic to answer the arguments of the fundamentalists because their beliefs are not based on reason. But it is possible to show that we are not running out of food, that the world is not running low on resources, and that we are not overpopulated by a long shot.

It is to my friends in the population control movement that I present my arguments. They are reality-based in their thinking--though I think their conclusions are wrong--and so I am able to have a dialogue with them. As you read this monograph, remember that I applaud much of your work. I admire your fight for the right of women to choose for themselves. But I part company when the "right" to choose abortion becomes a mandate and when you use coercive methods of funding such as taxation.

--Jim Peron

The Myth of Famine

IT IS ORTHODOX IDEOLOGY TODAY THAT overpopulation is a problem. We regularly hear dire warnings about the dangers it poses. But the term "overpopulation" is never defined. Exactly what is it? How do we know if a country is overpopulated? If overpopulation exists, is there such a thing as underpopulation?

For decades people have been announcing that China is "overpopulated," but no one has seemed overly concerned about the state of Maryland. Yet the population density (the number of people per square kilometre) in Maryland is much greater than in China. The United Kingdom also has a far higher population density than does China. Actually, the UK has a population density almost equal to that of "overpopulated" India. And Switzerland is more densely populated than Pakistan.

Clearly, some problems exist when it comes to defining our terms. If Maryland, the UK, and Switzerland have greater population densities than India, China, and Pakistan, then why are the latter considered overpopulated, but not the former?

Defining the problem

If we are to make any sense of the term "overpopulation," we need to be more careful in our use of the word. "Overpopulation" is meant to be a measure, but when we measure something we must have a point of reference. Presumably, if we know what "overpopulation" is, we should be able to state what the optimum population is as well, since the former term simply means "more than the correct population." Now, if this is our reference point, why has no one devised a formula for determining the correct population so that we know when we have exceeded that number?

The reason these terms are never defined is that to define the terms is to solve the problem... or, rather, to discover that there was no such problem in the first place. For instance, most people would probably agree that if people in a certain area die of starvation because food production cannot keep up with population growth, then the area is clearly overpopulated. The Environmental Fund certainly saw population growth and available food supply as co-factors in the "overpopulation" problem. In 1975 it ran a full-page ad in leading American newspapers announcing: "The world as we know it will likely be ruined before the year 2000 and the reason for this will be its inhabitants' failure to comprehend two facts. These facts are: 1. World food production cannot keep pace with the galloping growth of population. 2. `Family Planning' cannot and will not, in the foreseeable future, check this runaway growth." Wall Street Journal, October 30, 1985.Note In other words, nothing could be done to prevent a major catastrophe because food production was declining on a per capita basis, and this catastrophe would strike "before the year 2000." We have almost reached the year 2000 and this prediction seems no closer to coming true today than it did in 1975. If anything, it now seems unlikely ever to come true!

Famine everywhere

The Environmental Fund was not alone in its dire forecasts. Many others also saw a crisis looming. William and Paul Paddock, in their book Famine--1975!, published in 1967, said that some nations were so far past salvation that a triage system must be instituted: Haiti, Egypt, and India, for example, could never be saved, and must be left to starve to death. William and Paul Paddock, Famine--1975! (Boston: Little, Brown, 1967), p. 222.Note Again, the mass starvation they predicted for these countries has not taken place, and there is no reason to believe that it will any time in the near future.

Paul Ehrlich, the father of the overpopulation myth, has regularly predicted mass world starvation (among other catastrophes) ever since the early 1960s. Ehrlich confidently wrote in 1968 in The Population Bomb that there would be a major food shortage in the United States and that "in the 1970s . . . hundreds of millions of people are going to starve to death." He also claimed that by 1999 the U.S. population would have declined to 22.6 million, less than 10 percent of its actual population as of 1994. He forecast that 65 million Americans would die of starvation between 1980 and 1989. He also thought that the oceans would be destroyed by 1979 and that fishing would collapse. For instance, he said that world fishing production in 1977 would be 30 million metric tons, whereas in reality it was 73 million metric tons, or well over twice what he predicted. Poor England fared even worse than the U.S. in Ehrlich's scenario: "If I were a gambler, I would take even money that England will not exist in the year 2000." Julian Simon, Population Matters (New Jersey: Transaction Publications, 1990), pp. 364-365.Note

As far as Ehrlich was concerned, the "battle to feed all of humanity is over" and starvation has won. Luckily for us, reality has never caught up with Erhlich's scenarios.

Lester Brown of the Worldwatch Institute, another major environmental organization, proclaimed in 1984 that "the period of global food security is over . . . the worldwide effort to expand food production is losing momentum . . . world food supplies are tightening and the slim margin between food production and population growth continues to narrow." Ibid, p. 103.Note Brown is a moderate, since he claimed only that the gap between food supplies and population was narrowing. In other words, unlike Ehrlich, he conceded that food production was increasing faster than population; he just believed it wouldn't continue. Ten years later, that gap still hasn't closed. But Brown hasn't changed his tune: disaster is still just around the corner. His Worldwatch Institute released another report in January 1994 saying virtually the same thing as it did ten years earlier: "Seldom has the world faced an unfolding emergency whose dimensions are as clear as the growing imbalance between food and people." "World is nearing limit to provide food: Report," The Citizen, Johannesburg, January 17, 1994, p. 16.Note Media reports summarized the Institute's findings as follows: "The world appears near the limit of its ability to produce more food, and its exploding population must be controlled if people are to be adequately fed in coming decades." Ibid.Note

In his 1994 statement, Brown emphasised that "[a]chieving a humane balance between food and people now depends more on family planners than on farmers" and ". . . we have enough data now. Unfortunately now I think we can see some of the constraints emerging more clearly" (my emphasis). Ibid.Note Brown's statements make it sound as if it is only now that he has discerned this trend toward world famine; however, he has been beating that drum for years. And if, as he says, it is only now that the data have become available, then on what evidence did he base his claims ten years ago? For instance, in 1967 he claimed, "The trend in grain stocks indicates clearly that 1961 marked a worldwide turning point . . . food consumption moved ahead of production." Ronald Bailey, Eco-Scam (New York: St. Martin's Press, 1993), p. 46.Note In 1984, he claimed that "we can see a clear breaking point somewhere around 1973." Ibid.Note

The U.S. government contributed to the atmosphere of impending doom in the mid-1970s by sponsoring a travelling exhibit for schoolchildren titled, "Population: the Problem is Us." The exhibit declared: "There are too many people in the world. We are running out of space. We are running out of energy. We are running out of food. And, although too few people seem to realize it, we are running out of time." Jacqueline Kasun, The War Against Population (San Francisco: Ignatius, 1988), p. 21.Note Children were told that "the birth rate must decrease and/or the death rate must increase." It reminded children that in times of famine "people have been known to eat dogs, cats, bird droppings, and even their own children." It showed a rat on a dinner plate and labelled it as a future "food source." Ibid.Note Books popular in "progressive" classrooms told school-children that "world population is increasing at a rate of 2 percent per year, whereas the food supply is increasing at a rate of 1 percent per year." John J. Burts and Linda Brower Meeks, Education for Sexuality (Philadelphia: WB Saunders, 1975), p. 408.Note Even the United Nations joined the chorus. The UN Economic and Social Commission for Asia and the Pacific said in 1975 that there would be "500 million starvation deaths in Asia between 1980 and 2025." Yet Asia is now considered one of the major economic powerhouses of the world. The standard of living throughout Asia has been improving at phenomenal rates, and starvation and famine are virtually unheard of there.

We should note that dire warnings about population growth are nothing new, and that modern doomsayers have many predecessors. Tertullian said, in 200 AD, "Most convincing as evidence of populousness, we men have actually become a burden to the earth, the fruits of nature hardly suffice to sustain us, there is a general pressure of scarcity giving rise to complaints, since the earth can no longer support us. Need we be astonished that plague and famine, warfare and earthquake come to be regarded as remedies, serving, as it were, to trim and prune the superfluity of population." Robert Nisbet, History of the Idea of Progress (New York: Basic Books, 1980), p. 52.Note In the 4th century, Saint Jerome made a similar observation: "The world is already full, and the population is too large for the soil." Jerome, The Principal Works, cited in Jacob Vinter, Religious Thought and Economic Society (Durham: Duke University Press, 1978), p. 34.Note At the time, the world population was around 250,000,000, or approximately the population of today's United States. Like many doomsayers, Tertullian and Saint Jerome simply assumed that they knew all there was to know. They were completely ignorant of the existence of North and South America, Australia, most of Africa, and parts of Asia and the South Pacific. In other words, they didn't know about the existence of most of the world!

The abundance of food

Measuring food production per capita actually isn't a bad way of determining overpopulation. The problem for the overpopulation panic-mongers is that if we use this definition, the "problem of overpopulation" has been decreasing each year even though the world has more and more people.

How can this be? Simply because there are two factors in the equation: the number of people, and the available food supply. If the world population is growing each year but the food supply is growing at a faster rate, then each year there will be more and more food per person. Under these circumstances, we would have to say that each year the world is less overpopulated despite the increasing number of people. And the fact is that world food production has regularly and consistently grown at a faster rate than world population. That is the reason we don't worry about overpopulation in Maryland or England: though they have high population densities, both can feed their people without much difficulty.

Before looking at world population trends, we should look at world food production. If we take caloric consumption as an indicator of how well fed the nations of the world are, we see some dramatic changes. In 1964-66 only 59 countries (42 percent of the world's total) recorded an average daily caloric consumption of at least 100 percent of requirements. Ten years later, in 1974-76, this was true of 72 countries (52 percent) and by 1982-84 this had increased again to 92 countries, or 66 percent. David Osterfeld, Prosperity Versus Planning (New York: Oxford University Press, 1992), p. 63.Note Economist Jacqueline Kasun notes that

world food production has increased considerably faster than population in recent decades. The increase in per capita food output between 1950 and 1977 amounted to either 28 percent or 37 percent, depending on whether United Nations or United States Department of Agriculture figures are used. . . . More recent United Nations or United States Department of Agriculture data show that world food output has continued to match or outstrip population growth in the years since 1977. Some of the most dramatic increases have occurred in the poorest countries, those designated for "triage" by the apostles of doom. For example, rice and wheat production in India in 1983 was almost three-and-a-half times as great as in 1950. This was considerably more than twice the percentage increase in the population of India for the same period. Kasun, The War Against Population, p. 33.Note

Worldwide grain yields expanded by 2.6-fold between 1950 and 1984 "raising the grain consumed per capita by 40 percent." Peter Fabricius, "Too many mouths point to food crisis inside 40 years," Johannesburg Star, August 16, 1994, p. 9.Note Nations where famine was common just a few years ago have now become food exporters. Only a few decades ago, for example, India was considered overpopulated and doomed to mass starvation; Paul Ehrlich wrote in 1968, "I have yet to meet anyone familiar with the situation who thinks India will be self-sufficient in food by 1971, if ever." Julian Simon, The Ultimate Resource (Princeton: Princeton University Press, 1981), p. 64.Note Yet India today exports food, and mass starvation is not very likely there any more. Ehrlich must have noted this himself, since in 1971 he quietly deleted this comment from his book.

In 1981, Julian Simon, the bane of the overpopulation advocates, pointed out in the Atlantic Monthly

Net food grain availability--the amount available for human consumption--in kilograms per capita per year has been rising in India since at least 1950-51. Throughout the 1970s, food production increased at a faster rate than population. Why has India's food supply improved so dramatically? The cause is not an agronomic miracle but an expectable economic event. Most price controls on food were lifted, and price supports were substituted for controls. Indian farmers had a greater incentive to produce more, so they did. They increased production by planting more crops a year, on more land, and by improving the land they had. They also introduced higher-yield strains and improved fertilizers. Julian Simon, "The State of World Food Supplies," The Atlantic Monthly, July 1981, pp. 72-76.Note

David Osterfeld writes:

Since market-oriented reforms were introduced during the post-Mao period in China, food output has increased 40 percent, and China has now become a food exporter. Bangladesh, whose desperate plight inspired the first music relief concert in 1971, is now self-sufficient in food grains. And India, until just recently regarded as a hopeless basket case, has doubled its wheat production in less than 20 years, increased its rice output by 30 percent and its per capita food grain production by 7 percent, and is now a net food exporter. Indonesia, traditionally one of the world's largest importers of rice, is now rice self-sufficient. It has also made impressive gains in the production of cassava, sugar, and other products. Osterfeld, Planning Versus Prosperity, p. 64.Note

In most of the world, food production is easily outstripping population growth, and on a worldwide basis the problem of overpopulation no longer exists. It is true, of course, that some nations still cannot feed themselves, but the reasons for this tend to be political. For instance, Cuba, once a highly industrialized and well-fed nation, is having major problems under Castro's brand of socialism. Zimbabwe has seen a massive decline in food production since independence, as have most of the emerging nations of Africa. But Africa is the last bastion of state planning and socialism, and it is no accident that it is also the last bastion of famine.

The dramatic rise of food production in Asia is testimony to the powerful effect that market-oriented reforms can have on a economy. Nations that abandon state economic planning for free markets see a dramatic increase in food production and even the poorest of the poor are better fed because of that increase. The crumbs of capitalism are capable of feeding more people than the planned banquets of socialism. This has been proved over and over again all around the world. As Jacqueline Kasun says, "War and socialism are two great destroyers of the food supply in Africa, as they have been in other countries." Kasun, The War Against Population, p. 34.Note

The fact is that the world is easily capable of sustaining populations far in excess of current population figures even without developing any new farming methods or technologies. Roger Revelle, former director of the Harvard Center for Population Studies, estimated that the world could easily provide an adequate diet for 40 billion people. And his estimate assumed that the average yield per acre would be about one half what is currently produced in the United States. More surprisingly, he also argued that less-developed countries are capable of feeding 18 billion people, and that Africa alone could produce enough food for 10 billion people. Ibid., p. 35.Note In other words, Africa could feed the world twice over if its people were free to farm without state interference and socialist planning.

The former director of the Agricultural Economic Institute at Oxford University, Colin Clark, has estimated that if the world's farmers were to use the best methods of farming available, an American diet could be provided for 35.1 billion people. If a Japanese-style diet were provided, this number would be trebled. Colin Clark, Population Growth: The Advantages (Santa Ana: RL Sassone, 1972), p. 44.Note The United Nations Population Fund has, in essence, acknowledged that famine is not very likely in the near future. A report by the UNPF

dismisses fears of an overall global shortage of food of the kind much voiced by the Club of Rome school of forecasters some 20 years ago, pointing out that during the past 10 years, the world's food production has increased by 24 percent, outpacing the rate of population growth. . . . The report concludes that . . . production should be sufficient to meet all needs for the foreseeable future. Bronwen Maddox, "Too many people, so few resources," Sunday Times Business Times, August 28, 1994, p. 5.Note

The Myth Of Scarce Resources

What is scarcity?

WE LIVE IN A WORLD OF SCARCITY. THIS IS NOT a recent discovery of the environmental movement: economists have been studying the problem of scarce resources for centuries. In fact, without scarcity, the field of economics would not exist, since economics is simply the study of the allocation of scarce natural resources to meet the needs and wants of humanity. If all goods were available in unlimited supplies, there would be no need to allocate them, and thus no need for economics. Economist Thomas Sowell explains it this way:

An economic system is a system for the production and distribution of goods and services. But what is crucial for understanding the way it functions is that it is a system for rationing goods and services that are inadequate to supply all that people want. This is true of any economic system, whether it is called capitalism, socialism, feudalism, or by any other name. The Garden of Eden was not an economic system, even though it produced and distributed goods and services, because it produced them in such abundance that rationing was unnecessary. A utopia would not be an economic system for the same reason . . . .

Looked at another way, there are inherent constraints, given the limitations of nature and the unlimited desires of man, and economic systems are simply artificial schemes for administering the inherent scarcities. The scarcities themselves exist independently of the particular economic systems, and would exist if there were no economic system at all and people simply fought over everything they wanted. Economic institutions exist to introduce elements of rationality or efficiency into the use of inputs and outputs.

The classic definition of economics is that it is the study of the allocation of scarce resources which have alternative uses. If resources--the ingredients of production--were not scarce, there would be no economics. Thomas Sowell, Knowledge & Decisions (New York: Basic Books, 1980), pp. 45-46.Note

Because all goods are scarce, they must be allocated, and that is what the price mechanism does. Prices restrict the demand for goods so that the quantity demanded is more in line with the quantity available or supplied. The greater the demand relative to supply, the higher the price, and the lower the demand relative to supply, the lower the price. But the very fact that a good or service has a price indicates that it is scarce. No scarcity, no price.

Abundance and scarcity together

Why am I emphasizing the scarcity of all goods when I have just been arguing that food supplies are abundant? For the very important reason that the term abundant does not mean unlimited. All natural resources are limited. Even in a world of abundance there are still limitations on what we can or cannot do. For example:

Seawater has been estimated to contain 1,000 million years' supply of sodium chloride, magnesium, and bromine; 100 million years' of sulphur, borax, and potassium chloride; more than 1 million of molybdenum, uranium, tin, and cobalt; more than 1,000 of nickel and copper. A cubic mile of seawater contains around 47 tons each of aluminium, iron, and zinc; given around 330-350 million cubic miles of such water, we are talking around 16,000 million tons each. Such estimates tend to exclude special concentrations such as the Red Sea brines and sediments; these alone contain perhaps $2,000 million worth of zinc, copper, silver, and gold, and perhaps ten times this level, at current market prices. William Page, "The Non-Renewable Resources Sub-System," in HSD Coles et al., Models of Doom: A Critique of the Limits to Growth (New York: Universe Books, 1973), p. 36.Note

Now that sounds like a rather abundant supply, and it is. But we must remember that knowledge of a resource's existence is not the same thing as possessing it. Knowledge of the resource is just the first step. Next we must discover how to recover these resources, and then we must actually work to accomplish this goal. Finally, we must transport the resources to the locations where they are needed. Each of these steps requires the use of other resources--e.g. scientific knowledge, the ability to innovate, skilled labour, sophisticated equipment, ships, etc.--which are scarce and therefore costly. That is why the fact that minerals are abundant does not prevent them from simultaneously being scarce. Throughout this discussion it should be assumed that the word abundant does not imply the lack of scarcity. There is nothing that human beings want or need that isn't scarce.

Abundant is used here as a relative term, to indicate that some scarce goods are more abundant than others, or that some scarce goods are now more abundant than they once were. So we can argue that food supplies are becoming more abundant or less scarce. We can also argue that minerals and other resources are now less scarce than they once were. What we are discussing is relative scarcity.

But if we are measuring scarcity, we must have a yardstick to measure it by. In other words, we need to answer the question: how do we determine relative scarcity? Julian Simon puts it this way: "Ask yourself: If copper, or oil, or any other good, were much scarcer today than it actually is, what would be the evidence of this scarcity? That is, what are the signs--the criteria--of a raw material being in short supply?" Simon, The Ultimate Resource, p. 17.Note

Simon notes that it isn't very likely that we will simply wake up one day to discover that a certain good has completely vanished. Long before a resource is depleted its supply begins to dwindle and individuals find it more difficult to obtain. The increased difficulty in obtaining the good will increase its price. And, of course, as the price goes up, the demand goes down, thereby helping to conserve the good that has become scarcer. The best indicator of increasing or decreasing scarcity is price.

Now, we can measure price in several ways. We can either take the price of a good in terms of dollars, rands, pounds, yen, etc., or we can use the amount of labour necessary to obtain the good. Both methods have merits. Most people think in terms of monetary units like dollars, and there is nothing wrong with that, as long as they remember that the monetary price of a resource may increase, not because the supply of the resource is becoming more scarce, but because the value of the money has been eroded by irresponsible government monetary policies. This is why economists adjust their calculations to take inflation into account.

There are also other circumstances in which temporary price distortions may give false signals about scarcity. For instance, during the 1970s the United States regulated the price of gasoline, limiting what prices could be charged. As gas became scarcer the price was not allowed to reflect the increased scarcity. As a result, consumers continued to demand an unrealistically high quantity of gas and there was a fuel shortage, which created long lines at the pumps. The scarcer gasoline was still being allocated, but not by the price--now it was allocated according to who could afford to wait in line. When the government deregulated the price of gas, the queues disappeared and gas eventually became even cheaper than it had been under the regulations.

The reverse may also occur. For instance, the South African government sets the price of gasoline above its market rate, giving the impression that it is scarcer than it is. Various taxes, tariffs, environmental regulations, and so on can also increase the price of a good above its market price. When this happens, consumer demand drops and producers find themselves with surpluses. Thus, government interventions distort prices and this, in turn, distorts the economic decisions of consumers and producers. Prices are a means of transmitting information. High prices tell consumers to buy less and producers to produce more. Lower prices do the reverse. When governments tamper with prices they give consumers and producers the wrong message and waste scarce resources.

Sowell explains:

How accurately . . . prices convey knowledge depends on how freely they fluctuate. The use of force to limit those fluctuations or to change the relationship of one price to another means that knowledge is distorted to represent not the terms of cooperation between A and B, but the force exerted by C. Looked at another way, the array of options people are willing to offer each other are reduced when force is applied to limit the level or the fluctuation of prices, and the array can shrink all the way to the vanishing point when the price is specified by the third party, if his specification does not happen to coincide with trade-offs mutually acceptable to entities contemplating transactions. Price fixing as a process cannot be defined by its hoped for results--"a decent wage," "reasonable farm prices," "affordable housing." Price fixing does not represent simply windfall gains and losses to particular groups according to whether the price happens to be set higher or lower than it would be otherwise. It represents a loss to the economy as a whole to the extent that many transactions do not take place at all, because the mutually acceptable possibilities have been reduced. The set of options simultaneously acceptable to A and B is almost inevitably greater than the set of options simultaneously acceptable to A, B, and C--where C is the third party observer with force, typically the government. Sowell, Knowledge & Decisions, pp. 167-168.Note

It can also happen that the known supply of a resource diminishes while the good simultaneously becomes less scarce. For instance, we clearly have used a certain percentage of the world's copper, yet the scarcity of copper has diminished. Why? The simple explanation is that the demand for copper is falling relative to the supply of copper available. Once we needed tons of copper for telephone cables: now we use satellites, weighing only a tiny percentage of the cables, and fibre optics for telecommunications.

Scarcity is affected by several factors:

• the known supply of any resource can increase dramatically with discoveries of previously unknown deposits

• in unregulated markets, as a resource becomes more scarce, its price increases, encouraging innovation. Consumers find ways of using less while producers find ways of producing more, or of doing the same thing with other resources. The magic of the market is that these incentives are in direct proportion to the scarcity of those resources. The greater the scarcity, the greater the incentives.

Throughout human history these factors have appeared over and over again. The possible discoveries are endless, and each new discovery increases the options available to us. The microchip, for example, expanded possibilities--it didn't reduce them.

Now that we understand what economists mean by scarcity, it is possible for us to discover the answer to our fundamental question: is population growing while the resources needed to sustain human life are becoming scarcer?

Are we running out of resources?

Since food production continues to outstrip population growth, we cannot say the world is overpopulated in relation to food. But perhaps other resources are becoming scarcer as time goes by. After all, we can grow food, but we can't grow coal, oil, or iron ore. And certainly the doomsayers of environmentalism have repeatedly warned us of the growing scarcity of natural resources. Fortunately, they have been just as wrong about this as they have been about food production.

The Limits to Growth, a popular doomsday book published in 1972, was considered to be a major work outlining the problem of resource depletion. Extrapolating from current trends, the authors attempted to show that the world was in dire danger of running out of virtually everything, and soon. The world would run out of gold by 1981, mercury and silver by 1985, tin by 1987, zinc by 1990, petroleum by 1992, and copper, lead, and natural gas by 1993. Donella Meadows et al., The Limits of Growth: A Report for the Club of Rome's Project on the Predicament of Mankind (New York: New American Library, 1972), pp. 64-67.Note Similarly, Gordon Rattray Taylor, in his appropriately named The Doomsday Book, extrapolated from the fact that North Americans were using 50 percent of the world's resources in 1970 to conclude that "by 2000 they will, if permitted, be using all of them." Gordon Rattray Taylor, The Doomsday Book (London: Thames and Hudson, Ltd., 1970), p. 292.Note Well, extrapolating from past trends can be dangerous, especially if you ignore all the factors. Clearly, the inhabitants of North America, in 1995, are not even close to using all the world's resources. Considering how rapidly Asia and South America are developing, along with the fact that there is no major decline in Europe or Australia, it is safe to say that North America will not be able to grab all the world's resources in the next five years either! (For the record, Taylor also announced that "supplies of uranium at current prices . . . are expected to run out in the mid-1970s.") Ibid, p. 208.Note

The world has been expecting to run out of oil ever since oil was first put to use. In 1885, the U.S. Geological Survey announced that there was "little or no chance" of oil being discovered in California. A few years later, in 1891, it said the same thing about Kansas and Texas! Osterfeld, Prosperity Versus Planning, p. 86.Note The U.S. Department of the Interior said in 1939 that American oil supplies would last only another 13 years. In 1949 the Secretary of the Interior announced that the end of the U.S. supply of oil was in sight. Ibid.Note In 1974, learning nothing from its past mistakes, the U.S. Geological Survey announced that "at 1974 technology and 1974 price" the United States had only a 10-year supply of natural gas. The American Gas Association, on the other hand, disputed this, and said that natural gas supplies were sufficient for the next 1,000 to 2,500 years. Simon, Population Matters, p. 90.Note

In 1952 the U.S. President's Materials Policy Commission concluded that by the mid-1970s copper production in the States could not exceed 800,000 tons and that lead production would be at most 300,000 tons per year. But copper production in 1973 was 1.6 million tons, and by 1974 lead production had reached 614,000 tons, i.e. 100 percent higher than predicted. Osterfeld, Prosperity Versus Planning, pp. 85-86.Note

Professor William Page of the Science Policy Research Unit at the University of Sussex notes that surveys of available minerals are continually discovering new supplies:

In 1908, President Roosevelt called a meeting of State Governors in Washington, to discuss what to do about the apparent run-down of many mineral reserves. A large-scale survey of the USA was launched as a result and sufficient new deposits were found to alleviate concern. There have been a number of similar surveys conducted since then. Had a 1944 review been correct, the Americans would by now have totally exhausted their reserves of about 21 of the 41 commodities examined. Tin, nickel, zinc, lead, and manganese were on this short list. But more has been found; more deposits (in terms of tons) were found in the USA during the 1950s than during the previous 25 years. Or take aluminium: between 1941 and 1953, known world bauxite reserves grew by 50 million tons a year on average, while between 1950 and 1958 the average annual increase was about 250 million tons. William Page, in Models of Doom: A Critique of the Limits to Growth, p. 38.Note

The economist Stanley Jevons predicted in 1865 that England would soon run out of coal, and that this would bring England's factories to a standstill. Yet the government of John Major was recently embroiled in controversy because it closed a number of English coal mines. British coal is so plentiful, 130 years after Jevon's prediction, that the government can't sell the mountains of coal that have accumulated. Their only recourse has been to shut down the mines.

It has become so clear that mineral resources aren't being depleted that even some environmental groups have conceded the fact. The World Resource Institute estimates that the average price of all metals and minerals actually fell 40 percent between 1970 and 1988. Ronald Bailey, Eco-Scam (New York: St. Martin's Press, 1993), p. 67.Note And as any economist can tell you, the best indicator of scarcity is price. The amount of labour it takes to purchase the vast majority of goods and services today is less than it was 20, 50, or 100 years ago. In other words, virtually everything we need for our existence is becoming less and less scarce each year!

Even the leading doomster, Paul Ehrlich, was forced to concede that his predictions were in error when he accepted a bet with Julian Simon. Ehrlich has continually attacked Simon and demeaned him as a serious scholar, referring to his views as "examples of the sort of blunders... economists of his ilk commit when they attempt to deal with problems of pollution, resources and environment." Julian Simon, Population Matters, p. 369.Note

In the midst of a heated exchange of papers between the two Simon flung down the gauntlet. He wrote:

I'll put my money where my mouth is. This is a public offer to stake $10,000, in separate transactions of $1,000 or $100 each, on my belief that the cost of non-government-controlled raw materials (including grain and oil) will not rise in the long run. If you will pay me the current market price of $1000 or $100 worth of any standard mineral or other extractive product you name, and specify any date more than a year away, I will contract to pay you the then-current market price of the material. How about it, doomsayers and catastrophists? First come, first served. Ibid, pp. 365-366.Note

Ehrlich promptly responded that he would "accept Simon's astonishing offer before other greedy people jump in." Ibid, pp. 371-372.Note When the contract was drawn up, it differed from Simon's original version only in a few details.

Ronald Bailey reports:

In October 1980, Ehrlich and Simon drew up a futures contract obligating Simon to sell Ehrlich the same quantities which could be purchased for $1,000 of five metals (copper, chrome, nickel, tin, and tungsten) ten years later at 1980 prices. If the combined prices rose above $1,000, Simon would pay the difference. If they fell below $1,000, Ehrlich would pay Simon. Ehrlich mailed Simon a check for $576.07 in October 1990. Simply put, the combined real prices of the metals selected by Ehrlich fell by more than 50 percent during the 1980s, confirming cornucopian claims that the supply of resources is becoming more abundant, not more scarce. Bailey, Eco-Scam, pp. 53-54.Note

Simon offered to renew the wager, but this time Ehrlich denounced the wager as a gimmick and refused to take part.

Why the estimates are usually wrong

Not only are the estimates of the reserves of various resources usually wrong, they are often wrong by huge percentages. The following chart, compiled by Herman Kahn, shows how the known reserve estimates of various ores have changed over the years.

Click here to view Table: Known Reserves in Metric Tons

Figures like these are dramatic testimony to the underestimations that are continually made about the natural resources available for our use. In some cases, environmentalists deliberately underestimate resources in order to promote their own public policy agendas. Kahn gives an interesting example of this when he discusses aluminium reserves as stated in The Limits to Growth. According to Limits, the world had only 33 to 49 years of aluminium resources left--and remember, it was written in 1974, which means that the world should be running out sometime between 2007 and 2023.

Kahn writes:

Except for silicon (a semimetal), aluminum is the most abundant metal in the earth's crust, which contains about 8 percent aluminum, or roughly 2 million trillion tons. Can that much metal (or even .0001 percent of it) be used up in 49 years, the high side of Meadows' estimate? The resolution of the apparent confusion lies in Meadows' footnotes, where he explains that he has counted only the aluminum in known reserves of bauxite. In other words, if we ignore every possible source of aluminum except known high-grade bauxite deposits, we will come up with this number. Or will we? No, not even then. For even though he states in a footnote that unless otherwise specified he will use data from the 1973 U.S. Geological Survey document U.S. Mineral Resources, in the case of aluminum there is another footnote explaining that he has taken the estimate from the earlier U.S. Bureau of Mines report Mineral Facts and Problems, 1970, which happened to use a 1965 estimate that was less than half the one given in the 1973 document. Moreover, the later volume unambiguously asserts in a summary statement that "the nation has virtually inexhaustible potential resources of aluminous materials other than bauxite," and it proceeds to describe 10 of them, a single of which contains more aluminum than Meadows' estimate for total known world reserves plus potential future reserves. Kahn, The Next 200 Years, p. 90.Note

Kahn points out similar distortions regarding other metals such as iron. Meadows contended that the world iron supply would not last beyond the year 2128. Yet iron, like aluminium, is one of the most plentiful metals in the earth's crust.

Nobody is looking

Huge discrepancies like these may give rise to charges of dishonesty. But--a few deliberate distortions aside--there are good reasons why these estimates continue to be off by such large percentages. The fact is that we have no need for accurate estimates since we are not in danger of running out of any of the major natural resources that we need. Report on the Limits to Growth by the World Bank explained it this way:

We do not know the true extent of the resources that exist in, and can ultimately be recovered from, the earth. Nor will we know in the next two years or ten years. The reason why we do not know the absolute limits of the resources we have is simple and does not even require recourse to elaborate arguments about the wonders of technology. We do not know because no one has as yet found it necessary to know and therefore went about taking an accurate inventory. Quoted in Simon, The Ultimate Resource, p. 35.Note

Neither the businesses that depend on these resources nor the mining companies that mine them are interested in investing large sums of money to locate resources which they have no need for in the foreseeable future. The estimates, however, continue to grow because we continue to stumble, without much effort, on new reserves. In a few cases temporary panics produce large reserves by acting as a spur to systematic exploration--there was a dramatic increase in oil reserves as a result of the oil crisis of the 1970s, for example. Wilfred Beckerman of the University of London explains it like this:

At no point is it worth prospecting for enough to last to the end of eternity, or even some compromise period, such as a hundred million years, or even 1,000 years. New reserves are found, on the whole, as they are needed, and needs do not always rise exponentially at past rates. In fact, given the natural concentrations of the key metals in the earth's crust, as indicated by a large number of random samples, the total natural occurrence of most metals in the top mile of the earth's crust has been estimated to be about a million times as great as present known reserves. Since the latter amount to about 100 years' supplies, this means we have enough to last about one hundred million years. Quoted in Edward Walter, The Immorality of Limiting Growth (Albany: State University of New York Press, 1981), p. 131.Note

Furthermore, it is a mistake to think only about underground resources: there are millions of tons of metals and minerals that, at the right price, can be recycled from above-ground sources. This lesson was learned by the Hunt brothers when they attempted to corner the world silver market in the 1970s. Using their vast resources they began to buy up all the silver they could find. As a result, silver prices went through the ceiling, soaring from just a few dollars an ounce to over $50.

But then several things happened. Out of the woodwork came a flood of silver. People searched their attics for stray silverware, candlesticks, rings, etc. Some people had silver fillings removed from their teeth and replaced with less valuable substitutes. Old silver coins, previously worth little, were suddenly relatively valuable and joined the flood. Meanwhile, silver mines found they could afford to mine less valuable ore since the price of silver was so high. Soon the market was awash with a veritable flood of silver. Silver prices plummeted and the Hunts lost a bundle. Their attempt to corner the silver market resulted only in the redistribution of their wealth to thousands of others, who suddenly found themselves with windfall profits.

We can assume that the same set of economic incentives will be created by a natural shortage of any resource as well. The higher price will encourage recycling, cheaper substitutes will drive down demand, and new stockpiles will be located. The Hunt brothers learned a lesson about economic incentives and the scarcity of resources. Now if only the environmentalists would learn the same lesson.

One fundamental error that is made not just by environmentalists, but by politicians and many others, is to take a current trend and project it into the future. Almost without exception such projections are virtually worthless because they ignore the fact that changing conditions change incentives, which in turn change human behaviour. Max Singer referred to this desire to project into the future as the Gary Cooper effect, based on an old film he saw. Singer said the film was

a piece of froth in which the humour was based on Cooper, playing Hollywood's idea of a typical masculine engineer in those days, having to take care of a baby without any woman to help him. He was doing fine applying his engineering training and masculine logic to the tasks of diapering, feeding, burping, etc. But one thing troubled him. He reported to his friend that the baby's weight had already increased by 20 percent and that at that rate it would weigh over a hundred pounds before it was a year old, and he didn't know what to do about it. Singer, Max, "The Serious Errors Inherent in a Doomsday View" in Rational Readings on Environmental Concerns (New York: Van Nostrand Reinhold, 1992) p. 701.Note

Projections based on current trends usually assume that humans are incapable of change--that they are mindless creatures who will continue behaving as they have always behaved despite changes in circumstances. Paul Ehrlich uses examples of animal behaviour and then tries to extrapolate to humans. He argues: "To ecologists who study animals, food and population often seem like sides of the same coin. If too many animals are devouring it, the food supply declines; too little food, the supply of animals declines... Homo sapiens is no exception to that rule, and at the moment it seems likely that food will be our limiting resource." Bailey, Eco-Scam, p. 51.Note Yet we know this is not true. We know that rising prices encourage lower consumption and increased production. We know that when an economy prospers the birth rate declines, often to the point where there is negative population growth. We know that humans do respond to incentives and change their behaviour. And this is a major reason the doomsday predictions have been wrong: they forget that people have minds. As Nick Eberstadt of the Harvard Population Center pointed out, "One of the reasons that Ehrlich's been so wrong is that he has no understanding of, or sympathy for, the economic process that human beings engage in." Ibid.Note

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