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The economics of responding to overpopulation

rockwater
Posts: 273
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7/1/2013 10:36:49 AM
Posted: 3 years ago
I started a discussion on this in the politics forum but someone suggested a separate thread about the economics of it.

Overpopulation is a trend in human population that is unsustainable given the planet's resources and trends in technology. I know that there is debate as to whether overpopulation is a reality but let us assume that it either is or it will be at some point in the future for the purposes of this discussion.

Assume, then, that in response to overpopulation, education about and/or subsidizing of birth control allows for the global population growth rate to decrease to almost zero or even become negative (and that this is not due to war, disease, famine, drought, or environmental catastrophe). (I know, a lot of assumptions.) Would this create an economic disaster?

One more assumption - that global healthcare and life expectancy begins to approach closer and closer to that now seen in developed countries.

Here is why I think it might. Developed countries already have a low birth rate. Many rely on immigration for population growth or have stagnant or decreasing populations (like in central and Eastern Europe). China's one Child policy (for its cities) means that one grandchild has to take care of two parents and four grandparents (unless they shirk this responsibility, which often happens). Japan has an aging population with huge pension and healthcare costs and a middle aged population that holds into its cushy jobs such that the relatively few young people have a very har time finding steady work other than low paying second class jobs with little benefits, security, or future. If the global population stops growing or starts shrinking, how can the global economy function healthily with a plurality or even majority of elderly people living longer and longer, healthcare costs to care for the elderly skyrocketing, and fewer and fewer healthy young people working? Does this mean that is overpopulation is a reality, there is no ethical way to deal with it that will not devastate the economy?
darkkermit
Posts: 11,204
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7/1/2013 10:49:47 AM
Posted: 3 years ago
There's no reason why a smaller population is bad. After all, a smaller population means that less goods and services need to be produced. Due to marginally increasing costs, we'd expect the last good or service created to cost more to produce than previous goods/services. For example, if we think of farming, the first lands cultivated would be the most fertile and easier to grow things naturally. The "last" lands cultivated might not be as fertile and cost more to maintain (use of fertilizer, have to import water, etc.).

Now, the problem of too little people, is really a problem of not enough labor in use. For example, old people retire and do not contribute any labor to the economy. These people that are not working either must obtain a form of income from their own wealth (savings), or income from others (workers). We'd also expect that the GDP per capita to decrease the less people are working as well, for obvious reason. There's also the problem that it becomes expensive to keep older people alive. And society seems to strongly disfavor the idea of just "letting people die" if they don't have the money, even if they are living way beyond the average life expectancy of previous generations.
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darkkermit
Posts: 11,204
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7/1/2013 10:51:53 AM
Posted: 3 years ago
I'd say its mostly a myth that you need to retire at the age of 65, and its more of a culture thing and a result of social security occurring at 65. However, social security was set at 65 because the life expectancy was at 65 when social security was first set up. It wasn't designed for a scenario where people would be living much longer than 65.
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wrichcirw
Posts: 11,196
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7/1/2013 2:44:11 PM
Posted: 3 years ago
There's one extremely easy solution that you are not considering: extend the retirement age.

If the elderly are healthier now than before because of better health care, then there's not much other than political obstacles preventing them from working longer. If they can afford not to work, then the economy isn't in that bad of a shape, since they can pay others to labor for them. This also ameliorates problems you cite with the younger generation.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
shenjie
Posts: 17
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7/5/2013 12:48:50 AM
Posted: 3 years ago
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DanT
Posts: 5,693
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7/7/2013 1:01:48 AM
Posted: 3 years ago
At 7/1/2013 10:49:47 AM, darkkermit wrote:
There's no reason why a smaller population is bad.

A smaller population means a decrease in the labor supply, which can result in a labor shortage.

After all, a smaller population means that less goods and services need to be produced.

The Aggregate Demand = Consumption + Investments + Government Spending + Net Exports

Therefore the demand for output is not limited to the local community.

The Aggregate Output is a function of capital and labor or the capital to labor ratio. According to the law of diminishing returns, an increase in capital without an increase in labor, will result in a decrease in the Marginal Product of Capital. A smaller population will have a larger capital to labor ratio, which means there will be wasted capital.

The Golden Rule of capital is when the the derivative of the function with respect to the capital to labor ratio " (population growth + depreciation) = 0.

The Golden Rule of Savings rate = the Marginal Product of the golden rule of Capital to Labor ratio / the Average Product of the golden rule of Capital to labor ratio.

The Marginal Product of the golden rule of Capital to Labor ratio = the the derivative of the function of capital to labor with respect to the capital to labor ratio

The Average Product of the golden rule of Capital to labor ratio = the function of capital to labor / the capital to labor ratio.

Due to marginally increasing costs, we'd expect the last good or service created to cost more to produce than previous goods/services.
According to the product life cycle, products typically have 4 stages;
1.) Introduction (Very Few or no competitors)
2.) Growth (Some competitors)
3.) Maturity (Many competitors)
4.) Decline (Few competitors)

During the introduction stage the only suppliers are the innovators. Early adopters begin competing during the early growth stage. The early majority begins competing during late growth stage. The late majority begins competing during the maturity stage, and the laggards start competing during the decline.

Since competition amongst the supply gradually grows, the price gradually declines.

For example, if we think of farming, the first lands cultivated would be the most fertile and easier to grow things naturally. The "last" lands cultivated might not be as fertile and cost more to maintain (use of fertilizer, have to import water, etc.).

You are assuming that the last lands cultivated are not as fertile, which is not always the case.

Increasing marginal costs are related to a decline in Marginal Returns. Thus a decline in the Marginal Product of Capital would increase marginal costs.

Now, the problem of too little people, is really a problem of not enough labor in use. For example, old people retire and do not contribute any labor to the economy. These people that are not working either must obtain a form of income from their own wealth (savings), or income from others (workers). We'd also expect that the GDP per capita to decrease the less people are working as well, for obvious reason. There's also the problem that it becomes expensive to keep older people alive. And society seems to strongly disfavor the idea of just "letting people die" if they don't have the money, even if they are living way beyond the average life expectancy of previous generations.

See above
"Chemical weapons are no different than any other types of weapons."~Lordknukle