Malthusian Delusions in the XXI Century

Last week I attended another talk on demographic projections for 2050. A persuasive speaker (Mark Forman) impressed the audience with scary numbers about the probable increase in world population. So, let me clarify a few things.

The fear is that in the next 50 years the world population may rise to about 10 billion from the current 7 billion. This growth will be unequally spread around the globe, mostly adding to the 2.1 billion still living with less than $3.1 a day. Feeding all this people will deplete natural resources and seriously damage the environment. Equally scary, in rich countries, the rise in health care will increase life expectancy beyond 100 years, which, coupled with a drastic fall in birth rates and a rise in robotics, means that the ratio between retired people and employed workers will continue to increase. Meanwhile, lower qualified works may lose their jobs or will see them taken over by migrants.

These gloomy predictions may materialize or not, but even if they do happen they are not cause for panic. Let me explain why, one-by-one.

1) The danger of world famine. This is simply a repetition of Malthus erroneous conclusion in the XIX century and it is clearly misplaced since humanity has never lived in a world with so little hunger. Indeed, based on FAO estimates, if the increases in food production and productivity in the past 50 years (170%) are repeated in the next 50 years they will exceed by three times the forecasted rise in consumption. This is more than enough to feed the estimated two billion increase in population and still accumulate unnecessary stocks. Starting from a smaller base the growth in the recent past is more than enough to feed a much larger increase in population from two to seven billion inhabitants.

2) The depletion of nonrenewable resources, or its extensive use, like in the case of fossil fuels, will damage the environment to the point of making earth inhabitable. Again, history has shown that we can find new energy sources. For instance, just as humankind managed to replace coal by fossil fuels before we ran out of coal, we are also in the process of replacing these by electricity produced from solar and wind sources of energy before exhausting the fossil fuels.

3) Large scale migration will cause unemployment and bankrupt the welfare state. This is an old fear that history has repeatedly shown to be misplaced. Not only have mass migration flows been short lived, but they were also correlated with rising economic growth. Whether we consider ancient migrations during the Neolithic Revolution, the Indo-European expansion, and the Early Medieval Great Migrations or the recent flows to North and South America, or the contemporary flows within Europe the result has always been positive in economic terms. Of course these flows are not without turmoil, especially when they involve cultural shocks. Nevertheless, even at the cultural level, the rise of a global culture resulting from globalization at the level of the media and international travel will reduce cultural barriers.

4) Robots will replace humans causing mass unemployment. This is the same argument that led some workers to destroy machines at the start of the industrial revolution fearful of losing their jobs of 15 and 16 hours per day, including children. Many now work only 5 days a week and less than 8 hours per day and the feared massive unemployment did not materialize. It is foreseeable that robotics will facilitate longer education, longer holidays, and shorter weeks and days which will facilitate the employment of everybody for a long time. The possibility that robots might one day replace humans in most jobs is a welcoming evolution, since most humans can find better things to do than work. Still, such it is still too far away to be considered a threat.
5) An aging population is a time bomb since there are not enough babies being born and the ratio between pensioners and workers is increasing dangerously. In what concerns the risk of a pension time bomb I have written a post explaining why it is unfounded and easily overcome by past levels of productivity growth. The possibility of an inverted age pyramid is real but it is not a threat. Indeed, it will delay the replacement of humans by robots because the care for the elderly is more labor-intensive than other jobs performed by humans. All we will need is to adapt to a society with more elders than youngsters. But, humankind is eminently adaptable.

So, whatever way we look at the so-called demographic threat there is no reason to fear the future. With the right policies and transition periods all the frictions caused by demographic shifts can be solved, as long as people disregard the ignorance or malfeasance of the prophets of doom.

This is not to say that there no threats to humankind. There are certainly external threats, like the celestial bodies who destroyed the dinosaurs, as well as man-made dangers. The later may be accidental (e.g. result from scientific experiments) or may be caused by the evil use of weapons of mass destruction. Technical advances in space technology may help us avoid the fate of the dinosaurs while careful science monitoring may prevent scientific accidents.

Indeed, where humanity runs the risk of not progressing enough is in organizing society to stop evil or mad leaders from using arms of mass destruction.

All in all, as long as humans violent forms of conflict resolution, we have more reasons to be optimistic than pessimistic about the future of humankind. Such conflicts are the true threat to the humankind not demography.

The left bias against McDonald's

Given the ethics of capitalism and its closeness to a meritocracy it is a mystery why so many dislike it. Of course, the ruling classes in the alternative systems do not like having their position in the established social hierarchy challenged by the new capitalists. Nevertheless, since feudalism, corporatism and communism (partly) have disappeared some time ago it is surprising that so many still continue to dislike capitalism.

The reasons may be analyzed through different angles – social class, political divide, ideology and history. For instance, the left-wing opposition to capitalism can be illustrated through the frequent attacks on McDonald’s restaurants by anti-capitalists protestors.

Given that left wing ideologues are often driven by envy and a false-hearted love for the poor and aversion of the rich, it seems paradoxical that they choose to vent their ire on a restaurant that serves well the poor rather than on a luxury stores like Prada or Bugatti which serve the rich.

McDonald’s is a successful American company in the fast food industry, which now owns 30,000 franchised branches in prime sites in over 120 countries. Its success is mostly due to its ability to offer quality fast food at affordable prices in clean restaurants to a diversified, mostly young, clientele. So, it may be heralded as the symbol of the efficiency of capitalism.

Yet many in the left see McDonald’s as American, authoritarian, abusive of animals, exploitative of workers, unhealthy, unecological, and ruthlessly profiteering. Let me examine some of these claims.

The anti-Americanism endorsed by the left is largely a result of the cold war. And, because many in the left were on the communist side, they needed an American symbol to attack beyond the USA flag. Now, after the collapse of communism, its former supporters sought to rationalize their past ideology by turning to protectionism and anti-globalization. Again, McDonald’s, with its restaurants in every major city of the world, provided a visible symbol of globalization.

In the same way, the left sought new constituencies. For instance, by claiming that McDonald’s was authoritarian as it forced its franchisees to stick to the company brand. Afterwards, since they could not contest McDonald’s superior sanitary levels in the fast food industry, they turned to animal lovers by claiming that it was abusive of animals.

In fact they omit the fact that McDonald’s does not run any farms. However, because they are the main purchasers of some farm produce they want McDonald’s (not the governments) to force its suppliers to follow the demands of the animal rights groups.

The same tactic is used by environmental movements with arguments that are even more ludicrous. For instance, some blame McDonald’s rigorous demand for consistent ingredients for the existence of large chemical conglomerates like Monsanto or Cargill producing soil-damaging fertilizers.

The charge that an irresponsible marketing used by McDonald’s promotes unhealthy diets and obesity is also common.

It is true that kids today do not follow good diets. But can the Big Macs or Chicken Nuggets be blamed for that? Obviously not. The blame lies with their families and schools which, for financial and work reasons, have progressively replaced home-cooked food with cheap frozen meals and takeaways.

Indeed, one of the reasons why McDonald’s is so popular with kids is that they consider a meal there as better than the takeaway around the corner or the fish fingers they eat at school. If anything, the McDonald’s experience shows that it is possible to offer decent meals at an affordable price.

It is not necessary to be an economist to understand that in economies run on a pro-profit basis quality will take over cheap production, since a race to the bottom inevitably condemns its players to failure in a growing economy.

So, the left’s dislike of McDonald’s is fundamentally ideological. Because it epitomizes a living proof that profit-seeking benefits the poor, they see McDonald’s as a threat to their own propaganda.

The stupidity about the climate change debate

No day passes without us hearing about climate change. No problem with that for the British, because for them weather has always been a popular topic to start a conversation. What is annoying about this is that some people are trying to make a political issue about it and cash-in money out of this at the tax-payers cost.

Of course, there is climate change as there has been for millions of years and will continue to be for the million years ahead. There will be recurring spells of extreme heat, cold, rain, drought and so on.

Some of these changes may be influenced by mankind be it through fire, deforestation, CO2 emissions or something else.

Mankind has experienced that and has successfully adapted and survived such extreme conditions and will continue to do so.

So is there anything new about climate change except the mumbo-jumbo of today’s environmentalists; which is not fundamentally different from the Middle Ages prey of the church and witchcraft on the helpless and ignorant before a plague? Absolutely not!

We may wish to believe that we can fine tune the weather to our desires. That might be a possibility in a distant future, but it certainly is not an option now and in the foreseeable future. The best proof is to remind us that if we cannot easily fine tune the economic activity, a man-made process, we cannot expect to fine tune a natural process of which we know much less and over which we have so little control.

So modern sorcerers – sorry, “pseudo-environmentalists” – please give us a break and find something useful to do which is not preying on other people´s fear or ignorance.