Economic Abundance With Shrinking Population: Why Not?

August 29, 2014 • Daily Email Recap

Economic Abundance With Shrinking Population: Why Not?

See: http://www.forbes.com/sites/nathanlewis/2014/08/28/economic-abundance-with-shrinking-population-why-not/
Perhaps one of the silliest myths around today, in my opinion, is the notion that a shrinking overall population naturally causes or leads to economic decline. This is gradually becoming more immediately relevant, as the fertility rate is below replacement on every continent except for Africa today.

 

It’s true that a larger population will have a higher total GDP, simply because you are counting more people. However, you can have a large population with a relatively low per-capita GDP (all of Africa, 1.1 billion), or a small population with a high per-capita GDP (New Zealand, 4.5 million). So, obviously, just piling people together doesn’t create wealth and personal abundance.

 

As most any economist should know, per-capita incomes – what we usually mean by “wealth” – are largely a factor of productivity. Of course this includes the productivity of the employed, but it also includes productivity within the household or in other nonmonetary realms – the real-life economy, not the “economy” of statistical abstraction.

See: http://www.forbes.com/sites/nathanlewis/2014/08/28/economic-abundance-with-shrinking-population-why-not/


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