12: Chapter the challenge of economic development
Population growth and development
o Malthus and the dismal science
Malthus postulated a universal tendency for population to grow
exponentially
Eventually get so large that there is not enough space in the world for all
the people to stand
Because land is fixed, the supply of food would tend to grow only at an
arithmetic progression, could not keep pace with the growth of labor
As population doubles and redoubles, food production is below the
level necessary to support the population
When the law of diminishing returns is applied to a fixed supply of
land, food production tends not to keep up with a populations
geometric-progression rate of growth
In this view, the government cannot improe the welfare of the poor
population because increase any in the incomes of the poor would only
cause workers to reproduce until all were reduced to a bare subsistence
o Flawed prophecies of Malthus
Did not anticipate the technological miracle of the Industrial Revolution,
nor birth-control movement
o Population implosion?
Problem facing rich countries is declining population growth
Population in most advanced countries is growing only because of
immigration puts great stress on countries fiscal conditions because of
the need to fund health care and public pensions
o Limits to Growth and Neo-Malthusianism
Todays growth pessimists argue that growth will be limited by the
absorptive capacity of our environment
Todays concerns relate to externalities and public goods, where
unregulated market prices provide distorted signals
o