Monday, October 31, 2011
Globalization: Welcome, Number Seven Billion!
Many commentators are complaining that the growing number of humans causes problems to feed them. They claim that the rising demand for food, oil, metals and other commodities causes scarcities and maybe famines and wars.
This reminds me to Thomas Robert Malthus (wikipedia). The English social philosopher and Anglican clergyman, who lived from 1766 till 1834, warned about the dangers of population growth. He predicted that population will grow faster than the production of food and other commodities, leading to famines and a shrinking quality of life for the masses ("The power of population is indefinitely greater than the power in the earth to produce subsistence for man"). Malthus is a long time dead and his pessimistic predictions didn´t realize, but his ideas still live like zombies.
The pessimists don´t get it, that the wealth of the world is rising continuously, faster than the population. Around the year 1800 the world population reached just the number of one billion, by 1960 it climbed to three billion people. But we didn`t get poorer since then! Quite the opposite: The wealth per capita climbed and people in Europe, U.S., Japan & Australia, the so-called Western World, are much more wealthier than one hundred years ago. And: Countries like China, Brazil and India, the so-called emerging markets, started the run to catch up very fast.
The explosion of population was overtrumped by an explosion of wealth, thanks to the steeply rising productivity. This is the result of the technical progress and the learning process. People learn to get better & better every day and companies learn how to produce goods & services more efficient, with leads to lower costs. Today workers worldwide produce much more goods & services per working hour than decades ago. Since centuries farmers are expanding their crops, because they use better seeds and better methods for planting, plowing and harvesting. Take for instance the global grain production which increased by roughly two per cent a year from 1950 to 1990 (green revolution).
These efficiency gains should continue, maybe even accelerate with the help of rapidly developing computers and software and the progress in other sciences. For instance the U.S. is now boosting oil & gas productions, thanks to the technical progress in discovering & tapping the vast resources. There is also a lot of progress in genetic engineering which should guarantee a much larger food production.
The growing world population offers a huge chance because it will boost the markets for companies in Europe & U.S. Rising exports and income from foreign markets will help ripe nations like Japan and Germany where the population is stagnating. The income from the world markets could finance the retirement of the masses in countries where the average age is climbing.
Welcome No. 7 billion.