The Long View

Since the financial crash, and all the stuff about speculative financial markets, hedge funds, greedy bankers and their obscene bonuses for doing precious little of real worth, and then all the stuff about global warming, and BP’s poisoning the Gulf of Mexico … with all that going on it’s difficult to stand back and take a longer view of our situation. But it may be useful and instructive to try.

DNA scholars like, Spencer Wells (‘Pandora’s Seed: the unforeseen cost of civilization’), study human evolution from the genetic record stored in our DNA. Homo sapiens separated off as a distinct species around 195,000 years ago. Human population seems to have been relatively stable for around 115,000 years while people migrated from Ethiopia across Africa and the Middle East, it is presumed in search of food supplies to hunt and gather. Then population appears to have crashed, almost to extinction, around 70,000 years ago, probably as a result of climate changes reducing food supplies. Around 60,000 years ago population started to recover and spread across the globe. Then around 10,000 years ago, a watershed in man’s history, population started its continuous expansion from a few million to over 6 billion today, with a massive increase starting in the late eighteenth century. The change 10,000 years ago was caused by the conversion from hunter-gathering to farming and 250 years ago by industrialization.

Population in some advanced economies has already peaked, and expectations are that earth’s peak population will be around 9.5 billion which will be reached in the next four decades. This is therefore another watershed in the history of human evolution. It is marked by population’s collision with finite earth; finite in terms of its resources and its ability to absorb the various forms of human abuse meted out to it.

As population growth is coming to an end, so will economic growth. Populations will get older and more expensive, there will be fewer new markets to open up, and the cost of scarce resources will inevitably rise in real terms. Nevertheless, ignoring all this, our politicians are still relying on economic growth as the solution to all their problems, putting off the day of reckoning. But it would surely be better if we got used to the idea that economic stability is the limit and plan B should be for living with what economists refer to as negative growth (as though they can’t face words like decline). But the thought is not so terrible. We are already far wealthier than any previous generation. All we need is to learn how to make better use of the world we have been born into, rather than continuing this manic pursuit of ever more wealth.

2 thoughts on “The Long View”

  1. Thanks, for your thoughts, Gordon. I don’t think that there’s any link between the rapid rise in population and prospects (up or down) for future growth. That was the claim of Malthus in 1800 and it turned out to be wrong because of technological change. Technological change depends on free markets. For most of human history there were not free markets and there was little technological growth. The 17th century English saw a rise in innovation as the conflict between parliament and crown coincided with less government direction of the economy than existed elsewhere.

    The result was an increase in innovation. It didn’t take long for the central government, the court, to assert its power over the economy and create a central bank in the late 17th century. The advocates of mercantilism claimed that a central state and the crown’s acquisition of gold was crucial to obtaining wealth. But what differentiated England from the rest of Europe was the reduction in government interference, not its increase, an insight that Smith obtained in arguing against the older, pro-government ideology of Shaftesbury and Hume. It remains true today that more socialist states like Sweden, Cuba, France and North Korea tend to be lacking in innovation while freer ones are more innovative.

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  2. Agreed that innovation is a key factor. Growth in population implies growth in markets since most of them are comprised of people, one way or another. Growing markets encourages innovation, by raising the anticipated returns to be gained from innovative investment. Projections of such returns are more difficult to justify if there are few new markets to open up and a static or declining population. Thus population growth, innovation and economic growth are all diminishing and it will be a different world we are entering. But we still have the option to make it better rather than worse.

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