Over Population? Not Even Close!

Recently, President Trump remarked that the United States is "full" and can no longer take in any more asylum seekers. Trump has been a long-time New York City resident, so his view of population density may have been shaped by the hustle and bustle of everyday life in the Big Apple. Manhattan is the densest of the five boroughs of NYC with over 28,000 people per square kilometer. That ranks among the densest areas in the world, so we could forgive the president if he mistakes population density through erroneous extrapolation from his home town. Across the whole of the United States, the population density is just a measly 33 people per square kilometer. You can thank all the under populated areas in Alaska, Montana, New Mexico, Nevada, Texas and a dozen other states.

While Trump is clearly wrong about the population and available space for people, others are equally wrong in thinking that the world in over populated. The above floor plan is of a typical 50 square meter apartment in Paris. If we allocate for each man, woman and child one such apartment, and we only have one-story units (that is, not even a second floor), we can fit every person on earth in just a little over half of Texas. Here's the quick calculation to show the numbers: there are 7.6 billion people. Allocate 50 square meter to each person will require 380 billion square meters of space. Convert that to square kilometers and you get 380 thousand square kilometers. The area of Texas is 696 thousand square kilometers. Of course, I haven't included common areas, roads, stores, electrical and sewage infrastructures, and plenty of other items. My point is just to illustrate we don't really have that many people on earth, if we're measuring on land use alone.

The reason I make the point is because bad data beget bad policies. Bad policies beget bad outcomes (mainly economic) for people. When people rely on wrong data, they reach the wrong conclusions. When the conclusions are wrong, the policies that they enact to deal with such conclusions will inevitably be worse off for people than had they not been enacted.

What are some of the wrong assumptions people make, regarding global population? One assumption is that we're already over-populated. Geographically, I've already shown that we're nowhere near over-populated due to land constraints. Perhaps people might say that we don't have enough farmland to grow the food we need. The opposite is true: we produce more food than we need. Roughly 33% of the food we produce is wasted somewhere along the supply chain from producer to eater. At the same time, there are about 14% of the population that is undernourished. The problem with food is not that we can't grow enough. The problem is that we're not bringing the food to places that need them, and those include enclaves even in major metropolitan cities like New York City.

When the wrong assumptions are used, we tackle the problem with "solutions" that may actually worsen the condition. For food, we often tackle the problem by providing solutions that increase yield. Many startups in the AgTech space offer solutions to increase yield. The result of that is even more hardship for farmers as they cannibalize themselves by over supplying to a already satiated demand. They work just as hard and get less money per acre of farmland. But if they don't participate, then they lose all that revenue from that land. It's a downward spiral that, individually, the farmers can't escape. If there are new technologies in the AgTech space that allows for better allocation of the produced goods, then farmers can increase their revenue while more people will be properly nourished.

If it's not land, or food, perhaps it is the economic inequality that shows we have too many people? Way back in 1820, two hundred years ago, the world's population hovered around 1 billion people. Ninety-four percent of those people lived in what we would call extreme poverty, equivalent to earning under $2/day in today's dollars. Most recently, in 2015 that number of people living in extreme poverty has dropped to just 9.6%. Think about this: 94% of a billion people is 940 million people living in utter poverty back in 1820. In 2015, with a population of 7.3 billion people, that 9.6% is only 701 million people. There are now fewer impoverished people on earth alive now than there were 200 years ago in absolute terms. And we have seven times the number of people on earth now than 200 years ago! That is a huge global humanitarian achievement.

Was all this done through the invisible hand as suggested by Adam Smith? Well, actually not even close. The invisible hand certainly had a hand in the improvements, but it is actually due to government programs that many countries instituted over the past 60 years. The evidence is clear: life expectancies increased before per capita wealth increased in almost all countries that improved from being a developing nation to a developed nation. Globally, there was a period in the mid-1800s where per capita wealth increased without a correlating increase in life expectancy, indicating that the world was in a protracted period of unrestrained wealth generation (primarily through extractive industries). Post WWII, when the United Nations was chartered and information was distributed to other countries, those developing nations enacted policies to help reduce early death, increasing the average life expectancy. Increased life expectancy without the concomitant increase in wealth can pretty much be solely attributed to government policies. Once life expectancy increased, and educational levels increased (also a government policy, as almost all nations have public schooling now), people can then turn towards improving their economic well-being, and there, the invisible hand helped make the markets.

In summary, wealth creation can, and should be done in conjunction with good public policies that allow everyone to join in on the economic improvements. But good public policies require understanding and using correct data. Believing that the United States is over populated is not correct, and policies instituted under that belief will hurt the United States now and into the future.