Chapter VI

Rapid Population Growth

Cheap Labor and Expanding Markets for Necessities and Capital Goods

Population growth has been taken for granted in the democracies as a constant factor. It has not been given much thought for the simple reason that it has never been a problem. On the contrary, it has been the solution of most of the problems of capitalism. But it was a solution which no one had ever had to think out or work out. It was an apparently automatic solution which Mother Nature provided for capitalistic problems like depressions and public debts. It always made good the excesses of business optimism and public spending and borrowing for wars. It made capitalism and democracy virtually foolproof. It bred a lot of foolish political and economic theory and gave that theory a pragmatic sanction.

If investors and businessmen built too many residences, office buildings, railways or factories; if they expanded productive capacity far beyond current demand, rapid population growth quickly made demand catch up with potential supply. Thus the late Mr. J. P. Morgan was right in saying “Never sell America short” and the academic economists were right in talking about the harmonies of a system of economic freedom. Our present theory and practice in the matters of private investment and public credit are valid and workable only if population maintains a certain rate of increase. In the matter of paying off large public debts this is especially evident. The war debts of the American Revolution and the Civil War were easily reduced without the evils of extreme deflation. The reduction of the public debt is no longer possible because it cannot be offset by a corresponding expansion of private debt for new capital, and particularly because the per capita debt burden is no longer being reduced as before by a rapid growth of population. Three decades after the War of 1812 we had three times as many citizens to bear the debt burden as we had when the war ended. Thirty years after the Civil War, our population was twice as large and the public debt half as large as at the end of that war. That debt was easily paid off by the sale of public lands to a growing population and by the revenues from new tariffs for infant industries. Today, twenty years after the World War, the American population is only about thirty per cent larger than it was in 1919 and the public debt is not reduced but approximately twice as great.

If the assumption that population growth is a constant factor operating to make good excessive business optimism and government borrowing were true, the social philosophy and concrete recommendations of American conservatives and business leaders would be sound and the argument of this book would be false. As the assumption is false, the American conservatives are wrong and the thesis of this book seems correct. The issue is one of fact, not of opinion or preference.

Let us look at the record. In the matter of population this is comparatively simple. We cannot tell what the population of any country will be in any distant future, for we cannot foretell possible changes in current trends. But we can tell what the population will be any number of years hence on the basis of current, recent or assumed trends in the birth and death rates. We do not know the population of any given area in the distant past, or much before the opening of the nineteenth century. But we can be sure that the white population of the world rose more or less steadily from the discovery of the Americas to the opening of the nineteenth century, or from about 70,000,000 in 1500 to about 100,000,000 in 1700 and about 200,000,000 in 1800 and that during the nineteenth century it rose from about 200,000,000 to around 700,000,000 at present. We can be sure that the white population of the world will not double itself during the next hundred years and we can reasonably surmise that a hundred years from now it may not be much larger than it is at present. It may well be not as large then as it is now. Where the population of Europe only about doubled once during the nineteenth century, or increased by only about 150% between 1800 and 1930, that of the United States doubled no less than five times between the periods of our first census in 1790, when the total population was only 3,929,214, and our most recent national census in 1950 when it was 122,775,046. The rate of increase in our total population has steadily declined, the drop in this rate during the thirties being the sharpest of all. For the entire 140 year period, the rate of increase averages a doubling of the population about every thirty years. At the rate of increase during the twenties, the period in which we had our largest decennial addition, one of 17,064,426, it would take about 62 years for the population to double; at the rate of increase during the thirties, now estimated at about 8,000,000, it would take the population of 1930 about 155 years to double.

In population, so far as dynamics are concerned, the vital factor is the trend. The most sensitive and the most revealing-for-the-future-index of the trend is the birth rate. The effects of a sharp drop in the birth rate are not seen in the immediate excess of deaths over births or in the net change in population. They are seen only twenty to thirty years later when the reduced number of babies becomes a reduced number of marriages and new families.

Professor Fairchild opened his recent book on population entitled People with the startling though true statement that “if the birth rate of the United States should continue to decline as it has during most of the present century, by about 1975 (just thirty-five years hence) there would be no babies born at all.” Obviously no one expects this nadir in the birth rate to be reached in this or any other country. But if the current decline in the birth rate ceases and if the birth rate flattens out at any figure below that of the present rate, our total population must soon thereafter begin to decline. This is clear from another little noted fact about the present population trend, namely that the present birth rate is insufficient for replacement once the present birth rate is stabilized.

The full import of the population decline is not readily apparent in current census figures simply because the number of new marriages taking place today is determined by the number of births which took place twenty to thirty years ago when the total number of births was passing the peak in our history though the birthrate was then fast declining. In 1935 there were a million and a half fewer children under ten years of age than there were five years earlier. This means that twenty-five years later or between 1950 and 1960 there will be at least 75,000 fewer marriages and 75,000 fewer mothers each year than during 1930-1940. It must be borne in mind that if the present low birth were stabilized where it now is, the death rate would not be stabilized where it is at present. The reason is quite simple. The death rate is always determined in large part by the age composition of the population. In 1850 50% of the population was under twenty while only 8% was over fifty. At present about 40% only are under twenty while about 16% are over fifty. By 1950 it is estimated that only 32% will be under twenty and over 24% will be over fifty. Now the cut in the death rate since 1850 has been effected mainly among the young, especially among infants. This mortality reduction has now gone almost as far as it can go. During this time there has been no great reduction in the mortality of those over fifty. From now on there is likely to be little further reduction in the death rate, as medicine is doing little to prolong the life of the aged who are being exposed to more and more stresses and strains as a result of the increasing pace and insecurity of modern life. As a larger percentage of the population enters the old age group the death rate is certain to rise.

The National Resources Committee (in their report of May, 1938, on the “Problems of a Changing Population,” page 24) estimate the total population of the United States for forty years on the bases of seven different assumed hypotheses of mortality and fertility, Of these hypotheses the one most favorable to further population growth allows for an increase of some 42,000,000 or a total population of 174,000,000 forty years from now; whereas the most pessimistic estimate, which assumes that the present decline in the birth rate will not continue indefinitely, gives a population ceiling twenty years hence around 1960 of 140,000,000, or only 10,000,000 higher than at present, and, thereafter a decline resulting in a population total some forty years hence or around 1980 no higher than that of today.

For our purposes it is relatively unimportant just when the curve of total population turns down or at what angle it turns down. It is enough that the population growth curve has already started flattening out. It is this flattening out which, more than any other single factor, is preventing full recovery. The important point here is that our system is not geared or gearable to a stable population. It can work only with a much faster rate of population growth than that we have enjoyed during the thirties.

This behavior of the population curve is in accordance with the mathematical theory developed by Raymond Pearl to the general effect that in any form of organic life a growth curve tends to conform to a logistic or S shaped curve on which the upper end or asymptote conforms to the lower end or asymptote. Such a curve starts slowly from the horizontal, then turns up almost vertical for a time and then flattens out at the top more or less as it moved at the beginning from the horizontal to the perpendicular. Whether this explanation is a valid theory or law or merely a coincidence observed in innumerable growth curves of colonies of bacteria or spores, is immaterial. Pure mathematics is certainly definite and indisputable in telling us exactly what any given rate of genetic growth in geometric progression will produce in the way of numbers over any specified period of time. And common sense, as well as physical measurement of available food supply, tells us that no such numbers of human beings, oysters, or bacteria spores can ever exist at the same time on this earth.

A preposterous result is always reached sooner or later by any geometric progression. Whether it is reached in a few hours, as in the case of certain spores, or in a few weeks as in the case of flies, or in a century or two as in the case of the growth of the white population of the world during the past hundred years, the principle is the same. If the total population of the world continued to increase as fast as it has during the past hundred years, it would outrun the limits of possible subsistence at the lowest possible level within a couple hundred years. If the dark races increase as fast as the white races have been increasing during the past fifty years, the dark races, now numbering a billion and a quarter, thus doubling every fifty odd years, would number ten billion within a hundred and fifty years.

Of course, there is no need to worry about population out-running subsistence as did Malthus, not that Malthus’s premises and inferences were incorrect, but that checks to growth ignored by him always become effectively controlling factors long before the limits of subsistence are reached. The dilemma that Malthus saw is real only as a hypothesis. It will probably never even be approached. The dilemma Malthus and most of his defenders and critics did not and still do not see is of quite a different order. It is not, as Malthus feared, the dilemma of what to do with a steadily growing population but the dilemma of what to do without a steadily growing population. There would eventually arise a food deficiency if the population went on growing forever. But there arises immediately a dynamic deficiency if the population stops growing or slows down its rate of growth. Those who criticized Malthus for preaching population control, not by technical contraception but by means of premarital chastity, deferred marriage for the poor and moral restraint, based their criticism on religious or pious grounds. As the underlying religious beliefs have weakened, this criticism has lost most of its social force. The really scientific ground for attack on birth control or limitation of families is that a society to be healthy needs to be growing or that we have found no substitute for the dynamism of population growth. Scientifically it may be found possible and ethically it may be deemed desirable to find a substitute dynamism for population growth. But neither the Malthusians nor the anti-Malthusians have clearly seen or definitely attacked this particular problem.

The social problem of the world crisis today is one of finding sufficient dynamism, not of finding enough food. With wheat selling in Liverpool during the summer of 1939 just before the war started at the lowest price in sterling or in gold that it had ever touched since the time of Queen Elizabeth, and with the food and raw material surpluses everywhere, there cannot be said to exist a subsistence problem. On the contrary, the problem is one of what to do with food and raw material surpluses rather than one of how to feed an excessive population. The land-hungry great powers are seeking territorial expansion not because there is a shortage of food production for the needs of all mankind today but because, owing to high tariff and immigration barriers, the peoples of the overpopulated Have-not countries do not enjoy sufficient access to the unsalable surpluses of foodstuffs and raw materials being currently produced.

As the dynamic function of population growth has been neglected by the thinkers and theorists of democracy and capitalism, it would seem in order here to formulate briefly certain obviously dynamic functions which only a growing population or some yet undiscovered substitute therefor can perform.

First among the functions of population growth is that of creating a perpetual scarcity of bare necessities, so necessary for a healthy capitalism or socialism. This scarcity furnishes incentives for the leaders and compulsions for the led. This scarcity now affects only the Have-not countries; hence they alone are dynamic today. Capitalism in America was dynamic while world population increase assured food scarcity. Now that we have food abundance, capitalism is no longer dynamic. Hence the unemployed go hungry because we now lack scarcity. This explanation may sound paradoxical. Well, so is the situation in which farmers languish for buyers of their food and the jobless languish for food. A scarcity of bare necessities is a simple condition for the human mind to cope with. Such a problem admits of little disagreement and excludes the complications of taste and choice. Society is a complex and difficult business. Men need simple social problems and tasks. Abundance is much too complex a condition for the irrational mass mind to deal with. The existence of this problem of abundance moves our prophets of the irrational mass mind to preach more governmental economy and personal thrift. In this way the evil of abundance can be corrected by removing more workers and farm acres from production. The nineteenth century way of averting the evil of abundance was to have large families. The twentieth century way, now that we have small families, is to have large-scale unemployment and two world wars in one generation. Given the ideology of democracy and capitalism making thrift a virtue and given the shrinking size of families, it is hard to see any way of coping with abundance other than unemployment and war. And given our culture pattern, it is hard to see how we can operate society without the compulsions of a scarcity which a high birth rate, unemployment or war alone can maintain for us in a sufficient degree under our system.

The eighteenth century rationalists and the nineteenth century rationalizers never understood the dynamic function of scarcity. But we of the twentieth century, who have seen two world wars in one generation, should know better. The maintenance of order in a populous community is an extremely difficult business. A condition of having the necessary incentives and compulsions for the maintenance of public order is an abundance of unsatisfied needs, not an abundance of goods. Those naive neo-liberals who would solve the problems of the hour by stabilizing abundance have not learned that order is the first requisite of society, that order requires discipline, that discipline requires need and that need requires scarcity. For maintaining the necessary degree of scarcity a more humane way than unemployment or war would be perpetual pyramid building and peaceful squirrel-cage social activities imposed from above by a planning and coordinating will. In the absence of a dynamic scarcity, such activities are not self generating among the masses. A dynamic scarcity is one in which there is not enough food to allow the ruling classes to keep several millions unemployed on a relief dole. But unemployment and war, in lieu of large families, are obviously the course of least resistance. Besides, practically no one understands the disciplinary and dynamic function of scarcity. Broadly speaking, practically no one takes either an intelligently realistic or a purely humane view of any major social problem.

A second function of rapid population growth is to maintain a large percentage of youth in the age composition of the total population. The larger the percentage of youth in the age composition of a population, the greater the supply of initiative and dynamism; the larger the percentage of old people in the age composition of a population, the greater the tendency to stagnation and decline.

A third important function of rapid population growth is to assure great elasticity in social adjustments, especially in wages, and great pliability and fluidity of labor. An aging population tends to social rigidity especially in class relationships and social rigidity renders any dynamic readjustment difficult.

In a fast growing population there is a perpetual scarcity of producer’s goods and a plethora of workers. In consequence, the leaders, who, under capitalism are the investors and enterprisers, and under socialism are the politicians, have the whip hand. Under capitalism, if wages can always be fixed at levels attractive to the investor and enterpriser, there is never a lack of new investment and enterprise and, consequently, never large-scale unemployment. There is always full employment because wages are sufficiently flexible always to be low enough to interest the profit seeker.

Under no system do workingmen create jobs for themselves. Jobs, or enterprises which employ labor, have to be created by the leaders who may be capitalists, politicians, priests or soldiers. There must be incentives for the leaders and compulsions for the led. These must inhere in a social situation and a social trend. The leaders must have vision and the led must have needs. The leaders cannot create the situation or the trend. They are rather created by the situation and the trend. Now that the conditions for the success of capitalist leadership are disappearing, the businessmen are headed for what for them will be the equivalent of the ghetto and a new brand of leaders appropriate to the new situation and trend will take charge. The necessary motivations for the leaders and the necessary discipline for the workers for the success of capitalism depended absolutely on certain trends, one of which was rapid population growth, a factor making for perpetual capital shortages. Once the population-growth curve begins to flatten out, capitalists cannot find enough incentives nor can they discipline labor. The correlation between capitalistic incentives and labor discipline on the one hand and population growth is too obvious to need much explanation. Some of the incentive part of it has been pointed out in the preceding chapter wherein was shown the connection between rapid population growth, rising land values and unearned business profits on such land appreciation, all tending to induce more building and industrial expansion. The discipline part of the correlation is equally obvious: During the days of heavy immigration, rapid population growth and a scarcity of food and shelter, labor could not have enforced its present real wage demands, which, to the extent they must be met at the expense of profits, are deterrents to new investment and enterprise.

It would be unfair to the classical or professional economists not to credit them with a belated recognition of the population factor. At the opening of the 51st annual meeting of the American Economic Association held in Detroit December 28, 1938, Professor Alvin H. Hansen in his presidential address to the association on the subject “Economic Progress and Declining Population Growth” said: “It is my growing conviction that the combined effect of the decline in population growth, together with the failure of any really important innovations of a magnitude sufficient to absorb large capital outlays weighs very heavily as an explanation for the failure of the recent recovery to reach full employment.” At the same meeting Professors Glenn E. McLaughlin and Ralph J. Watkins read papers on “The Problem of Industrial Growth in a Mature Economy” in which they cautiously expressed more pessimism than hopefulness. The view of the vast majority of the economic profession, as well as of the conservative businessmen of the country as a whole, in regard to the population factor in recovery is doubtless expressed by Professor Wilford I. King in an article “Are We Suffering from Economic Maturity?” in which he confidently answered “No” and took Messrs. McLaughlin and Watkins to task for a mildly pessimistic view of the situation. The mental limitations of those who take Professor King’s view were clearly revealed by him when he used an illustration which completely invalidated his whole argument. By way of refuting the present-day pessimists who find no adequate industrial expansion and building boom to end current unemployment, Professor King dragged out the old familiar argument of the frontier of limitless needs disposed of in the preceding chapter. In so doing, he asked whether George Washington would have been upset back in 1780 to have learned from one of his overseers that increased efficiency had enabled the plantation to get its work done by fewer slaves and that there was consequent idleness. The answer, obviously, is that George Washington would have been delighted to learn that he was getting more done with less labor and that most of the necessary clearing about the place had been finished, and he would have been most happy to order his overseer to put the idle slaves to work on elaborate projects of beautification of the estate and improvement of its facilities in every possible way.

The trouble with Professor King’s illustration is that it completely gives away his whole case since the example chosen to show how increased efficiency and industrial maturity need never cause difficulties or unemployment was taken from slavery. Now anybody who does not recognize clearly the difference between present-day industrial capitalism and chattel slavery should not be teaching economics. Obviously, there can never be unemployment or depressions under socialism or slavery. Of course, a slave-owner who has to feed, clothe and house his slaves whether they work or loaf, will not leave them idle. He will either make work for them to do or sell them. If many slave-owners start selling slaves for lack of productive employment for them, the price of slaves will fall so low that owners will prefer to keep their slaves and employ them on works of beautification and creation of luxuries for the enjoyment of the masters, as occurred for centuries in many past civilizations.

The population factor has to be considered in the context of the system of private capitalism. Socialist dictators and owners of chattel slaves can obviously build pyramids or great mansions and hunting parks, thus forever keeping all the proletarian socialist workers or privately owned slaves employed all the time. This is exactly what happened in ancient Rome when it found itself flushed with slaves. Emperor Augustus, coming to power in such an era, said near the end of his rule: “I found Rome brick and I left it marble” But capitalists do not have individually to support their employees when the latter are thrown out of work. The incentive to industrial expansion under capitalism is not a desire for a higher standard of living for all the people but a simple desire for interest and profits. Professor King is correct in finding that industrial maturity would not matter if steps were continuously taken to make full use of all available labor and productive capital, thus ever raising living standards and lowering consumer costs of goods. But he is lacking in intellectual honesty when he adduces this argument without attempting to show why private capitalists and businessmen should take such steps or how they would profit more under present conditions by taking these steps than by hoarding their funds in tax-exempt government bonds as they are doing to an ever increasing extent. The chief dynamic factors which make capitalism work are those creating a sufficiency of motivations to private investment and enterprise and a sufficiency of disciplinary compulsions for mass acquiescence in the working of the system.

Raising living standards by building pyramids such as housing which the poor cannot afford out of their meager wages could insure full employment for any community in any phase of industrial maturity and with any conceivable supply of labor and abundance of food. But what is the motivation for a capitalist to raise living standards or build pyramids merely to eliminate unemployment and achieve full employment? This question Professor King, Mr. Herbert Hoover and all our conservatives advocating sound recovery conspicuously fail to answer. Rapid population growth was one of the five major factors which provided sufficient incentives for the capitalist, sufficient compulsions for labor and enough of the spirit as well as the material conditions required for the successful working of capitalism. The formation of new privately owned capital was continuously primed by the growth of population. Professor John Maynard Keynes in an article in the Eugenics Review of April, 1937, entitled “Some Consequences of a Declining Population,” made the following estimates for England:



Real Capital . . . . . . . . . . . . . . . . . . . .



Population . . . . . . . . . . . . . . . . . . . . . .



Standard of life . . . . . . . . . . . . . . . . . .



Most of this capital formation was made for supplying the necessities of a rapidly growing population and of the imperial state—a little for supplying the luxuries of the wealthy. And the creation of capital in Britain during this period was induced in large part by an increase in population in the British Colonies and America far more rapid than that taking place in England, where population growth was being greatly modified by heavy emigration all the while. Now an adequate rate of capital formation to end unemployment requires either a drastic raising of the standard of living of the masses by pyramid building or the destructive and consumptive processes of war.