WEBVTT NOTE The Labor Market 1 00:00:00.000 --> 00:00:08.000 Today, I think, a schedule of examinations, in which 250, SS-251, huh? 2 00:00:08.000 --> 00:00:15.000 Wait a minute, I'm just getting to that. 3 00:00:15.000 --> 00:00:20.000 And the schedule of the final examination, in which we are located, ignore it. 4 00:00:20.000 --> 00:00:26.000 I mean, you might, if you want to show up for the hell of it, you can do it. I'm not going to be there. 5 00:00:26.000 --> 00:00:56.000 The final will be next Monday at the same time, same spot, as Thursday, in other words, let me see, wait a minute, in other words, we have a class, yeah, we have a class now, right, we also have a class on Thursday, in room 503, on Monday, next Monday will be Thursday, in other words, Monday has been designated in the wisdom of Brooklyn Poly as Thursday, so we show up, we act as if it's Thursday on Monday, 6 00:00:56.000 --> 00:01:03.000 Monday, and it's going to be the final. In other words, it's going to be a two-hour class in room 503, keeping our fingers crossed that everything works out. 7 00:01:06.000 --> 00:01:23.000 Yes, in other words, from 2 to 4, in room 503, Monday, what's the date? Anyway, next Monday. Monday, May 3rd, yeah. 8 00:01:26.000 --> 00:01:35.760 2 to 4 p.m., room 503. We're still in the labor market, we finished the union question, 9 00:01:35.760 --> 00:01:40.680 and now dealing with population. In other words, one of the things of course that determines 10 00:01:40.680 --> 00:01:49.840 the labor supply, the stock of labor, is how many people there are. So, quiet please. There's 11 00:01:49.840 --> 00:01:53.800 been a lot of nonsense spoken about population, I think I mentioned last time, I'll just review 12 00:01:53.800 --> 00:02:00.680 In the old, old days, the history of Western civilization, let's say, was considered the 13 00:02:00.680 --> 00:02:01.680 more people the better. 14 00:02:01.680 --> 00:02:07.760 In other words, higher populations were considered a test of whether the society is doing well. 15 00:02:07.760 --> 00:02:10.240 So the idea was to have increased population. 16 00:02:10.240 --> 00:02:15.600 Also of course, the ruling classes at the time, the feudal lords and the privileged 17 00:02:15.600 --> 00:02:17.280 merchants and the kings, etc. 18 00:02:17.280 --> 00:02:20.840 One of the more people, they had more cannon fodder, more people to march against Burgundy 19 00:02:20.840 --> 00:02:23.940 or whoever the enemy is around the hill. 20 00:02:23.940 --> 00:02:28.120 So the higher population means a bigger army. 21 00:02:28.120 --> 00:02:35.240 Then as I think I mentioned in the early 19th century, late 18th, actually 1798 to 1820 22 00:02:35.240 --> 00:02:43.520 period, Reverend Thomas Robert Malthus, famous English Anglican churchman and economist, 23 00:02:43.520 --> 00:02:53.520 wrote his famous essay on population, giving rise to the theory called Malthusianism, an essay on population. 24 00:02:53.520 --> 00:03:01.520 And here we wrote this in a period when England had embarked on its industrial revolution, 25 00:03:01.520 --> 00:03:07.520 an industry was increasing tremendously, and standard living was going up a lot, and population was going up a lot. 26 00:03:07.520 --> 00:03:19.520 In other words, to put this, to oversimplify a lot, the population of Europe remain about the same from, say, 1000 AD to about 1750, with certain fluctuations, but basically remain about constant. 27 00:03:19.520 --> 00:03:23.520 See, we're used to a situation where the population grows every year. It didn't do that in the old days. 28 00:03:23.520 --> 00:03:30.520 So, then after the Industrial Revolution comes in about 1750, population of England started doubling after every 30 years or whatever. 29 00:03:30.520 --> 00:03:34.520 In other words, it started going up a lot, doubling in 50 years, whatever it was. 30 00:03:34.520 --> 00:03:46.520 And so Mouses is writing around here, observing a situation where the standard living was going up and the population was going up and he's very gloomy, everything is going to hell because population is pressing on the food supply. 31 00:03:46.520 --> 00:03:56.520 And he's writing this in a period, one of the few periods in population wasn't pressing on the food supply and he's gloom and doom itself, gloom and doom personified. 32 00:03:56.520 --> 00:04:04.040 So what he said was that the population tends to grow geometrically. 33 00:04:04.040 --> 00:04:12.240 What he meant by that is that every two people have four kids and this person has four kids 34 00:04:12.240 --> 00:04:17.120 or whatever, so it sort of grows exponentially or whatever over the years. 35 00:04:17.120 --> 00:04:20.720 You have a tremendous increase in population, something like fruit flies, you know, you 36 00:04:20.720 --> 00:04:25.360 give fruit flies their head and they quadruple every couple hours or whatever, it's not done 37 00:04:25.360 --> 00:04:26.360 at that rate. 38 00:04:26.360 --> 00:04:31.360 is that people, like animals or by food supplies or whatever, keep multiplying all the time. 39 00:04:31.360 --> 00:04:37.360 On the other hand, the food supply increases arithmetically. In other words, it only goes up a certain amount each year. 40 00:04:37.360 --> 00:04:44.360 So, as a result of that, the population tends to press, the famous phrase in Malfus, 41 00:04:44.360 --> 00:04:49.360 tends to press on the food supply, on the means of subsistence in food supply. 42 00:04:49.360 --> 00:04:54.360 So, population is always pressing on the means of subsistence, and this causes the wage rate 43 00:04:54.360 --> 00:05:03.360 always to be around subsistence level, just about enough to keep people functioning and reproducing, that's about it. 44 00:05:03.360 --> 00:05:11.360 So in other words, the standard of living can never go up for any length of time because people read faster and it presses the population right down again. 45 00:05:11.360 --> 00:05:22.360 So you have in other words that this is the wage rates, in real terms, not real wage rates, meaning corrected for inflation and price level changes. 46 00:05:22.360 --> 00:05:29.280 And if the man for labor goes up a little bit, let's say, and wage rates go up, very soon 47 00:05:29.280 --> 00:05:36.040 population will breed up until you're down again to the subsistence level. 48 00:05:36.040 --> 00:05:40.160 Ricardo then adopts this, Smith really adopts it more or less, Ricardo adopts it, and this 49 00:05:40.160 --> 00:05:42.400 gets into classical economics. 50 00:05:42.400 --> 00:05:45.880 And Karl Marx adopts it, let's see, what you have is basically the so-called iron law of 51 00:05:45.880 --> 00:05:57.080 People are always on the brink of starvation, in other words, because if they get a little 52 00:05:57.080 --> 00:06:02.400 bit more affluent, they breed more kids right away, and you're back down to the semi-starvation 53 00:06:02.400 --> 00:06:04.920 level. 54 00:06:04.920 --> 00:06:08.240 Population is then kept in check by various, what my mouth is called, checks, in other 55 00:06:08.240 --> 00:06:14.440 words, people are breeding like rabbits, and the population is kept down by famine, okay? 56 00:06:14.440 --> 00:06:22.840 by disease, which is more or less quite similar, and by war, where people are quarreling over 57 00:06:22.840 --> 00:06:27.720 the last piece of bread left or whatever, so they, so war, famine, disease, and keep 58 00:06:27.720 --> 00:06:33.480 down, keep down the population, keep the population level from going over the edge, actually goes 59 00:06:33.480 --> 00:06:35.920 over the edge and comes back again, so to speak. 60 00:06:35.920 --> 00:06:53.920 So this is a gloomy view of life in general, of course, and Malthus' only remedy for all this is what was known euphemistically as late marriages, known as abstinence, and late marriages, so that then you keep down the population level. 61 00:06:53.920 --> 00:07:01.920 As one might expect, there wasn't any mass adoption of this doctrine, in practice at least. 62 00:07:01.920 --> 00:07:05.920 So people might be Malthusian in theory, but in practice they didn't really follow this. 63 00:07:05.920 --> 00:07:13.920 The neo-Malthusians, who have more or less the same view as Malthus, except don't have a religious outlook, 64 00:07:13.920 --> 00:07:22.920 are of course in favor of birth control as a method rather than abstinence, rather keeping down the population. 65 00:07:22.920 --> 00:07:28.680 But the focus is more or less the same without the arithmetic geometric stuff, basically 66 00:07:28.680 --> 00:07:33.160 the idea being that the population keeps breeding, multiplying and separating, you have to have 67 00:07:33.160 --> 00:07:40.920 voluntary restraint of some sort, or even compulsory restraint to keep down a population. 68 00:07:40.920 --> 00:07:45.400 Oddly enough, by around the 1920s and 1930s, population growth was going down, as a matter 69 00:07:45.400 --> 00:07:49.340 of fact, to the extent that population in France, I think, was actually going down over 70 00:07:49.340 --> 00:07:51.000 the years. 71 00:07:51.000 --> 00:07:58.000 At this point, the population of Europe is leveling off and even going down after a couple of hundred years or a hundred fifty, yeah. 72 00:07:58.000 --> 00:08:09.000 Yeah, that certainly, that helped. World War I helped to reduce, yes, it helped to decrease the population a lot, no question about it. 73 00:08:09.000 --> 00:08:19.000 The, actually, in the Christmas Carol, Charles Dickens Scrooge, you're going to watch that on television or Reddit, 74 00:08:19.000 --> 00:08:23.000 Scrooge is the epitome of the Malthusian classical economists in work 75 00:08:23.000 --> 00:08:27.000 and anytime they ask Scrooge to give a dollar to the poor or something 76 00:08:27.000 --> 00:08:31.000 no, no, he says we have to reduce the surplus population 77 00:08:31.000 --> 00:08:35.000 and if you help anybody out it means you're delaying this beneficent process 78 00:08:35.000 --> 00:08:39.000 reducing surplus populations 79 00:08:39.000 --> 00:08:43.000 so the idea of the surplus population comes from Malthusian doctrine 80 00:08:43.000 --> 00:08:47.000 so this has been, yeah, you're right, World War I certainly 81 00:08:47.000 --> 00:09:00.000 And then by the 1930s, Western European governments began to give subsidies to get people to breed more kids because they were worried about cannon fodder again. 82 00:09:00.000 --> 00:09:05.000 How will France or Germany or whatever have enough people going in the army to fight? 83 00:09:05.000 --> 00:09:09.000 So they started having subsidies, bounties, per kid. 84 00:09:09.000 --> 00:09:15.960 After World War II, there was a big increase in number of kids, it was really, in the United 85 00:09:15.960 --> 00:09:20.200 States it was sociological, veterans came back and they started, there was a shift away from 86 00:09:20.200 --> 00:09:25.600 women working, there was a big increase in women working in the 20s and 30s. 87 00:09:25.600 --> 00:09:30.880 After World War II, there was a shift back to the home and family, etc., so-called baby 88 00:09:30.880 --> 00:09:36.640 boom came into operation, and a lot more kids were born in the 50s and 60s, big families 89 00:09:36.640 --> 00:09:40.360 became popular again, etc. 90 00:09:40.360 --> 00:09:46.500 By the 1970s, the late 60s, early 70s, the ZPG movement comes in, a bunch of neo-Malthusian 91 00:09:46.500 --> 00:09:51.900 hysterics who call it the zero population growth. 92 00:09:51.900 --> 00:09:56.960 And usually their forecasts are very similar to the guys who say that we're running out 93 00:09:56.960 --> 00:09:57.960 of oil in 10 years. 94 00:09:57.960 --> 00:09:58.960 It's very similar. 95 00:09:58.960 --> 00:10:03.920 They took the population growth, say, the rate of population growth in the 1960s, extrapolated 96 00:10:03.920 --> 00:10:07.560 for a hundred years, as if it's going to continue at the same rate, it came to conclusion in 97 00:10:07.560 --> 00:10:11.640 fifty years that we won't have any room to walk, you know, two quadrillion people and 98 00:10:11.640 --> 00:10:16.000 we couldn't move, that was basically the argument. 99 00:10:16.000 --> 00:10:22.280 And using computers, etc., doesn't deduce the naïve pay of this approach. 100 00:10:22.280 --> 00:10:27.160 And they started calling for zero population growth, for advanced birth control techniques, 101 00:10:27.160 --> 00:10:28.160 etc., etc. 102 00:10:28.160 --> 00:10:32.660 Economists, some economists are in the forefront of this, it's typical of the only economists 103 00:10:32.660 --> 00:10:38.100 came up, the distinguished professor, economist, Professor Boulding of the University of Colorado 104 00:10:38.100 --> 00:10:42.500 came up, he was a big ZPG person, he wanted to introduce a marketing approach too, he didn't 105 00:10:42.500 --> 00:10:48.700 see the true ZPG, or the militant ZPG, or the favorite compulsory birth control, in other 106 00:10:48.700 --> 00:10:52.900 words, allowing every woman can only have two kids, if you have a third kid you shoot 107 00:10:52.900 --> 00:10:58.340 the kid, or whatever the approach is, okay, these are the extremists, this has been done 108 00:10:58.340 --> 00:11:05.700 and I believe in some extent in China, at least under Mao, the compulsory, compulsory 109 00:11:05.700 --> 00:11:12.260 sterilization and compulsory infanticide, we can call it late abortion, I guess you 110 00:11:12.260 --> 00:11:13.260 can call it. 111 00:11:13.260 --> 00:11:20.420 At any rate, the, Bolden being a sort of free market economist comes up with a market approach 112 00:11:20.420 --> 00:11:26.380 to talk to two people for every woman, two kids for every woman. 113 00:11:26.380 --> 00:11:33.880 His approach is this, we shouldn't say every woman should have only two kids, that's sort of tyrannical, sort of despotic, sort of totalitarian. 114 00:11:33.880 --> 00:11:42.380 What we should do is this, every woman is conferred the right, at whatever age, the age of 10 or something, to give each female the right to have two kids. 115 00:11:42.380 --> 00:11:51.380 This right, however, is negotiable on the market, so that if you want to have three kids, you have to buy the right from some woman that doesn't want two kids, wants to have one or zero kids. 116 00:11:51.380 --> 00:11:57.500 They have a free market, quote-unquote free market, and baby rights, and this way you 117 00:11:57.500 --> 00:12:01.820 pay in the end a market price, the baby right is then determined by supply and demand, like 118 00:12:01.820 --> 00:12:08.460 taxi medallions are, we'll get into that today on Thursday, is determined then by supply and 119 00:12:08.460 --> 00:12:09.940 demand. 120 00:12:09.940 --> 00:12:14.300 Only an economist could come up with this nonsense, and it's true that it would be better 121 00:12:14.300 --> 00:12:19.780 from a libertarian perspective to have a free market and baby rights to have two kids for 122 00:12:19.780 --> 00:12:23.980 for every female. It's still totalitarian, however, it's only the icing on the cake. 123 00:12:23.980 --> 00:12:30.420 At any rate, the ZPG hysteria reaches maximum around, I would say, the early 1970s, just 124 00:12:30.420 --> 00:12:37.220 at the point when population growth began to decline. In other words, this is typical 125 00:12:37.220 --> 00:12:42.100 of what happens in social trends. Hysteria about a certain problem usually reaches maximum 126 00:12:42.100 --> 00:12:48.540 just after the problem is being eliminated. So when the 1970s census came out, it takes 127 00:12:48.540 --> 00:12:51.580 In the course of about two or three years of the process of census, they discovered by 128 00:12:51.580 --> 00:12:57.220 God and low and behold, population growth declined severely during the 1960s and reached 129 00:12:57.220 --> 00:13:01.780 a point where ZPG would arrive in about 20, 30 years or whatever. 130 00:13:01.780 --> 00:13:08.780 So as a result of this discovery, the ZPG has more or less died out in the last 10 years. 131 00:13:08.780 --> 00:13:11.860 It might always come back again, these things happen in fashions. 132 00:13:11.860 --> 00:13:18.460 So something like hemlines or whatever, every 10 years there's a different schtick here 133 00:13:18.460 --> 00:13:25.940 But at any rate, they're now getting to the point, now that we have more or less, we're 134 00:13:25.940 --> 00:13:29.420 getting to the point of ZPG, we're getting to the point of declining population growth. 135 00:13:29.420 --> 00:13:33.340 These same people were complaining about the no standing room, you have to have compulsory 136 00:13:33.340 --> 00:13:37.620 birth control or whatever, and I was saying, Jesus, there's a lot of problems with slower 137 00:13:37.620 --> 00:13:38.620 population growth. 138 00:13:38.620 --> 00:13:41.380 It means that the population gets older every year, and indeed it does. 139 00:13:41.380 --> 00:13:46.940 In other words, if you cut down the rate of population growth, this is the so-called population 140 00:13:46.940 --> 00:13:53.940 The age pyramid, if this is the number of people from 0 to 10 and 10 to 20 and 60 to 80 or something, 141 00:13:53.940 --> 00:13:57.940 and the width is the number of people, this is the age bracket, 142 00:13:57.940 --> 00:14:05.940 if you cut down, if you have a high population growth, it means you have a big base of the pyramid on the small top, 143 00:14:05.940 --> 00:14:10.940 if you have, if you cut down population growth, of course the average age is going to get older, obviously, 144 00:14:10.940 --> 00:14:13.940 so all of a sudden these same jerks are now saying, jeez, it means the average age is getting older, 145 00:14:13.940 --> 00:14:18.440 more old people to support, we have to shoot the old people now 146 00:14:18.440 --> 00:14:21.440 before we shot the kids, now we have to shoot the old people 147 00:14:21.440 --> 00:14:25.440 that's the latest problem on the horizon 148 00:14:25.440 --> 00:14:29.940 at any rate, also the mayors of different cities kept saying, no, there must be more people 149 00:14:29.940 --> 00:14:32.940 in other words, they had a census, every ten years there's a census 150 00:14:32.940 --> 00:14:35.940 the census says, I don't know, 3.2 million people in a certain city 151 00:14:35.940 --> 00:14:40.440 the mayor says, no, no, it's got to be 3.8 million because they get federal aid per person 152 00:14:40.440 --> 00:14:47.440 So every mayor of every city is constantly scouring, beating the bushes, calling for a recap, demanding more people. 153 00:14:47.440 --> 00:14:52.440 And these same people 10 years ago were calling for compulsory birth control, more or less, or something like it. 154 00:14:52.440 --> 00:15:02.440 At any rate, the major point here is that the whole population problem is overblown. 155 00:15:02.440 --> 00:15:05.440 It's not really much of a problem. 156 00:15:05.440 --> 00:15:17.440 And the C1, that's one of the best ways to look at it, is a concept called the optimum population point. 157 00:15:17.440 --> 00:15:31.440 The word optimum is a bad one, it implies that it's somehow the best population, but it's not supposed to mean that, but anyway, it's a useful way of looking at it. 158 00:15:31.440 --> 00:15:46.440 If you have a diagram on the y-axis as standard of living, or output per person, or productivity, or output of goods per person. 159 00:15:46.440 --> 00:15:52.440 Obviously you can't really measure it, but in some vague way you can understand it can be more or less. 160 00:15:52.440 --> 00:15:58.440 If the output per person is on the y-axis, the number of people is on the x-axis. 161 00:15:58.440 --> 00:16:04.840 And again, if you've got no people, if the whole world was wiped out by, let's say I had a neutron bomb, a giant neutron bomb wiped out, 162 00:16:04.840 --> 00:16:14.840 a neutron bomb, of course, is one that is beloved by many amongst the establishment of think tank types, it kills only people, it doesn't destroy any property, it only kills people, it makes it good. 163 00:16:14.840 --> 00:16:22.040 I could never figure out why, exactly, many of us, at any rate, if you have no people, the whole world will be wiped out by one giant plague, 164 00:16:22.040 --> 00:16:26.840 there will still be the factories and the land and the natural resources, there won't be no people, there won't be no production. 165 00:16:26.840 --> 00:16:31.560 Again, you start at the point of origin. Zero people, zero production. 166 00:16:31.560 --> 00:16:36.280 At any given time, in other words, given the capital investment and given the technological knowledge, 167 00:16:36.280 --> 00:16:41.720 at any given moment, you have something like this. If you add one more person, you get some production, etc. 168 00:16:41.720 --> 00:16:46.080 So you get to the point, an output per person, where it reaches a peak, 169 00:16:46.080 --> 00:16:49.440 and you get more and more people, and finally turns downward. 170 00:16:49.440 --> 00:16:53.720 This is, in a sense, average productivity. Remember, the average physical productivity. 171 00:16:53.720 --> 00:16:57.800 overall average physical productivity can never get negative, you can't have minus 172 00:16:57.800 --> 00:17:02.640 production. You keep adding people with a fixed amount of capital goods and resources, 173 00:17:02.640 --> 00:17:06.240 land and technological knowledge 174 00:17:06.240 --> 00:17:11.320 will start turning down. So this is essentially the average productivity 175 00:17:11.320 --> 00:17:15.320 curves. 176 00:17:15.320 --> 00:17:19.320 And we can say that for any given level of 177 00:17:19.320 --> 00:17:22.960 capital and technological knowledge that 178 00:17:22.960 --> 00:17:27.240 Those number of people which yield the maximum average productivity is the so-called optimum 179 00:17:27.240 --> 00:17:28.240 population point. 180 00:17:28.240 --> 00:17:32.240 Let's say for a certain country or a certain time it's two million. 181 00:17:32.240 --> 00:17:37.280 This is two million, this is the code optimum population. 182 00:17:37.280 --> 00:17:42.800 So that below that you have a lower productivity per person, and above that you have a lower 183 00:17:42.800 --> 00:17:44.140 productivity per person. 184 00:17:44.140 --> 00:17:48.560 So what we're saying is that at some point there's some kind of maximum. 185 00:17:48.560 --> 00:17:51.660 Now nobody knows what the maximum is, there's no way at any given time or any given country 186 00:17:51.660 --> 00:17:52.660 to figure it out. 187 00:17:52.660 --> 00:17:57.700 test, but you can sort of vaguely say, alright, this is more or less the situation, but somewhere 188 00:17:57.700 --> 00:18:03.100 around there, probably, and if you look at it this way, if, for example, tomorrow, half 189 00:18:03.100 --> 00:18:08.060 the people in the country died of a plague, and so there would only be half the people 190 00:18:08.060 --> 00:18:11.060 left, productivity of the person would go way down, because there wouldn't be enough 191 00:18:11.060 --> 00:18:15.660 people to man the various machines and the rest of it, and so the productivity of the 192 00:18:15.660 --> 00:18:16.660 person would go down. 193 00:18:16.660 --> 00:18:20.140 On the other hand, if you had a magic cloning system, like in the science fiction pictures 194 00:18:20.140 --> 00:18:24.460 and so on and so forth, everybody is automatically, instantaneously cloned, they have twice as 195 00:18:24.460 --> 00:18:28.140 many people and obviously they had nothing to do, there would be no way that they could 196 00:18:28.140 --> 00:18:32.820 fit into the current system and the productivity per person would go down too. 197 00:18:32.820 --> 00:18:35.860 So in other words, somewhere, we're somewhere in here, nobody knows exactly where we are 198 00:18:35.860 --> 00:18:39.280 at any given time, somewhere around the, near the peak or something. 199 00:18:39.280 --> 00:18:44.300 So that you then say, this is not a moral optimum, doesn't say this is the best population 200 00:18:44.300 --> 00:18:48.140 point, but it does say this, if your people are then confronted with some kind of a choice, 201 00:18:48.140 --> 00:18:53.380 In other words, they have more kids at a cost of a slightly lower living standard for the 202 00:18:53.380 --> 00:18:54.380 family. 203 00:18:54.380 --> 00:18:57.300 So in other words, and they can adopt, they can choose having more kids, they can choose 204 00:18:57.300 --> 00:19:01.020 having eight kids knowing that your income per kid will be going down. 205 00:19:01.020 --> 00:19:05.940 You're choosing to be a little bit further to the right, in other words, you're trading 206 00:19:05.940 --> 00:19:09.860 off between living standards for the family and having more kids. 207 00:19:09.860 --> 00:19:13.820 After all, having kids is presumably a positive benefit for the family, otherwise they presumably 208 00:19:13.820 --> 00:19:14.820 wouldn't have them. 209 00:19:14.820 --> 00:19:18.820 So in other words, they're trading off a psychic benefit of having a kid as against the possible 210 00:19:18.820 --> 00:19:21.540 psychic cost of the drop in the average living standard. 211 00:19:21.540 --> 00:19:24.940 And each family will make its own decision on that basis. 212 00:19:24.940 --> 00:19:27.940 So that's, I think, a much better way of looking at it. 213 00:19:27.940 --> 00:19:34.460 In other words, population usually fits in what economically desirable at the time. 214 00:19:34.460 --> 00:19:41.100 At any given point, they can trade off, every person or individual or family can trade off 215 00:19:41.100 --> 00:19:42.220 Living Standard 216 00:19:42.220 --> 00:19:43.740 and a number of people. 217 00:19:45.940 --> 00:19:49.300 Another thing, also very important to look at, is over time 218 00:19:49.300 --> 00:19:53.620 productivity keeps going up. As I said, real wage rates go up and employment 219 00:19:53.620 --> 00:19:56.260 goes up over time, capital keeps increasing. 220 00:19:56.260 --> 00:19:57.380 It gets better. 221 00:19:57.380 --> 00:20:01.500 So what you have over time is this sort of stuff. It's a family of curves 222 00:20:01.500 --> 00:20:03.520 which over time keeps 223 00:20:03.520 --> 00:20:06.760 increasing so that the 224 00:20:06.760 --> 00:20:08.560 productivity keeps going up 225 00:20:08.560 --> 00:20:13.680 and the optimum population point keeps increasing, so it goes up from here to here to there, etc., etc. 226 00:20:13.680 --> 00:20:16.520 So over the decades and the centuries 227 00:20:16.520 --> 00:20:22.920 the optimum population point keeps going up. Instead of more people being a threat, more people is a good thing even economically because 228 00:20:22.920 --> 00:20:26.440 you're able to provide more division of labor. 229 00:20:26.440 --> 00:20:31.000 If there's only one person left in the country, you have a neutron at play, 230 00:20:31.000 --> 00:20:33.020 one person is left, you wouldn't be able to 231 00:20:33.020 --> 00:20:36.960 produce much of anything, even with all this massive equipment. 232 00:20:36.960 --> 00:20:41.320 This optimum population point keeps going up over time 233 00:20:41.320 --> 00:20:44.780 When Columbus discovered America, there were about 234 00:20:44.780 --> 00:20:47.920 nobody knows exactly how many Indians there were here, there was 235 00:20:47.920 --> 00:20:51.300 somewhere, say a few million, say five million 236 00:20:51.300 --> 00:20:52.520 something like that 237 00:20:52.520 --> 00:20:55.560 The Indians were mostly living on a subsistence level, they indeed were living on a subsistence level 238 00:20:55.560 --> 00:20:59.800 because they're more or less adapted, the population more or less adapted 239 00:20:59.800 --> 00:21:03.880 for the available resources 240 00:21:03.880 --> 00:21:14.880 So you have five million Indians living at the subsistence level. We now have, and this is all of North America by the way, South, Central and Canada and the United States, about five million. Now we have in this whole area about 200 million, something like that. 241 00:21:14.880 --> 00:21:21.880 Almost each of which is living at an infinitely higher living standard than the five million over here when we got, when the Europeans got here. 242 00:21:21.880 --> 00:21:27.880 So in other words, what you have then is over time an enormous increase in population, each one at a much higher living standard. 243 00:21:27.880 --> 00:21:33.000 standards. In other words, the optimum population point keeps shifting upward and to the right 244 00:21:33.000 --> 00:21:36.440 as you have more and more capital equipment and more better technology and all the rest 245 00:21:36.440 --> 00:21:42.380 of it. So population, in other words, is not really an active force. It usually adapts 246 00:21:42.380 --> 00:21:49.280 over time to the available living standards, available resources. It's very much like energy 247 00:21:49.280 --> 00:21:54.880 things adapt. Oil does not become short because you find more oil, you get other energy sources. 248 00:21:54.880 --> 00:22:06.320 It's something similar in population, but usually what's happened in population growth 249 00:22:06.320 --> 00:22:10.880 in the underdeveloped countries, developing countries, whatever you want to call them, 250 00:22:10.880 --> 00:22:16.280 third world countries, there's been a fashion on this too, in the time I've been teaching 251 00:22:16.280 --> 00:22:20.760 economics, third world countries were originally called backward countries. 252 00:22:20.760 --> 00:22:24.620 This was considered discriminatory or nasty. 253 00:22:24.620 --> 00:22:29.200 The word backward was then outlawed, and then they were called undeveloped countries. 254 00:22:29.200 --> 00:22:32.360 This also was considered nasty, and then it was called developing countries, which is 255 00:22:32.360 --> 00:22:36.200 very peculiar because we're all developing, and you don't have to be, it's very odd. 256 00:22:36.200 --> 00:22:40.200 So now it's called third world, I guess it's just as good as anything else. 257 00:22:40.200 --> 00:22:45.280 Anyway, third world countries, what happened there was, usually again the population level 258 00:22:45.280 --> 00:22:46.280 was about the same. 259 00:22:46.280 --> 00:22:52.280 In other words, birth rates and death rates, this is what happened in England before 1750. 260 00:22:52.280 --> 00:22:59.280 In a sense they weren't pressing on means of assistance, well except they weren't, everybody's not at starvation level, it was a much higher level. 261 00:22:59.280 --> 00:23:05.280 At any rate, in a sense birth rates and death rates were about the same and population more or less remained about the same. 262 00:23:05.280 --> 00:23:15.280 And then what happened was, in England in the 18th century, what happened was a big drop in the death rate due to better food. 263 00:23:15.280 --> 00:23:22.720 In other words, they're eating better, nutrition was better, and therefore disease was kept under control. Disease is much less. 264 00:23:22.720 --> 00:23:29.920 Disease is largely caused, by the way, by bad, bad food. In other words, inadequate nutrition, one way or the other. 265 00:23:29.920 --> 00:23:35.760 And so, as nutrition got better, disease rates and death rates in Britain went way down. 266 00:23:35.760 --> 00:23:43.280 The same thing happened in third world countries in the 1940s and 50s. As Western medicine spread to the third world countries, death rates fell very sharply. 267 00:23:43.280 --> 00:23:47.780 So what you have is, here's the birth rate, population of course is determined by birth rate and death rate. 268 00:23:47.780 --> 00:23:51.480 Make it very simple, birth rate minus the death rate. 269 00:23:51.480 --> 00:23:57.080 In other words, the birth rate per thousand is five, and the death rate per thousand is four. 270 00:23:57.080 --> 00:24:00.780 You can have an increase in population of one per thousand. 271 00:24:00.780 --> 00:24:05.680 So the death rate suddenly fell, okay, and that was very sharply. 272 00:24:05.680 --> 00:24:10.880 More so in the third world in 1940, you have a very dramatic drop in the death rates. 273 00:24:10.880 --> 00:24:21.880 and birth rate continues on for a while. So what you have during this period is a tremendous increase in population and there are studies in Barbados in West India, Barbados in Jamaica, etc. 274 00:24:21.880 --> 00:24:26.880 You can see that happening as the death rate falls in the 40s and 50s and the birth rate remains the same. 275 00:24:26.880 --> 00:24:32.880 Big population increase and most people think that all of a sudden people breed faster. There's a tremendous increase in births. That's not the way it works. 276 00:24:32.880 --> 00:24:37.880 The birth rate remains about the same just as the death rate falls and so the population goes up. 277 00:24:37.880 --> 00:25:00.880 And then what happens after 20, 30, 40 years, after a transition period, people get used to a higher, want a higher living standard, the birth rate usually falls proportionately, so you wind up somewhere like here, back to an equilibrium level, so to speak, with people then voluntarily cutting their births in order to enjoy a higher living standard for the family. 278 00:25:00.880 --> 00:25:09.880 And this is what happened in England in the 19th century and what's happening now in third world countries, it's already beginning to happen, this process. 279 00:25:09.880 --> 00:25:16.880 It takes a little while but the thing is you can't just extrapolate population growth rates for hundreds of years. 280 00:25:16.880 --> 00:25:20.880 There's adaptation taking place all the time and this is one of them. 281 00:25:20.880 --> 00:25:28.380 So, it's happening now in the United States, after hysteria was taking over, by the 1960s, birth rates started to fall. 282 00:25:28.380 --> 00:25:33.380 As I say now, they're beginning to bellyache of an older population, as a result. 283 00:25:33.380 --> 00:25:36.380 This is one of the, anyway, there's no way of getting around this. 284 00:25:36.380 --> 00:25:42.380 If you cut the population growth, birth rates, I mean, the average age of the population is going up. 285 00:25:42.380 --> 00:25:54.380 So, at any rate, this is the, therefore, usually the situation is there's no real long-range worry about population. 286 00:25:54.380 --> 00:25:58.380 Population usually adapts to the resources and the standard of living available. 287 00:25:58.380 --> 00:26:03.380 And I hope this has learned to quiet. 288 00:26:03.380 --> 00:26:08.380 And as I say, the population history has really damped down for a while, but it can always pop up again. 289 00:26:08.380 --> 00:26:16.380 When it comes to the policy of China, how do you eliminate these grounds? 290 00:26:38.380 --> 00:26:42.380 The problem is really, in other words, if you take the, let's take another thing. 291 00:26:42.380 --> 00:26:48.380 If you take, yeah, I think they were sucked into it by Western Malthusians, demographers. 292 00:26:48.380 --> 00:26:58.380 Oh sure, yeah, but I mean the thing is that part of the living standard is having, for people who want to have kids, part of their living standard is having kids. 293 00:26:58.380 --> 00:27:03.380 In other words, the standard of living is a psychic question, not just strictly a material one. 294 00:27:03.380 --> 00:27:07.380 In other words, you're trying to fulfill various goals and objectives. 295 00:27:07.380 --> 00:27:11.380 If one of your goals is to have several kids, that's part of your living standards. 296 00:27:11.380 --> 00:27:14.380 You can't have an outside person arbitrarily say, 297 00:27:14.380 --> 00:27:17.380 we want to increase your living standard by forcing you not to have kids. 298 00:27:17.380 --> 00:27:20.380 To them, that's a real cut in psychic income. 299 00:27:20.380 --> 00:27:23.380 I mean, after all, the objective is psychic income. 300 00:27:23.380 --> 00:27:28.380 In other words, to fulfill whatever your objectives happen to be or your goals happen to be. 301 00:27:28.380 --> 00:27:32.380 The question is, can an outside group set your goals for you 302 00:27:32.380 --> 00:27:50.380 Another thing, if you look at population density, another way of looking at it is this. There is no correlation between population density, which the objective method is the number of people per square mile, and standard of living. 303 00:27:50.380 --> 00:27:57.380 In other words, if you were right or the Malthusians were right, it should be a higher the density, it should be a lower the standard of living. 304 00:27:57.380 --> 00:28:04.380 It doesn't work that way at all. In some cases, it's almost the opposite. 305 00:28:08.980 --> 00:28:15.900 For example, in the Western world, the highest density population is probably Holland, certainly Western Europe. 306 00:28:15.900 --> 00:28:22.900 Holland has a high standard of living and a high density. 307 00:28:22.900 --> 00:28:31.740 Holland is probably the highest density, one of the highest standards living in Europe. 308 00:28:31.740 --> 00:28:37.340 West Germany is a high living, high density population. 309 00:28:37.340 --> 00:28:45.660 The United States has a much lower density population than West Europe, on the other 310 00:28:45.660 --> 00:28:51.140 hand, has a higher density population than a lot of other countries. 311 00:28:51.140 --> 00:28:58.140 Switzerland is somewhere in the middle of density. Switzerland is a high density population. It's got a very high standard of living. 312 00:28:58.140 --> 00:29:06.140 As a matter of fact, you can tell the difference if you ever visit both the Alps and the Iraqis. It's very instructive. 313 00:29:06.140 --> 00:29:12.140 If you look at population density, the Alps are magnificently high. I like high density, at least up to a certain point, personally. 314 00:29:12.140 --> 00:29:16.140 I mean, if you live in Manhattan, you have to like high density anyway. 315 00:29:16.140 --> 00:29:23.600 In Switzerland, going to the Alps, every Alp is tilled, cultivated, there's a cabin everywhere, 316 00:29:23.600 --> 00:29:25.980 the cows are all on the slopes, it's great. 317 00:29:25.980 --> 00:29:29.620 You go to the Rockies, there's no people, not money, no people. 318 00:29:29.620 --> 00:29:36.900 You go from, you drive across the country from, we get to Nebraska, from Nebraska until 319 00:29:36.900 --> 00:29:41.300 the border of California, about 2,000 miles of zip, there's nothing there, no people, 320 00:29:41.300 --> 00:29:45.700 no houses, no trees, no nuts. 321 00:29:45.700 --> 00:29:50.860 And I also want to suggest that for the ZPG people who are worried about high population 322 00:29:50.860 --> 00:29:53.140 growth in the United States, what you have to do is to parachute them in Arizona and 323 00:29:53.140 --> 00:29:56.140 Wyoming and let them fend for themselves for a while. 324 00:29:56.140 --> 00:30:01.060 It's annoying, there's nothing else there, zip! 325 00:30:01.060 --> 00:30:07.220 Even in California, except for selected sectors, it's a very low density population. 326 00:30:07.220 --> 00:30:12.980 And again you have, in Asia, probably the highest densities in Hong Kong, enormous density, 327 00:30:12.980 --> 00:30:24.980 We have an extremely high standard of living for Asia, we have, those of you who have been to Hong Kong, I mean it makes Manhattan look like Wyoming, let's face it. 328 00:30:24.980 --> 00:30:29.980 Any time of the day and night, you go out in four in the morning, there's thousands of people bumping into you. 329 00:30:29.980 --> 00:30:37.980 Up the mountain slopes, there's apartment houses up to the peak of every mountain, rows and rows of apartment houses, fantastic. 330 00:30:37.980 --> 00:31:04.980 And that's it. So it's Japan is very high density and very high population and a very high living standard and also some of the highest, some of the poorest areas in the world are low density. Africa, which is a very low standard living, is usually very low density. 331 00:31:04.980 --> 00:31:11.980 The problem in Africa is that there are resources and no capital investments, even though there are very few people, they're starving. 332 00:31:11.980 --> 00:31:24.980 In other words, you have what you have, and mostly in Africa, the population density is very low, and standard living is very low. 333 00:31:24.980 --> 00:31:32.980 In many parts of South America also, South America has low density and low standard living. 334 00:31:32.980 --> 00:31:39.660 Brazilian interior, low standard of living, and people are all starving and low density. 335 00:31:39.660 --> 00:31:44.560 So what you have over the world is a high income, a high increase of income, increase 336 00:31:44.560 --> 00:31:46.540 of capital investment will attract more people. 337 00:31:46.540 --> 00:31:50.700 People then move from where they're starving to the areas where there's more opportunity 338 00:31:50.700 --> 00:31:53.660 like the United States in the 19th century or now. 339 00:31:53.660 --> 00:31:59.300 So the population flows to where they can flow, permitted by migration barriers, flows 340 00:31:59.300 --> 00:32:02.960 to where there's more opportunity and higher living standards. 341 00:32:02.960 --> 00:32:09.400 So in Singapore, very high density, very high standard of living, families and other people 342 00:32:09.400 --> 00:32:13.480 involved because if they weren't working in the factories, they were starving, literally. 343 00:32:13.480 --> 00:32:19.320 So it's considered better to have an eight-year-old working in a cotton spinning, et cetera, than 344 00:32:19.320 --> 00:32:24.080 an eight-year-old to die out. It's considered better by the kid himself and by the family. 345 00:32:24.080 --> 00:32:30.840 It's only outside intellectuals, even though it's going on, sociologists, journalists, 346 00:32:30.840 --> 00:32:33.840 and so on and so forth, who got the thing all screwed up, they never went to the rural 347 00:32:33.840 --> 00:32:34.840 areas. 348 00:32:34.840 --> 00:32:38.800 And this is one of the problems, by the way, with third world economists, I mean, American 349 00:32:38.800 --> 00:32:42.760 economists who go to third world countries, at least until quite recently, would never 350 00:32:42.760 --> 00:32:43.760 go to the rural areas. 351 00:32:43.760 --> 00:32:47.320 They'd just sit there in the capital city and get the government air-conditioned clubs 352 00:32:47.320 --> 00:32:49.840 and get the government handouts, you know, the government officials never went to the 353 00:32:49.840 --> 00:32:50.840 rural areas either. 354 00:32:50.840 --> 00:32:53.180 They didn't want to schlep up there in the jungles. 355 00:32:53.180 --> 00:32:58.360 So the misconception, misperception of what was going on is enormous. 356 00:32:58.360 --> 00:33:04.000 And at any rate, so this is pretty clear that there's no correlation between population 357 00:33:04.000 --> 00:33:10.360 density and standard of living, and so the focus on the population being the key element 358 00:33:10.360 --> 00:33:15.400 I think misconceives the problem. 359 00:33:15.400 --> 00:33:20.720 In the West Indies historically, when new entrepreneurial-type groups come in like Chinese 360 00:33:20.720 --> 00:33:25.400 and Lebanese emigrate to the West Indies, a result with no capital, they just come in 361 00:33:25.400 --> 00:33:29.080 So they get in there, they start being entrepreneurs and saving and investing and so they wind 362 00:33:29.080 --> 00:33:33.640 up creating more jobs and more employment and better working conditions than without 363 00:33:33.640 --> 00:33:34.640 them. 364 00:33:34.640 --> 00:33:37.360 So you have an increased population and a higher standard of living as a result of the 365 00:33:37.360 --> 00:33:38.360 increased population. 366 00:33:38.360 --> 00:33:44.160 This often happens in the Chinese, mostly in the rest of Asia, perform the same entrepreneurial 367 00:33:44.160 --> 00:33:45.160 role. 368 00:33:45.160 --> 00:33:51.960 Anyway, but I think you'll now find the new trends in China, I think they're getting away 369 00:33:51.960 --> 00:33:55.960 from us, folks radio, okay, birth control.