Assuming the world can feed five billion Asians, four billion Africans and 2 billion ‘other’, the above graph plots the population growth 1960–2100 based on predictions by the United Nations. However, a different set of predictions was published in 1972 in a book titled Limits to Growth, which takes into account declining birth rates, pollution and depletion of resources leading to a premature collapse of the global economy.
What is driving population growth? I believe that the developing world’s demand for consumer products and services drives demand for human capital, namely large numbers of (low wage) laborers and the required managerial talent to lead them. But by incorrectly projecting a linear growth of demand beyond sustainable levels the global economy incentives an unprecedented overshoot of ‘labor production’ i.e. new births of people destined to become future workers.
Supply of Human Capital
According the supply chain theory complex chains suffer greatly from inefficiency when intermediaries hoard supplies in anticipation of future demand. This causes an overshoot in production by producers upstream of the chain. In the case that demand is not met, unsaleable supplies and products may put companies out of business and hurt the economy as a whole. In some cases the entire chain may collapse.
Historically, and even today, we have seen large numbers of people from rural areas migrating to nearby cities in hopes of better lives. The upper middle and upper classes will not be very wiling to give birth to large families of children merely to send them off to work in crowded factories.
This means that not all people are born equal. The majority of people from undeveloped rural areas are considered human livestock born to populate factories or perform other menial jobs. The mechanism is that wealthy people are not willing to send their children off to poor, unrewarding jobs.
The Great Detachment
As Europe started rebuilding itself after World War II soon economic growth outpaced population growth. I call it the great detachment because local economies no longer served local communities. AS the demand for mostly low wage labor skyrocketed several European countries such as France, United Kingdom, Belgium, The Netherlands, Germany and others invented a scheme we now know as the guest worker mass immigration.
Dutch researcher Paul Scheffer wrote a book about the guest worker phenomenon, a political policy that officially ended in The Netherlands and Germany around 1973. Businesses in demand of labor were allowed to recruit workers from Morocco and Turkey. Scheffer describes how Dutch companies selected workers based on their level of education, namely: a high school diploma was considered over-educated.
Although the mass guest worker immigration policy officially ended, it was essentially extended through legal family reunion, including brothers, sisters and their families. Even today many descendants of the former guest workers marry a partner from their home countries. Whereas indigenous native Dutch continue to have low birth rates, the first and second generations of guest worker immigrants provided ample offspring.
The Hidden Class
But while guest workers are employed in the western world, a much larger hidden class of workers is employed over seas. How many people in China are employed in factories that refine or produce parts that end up in Apple’s iPhone, sold to mostly western consumers? They range in the hundreds of thousands. Western demand for consumer products employs hundreds of millions if not billions of people worldwide.
The point is that human population growth -mothers deciding to have children- is based on exaggerated estimates. In reality a stagnating or even dropping demand for consumer products in the western world will have a ripple effect across the global economic supply chain. Ultimately the least productive people, manual laborers in Third World countries, will be hit with hunger and extreme poverty.
It requires dedicated global leadership to slow down economic growth and prepare for a world without growth for growth’s sake, towards a world of quality over quantity, and happiness over money.