Inequality and Good Intentions

Copyright, The New York Times Company

A new book says good intentions are a barrier to equality and to progress among the world’s poor.

For most of human history, family incomes were barely enough to survive and life was short. But in “The Great Escape: Health, Wealth and the Origins of Inequality,” Professor Angus Deaton of Princeton writes that while economic progress allowed much of the world to escape poverty, “escapes leave people behind, and luck favors some and not others; it makes opportunities, but not everyone is equally equipped or determined to seize them.”

Professor Deaton also deals with the events after the great escape: that is, how the progress of some families and nations affects the prospects for progress of those initially left behind.

Imitation is one force and works in the direction of progress for all. The poor can look to the progress of others to embark on their own escape. Professor Deaton shows how the imitation of new methods has occurred, for example, with medical technologies that have allowed the residents of a number of poor nations to live longer than Americans did just a hundred years ago, and sometimes longer than Americans live today.

But new methods can harm those with vested interests in the old ones, and the vested interests can use their political power to block competition and progress. Professor Deaton explains how “the emperors of China, worried about threats to their power from merchants, banned oceangoing voyages in 1430,” adding, “Similarly, Francis I, emperor of Austria, banned railways because of their potential to bring about revolution and threaten his power.”

Progress begets inequality, and the resulting inequality can either encourage more progress or impede it, or both. Professor Deaton suggests that inequality in the modern United States has had both of these effects.

He points to a third influence of progress and inequality on outcomes for those left behind: good intentions. As part of the world becomes rich and no longer worries about day-to-day survival, it can look outward. Many residents of developed countries have a “need to help” those less fortunate.

But the attempts to help often – perhaps even usually – go awry.

As medical progress began to diffuse around the world, people stopped dying so young, and that made for an increase in population, especially in less-developed countries. Developed countries thought they would help poor nations by encouraging population control, based on the dubious proposition that more people means more poverty.

“What the world’s poor – the people who were actually having all these babies – thought about all this was not given much consideration,” Professor Deaton says, citing China’s continuing one-child policy as an example. He adds: “The misdiagnosis of the population explosion by the vast majority of social scientists and policy makers, and the grave harm that the resultant mistaken policy did to many millions, were among the most serious intellectual and ethical failures of a century in which there were many.”

Other types of foreign aid to developing nations have also been a disaster, he says, with “pictures of starving children being used to raise funds that were used in part to prolong war, or to N.G.O.-funded camps being used as bases to train militias bent on genocide.”

Professor Deaton’s book is primarily international in focus, and he insists that help for the American poor is different and more effective than aiding the world’s poor. Nevertheless, American readers may be left wondering how much aid to American poor, is, as Professor Deaton says, “more about satisfying our own need to help, and less about improving the lot of the poor.”

Nanny Robots and Population Growth

Copyright, The New York Times Company

As any parent can attest, caring for young children is time-intensive. As a result, child care is one of the largest segments of the economy, at least when the nonmarket household sector is included.

Many parents treasure their children and feel the benefits outweigh the time and costs of having children. Many other adults decide not to have their own children, and the time costs are sometimes a factor in that decision. (To be sure, the influences are complex; a study by Satoshi Kanazawa of the London School of Economics, which suggests that women with higher IQs are less likely to have children, made waves in the blogosphere in recent days.)

The time costs of child care are also a factor limiting teenage pregnancy. Teenagers are encouraged to complete high school and higher levels of schooling, and students’ parents, teachers and counselors – if not the teenagers themselves – understand that teenage motherhood takes time away from schoolwork and thereby makes academic success less likely.

The world would be very different if children did not need so much time. More people, perhaps especially teenagers, would have children if children did not require so much time and attention, especially from their mothers. People who already have children despite the cost might have more of them if they expected each child to require less time.

As the time costs of children limit population growth, the population would be likely to grow more rapidly if those costs were somehow reduced, whether you think that such growth is a good thing or a bad one.

If each child required less parental time, you might expect parents – especially mothers – to use their time on other things, like work more outside the home, pursue their own schooling or leisure activities. But it is possible that people would spend more of their lives caring for children and less time on those other things because they would be having more children.

Wealthy people have already had some of these opportunities, because they can afford numerous baby sitters, nurses and tutors. But technological progress may one day reduce child-care costs for the general population.

Because robots and other machines take on a number of tasks formerly done by people – even playing chess – and are expected to do others like drive cars, perhaps we should expect that robots will some day take care of children, too.

People today may believe that it would be inhuman or immoral to leave young children at home alone with a robot or to drop them off at a day care center staffed by machines. But economic and technological changes of the past have already transformed child-rearing attitudes and practices: take test tube babies, working mothers, screen time, fast food or children with their own telephones.

There is little need to worry that machines will take over all aspects of child rearing. People will always have a comparative advantage over machines, even if machines could in principle be better at just about anything. For the same economic reason that the world can produce more by assigning some tasks to unskilled people and other tasks to talented people, people will be doing tasks that are difficult for machines relative to other tasks.

But perhaps robots will make parenting easier and thus more popular.

Oil is not Food

Professors Becker and Posner say that SUPPLY is a fundamental part of the analysis of food and oil markets.

Professor Kremer Says that Population Growth Encourages Innovation, Even in Poor Societies

A recent study reiterated the conclusion that population growth ought to be controlled in order to combat global warming, and other world problems. The authors of studies like these have exaggerated the benefits of population control, because they ignore some of the significant economic benefits of large populations -- in particular, the effect of population on the rate of technical change.

Some may argue that population spurs innovation only when the population in question is "adequately" educated, and that population needs to be controlled to achieve that adequate education. That's and interesting hypothesis, and worthy of further investigation, but let's not ignore what's already been published on this subject. Harvard's Professor Kremer wrote

"high population spurs technical change ... [historically] societies with larger initial populations have had faster technological change ...."

Michael Kremer (1993), "Population Growth and Technological Change: One Million B.C. to 1990," Quarterly Journal of Economics 108:3 (August), pp. 681-716.

In case you're wondering, the populations considered by Professor Kremer were actually LESS educated than the populations that some want to control today.

[Interestingly, the link above proves that at least some population control advocates are aware of the Kremer study, and have deliberately chosen to ignore it in the recent blogosphere debate]

Say It Enough, and It Becomes Truth

I write "The authors of studies like these have exaggerated the benefits of population control, because they ignore some of the significant economic benefits of large populations."

Within hours it is claimed that I wrote "we shouldn't improve education and access to contraception in developing nations"!

Shortly thereafter, it is repeated that I said that "we shouldn't improve education and access to contraception in developing nations."

Obviously, it is too risky to rebut me directly -- ie, take the position that it is OK to ignore some of the significant economic benefits of large populations. But why not just ignore my point rather than fabricating something to discredit?

While reasonable people can debate whether the effects of population on innovation are small (or even in the other direction) when compared with costs of population, don't the innovation effects have to be considered before coming to a conclusion? Where is the body of research that did this work? If it exists, why is it conspicuously absent from discussions by population control advocates?

Apparently there are some really smart people out there who can secretly consider an effect like this, come to an accurate and private conclusion, and then brand as foolish anyone who publicly considers the effect (even without coming to a conclusion as to what is the net of all relevant effects).

It looks like Professor Michael Kremer (a well-deserving winner of the "genius award") missed the secret meeting too

"high population spurs technical change ... [historically] societies with larger initial populations have had faster technological change ...."

Michael Kremer (1993), "Population Growth and Technological Change: One Million B.C. to 1990," Quarterly Journal of Economics 108:3 (August), pp. 681-716.

In case you're wondering, the populations considered by Professor Kremer were actually LESS educated than the populations that some want to control today.

[Those coming here from Professor DeLong's blog may be wondering why he recommended Professor Kremer's paper to them a few months ago, yet now he vilifies someone for stating a weaker version of the same point, citing Professor Kremer's paper and others in that literature.

The same visitors are probably also puzzled by the fact that Professor DeLong himself wrote a paper that heavily relied on Kremer's (1993) work, yet did not even hint at how (supposedy) terribly evil is its main conclusion that "high population spurs technical change."]

The More the Merrier: Population Growth Promotes Innovation

Copyright, The New York Times Company
A recent study reiterated the conclusion that population growth ought to be controlled in order to combat global warming, and other world problems. I beg to differ. The authors of studies like these have exaggerated the benefits of population control, because they ignore some of the significant economic benefits of large populations.

The director-general of Unicef has been quoted as saying, “Family planning could bring more benefits to more people at less cost than any other single technology now available to the human race.” And one of the benefits of reduced population, it is claimed, is reduced carbon emissions and therefore mitigation of climate change.
This statement takes technology for granted, yet technology itself depends on population.

Especially important among the sources of technical progress — discoveries — are trial and error, and incentives. Reasonable people can disagree about the relative importance of these two, but both are stimulated by population.

The more people on earth, the greater the chance that one of them has an idea of how to improve alternative energies, or to mitigate the climate effects of carbon emissions. It takes only one person to have an idea that can benefit many.

Plus, the more people on earth, the larger are the markets for new innovations.

Thus, even if the brilliant innovators would be born regardless of population control, their incentives to devote effort toward finding new discoveries and bringing them to the marketplace depend on the size of that marketplace. And it’s clear that incentives matter for innovative activity: That’s why we have a patent system that helps innovators obtain financial rewards for their inventions. Not surprisingly, research has shown that market size stimulates innovative activity, as in the case of pharmaceutical research that is especially intense for conditions that have more victims.

It may take a long time for population growth to either give birth to an inventor brilliant enough, or motivate enough incentives, to have an impact on the climate. But that’s not a reason to turn to population control, because it also takes a long time for population control’s impact to be noticeable.

Although the calculations are inherently uncertain, the value of the additional innovation stimulated by additional population may be significant. In my academic work I have calculated that the value, to the entire marketplace through this channel, of an additional person may be on the same order of magnitude of the value that person places on his own life.

For example, a person who can earn $2 million in his own lifetime may, by his presence in the worldwide marketplace, stimulate innovative activity that is worth a few hundred thousand dollars.

The role of technical change has been repeatedly underestimated. For example, someone a century ago who claimed that the earth could have enough food to support nine billion people (population control advocates now think that the earth’s population can easily get there) would have been considered crazy. But with today’s technology it is easy to see how many billions can be fed. Some of the important solutions to climate change will also come from technological progress.