Science in Christian Perspective

Economic Resources and Population
WALLACE OGG and WALTER BUTCHER**

The value of economic resources is derived from their capacity to produce goods and services. It follows, therefore, that both the rate of production per unit of resource and the supply of the resource are important. The fact that industrial firms are willing to pay large amounts for patent rights is indicative of the value of a more efficient production process. In fact, it may be helpful to think of technical know-how as in ' itself a special type of man-made economic resource. Doing so brings an inventory of economic resources desirably closer to the item of real concern-productive capacity.

In the United States, productive capacity has grown so large and society so affluent that attention is now being turned to discovering useful ways to employ this productive capacity." Other "western" nations are approaching the same position. But the situation of a majority of the world's peoples who live at or near subsistence levels provides a marked contrast. The possibilities for using additional productive capacity to alleviate suffering and provide for the "good life" (materially speaking) are indeed great.

For centuries the peoples in the subsistence economies have lived and died without changing their lot in life. Their resources have been in a kind of stable equilibrium. Population has been held in check by high death rates-due primarily to disease but also to famine.

Two important changes in these subsistence societies are putting pressure on the old productivity base. First, the spread of modem health measures (by the United Nations and various philanthropic groups) has drastically reduced the death rate, even in the most primitive societies. The resulting population boom requires increased productive capacity just to keep up the same subsistence level of living. Second, neither the poor nor the rich societies are any longer willing to accept poverty as inevitable.

*Presented before the 16th Annual Convention of the Ameri can Scientific Affiliation, Houghton, New York, August 22-25, 1961. 
**Professor of Agricultural Economics, Iowa State University, and Agricultural Economist, Farm Economics Division, Economic Research Service, U. S. Department of Agriculture. The opinions expressed are those of the authors and do not necessarily reflect the viewpoint of their respective institutions.

economic growth are not yet fully known. In the history of the wealthy nations, population growth and economic growth occurred simultaneously in the early stages of development. Health measures that reduced death rates were adopted at the same time that technology and capital accumulation were bringing rapid growth to the economy. Later, however, with the development of an urban society and cultural adaptation to reduced death rates, birth rates tended to taper off and population growth slackened. An important factor in this decline in birth rates was the acceptance by society of the general philosophy of control of nature. With a rising educational level and spread of the idea of self-determination, people realized that it was no longer necessary to accept what nature gave. Nature could be controlled. So also, could the birth rate be adjusted to a lower level than the natural (biological) rate. Eventually, with the attainment of high per capita incomes, rapid population growth can be accepted without seriously conflicting with other goals. In the United States, we are experiencing this sort of development.

The particular concern here is with the relation between economic resources and population. It is conceivable that productive capacity in the subsistence societies might be increased just rapidly enough to prevent widespread starvation as populations grow. However, the strength of feeling behind the present day drive to raise incomes above subsistence levels is so great as to make it imperative that productive capacity be increased enough to provide higher per capita incomes.

Productive capacity may be increased in the following ways:

Economists generally agree that the discovery of unknown resource deposits offers only limited possibilities for expanding productive capacity. Also, increasing the size of the work force implies an expanding population, which in turn means unchanged or lower per capita incomes unless productivity per worker is increased. Construction of capital goods and improving efficiency offer more hope.

W. W. Rostow, in his book The Stages of Economic Growth, has studied the historical pattern of growth by the present-day wealthy societies in an attempt to find guidelines for expanding productive capacity in the poor nations. Rostow concludes that there are two preconditions for transition into what he calls the take-off period.² The first is that "investment be increased and that the hitherto unexploited backlog of innovations be brought to bear on society's land and other natural resources. . . ."³ The second precondition involves a reorientation of goals and reorganization of society wherein modernization and change are accepted as desirable and power is transferred from traditionalists to a "new elite."⁴

Investment plays a key role in both of these preconditions. In the first, capital goods - tools, machines, roads, dams, etc.-are needed to modernize the economy. Innovations that employ improved technology can seldom be introduced without some capital investments. In the reorientation of society, education is of vital importance. This requires investment-in schools, teachers, and time spent in studying-rather than at work.

Investment in either working capital of human capital requires saving. For the society as a whole, current consumption must be held below current production. Only then is it possible to use some resources for building capital goods and improving the level of education. Eventually, the consumption given up will be returned with compound interest as investments raise productivity. But, in the early stages of growth, some "belttightening" is a necessity.

Rostow estimates that savings and net capital formation in the neighborhood of 10 per cent of net national product was needed to get economic growth started in the now wealthy nations. Most of those nations were experiencing population increases of from 1 to 1.5 per cent per year. By comparison, in many of today's emerging nations population is growing at a rate of more than 2 per cent per year. Outfitting these new additions to the population will require additional investment equal to 3 to 5 per cent of net national product.

As a result, if today's emerging nations do not reduce the rate at which their population is growing, they must be willing and able to save at a higher fate than we did during our own early economic growth or else they will not be able to achieve the minimum investments needed for entering into the economic take-off. Saving enough out of current consumption to make the needed investments involves considerable hardship in societies where productivity provides only for bare subsistence. Saving involves living for the future and living for the future may not be very enticing if, in the meantime, present hardships are made too extreme.

There is a serious possibility that maximum attainable levels of savings and investment may not be adequate for both the needs of net population increases and the requirements for beginning economic growth. Restow calls the additional savings required because of rapid population growth a "strain." Others feel that rapid population growth may either be a strong deterrent to economic growth or make it altogether impossible.

This later view has been expressed by Frank W. Notestein, a demographer.6 Notestein is quite concerned that rapid population expansion is taking place before the conditions for economic growth are met rather than at the same time as it did in our own history. He feels that the demands for current consumption and for basic investments to equip the additional population may sop up all potential savings and preclude the investments that are needed to move the economy into the process of economic growth and rising per capita incomes. Notestein feels that an aggressive program of birth control must be used to hold population in check until some measure of economic growth has been achieved. Then with rising incomes and increasing urbanization, birth rates may be expected to fall as they did in the wealthy nations.

Some serious questions are posed for Christians by the relationships between economic resources or productive capacity and population.

First is the Christian's attitude toward economic growth. As incomes rise, much physical discomfort can be eliminated and education, which goes along with economic growth, provides an opportunity for more complete understanding of spiritual concepts. But during the process of capital formation, economic growth has often been associated with human exploitation. Nor is it certain that if and when attained, affluence will not be accompanied by materialism and moral decadence rather than by spiritual growth. Perhaps, at the least~ we should make efforts to help today's emerging nations avoid these pitfalls, making such help an integral part of our efforts to help them advance economically. Second, if economic growth is accepted by the Christian as a desirable goal, the question must be faced as to whether or not birth control should be used as a means to facilitate economic growth. It seems clear that for most under-developed countries, an early reduction in the rate of population growth could be a facilitating factor in economic growth and income improvement. Some scientists contend that a slowing of the population growth is, in fact, a necessity. But from an ethical viewpoint, Christians are still divided in their attitudes toward birth control.

References

1. J. K. Galbraith, The Affluent Society. Houghton-Mifflin Co., 1958.

2. W. W. Rostow, The Stages of Economic Growth. The University Press, Cambridge, Massachusetts, 1960.